Fedcap moves into key roles at Paul Smith’s

‘Turnaround Team’ tasked with improving communications, addressing key challenges facing college

By James M. Odato

The Manhattan job preparation enterprise proposing to acquire Paul Smith’s College is already involved with aspects of the school even without state approval of the merger.

“I understand that effectively they have taken over Paul Smith’s,” said John Dillon, a major donor and alumnus of the Adirondacks’ only four-year institution of higher education. He described the arrangement as “a friendly situation,” but like many interviewed in the past month, including honored donor Joan Weill, he did not have details about what is going on as proposed acquirer The Fedcap Group moves in.

Among college tasks shouldered by outsiders is communications, which James Malatras, former head of the state university system, is handling on behalf of Fedcap. Fedcap hopes to add Paul Smith’s to its diverse holdings, which work with underserved people.

Interim President Dan Kelting has pledged transparency to the campus community, yet details of the impending merger have not been shared with them to date.

 Kelting has declined to respond to inquiries from the Explorer since he was promoted from professor to interim president in early November, replacing the president installed by the Paul Smith’s board of trustees in August, Nicholas Hunt-Bull, now provost.

The State Education Department has been reviewing a petition for approval of the merger for several months, as has the Middle States Commission on Higher Education.

More than a month after asking him his role in the merger, Malatras, the former chancellor of the State University of New York, confirmed he is working for Fedcap.

“I am an unpaid advisor to The Fedcap Group helping advance various policy and operational improvements and integration in their core areas of service from health, K-12/higher education, and workforce training initiatives for various populations (e.g. foster kids, veterans, underserved communities) across their entire portfolio of more than 20 organizations,” he wrote. 

He declined to answer further questions and referred merger inquiries to Fedcap or the college. Representatives have not returned a reporter’s calls in recent weeks.

Campus communications

Kelting has issued memos to college personnel identifying Malatras and Fedcap officials as involved in solving the school’s greatest challenges, such as its low enrollment.

He said Malatras and Fedcap President Christine McMahon are on “The Turnaround Team,” according to a communication obtained by the Explorer. Others team members are Fedcap Chief Financial Officer Carol Khoury and Fedcap Senior Vice President of Business Development Lyell Ritchie, along with some college faculty and administrators, including Hunt-Bull.

Several college employees have said that any releases to the media about college affairs, such as photos by college staff, must be cleared by Malatras, identified by one as being in “our press office.” 

Malatras left his post as SUNY chancellor at the end of last year, and continues to receive $450,000 plus benefits from SUNY through mid-January. When he was in charge of the 64-school SUNY network, with 370,100 students and 29,374 faculty members, enrollment declined 15 percent.

He has been on study leave from SUNY Empire State College — where he once served as president — for most of 2022 and through mid-January, when he is eligible to assume a $186,600-per-year, tenured teaching position at the school, according to a copy of his contract provided by SUNY. Paul Smith’s, which does not offer tenure, has occupied some of Malatras’ time during his leave.

Kelting said in a recent memo to college personnel that “our most pressing need is to increase enrollment so that we have a freshman class next year of at least 300 students and a total enrollment of 800.” The college’s enrollment is around 650, according to one former employee. The college intends to enhance recruitment of students from Adirondack high schools.

He also wrote that The Fedcap Group envisions Paul Smith’s as a component in its organization’s goal of helping disadvantaged people to achieve economic well-being through college credits and degrees.

Kelting added that the college needs to improve “campus-wide engagement, starting with me … building the structure of transparency and open dialogue that is essential to engaged and informed decision-making.  None of us can succeed alone; progress and eventual success depend upon community and community requires communication.”

Legal troubles

Both the college and Fedcap have experienced signs of trouble within their communities with communication, according to litigation by people who have worked for or with them.

A pending U.S. District Court lawsuit against Paul Smith’s College by Tess Eidem, a former professor and biology program coordinator, claims the school denied her equal employment and improperly responded to her concerns about a “toxic gender discrimination environment.” 

The suit states that school officials retaliated against her for being outspoken about alleged discriminatory practices during 2018 and 2019. She said students turned to her about the college’s “lack of action in addressing on-campus rapes, assaults, and other gender discriminatory practices.”

“Administrators stated that no attention should be paid to these student concerns as these are just examples of “kids having fun” and that this is what you should expect when “kids get drunk,”’ the 2021 complaint stated. The college denied the accusations and took steps to settle the case.

Lawsuits against Fedcap, involving claims of shorting workers of compensation or improper billing, have been disputed by Fedcap, which agreed to private settlements.

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