"[Harvard has] a tendency to force people to put the ethical theory aside and I think they've straightjacketed their people by forcing them to work exclusively in the case-study method," says Donaldson. "To do business ethics without doing serious ethical theory is to do it at an elementary level, and is a half-hearted and inadequate approach."

"I don't know what the local politics are, but I can see that it's possible that the money be used in ways that don't foster the development of ethics in business, but I hope the danger is averted," says DeGeorge.

While acknowledging that instituting a comprehensive ethics program will be a gradual process, the B-School Dean said at the New York gala that important initiatives are already underway. McArthur points to Bok's University-wide ethics program, which is aimed at versing teachers in ethical issues in the various professions, and a B-School research project focused on competitiveness, ethics and leadership as examples of this effort.

"Compared to other major business schools, I would rank Harvard above average on their commitment to ethics," says Vogel.

The timing of Shad's gift follows the expulsion of first-year B-School student Randall D. Cecola last fall, when Cecola faced SEC charges of insider trading. Cecola played a small role in the same Wall Street scandal that incriminated Ira B. Sokolow and Martin A. Siegel, who obtained their Harvard MBAs in 1981 and 1971, respectively.

"Business schools have this nice racket where every time someone who has graduated from the school gets in trouble, people will throw money at the problem," Vogel says. "I think it's the most ridiculous thing I've ever heard. I think it's sort of a parody--the notion of throwing money at problems went out with the sixties. I think that schools are setting themselves up to be made fools of."