Steel to Wachovia

The Wall Street Journal is reporting that Wachovia has hired Bob Steel as its new chief executive officer.

Notes the Journal, “Mr. Steel said he was approached about the job in the past few days. He has a long friendship with Mr. [Lanty] Smith [who chaired the Wachovia search committee] as both share ties to Duke University; Mr. Steel is the current chairman of Duke’s board of trustees, and Mr. Smith is a former trustee.”

Wachovia’s shares and earnings have declined noticeably in the past 12 months, and the bank has been the subject of takeover rumors. Said one financial analyst about Steel, “He is an ideal choice for this time of turmoil.”

Steel might have many qualifications for taking the helm of the nation’s second-largest chain of banks, but surely his track record in leading institutions in a “time of turmoil” is not among them.

Steel’s handling of the lacrosse case suggested a leader who was mostly concerned with upholding the position of the man he selected as president of Duke, Richard Brodhead. The fact that Duke already has paid out three settlements (to the falsely accused lacrosse players, to the Dowds, and to former coach Mike Pressler) and is facing two other massive lawsuits reflects poorly on Steel’s ability to fulfill the chief requirement of his position: looking after the fiduciary interest of his university.

Moreover, Steel’s performance on issues associated with the case raised profound questions about his judgment. This is, after all, a man who:

• In August 2006 informed the New Yorker that the University had cancelled the lacrosse season because “we had to stop those pictures [of the players practicing]. It doesn’t mean that it’s fair, but we had to stop it. It doesn’t necessarily mean I think it was right—it just had to be done.” The quote hardly inspires confidence of a BOT chairman providing moral leadership for the University.

• Seemed unconcerned that many Duke faculty members refused to adhere to their contractual guidelines (the Faculty Handbook) or even Duke regulations (departments not paying for political ads, departments actually voting on issues before they claimed to provide an official endorsement).

• In a fall 2006 private meeting with Friends of Duke head Jason Trumpbour, passed on unsubstantiated personal attacks about the lacrosse players’ character, suggesting that something “terrible, terrible” occurred at the party; and dismissed Trumpbour’s concerns about Mike Nifong’s ethical behavior. In both respects, of course, Trumpbour’s judgment was proved correct, and Steel’s was proved wrong.

• Promoted the African-American Studies program to full departmental status, despite the abysmal performance in the case of many of the program’s leading faculty members.

• Behaved, in general, as if he were more afraid of arousing the wrath of the politically correct on campus or “activists” in the Durham community than in upholding the due process rights of his own institution’s students.

• Justified the dismissal of Coach Mike Pressler to one lacrosse parent by musing, “Life sucks. Bad things happen to good people and you better get used to it.”

This record, it’s worth noting, led to an extraordinary call for Steel’s resignation from Duke alum Jay Bilas, who wrote “Based upon Bob Steel’s letter of April 11, 2007, in which Mr. Steel stated that the board agreed with the principles President Brodhead established and the actions he took, the resignation of Mr. Steel and any board members that acted in lock step with President Brodhead are also appropriate.”

If Steel runs Wachovia like he oversaw the lacrosse case at Duke, I fear the institution’s “time of turmoil” might just be beginning.