WHEN: Today, Friday, January 12, 2024
WHERE: CNBC’s “Squawk Box”
Following is the unofficial transcript of a CNBC exclusive interview with Pershing Square CEO Bill Ackman on CNBC’s “Squawk Box” (M-F, 9AM-11AM ET) today, Friday, January 12. Following are links to video on CNBC.com:
All references must be sourced to CNBC.
ANDREW ROSS SORKIN: Welcome back to Squawk Box. Our next guest is Pershing Square CEO Bill Ackman. He has been one of the most outspoken voices against antisemitism on college campuses in America, has also pushed for three university presidents to resign since that Capitol Hill hearing early last month, during which those leaders were widely seen as not defending their Jewish student populations. Two university presidents did resign, one of them now former Harvard leader Claudine Gay became embroiled in a plagiarism scandal. A topic which is now touched on Ackman’s own family. Bill Ackman is here and this is your first major television interview since this all began. We did talk once briefly on Squawk, I think it would call in to talk about what was happening. But in the past couple of weeks –
BILL ACKMAN: That was about DEI though.
SORKIN: That was about DEI but over the past couple of weeks you have been active throughout on X outspoken on all of these issues, especially as there have now been attacks against your wife around the idea of plagiarism. I want to sort of just untangle all of this because I think people are trying to understand what is motivating you, how this all began, what you’re trying to do their issues about DEI and free speech and other things as well. But you have become one of the most influential, provocative and polarizing voices in this debate. So let’s start with where this began back in October for you.
ACKMAN: It actually began before October, and it began in this room. This is our boardroom at Pershing Square. It also happens to be the place we hosted our Pershing Square foundation board meetings, a board that my father was a member of and literally every meeting, my dad would say, Bill, you’re just not doing enough about antisemitism. I think it’s a really important problem. You need to focus on it and I was very dismissive of my dad. I love my father. He passed away in May.
SORKIN: You dismissed your dad.
ACKMAN: I said look, the Jews are doing great. I’m not experiencing, I don’t see Jews experiencing a lot of antisemitism. And we focus on economic empowerment, we focus on you know enhancing people’s ability to one acre farmers in Kenya, right, it’s like this. And then dad had heart surgery coming on. And he was very concerned about it because it was kind of life or death and he wrote me three letters. One was here, my instructions if I die, you know, memorial service, etc. This is what I want you to do with your mom, financial state planning. The third one was like a long lecture about antisemitism. It said, look, Bill, I want my last words to you to be this is something you need to focus on. And I didn’t do anything to be honest. And then October 7 happens and it’s really October 8. It was when 30 odd students, Harvard student organizations, my alma mater, came out and said the morning after the most horrendous, barbaric terrorist acts in history, at least in modern history for sure. They came out and said, you know what? It’s Israel’s fault. Israel is solely responsible for these horrendous heinous acts. And then that was the beginning of this journey.
SORKIN: And you have taken dare I say, an activist approach to this.
ACKMAN: Yes.
SORKIN: You’ve also been criticized for the activist approach. There’s been some who have been very praiseworthy of what you have done in terms of pushing on these issues. But at the same time, there has also been a remarkable backlash, and we’re now seeing that backlash manifest itself in the attack on your wife as it relates to accusations of plagiarism.
ACKMAN: Yes.
SORKIN: How has that made you feel? And has it changed your view about how to approach these things? Because there’s some who say this is this was really great what you were doing, but there’s others say that you’ll have taken it to some degree too far. And then, in fact, by being such a big figure in this conversation, that it actually has made it harder to get what you want.
ACKMAN: I disagree. Actually, I think, first of all, we’re going to go out there in the public eye and you make statements, strong ones about issues that are controversial, you’re going to be criticized. Hopefully, you’re going to be applauded, as well. When they go after your wife, you know that you you’re making some progress. I mean, I feel very, you know, the worst of this is for Nari who did no wrong we said nothing really publicly. But it means we’ve kind of hit a cord, if you will, like I talked about starting with antisemitism on campus, then I got concerned about governance at Harvard. Not just the president but when the board in my view didn’t anything. Then broader concerns about higher education generally. And then, you know, the origins of antisemitism on campus, I think which are results from the so called DEI movement. And I think these are very important issues. And these are issues that were resources to be focused on and I’m, I would say, I was extraordinarily committed before. I’m undeterred. And actually, I’m standing up an organization very shortly to focus on precisely this –
SORKIN: What’s that organization going to do?
