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Is HSA Any Way to Run a Business?

THE Commission of Inquiry released last week the report of its investigation of Harvard Student Agencies, an organization that is supposed to provide jobs for scholarship students.

The commission studied HSA's effect on the academic performance of participating students, its monopoly position, its annual University subsidy of $10,000, and the percentage of scholarship students who actually get HSA jobs.

Three of the Commission's nine recommendations are of major importance:

*Eliminating the office of HSA president, with the adult General Manager alone being responsible for day-to-day operations,

*Submitting a weekly list of all jobs awarded, with scholarship student workers indicated, to the Office of Student Employment and semi-annual list to the Dean of Harvard College,

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*Requiring regular full disclosure of HSA's financial affairs, including its distribution of wages and profit shares to scholarship, loan and other students.

Until January of this year, HSA functioned as a secretive monopoly, confident of the University's protective cloak. As an indicator of HSA's lack of responsiveness to the community, no public report had been issued since 1967.

The spark that touched off this semester's controversy was the discovery in January that HSA would receive funds from a benefit showing of the movie Dealing. HSA agreed to participate despite its attorney's advice to the contrary, and despite the fact that Phillips Brooks House, the Crimson, and the Alumni Office had refused. The Sack Theatre promoters billed HSA as a group that would use the money for student financial aid. This claim, of course, called into question whether financial aid students were receiving the bulk of HSA jobs. And nobody, from administrators in Holyoke Center to the student president Michael L. Ryan '72-3 knew the answer. The data had not been compiled.

In early February, the Crimson launched an investigation of Ryan and of HSA's major divisions, which include charter flights, publishing and catering. Various insiders of these divisions willingly supplied the Crimson with financial information which the HSA management had seen fit to withhold, such as balance and schemes. They also provided valuable information about HSA personalities and politics.

At the beginning of this semester, Ryan quietly took a leave of absence and became HSA president on a full-time basis. His one-year term ended May 31. During the first semester, Ryan had put in very long hours, doing much of the job that belonged to Andrew W. Nelson, the full-time adult manager who had been seriously ill. Nelson returned to work full-time in February, but agreed to give Ryan one-quarter of his own salary from February through May. Nelson praised Ryan and said, "Michael has responded above and beyond the call of duty."

EVEN if Ryan had not been shouldering Nelson's work load the first semester, he would still have been busy beyond the call of duty. In addition to being president of HSA, Ryan was also president of the College Bartenders Service in his home town, Garden City, N.Y. The business folded after the Christmas season, and Ryan insists that he spent no more than 30 hours on the College Bartending Service since its inception. He refused to say when it began.

While the Crimson was investigating HSA, an outside travel agency, Uni-Travel, flew in the face of a University ruling that gave HSA virtually exclusive rights to set up charter and affinity group flights for the Harvard community. Uni-Travel in early February offered Harvard students, employees and families a round-trip affinity group flight to Acapulco over Spring vacation. Ryan had complained to Dean Epps about Uni-Travel in February 1971, when Uni-Travel organized a Europe flight with the help of a Law School student. Daniel Steiner '54, General Counsel to the University, began putting pressure on the law student and a few months later, the University protected HSA's monopoly by making it a violation of University regulations for a student to organize a non-HSA charter flight. Legally, HSA had no grounds to complain in a real world courtroom and that's why it had to rely so heavily on the University.

Steiner, in February 1972, pledged "We will try to stop them (Uni-Travel)." Unfortunately for HSA, Steiner soon became needed for more pressing matters--the issues of whether SDS could hold its national convention on the Harvard campus and then, in April, the Gulf Oil proxy vote and the ensuing takeover of Massachusetts Hall.

Even if Steiner had put all his power to the test, his backing of HSA would have been like the Marines backing a regular regiment of Thieu's Army. On May 5, 1972, HSA was forced to mail out cancellation notices to those who had subscribed to five of its seven charter flights to Europe. HSA, due to competition from lower-than-ever youth fare rates, could simply not corner the Harvard market as it had done in the past.

Although HSA bungled the transportation to Europe, for those who still get there, HSA published this year a very well-written guide Europe. Behind their high quality publication, bitter disagreements existed between Ryan and Donald C. Thomas III '72, the publishing division manager who resigned in September 1971. Ryan, Thomas and a third student had vied for the HSA presidency the previous Spring in a close contest.

Thomas accused Ryan of giving him a poor deal in the profit-sharing contract by charging the publishing division with too much overhead. Unfair overhead assessment is probably the most common complaint of division managers. To an extent, Thomas took matters and money into his own hands. Although he resigned in September, he drew $1800 in salary, which he had been budgeted through May 31, 1972. "If you look at it cut-and-dry, I made more than I was supposed to get," Thomas said. "But it wasn't intentional." Thomas said he is morally entitled to his salary for the eight months he is not working because he negotiated extraordinarily lucrative publishing contracts. This semester, the adult general manager Nelson has asked Thomas to return a large portion of the salary. Well-placed sources say that Thomas has not and will not comply.

THOMAS also charged Ryan with interfering too much in the day-to-day management of the publishing division. Ryan dismisses the accusations outright. His face turns red consistently when the subject of Thomas is broached.

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