Make That 'Dr. Chainsaw'

Al Dunlap, banished from public corporations following the Sunbeam collapse, gets an honorary degree from Florida State

When Florida State University students returned to campus this fall, they found themselves basking in the largesse of one of the school's newest honorary doctors—Albert Dunlap of Ocala, Fla., listed by FSU as an "entrepreneur and philanthropist." Dunlap, of course, is better known by the sobriquet "Chainsaw Al" for his rough-and-tumble approach to management. He is probably the only honorary graduate of FSU who sports a lifetime ban from top jobs at public companies following the 2001 bankruptcy of appliance maker Sunbeam, where he was chief executive.

Dunlap—who earned his nickname for gutting the companies he headed and his my-way-or-the-highway treatment of his executives—was awarded the honorary degree in April, a year after he and his wife committed $5 million to FSU to help fund a Student Success Center and other programs. He can afford it. In 2002, Dunlap had an approximate net worth of $100 million, minus a $500,000 payment to the Securities & Exchange Commission to settle charges that he cooked the books at Sunbeam. As part of the settlement, he didn't admit or deny the SEC's charges.

Strangely, Dunlap's notorious past stirred little controversy on the FSU campus when the honorary degree was announced. "I guess 10 million is 10 million," says Ceasar Douglas, associate professor of management at FSU's business school. Douglas stressed that the matter was decided by administration and had nothing to do with the B-school. "You are trying to run a program that touts ethics, and it's pretty difficult to do that and bring a guy in who has had ethical difficulties, as a featured speaker," he says of a visit Dunlap paid to campus in 2006. "It wasn't well received over here."

Controversial Gift

Dunlap's donation will go toward the 50,000-square-foot Student Success Center, which will include classrooms, interview space, and a resource center. (The $5 million from Dunlap will be matched by the state.) A lengthy and glowing 2006 press release announcing the donation mentions his horse farm in Ocala, his childhood in blue-collar Hoboken, N.J., his West Point degree, and his love for German shepherds. The only hint of the "Chainsaw" Wall Street knew and initially loved is this bit: "During his business career, Dunlap was a top CEO, running nine companies in the United States, Australia, and England. He never shied away from the controversy that so often comes with leadership. In 1995, he was voted the most admired executive in a survey of 3,300 chief executive officers throughout the country."

Not that the Dunlap gift passed completely without notice. As the blogger for RepMan, Steve Cody, managing partner and co-founder of public-relations firm Peppercom, asked, "What's next: The OJ Simpson School of Sports Management at USC?" "There've been some jokes cracked, but there haven't been real issues," says one faculty member, who asked not to be named. "People are concerned about the school's reputation," he adds.

Frank Murphy, an FSU spokesman, says the school was well aware of the controversy that Dunlap engenders and therefore would likely accompany the gift and the honorary degree. But he says that the letters of recommendation the school received and Dunlap's belief that "higher education is the great equalizer" tipped the scales in favor of accepting the gift. "There's no doubt that he's a controversial person," Murphy says. "He has told students that himself. But there were times in his career when he was revered."

Names of Dubious Distinction

There's a precedent for big financial gifts that are linked to questionable names. In 1999, Enron Chairman Ken Lay donated $1.1 million to endow the Kenneth L. Lay Chair in Economics at the University of Missouri-Columbia. Before his death in 2006, Lay was convicted of fraud and conspiracy in Enron's spectacular collapse, but his name remains on the professorship, which has never been filled. "It's not unusual for these kinds of positions to take this long," says Christian Basi, a university spokesperson.

A. Alfred Taubman spent a year in jail after being convicted in 2001 for price fixing as a former chairman at Sotheby's auction house, but that doesn't stop his name from appearing on important buildings at the University of Michigan in Ann Arbor. Michigan's Taubman Medical Library, Taubman Health Care Center, and Taubman College of Architecture & Urban Planning all continue to bear his name because of his significant gifts. The school said in an e-mail statement this week that Taubman "has continued to be a generous supporter of the University" and reaffirmed its decision to keep the names.

Schools don't necessarily turn a blind eye when their donors and illustrious graduates fall from grace. Former junk-bond king Michael Milken's name was removed from the Wharton Business School Hall of Fame in 1990—a month after he reached a plea bargain with officials for securities violations.

And in 2005 the building that houses Seton Hall University's Stillman School of Business was renamed Jubilee Hall—from Kozlowski Hall—after its endower, former Tyco International (TYC) Chief Executive L. Dennis Kozlowski, was convicted of looting the company of $600 million. According to the school, Kozlowski asked that his name be taken off the building.

Low Profile

Dunlap doesn't have a listed phoned number in Ocala and couldn't be reached for comment. He's quoted in the FSU news release as warning, "if you are going to be a leader, you will be criticized—and sometimes very severely criticized. But criticism is the price of leadership, and I think it's a price well paid."

Nonetheless, during a visit to campus last year, Dunlap kept a fairly low profile, as did the school. "We kind of found out by word-of-mouth or by accident," says Professor Douglas of Dunlap's visit. What's more, says Douglas: "He didn't come anywhere near the business school."

Before it's here, it's on the Bloomberg Terminal.