ACKMAN: It’s going to be I would say, you know the problem with think tanks they write a bunch of papers, nothing happens. I would say it’s going to be a think and do tank. It’s going to be an activist. And we’re going to study these issues. And we’re going to come up with solutions to problems and we’re going to implement.
SORKIN: And what are those issues, is this is about antisemitism? Is about free speech or this is about DEI? Is this about governance, plagiarism?
ACKMAN: All of the above. So you know my day job in Pershing Square, my job I love. And at the early days of Pershing Square, I paid my own bills. But you know what? That’s not a good use of my time. So I hired some people to do that. I used to do all of my own philanthropy, but you know, that started to become a bigger responsibility. So I put together, set up a foundation of a board of directors hired a team. This you know, I’ve done other initiatives like this, you and I were on TV to talk about child sex trafficking and visas providing the payment rails if you will for pornography sites, YouPorn and it was a 30 minute interview and, and a few tweets. This is a bigger project. And it’s now this kind of activism now requires, you know, sort of a serious team. We’ve got some extra space, I’ll rent some space. I’ll hire some people, hire a CEO, put together board of directors and we’re gonna go after these issues in a very aggressive way.
SORKIN: I think there’s a lot of people who are watching you write on X almost by the hour constantly. Can you just take us inside your own head on this, your home? What this has felt like because there’s an interesting dynamic at play, which is, you have long been somebody who has attacked others in the context of activism. And now in some cases, arguably, you are being attacked, and your family’s being attacked.
ACKMAN: I was attacked before. Remember, if you’re an activist short seller, you undergo the most aggressive attacks. So I’m kind of a battle hardened person right. MBIA tried to put me out of business and did a pretty good job. You know, sticking Eliot Spitzer on me years ago, if you remember that one and then of course, Herbalife was a, you know, to the end of the earth campaign, I would say on both sides.
SORKIN: Is this different?
ACKMAN: Yes. It’s much more important. Much more profound, it affects many more people. It’s not just about a company. It’s about society. It’s about education. It’s about free speech. It’s about you know, not just higher education. It’s about nursery schools to K through 12 education.
SORKIN: But take us inside your home because part of this is about your wife and about these allegations of plagiarism. One of the things that you did in the context of going after Claudine Gay was originally it was about antisemitism then turned into an argument about governance and plagiarism on her side.
ACKMAN: Sure, actually it was always about, I would say leadership, and its lack of leadership, in my opinion, led to the what started out as protests against Israel, then became protests that turned into antisemitic activity on campus. And I think that really that transformation happened because of a lack of leadership, a lack of enforcement of rules. And that’s really, ultimately lack of moral clarity, the catalytic moment where I said she should resign, by the way I said she should resign. I said President McGill should resign, and President Kornbluth from MIT should resign. And I’ll point out you know, one of them is Black, one is Jewish Christian, you know, this was a diverse collection of people, although they’re all women.
SORKIN: But there have been people that have accused you of being racist in the context of Claudine Gay.
ACKMAN: Unfortunately today, if you criticize a person of color, regardless of the credibility of your accusations, you know, you’re going to be accused of being racist, and that’s not right. Right. I’m an equal opportunity criticizer but I do want to get to the topic of explain. So that was the catalytic moment. And then that was December 10, December 9, that congressional hearing and two days later the Harvard board said we’re unanimously in support of President Gay and, and then this whole plagiarism thing kind of erupted. It was sort of out there. And then more and more findings were found. And I reposted these findings because at that point, I was happy for to leave for any reason, right? I had failed to convince this board on leadership on moral clarity on antisemitism on campus. And then this plagiarism thing started to get some legs and it’s not like I discouraged it was not, I didn’t look for it. It was found by found by others, but it was in fact I thought it was disappointing that she would the perception that the catalyst for the resignation was plagiarism as opposed to a failure to address antisemitism.
