Who Profits From Upper West Side's Barnard College?--Part 3

“Non-profit” Barnard College may have only paid zero dollars in income taxes to the U.S. federal government between July 1, 2018 and June 30, 2019. But, according to its Form 990 financial filing for 2018, Barnard College did pay over $1.3 million “for investment management fees,” including a payment of over $844,000 to Strategic Investment Management LLC, the for-profit Arlington, Virginia-based firm that Barnard hired as its “new Outsourced Chief Investment Office (OCIO)” in September 2017, which “has a proven track record of managing endowments and has achieved strong returns,” according to a press release that was posted on the Barnard College website on Sept. 13, 2017.

According to a Dec. 20, 2018 press release of the for-profit Northill Capital privately-held asset management business firm, this London-based firm purchased “a majority stake” in the Strategic Investment Group “by acquiring the equity interest previously held by FFL Partners for an undisclosed sum.” A June 26, 2019 Financial Times website article, however, subsequently revealed that the “majority equity interest” in the Strategic Investment Group, that Barnard hired in September 2017 to manage its endowment investments, was bought for “$26 billion.”

The FFl Partners for-profit firm--that had owned a “majority stake” until December 2018 in the Strategic Investment Group-- was “a San Francisco-based private equity firm with over $4.5 billion under management” that invested in for-profit “business services, healthcare services, industrial products” and “financial services,” according to Northill Capital’s Dec. 20, 2018 press release.

Northill Capital’s press release also noted that the new owner of a “majority stake” in the investment management firm to which Barnard College paid over $844,000 in 2018, was established in 2010 “with substantial backing from interests associated with the Bertarelli Family;” and that “assets under management by businesses in which Northill owns a majority interest total approximately US $56 billion at 30 November 2018.”

The “Swiss-Italian Bertarellis,” according to the June 26, 2019 Financial Times article, became “one of Europe’s richest families,” especially, after “Ernesto Bertarelli sold his family’s pharmaceutical business, Serono, to Merck in 2007 for $13.3 billion.” And the former Serono CEO that financially backs Northill Capital was, in 2019, living in Switzerland with his wife, “the songwriter and former Miss UK Kirsty Bertarelli," who, coincidentally, was then “Britain’s richest woman,” according to the same 2019 article.

Also coincidentally, two years before Serono CEO Bertarelli sold his Big Pharma family business to Merck for $13.3 billion, his company’s Boston area-based Serono Laboratories subsidiary had agreed “to pay $704 million and plead guilty to federal conspiracy charges that it increased the market for the AIDS drug Serostim by offering kickbacks to doctors and manipulating a test for AIDS patients,” according to a Dec. 16, 2005 Associated Press article by Mark Sherman, titled “Serono To Pay $704M in Settlement.” The same Associated Press article also noted:

“Eighty-five percent of prescriptions written for Serostim, accounting for roughly $615 million in sales, were unnecessary, said Michael Sullivan, the U.S. attorney in Boston who led the four-year federal investigation into the marketing of the drug. The cost of many of those prescriptions, $21,000 for 12 weeks of treatment, was paid by Medicaid, the joint federal-state health program for the poor, and other government insurance plans….Prosecutors began their investigation after several U.S. employees of Swiss-based Serono claimed fraud. The result, announced Monday at the Justice Department, was the third-largest health care fraud settlement: a criminal fine of $136.9 million and civil penalties of $567 million….Serono offered doctors free trips to the south of France in return for agreeing to write up to 30 new prescriptions for Serostim….”

The estimated current wealth of the Bertarelli family is over $18 billion, according to the website of the Waypoint firm, which manages the investments of this family. And besides financially backing the Northill firm that owns the Strategic Investment Group firm which manages Barnard College’s investments, the Bertarelli family also invests in real estate and in a biotech investment firm called Gurnet Point Capital.

Despite the U.S. subsidiary of the then-Bertarelli family-owned Serono pharmaceutical firm previously pleading guilty to federal conspiracy charges in the “third-largest health care fraud settlement” in 2005, however, the Bertarelli family’s Cambridge, Massachusetts-based Gurnet Point Capital, was still allowed to be “a major investor in 2015 founded Boston Pharmaceuticals,” according to the Waypoint firm website. And the same website also noted that, equipped with the over $600 million that the Bertarelli family’s Gurnet Point Capital initially provided it with, in 2018 Boston Pharmaceuticals “acquired three different drug licenses from Novartis and GlaxoSmithKline;” and “the mastermind behind the strategic investments was industry insider Ernesto Bertarelli and his powerful Waypoint family office.”

And although over 98 percent of the over $280,000 in political campaign contributions made by individuals affiliated with Barnard College in 2020 went to politically liberal or Democratic Party candidates in the 2020 campaign (according to the Center for Responsive Politics's Open Secrets website), the president and CEO of the now-Bertarelli family-backed Strategic Investment Group that Barnard College hired to provide investment management services in 2017, Brian A. Murdock, is a trustee of the National Review Institute.

Yet, ironically, according to the National Review Institute’s website, the “National Review Institute is a non-profit, 501(c) (3), journalistic think tank, established to advance the conservative principles William F. Buckley Jr. championed and complement the mission of National Review magazine, including by supporting and promoting NR’s top talent;” despite “all contributions to it” being “deductible for income, gift, and estate tax purposes.” (end of part 3. To be continued).