April 26 (Bloomberg) -- Dartmouth College will host a different breed of guest lecturer this week -- a convicted felon.

Donald Snede, who pleaded guilty in 1992 to securities fraud in connection with the collapse of Midwest Federal Savings & Loan Association, will engage in an ``ethics fireside chat'' with students at the Hanover, New Hampshire, college.

The invitation to Snede underscores how elite colleges are grappling with ethics issues amid recent scandals. The topic has shot to the head of the agenda with accusations of rape at Duke University resulting in two arrests, and an insider-trading scheme at Goldman Sachs Group Inc. and Merrill Lynch & Co. allegedly involving a Harvard University graduate. Harvard also said yesterday it's investigating a student-author who said she unintentionally took passages from other books.

``Ivy Leaguers are hard-driving, talented people, and the temptation to get ahead by any means is just as prevalent there,'' says Ronald Green, director of Dartmouth's Ethics Institute. ``If they see people around them gaming the system, they are quick to pick up on that. Maybe quicker.''

Schools in the U.S. and overseas are also taking such measures as conducting more extensive background checks on applicants, sending misbehaving students away for entire terms, and expanding ethics courses.

``Is it wrong for people to misbehave when they have been given great opportunities? I think absolutely it is,'' says Ron James, president of the Center for Ethical Business Cultures at Minneapolis-based University of St. Thomas.

`Not Your Degree'

Hank Shea, 49, is an assistant U.S. attorney in Minnesota who will join Snede at Dartmouth's Amos Tuck School of Business Administration to participate in tomorrow's talk as part of a program to allow white-collar criminals to share their experiences. Shea says when he began prosecuting such offenders, he thought graduates of elite schools would know better. He's changed his mind.

``Where you go to school is not going to dictate how you are going to behave,'' says Shea, 49, ``It is not your degree. It is not your last name. It is what kind of person you are.''

Snede earned an M.B.A. at the University of St. Thomas before becoming an executive at Minneapolis-based Midwest Federal. Snede cooperated in the investigation and was incarcerated for two months.

Big Temptations

Harvard said on April 25 it would look into the case of student Kaavya Viswanathan, who said she inadvertently adopted passages from other books for her own novel. Viswanathan said she had read and ``internalized'' works by author Megan McCafferty.

McCafferty's agent, Joanna Pulcini, said at least 45 passages in Viswanathan's book are similar to McCafferty's books ``Sloppy Firsts'' and ``Second Helpings.''

The scope of the probe wasn't disclosed. Harvard's plagiarism policies only apply to course work and don't cover Viswanathan, said Robert Mitchell, spokesman for the undergraduate College of Arts and Sciences.

Mitchell said he wouldn't comment on whether Viswanathan would be admitted to the school now given the accusations. Dean of Admissions William Fitzsimmons's office directed all requests for a response to university spokesman Joe Wrinn, who declined to comment.

Two Duke lacrosse players were arrested on April 18 after a black woman said she was raped last month at a party held by the team. On April 5, lacrosse coach Mike Pressler resigned and the university in Durham, North Carolina, canceled the team's season.

Employees Charged

Arrested were Reade Seligmann, 20, a graduate of the Delbarton School, a prep school in Morristown, New Jersey, and Collin Finnerty, 19, who graduated from Chaminade High School, a Catholic academy in Mineola, New York.

On April 11, U.S. prosecutors charged employees at Merrill Lynch and Goldman Sachs with making $6.7 million on insider trades. One of the accused, Eugene Plotkin, 26, graduated with honors with a degree in economics from Harvard before going to work for Goldman. Another, Stanislav Shpigelman, 23, a mergers and acquisitions specialist at Merrill, was a student at the State University of New York at Binghamton when he befriended Plotkin, prosecutors say.

The lapse in ethics isn't exclusively a U.S. phenomenon.

In November, Phillip Bennett, 57, the former chief executive officer of New York-based Refco Inc., pleaded not guilty to fraud charges stemming from disclosures that he hid $430 million in company debt. Bennett has a master's degree from the University of Cambridge in the U.K.

`Pirate of Prague'

Viktor Kozeny, dubbed the ``Pirate of Prague,'' is sitting in a Bahamas jail fighting extradition to the U.S., where Manhattan District Attorney Robert Morgenthau charged him in 2003 with stealing $182 million from investors. Kozeny graduated from Harvard in 1989 with a bachelor's degree in economics.

Ecole Nationale d'Administration, a graduate school for civil servants in Strasbourg, France, counts among its alumni former Prime Minister Alain Juppe. Juppe, 60, received a suspended 18-month sentence in 2004 from a French court in connection with illegal political party funding.

Sometimes the trouble comes when people with good values become engrossed in pursuing a single objective and lose perspective, says Francisco Benzoni, 39, who teaches ethics at the Fuqua School of Business at Duke.

``You can see the intense focus on a narrow goal, making your numbers, so everything else becomes bleached out,'' says Benzoni.

Examples of this behavior often emerge in commercial scientific research and entrepreneurial startups, says Leigh Hafrey, 54, a senior lecturer at the Massachusetts Institute of Techology's Sloan School of Management in Cambridge, Massachusetts.

`Live in a Bubble'

These enterprises carry with them the narrow focus to succeed or bring forward a new product or technology such as genetic engineering, nanotechnology and robotics that could have drastic societal consequences, Hafrey says.

Dartmouth's Green says it's important to keep small groups from becoming too exclusive on campus. Problems often arise when sports teams or fraternities and sororities get too isolated from the rest of the school and begin to develop their own morality.

It's no surprise that big athletic programs that have special privileges and are recruited and live separately from the rest of the campus are sometimes involved in sex scandals, Green says. ``They live in a bubble that makes them think no one is watching.''

`Parkhurst Vacation'

Dartmouth has something called a ``Parkhurst vacation,'' Green says. Parkhurst Hall is where the administration offices are located, and when students are caught doing something seriously wrong, they are suspended for a term.

``People who step out of line are punished,'' Green says. ``It is good for those people and it is good for their peers.''

Ecole Nationale d'Administration has extended to a full week a two-day course on the legal responsibilities of public servants. Among the topics added to the ``professional ethics'' curriculum at the school: international anti-corruption laws and how to handle insider information.

Some schools look to keep out students they perceive to be ethical threats.

During a candidates' weekend at Olin College of Engineering in Needham, Massachusetts, a potential student talked about how much he was looking forward to partying and drinking when school started in September.

The student -- one of a select group invited to the exclusive engineering school, which pays full tuition for all who attend -- was immediately dropped from consideration as an applicant, says Duncan Murdoch, dean of admissions.

``The personal attributes of the candidate are as important as the academic power of the candidate,'' Murdoch, 66, says.

Richard Schmalensee, 62, dean of MIT's Sloan School, says the school conducts background checks on a random sample of its applicants. In March of last year, Sloan, Harvard Business School and other institutions rejected candidates who allegedly broke into an online database to find out their admissions status before the schools were scheduled to notify students.

Schmalensee and other experts say ethical behavior must pervade college life and be ingrained in the campus culture.

``You do values all the time or they are not values,'' he says.

To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net.

Last Updated: April 26, 2006 00:02 EDT