New Haven Independent

Why? Because Wachovia is the trustee of Commonfund. Commonfund manages $42 billion in assets for colleges and non profits nationwide, including funds from Connecticut colleges and universities.

The Wachovia move — and its possible consequences — are yet another example of the ripple effect of the wreckage on Wall Street.

This week Commonfund restricted redemptions from the fund and said its assets would be liquidated. The move may affect the financial positions of any Connecticut colleges and nonprofits that use Commonfund for short-term accounts.
Even if Wachovia and Commonfund ultimately release the dollars (after the initial shock, Wachovia suggested funds may be released by 2010), organizations may have difficulty paying vendors or even worse, meeting payroll. Connecticut colleges may be less affected than Minnesota, or the University of Vermont, but every dollar counts now.

The endowments of many colleges have already been hit by sharp downturns in the market.

Wachovia is one of many banks seeking a buyer. It appears that the Wells Fargo move is a better deal for Wachovia shareholders than the alternative proposed merger with Citibank, but it is unclear what the terms of the Wells Fargo merger are and what the fate of Commonfund participants will be.

Even if colleges get their money back from Commonfund, it may take time and thus hurt cash flow.

Financial aid for students, and access to a college degree, may be affected.
In a knowledge economy, access to higher education is crucial not only for future students, but also for an educated workforce and job creation.

Gov. Rell and Attorney General Blumenthal are best positioned to reach out to nonprofits — and to Wachovia — to protect our universities. Bob Steele, president of Wachovia, lives right here in Greenwich.

We should take advantage of that.

Pat Dillon is a state representative from New Haven.