SORKIN: Let me ask you about the plagiarism charge though however, which is now that you have been on the other side and your wife has been accused of plagiarism herself and you have disputed that it is plagiarism. You’ve argued around the idea and the definition of plagiarism, what does it mean to be able to cite somebody but not necessarily put quote marks around it. This is something that Business Insider accused your wife of but Business Insider has also tried to argue that affectively it’s very similar to what Claudine Gay had been doing. Do you have a different view now of this?
ACKMAN: Sure. So plagiarism is fraud in academic context, it’s the most aggressive the most damaging thing you can do to a professor other than accusing them of some kind of, you know, rape or some kind of sexual harassment or some kind of violent. So it’s maybe slightly better than that. So it’s a very serious crime. And it is for that reason when a professor is accused of plagiarism is a very serious process that goes underway to determine whether or not it’s plagiarism. Now, it doesn’t take six months, which is a typical period for assessing whether a professor has committed plagiarism to determine whether they had a footnote or quotation marks. It’s about intent that the professor intentionally steal someone else’s ideas. And one of the indicia if you will of plagiarism is, you know, where they’re using someone else’s words or they’re not putting a footnote. The question is, is that an oversight or is that intentionally theft, and the things that you want to look at in determining whether or not it was intentional or not, you’re trying to get into the mind of the person is how pervasive is it? Right. And I don’t know today, whether Claudine Gay committed plagiarism or not because you know, I haven’t done a six month assessment.
SORKIN: But you are out there on Twitter saying she plagiarized. She shouldn’t, not only should she not be the president of the university, when in fact she stepped down and they made her a member of the faculty, you raised questions about that, based on the plagiarism accusation itself.
ACKMAN: What I said was, I said, in light of her what has been revealed that her academic record of what we’ve learned about plagiarism, I don’t think she’s qualified to serve on the faculty. And one of the things that came out which again, I had never focused on Claudine Gay’s academic record or plagiarism, but what I learned sort of after the fact is that you should publish 11 articles, not a dissertation 11 articles in journals, and it’s if you look at what’s required to be a professor at Harvard, if you’re in the field of social sciences, that’s a very, very small, very limited academic record. Six of those 11 papers had 51 missing quotations, but you know, if you will, still, I would say that doesn’t look good. And there was a point in which, you know, her accusers were people who’ve been plagiarized from this woman, Carol Swain, kind of a noted member of faculty professor academic, in her same fields that she took my work right. So that’s maybe some it was those words plus the record. I’m saying that you’re rewarding her with a $900,000 a year professorship. I mean, the reality was, that was a legal settlement, you know, so but my activism on Claudine Gay, I don’t want to distract from the fact it was about just yesterday, and I just tweeted this out. There was a 73 page complaint kind of leveled at Harvard. I encourage everyone to read it and it outlines some of the things I seen when I went up to campus and learned about but a basically 50 pages of antisemitic acts on campus. It’s a bit like New York City when New York City was a crime infested place, and Giuliani showed up the good version of Giuliani. He instituted what people called the kind of the broken windows theory. He cracked down on even small violations like the squeegee guys, what happened at Harvard is the protesters kind of tested the administration and then incrementally they started violating more and more and more rules, and there are no consequences and that’s why they felt comfortable going into university.
SORKIN: Well, you are now planning to if you haven’t already begun, effectively scrubbing the records of professors everywhere, especially at MIT because you believe that’s where the accusations against your wife came from.
ACKMAN: No, that’s to make a point. So just briefly on plagiarism, so plagiarism is fraud. It depends on the intent and the degree to some extent, and, you know, getting back to Neri right so Neri’s thesis 330 pages, Business Insider found four paragraphs, okay. Where she had used words and, and gave proper attribution without quotation marks four and then one sentence where she missed an attribution and by the way, the same person when she missed an attribution for, she referenced eight other times and properly referenced that person. So again, stick with me and its important it’s my wife. Okay, so if I’m, if I’m an academic panel assessing this, I would say, you know, out of the 2700 paragraphs, you know, four she attribution clearly not theft of intellectual property were nothing special about those words. It’s not like quoting Shakespeare okay. And there was one sentence, no one’s going to conclude that that’s fraud. Fraud requires like scienter right intent, right, that she’s, it’s not even an important part of her thesis. Right. So that’s, that’s Neri. The problem with plagiarism, though. And the point I was making is it can be weaponized, right? We’re going to know once we finish this review, how many other members of the MIT faculty have this problem? And if it’s plagiarism, because we find a dozen paragraphs without attribution and you know, 300 other members of the faculty, that’s it makes no sense. So what has to happen to be clear, one of the things our little Institute, kind of focus we should impanel a group of top scholars and let’s come up with a definition of plagiarism that’s consistent with what makes sense and we’re proving a point by showing you know, the standard is we find a missed footnote you are a plagiarizer. Or again, what Businesses Insider said is, we found four paragraphs and a footnote. So Neri Oxman’s dissertation is marred by plagiarism. When Neri said I, they’re right there were four paragraphs and one sentence at the date. The next story they wrote it was Neri Oxman admits to plagiarism. She didn’t admit to plagiarism she admitted to basically a few clerical errors in a 30 page document.
