Stevens, How John Searle and the Chicago Supermob Took Out Northwestern University

In 1851, the Illinois state legislature passed “An Act to Incorporate The Northwestern University,” an institution to be run under the control and patronage of several Midwest Methodist Conferences. In 1867, the charter’s last amendment required a “majority of the whole Board shall be members of the Methodist Episcopal Church.” In 1972, Northwestern changed its governance rules and removed the obligation to appoint Methodists, in violation of its charter. Enacted by affiliates of the Chicago Supermob, the new bylaws allowed those running Northwestern to appoint their non-Methodist friends and relatives to the board. Had Northwestern simply wanted to avoid religious entanglements, it could have reincorporated under state nonprofit laws, as did the University of Chicago, originally Baptist affiliated. Or Northwestern could have petitioned a state court to permit deviations from the charter. Motivated by the charter’s immunities from commercial real estate taxes and other financial opportunities beneficial to trustees and their associates, Northwestern continues to operate under a charter whose privileges its leaders had de facto forfeited. The Article draws on archival sources and original research on nonprofit case law as applied to private universities to explain why Northwestern ‘s actions should prompt scire facias proceedings and a de jure declaration that Northwestern has forfeited its charter. The case study of Northwestern is situated in the broader context of legal scholarship critical of the philanthropy complex and failures of nonprofit law to enforce mission adherence at private universities. The Article concludes by proposing laws to insure nonprofits prioritize the public good and not the private interests of their donors, directors, and officials.