The End Of The Affair Jeffrey Sonnenfeld's battle with Emory University is finally over, but the question remains: Why on earth did Emory's president accuse Sonnenfeld of vandalism?
By Geoffrey Colvin

(FORTUNE Magazine) – Now that the whole nasty business is over--the false accusations, the police threats, the lies, the broken promises, the wrecked career--a couple of questions just won't go away. Why did it really happen? And what's to stop its happening again?

The Jeffrey Sonnenfeld affair started in late 1997 when Sonnenfeld's employer, Emory University, forced him to resign from its Goizueta Business School, where he was a popular professor who had brought the school millions from corporate donors. Having been passed over as the business school's next dean, Sonnenfeld had accepted a job running the business school at Emory's Atlanta rival, Georgia Tech; he would be making the move in a month. But on the evening of Dec. 1, on orders from Emory's president, William Chace, campus police called in Sonnenfeld and told him they had videotape of him vandalizing school property. Sonnenfeld could resign on the spot or be arrested.

Though protesting his innocence, he resigned; after all, he was about to leave anyway. He didn't know that Chace had already decided to call Georgia Tech's president saying that Emory had tape of Sonnenfeld vandalizing the school. Without seeing the tape, Tech withdrew its job offer. Damning stories appeared in the Wall Street Journal and the New York Times, though no journalists had seen the tape. Sonnenfeld, an academic star, was suddenly unemployed and untouchable.

He sued. Last month he and Emory settled, on terms that must mortify the university.

Disclosure statement: Sonnenfeld is a friend of mine. I've known him 27 years, since we were undergraduates. For that reason I kept quiet through this whole matter, uttering not a word about it in print. But now that it's over, a few things need saying.

This case was so bizarre that it ended up on 60 Minutes, where millions finally got to see the crucial videotape, which showed...nothing. We see Sonnenfeld ambling down a hall, brushing up against walls, seeming to tap his shoe against a wall. While his movements seemed perhaps odd, could one detect any damage being done? Even Chace admitted, under oath, that one could not.

So why did Chace use this absurd pretext to ruin Sonnenfeld's academic career? Neither man will comment, but there aren't many possible answers. Sonnenfeld apparently wasn't a vandal, and of course he was leaving anyway--within days. Did Chace want to make sure that if Emory no longer had access to Sonnenfeld's corporate fans, then Tech wouldn't either? Maybe, though that would have been remarkably childish and shortsighted. But then the only motivation we're left with is even more childish: Chace's only apparent objective that I could see would be--forgive the indelicacy--to screw someone he clearly didn't like. Actually, you could put it far more indelicately than that.

Emory and Sonnenfeld agreed neither would speak to the press about the matter, but Chace secretly broke the agreement--and in anonymously speaking to a New York Times reporter, he suggested that Sonnenfeld had not disputed the vandalism charges. When an alumnus complained to Chace that Sonnenfeld was being vilified in the press, Chace lied that Emory hadn't spoken to the press. Under oath in a disposition he admitted to these lies.

He then spent millions of the university's dollars fighting and eventually settling Sonnenfeld's lawsuit. As part of the settlement, he withdrew the accusations--all of them--that had started the whole mess.

Bottom line: He cost the university many millions and brought it nothing but disgrace and embarrassment.

This is a governance failure, a really ugly one. In today's climate of vigilant boards, it isn't hard to imagine what would happen to a CEO who not only put his organization through such a debacle but exhibited the traits that could allow it to happen.

Emory's trustees have apparently done nothing. Still, this affair will have its effects. How many top professors will now harbor second thoughts about going to Emory, where success may be brutally punished? How many potential donors will worry about their gifts going to waste in the Chace Tantrum Fund?

What's saddest about Chace's jihad is that it damaged everyone it touched: Sonnenfeld, himself, Emory. Even Georgia Tech lost the dean it wanted. All losers, no winners. That's mismanagement at the highest level, where a board is supposed to--but in this case didn't--show some mettle.