SORKIN: Are you going to sue Business Insider which we should say is owned by KKR, Henry Kravis and you made calls given your stature in the world and your relationships with some of these people that most people have no access to when an article is published about them that they don’t like?
ACKMAN: Well, the first thing we did, first thing I did was call someone I knew on the Business Insider board, but again, this is why we’re going to stand up this organization because unfortunately I’m not the first person that Business Insider or my wife is not the first person that they’ve gone after falsely accusing them of something criminal. Okay, accusing my wife of fraud. The Twitter if you will, or X is littered with, you know everyone in the world…
SORKIN: But they’ve accused you of being a racist. They’ve accused you of being a liar. People have accused you of fraud, you care about free speech.
ACKMAN: I do but let me just first of all, accusing someone of fraud is a very serious thing. Okay, but you’re right. The average guy is not gonna pick up the phone and call Henry Kravis on his cell phone or text him which I did. Okay. And it shouldn’t have to be that like that I call Henry Kravitz.
SORKIN: What did Henry Kravitz tell you?
ACKMAN: I didn’t reach him so I sent him a text. And I sent him a text saying I’d like to talk to you about something. It’s all outlined in my tic tock, read it. You know, and then I spoke to a member of the Board of Business Insider, and he calmed me down. He said, oh, they’re doing an investigation. I totally agree with you that plagiarism is not a series of clerical errors in fact I have this text in my little tick tock. So I thought, okay, I said, look my only request is either withdraw the stories or announce that you’re investigating them and he said, I’ll get back to you. Let me get back to my point. Yes, I have the ability to reach out to a lot of people. I’m one person that moved or I know them directly. But a lot of people’s lives have been destroyed by media organizations writing a story that destroys their reputation, and they have no recourse. And that was a very, very bad, bad, bad way for the world to operate. And a world where online media, the compensation for media is based on clicks, right. The more attention you get, the more you can sell your advertising for. And that model drives people to do stories with high profile people where they can say they commit crimes or with the wives of high profile.
SORKIN: What about that? What about the facts themselves? I just want to read you this is Axel Springer spokesperson talking to Puck yesterday saying most people underestimated the way that Bill Ackman is completely losing it. That’s what he said about you. And went on to say that the facts of the story stand. Their argument, I believe is that the facts of the facts. There’s a question potentially about the motivations which you’ve raised about the editors and the reporters who may have pursued that story.
ACKMAN: I love that statement, let me tell you why I love that statement. Business Insider is a wholly owned subsidiary of Axel Springer. It’s probably a several 100 million dollar entity. Axel Springer is a multibillion dollar entity. When Axel Springer says the facts in the Business Insider story are correct after I put out my 54 6000 word thing outlining why the facts are false. The most material is Neri Oxman admitted to plagiarism. Neri Oxman never admitted to plagiarism. Okay. Axel Springer is now a recourse party. If there is a lawsuit which is where he started your question. I hope we don’t end up there.
SORKIN: We’re going to take a pause in this conversation because we have some data that’s coming out but we’re going to come back to this conversation we’re going to continue to talk about the world of activism. The political prism I want to talk to you about with which a lot of this is being looked at, DEI issues and how you have thought about the shift and all of this so stay where you are. I’m going to send it right now if I could back to Joe and we’ll come back with Bill Ackman in just a little bit.
