The suit follows a three-year investigation and charges that the defendants defrauded the U.S. government, abused public resources and engaged in conflicts of interest while managing the government’s foreign-aid program in Russia.
Between 1992 and 1997, the U.S. Agency for International Development gave Harvard more than $40 million to advise the Russian government in its efforts to establish a free market economy, the Journal said.
The lawsuit alleges that while Andrei Shleifer, a leading economic professor, and Jonathan Hay, a legal expert, were running the program, they used their personal contacts to launch business investments for themselves and their wives, and used employees and offices provided by the U.S. government to further those investments.
The complaint accuses Harvard of mismanagement and failing to provide oversight of the Russian program. It charges the U.S. paid the university and defendants because their services were represented as free from bias.
Harvard officials deny any wrongdoing and say the university can’t be held solely accountable for the actions of those individuals because the program was jointly managed with the government.