SORKIN: Welcome back to Squawk Box. We’re continuing our conversation with Pershing Square CEO Bill Ackman. Bill, thank you for being here. I want to just talk briefly though about the markets before we get back to the Henry Kravis and plagiarism and free speech and antisemitism issues. You just saw that data come across the tape. Where are you in terms of the markets right now and what you think is happening or not happening?
ACKMAN: So on the bond markets, I don’t know if you remember I tweeted that at 5% I thought that it had gone far enough. We actually reversed our position and instead of being short, the bond market, we went long, the five year and the one year through, again, through these sort of asymmetric instruments at that time rates have come in a lot and we’ve kept that position on because we believe rates are going to come in further. I think the data point that came out this morning, is sort of confirming the –
SORKIN: You think there’s three rate cuts in the offing now, four? By the way, we had Larry Fink on in the six o’clock hour. He actually thought that we may not get those three rate cuts. Maybe it’s two.
ACKMAN: I think he’s wrong. I think we have three or certainly remember three rate cuts is 75 basis points off of called five and a quarter, five and a half. That’s not a meaningful, that’s not a significant move. Three cuts would be like a 15% reduction in rates. Right now we’re with inflation, you know, cooling very meaningfully. The real cost of money is very high right now. So I think they’re gonna have to move early. And I think they’re gonna have to move, they can certainly do more than three cuts.
SORKIN: What does that mean both to equities but to the larger economy, as we look, remember, we’re in a presidential election year.
ACKMAN: Yeah. So I think it’s good for equities, as long as they bring rates down fast enough to avoid a meaningful recession.
SORKIN: By the way, talking just for a moment, because I mentioned the presidential election. You have been quite active online, about the election. One point you were supporting, or at least talking about Vivek Ramaswamy who appears no longer in the game. But you’ve also talked, you know, you’ve been a longtime Democrat. And you’ve been quite outspoken, it seems against President Biden. And so and I think a lot of people are trying to understand your politics today given sort of weird things have moved here.
ACKMAN: Sure. So one I’ve always been a centrist. Always believe in supporting was ever best for the country, Republican, Independent, Democrat. I think it’s really important that Biden steps aside says he’s going to step down. I think he’s just on the age, past his prime issue. I think a good part of the reason why we have what’s going on in the world geopolitically is he’s perceived as a weak president, and he will be even weaker in a year.
SORKIN: Does that mean that you would vote for president of President Trump against President Biden right now?
ACKMAN: You know, I’ll make that decision when I have the choice. But I would say when I’m hugely in favor of and actually coming here, right after this interview, is Dean Phillips he’s going to be with whole organization, Dean, a lot of people know what Dean Phillips is. He’s a 3 term congressman, from Minnesota, considered one of the most bipartisan congressmen. Super capable entrepreneur, Belvedere vodka, that kind of high end… but stick with me for a second. He’s gotten to 26% approval or percent of the vote poll in New Hampshire, from nothing in a very short period of time. He’s someone that people need to take a look at if Biden steps away and I’d love a world in which, imagine a world in which we have capable, young great motivated, energetic person on the Democratic ticket. And we had something you know, something similar on the Republican ticket and you went to the polls, and you weren’t sure who to vote for they’re both outstanding candidates. I think Phillips can be very interesting on the Democratic side, and my hope for Vivek was he was going to be that person on the Republican side. I expect he might surprise people, people think he’s out of the race. Maybe but if I think Haley someone. What’s interesting, I think about Haley, what I think is interesting about Phillips is that I think Democrats can support either of those two candidates.
SORKIN: Does that mean that you’re anybody but Biden at this point? And the reason I ask is you’ve also talked I think about former President Trump being dangerous historically. And so now you sound open to voting for former President Trump.
ACKMAN: My goal right now is to have good alternative to Trump and Biden. That’s my goal.
SORKIN: But if those if those are the choices –
ACKMAN: I’d make my decision then based on the state of the world, but I can’t imagine Biden I just am stunned that he hasn’t said he’s stepping aside and that is very, very, he will lose. Trump will be our next president, if Biden is the candidate for sure. I mean, and I think, you know, as Neil Ferguson’s has said, as he says, If Biden is president, and we’re in a very… stick with me his view is that the U.S. has great risk with Biden staying as President geopolitically but the Constitution is fine. With Trump as president, he’ll keep us safe, but constitutions at risk. That’s the choice.
SORKIN: Do you think your politics historically which have leaned to the left have been a mistake? And I asked because part of the whole political prism with which the arguments are on antisemitism and DEI, and freedom of speech, on campus and in bigger institutions is now seen that way? Do you made a mistake?
ACKMAN: I think that what the Democratic Party what left means today is not a party I want to be associated with and I think that’s been a big – I was a Bill Clinton, Democrat. And what the party has sort of — to, is not something I want anything to do with.
SORKIN: Do you want to have something to do with the Republican Party?
ACKMAN: I don’t want to be part of a party. I like being in the center. And if picking the right candidate. I’m tired of the country being about right and left. I want it to be about what’s right for the country.
SORKIN: Before our conversation was paused earlier, we were about to talk about Henry Kravis. These accusations about Business Insider which KKR owns and whether you’re going to sue them and sue him.
ACKMAN: I’m not suing Henry Kravis. Let me just be clear. Business Insider out up this story. It’s a rogue news organization. Okay, that’s what they are. I mean, check around you probably know this already. They’re owned by Axel Springer, which is the CEO of which is a real guy. Okay, I’ve had six or seven people close to me, call me and say, Mathias who’s CEO… Axel Springer, I thought was a legitimate company. Mathias is supposed to be a fantastic person, but they’re the control person, right? They own 100% or whatever management owns they own substantially all a Business Insider. They’re responsible for Business Insiders acts. And the best evidence of that is they put out the story. We’ve disputed it. They’ve confirmed that.
SORKIN: But do you think I guess my question is… I’ve written articles over the years… We’ve had disagreements about those articles. And you have felt in certain cases that they were unfair. I remember those conversations. Is this different to you? And is it different because of the facts or is it different because it’s your life?
ACKMAN: It’s different because of the facts. And also because it’s my wife, but let’s put it this way. If you wrote a story is saying Bill Ackman admitted insider trading, which is the academic equivalent of what they said about my wife. I would, certainly would call you but if you didn’t change the story, I would go to your editor. If your editor wouldn’t fix it, I would go to your president. I would go to the ultimate control person and that’s what I’ve done here. First, we object to the story to the Business Insider people and when they do nothing, then we complain to the Axel Springer management team or the board and when they do nothing, then at the end of the day, Henry Kravis controls 48% of the vote of this company with a phone call, he could fix this. So yes, the fact that this has gone on is now a week since this more than a week, Thursday was the beginning when they said that her thesis was marred by plagiarism. Neri Oxman thesis is marred by fraud. That’s what they said. And then and then the second story was Neri Oxman admits to fraud, i.e. plagiarism The third story is like we found a bunch of other examples which completely fictitious examples.
SORKIN: You have said that family is off limits. And that’s something you took to Twitter and you said historically, business people are not supposed to go after family and yet there are numerous instances where you have gone after members of families as part of some of this activism including around the universities. I want to just read you, this is Kara Swisher on X. She says “A okay to attack the wives of MIT folks, we can get into this in a sec of course, or talk about people being fired from jobs like it’s a human hunt and when economically attractive pals like Elon, you know, go after house speakers or the husbands of house speakers, file all of this effectively says under closeted billionaire cosplaying tough guy getting a taste of the endless I will use the word that rains down here on the rest of us surfs 24/7.” What do you what do you make of that?
ACKMAN: Well, first of all, I’ve not gone after anyone’s wife. I thought she was talking about Elon Musk.
SORKIN: I don’t think she’s talking about Elon Musk. He’s talking about at MIT, one of the board members, chair of the board, you have effectively said that the chair was funneling money, illegally, at least for tax purposes.
ACKMAN: Let me let me summarize. I can help you. I know the story better than you. Okay. So the chairman at MIT, there’s a guy named Mark Gorenberg. Mark Gorenberg so I had an MIT member the faculty share with me, he said Bill, do you think this is unusual? MIT is the only funder of this nonprofit, the CEO of which is the wife, the chairman at MIT. The chairman of MIT is the treasurer of this organization and MIT in their 990 is listed that’s their IRS disclosure as the only funder. Said Bill, what’s with this? I took a look at it. I said, how can this be? I tweeted about it? And then someone, a spokesperson said, “Well, no, that’s the MIT donor advised fund and Mr. Gorenberg funded the money to the donor advised fund and the donor advised fund funded the money to his wife’s charity. Now—
SORKIN: This is what it means about going out to the wife. This is going to impact the wife.
ACKMAN: Unless she’s involved in the business. She is involved in the business. Okay. The business, by the way, and this is a some little scoop we figured out recently I haven’t gotten around to tweeting about it the business is a DEI consultant, a nonprofit DEI consultant. The wife also owns apparently a for profit company. So you the DEI consultant determines whether or the nonprofit determines whether you’re supposed to sign a pledge saying you’re gonna keep various DEI things bit like companies have run around asking for an ESG pledge. And then they have a service which is a for profit service, where they sell you products, services, software or otherwise, to enable you to fix your DEI problem. Right. This is the chairman of MIT. And unfortunately, his wife who is the CEO of this business. I wasn’t purpose here was not an interest in the wife. But the wife is inextricably involved here. And the reason why this is tax fraud and has other problems is when you’re when you give money to a donor advised fund, the donor advised fund is not allowed to give money to something affiliated to a donor. So that’s problem number one. Problem number two is that this is MIT. Right? MIT has sponsored a couple of donor advised funds, and the goal is to get donors to give money to MIT affiliated things. And then also occasionally other things, this fidelity donor advised fund. You could never do this. And the benefit to him is his wife, even though MIT DAF is the only funder of his wife’s charity. They could this could not he couldn’t give money directly and get the same tax deduction. That’s the problem. So I, yes, I attacked the chairman of MIT. I thought it was fair game, okay, in light of what kind of what’s going on, and he’s putting at risk the tax exempt status of the donor advised fund.
SORKIN: Larger question though about your role as a both a donor, an influential figure in these in these instances. There are some people look at this and say, what is what is Bill Ackman have what is his right to be involved in any of this? Maybe as a shareholder you are, but should we be listening to the quote unquote billionaire class right? You’ve seen this critique? Should we be listening to these people over these people? And should the academics have more freedom and have more freedom from the money? What do you make of that?
ACKMAN: Sure so—
SORKIN: By the way, this is becoming a bigger issue at Harvard. Now. I want to get into the Harvard endowment in a moment, because that’s the next piece of the campaign that you’re going after.
ACKMAN: So, the answer is, if you don’t want to listen to me, don’t follow me. That’s number one. The reason why I can speak freely, and this is an unfortunate thing about society today. Today, if you say something that offends someone, you can lose your job. You can get blackballed. You can get cancelled. It happens on universities. I’m not afraid. I’m not afraid of being canceled, not afraid of losing my job, and financial independence, gives me the wherewithal to speak. And by the way, I’ve literally gotten thousands of emails, texts, letters, I can walk you back to my office and show you some of them and get them to come in every day. Piles of them. Okay, people saying, Bill, thank you for speaking on behalf of all of us. And, you know, my biggest driver in life I should have answered your question differently. This started pretty close to when I was 18, biggest driver was independence. I wanted to be able to speak freely with my life. And that motivates me to be successful. And, you know, I argue with success also comes responsibility. If I see something that’s a problem in society, I want to do something about it. And there are a lot of people have a lot of money and a lot of resources. You know, they sit on their yacht, which is fine, they’ve lived their life, and no one’s gonna criticize them or maybe they’ll catch them on the yacht and criticize them, right? In my case, I want to, you know, when I’m 85, looking back, I want to say you know what, I helped solve a number of important problems. If you can’t tell by now, I’m a fixer. Right. What is shareholder activism? Fixing companies. What is this helping to fix the universities? It’s all the same.
SORKIN: Let me ask one more question about that, and then want to talk about the Harvard endowment, which is, if you go back, you have a track record, in which you fix things and sometimes you fix them and you win in a very big way. You also fail in a big way too, right? You can even argue that you’re somebody who hits grand slam home runs, and at but also has a whole bunch of strikeouts throughout the process.
ACKMAN: I don’t think it’s accurate. If you look back at our history, we’ve had some big losses, sure, but the success vastly overwhelm, vastly overwhelm the failures, like the success rate is extremely high. And you should look at our record over time. So Valeant Herbalife, right disaster, okay, JCPenney smaller disaster, try to name 10. Right. We’ve made 100 investments. Well, more than 100.
SORKIN: Let’s let’s talk about the next fight that appears to be on your hands which is you were supporting, I think at least the reports had been the you’re supporting an overthrow of the folks who control the endowment at Harvard.
ACKMAN: Not accurate. So Harvard has a board of directors that elects itself. This is the most important board it’s the corporation board called the fellows of Harvard. They really control who gets who’s the president. Then there’s a group of alums that are part of something called the Board of Overseers, right about 30 or 32 of those. Each year, there are five or six seats that come up for election, in light of everything that’s gone down on campus, a group of four alumni, a very, very impressive group. You know, navy seal, marine corps, navy, all military people, but also brilliant. I know one of them. A guy named Alex Williams, Princeton, and he did a joint degree at Harvard Business School in Yale while he was going to Afghanistan. Super impressive guy. They’re very unhappy with what’s going on the Harvard campus. And they’re going to be need 3,200 signatures. By the way, if you’re a Harvard alum, go sign up and back to their campaign. And they’re gonna put themselves up for election to be on the Board of Overseers, which doesn’t have a lot of control. But the benefit of supporting them is it sends this incredible message to Harvard, gives them a mandate to look at things and their platform includes one of the issues they’re concerned about is a Harvard endowment earns at something like a four and a half percent compounded return for a decade in one of the best bull markets in history. I’m not allowed to disclose what our record has been during the period but the Harvard endowment will probably be, you know, 500 billion or something I’ve investing in Pershing or something instead of whatever they invested in, and so they’re gonna look into that.
SORKIN: So you think there’s, what are you suggesting?
ACKMAN: Well, since we, you know, what’s interesting about being in the position we’re in, we get inbounds I’ll share a couple of interesting inbounds and I guess the world will tell you whether it’s true or not. So Harvard lost apparently a billion dollars on a fraudulent situation.
SORKIN: What fraudulent situation?
ACKMAN: Apparently they bought like a forest in the Amazon or from Brazil, and the they included in their returns mark to market gains on the forest, right, but apparently they relied on marks each year from the person who sold them the forest, kept telling him that it was increasing in value until they, at some point, that bad things happened. It blew up and went to zero and had to write it off completely. At that point, it was worth over a billion dollars. So the employees who are getting paid incentives based on the increased value of this forest benefited and then Harvard took a huge wipe out. That’s never been disclosed publicly. Again, I have no—
SORKIN: We’re gonna have to fact check that.
ACKMAN: You’re going to have to fact check that. I’m just saying something I heard from a credible, very, very credible source. That’s one. The second one I heard was that a president of Harvard had a view on interest rates and decided and told the endowment to make drew to bet on rates and that bet lost a billion dollars. And so I got a couple of—
SORKIN: I want to follow up on that I’m a little anxious about putting that out in the public without without being able to fact check that in real time.
ACKMAN: Well, by the way, Harvard’s not a publicly traded thing. You don’t have to worry, Harvard should put out a statement. Is it true that the president of Harvard did a derivative trade effect causing them to do a derivative trade that lost money on rates about a billion dollars or anything close to it? And is it true that Harvard had an investment in a forest in South America or otherwise, that they mark to market each year they paid a couple few 100 million dollars for, increased in value to something approaching a billion and they were forced to write it off. Let’s ask the question instead of presenting it as fact.
SORKIN: We have to wrap up.
ACKMAN: But I have so much more to say.
SORKIN: I know you do. I just want to I want to end with this. When all this is said and done, do you want to be known as an activist investor? Do you want to be known as something else? I think there’s a real question sort of who Bill Ackman is supposed to be in all of this in the end.
ACKMAN: Sure. I want to be known as a good person who cares about society, a patriotic person who loves this country, a loyal alum that wants to help its University, a loving husband who wants to take care of my beautiful wife, and somebody who really cares about the truth and is prepared to go all in when important things show up, and I have the ability to affect change.
SORKIN: Bill Ackman. Thank you very, very much for the conversation today.
