Rust, USIU President 37 Years, Is Benched by Troubled School

William C. Rust, who guided United States International University as president for 37 years, was stripped of all governing power Thursday by the school’s trustees. The move was described as an effort to restore financial and academic equilibrium to a troubled campus.

At a Tuesday board meeting that Rust didn’t attend because of a business trip to Japan, the charter president of the San Diego-based school was named chancellor emeritus, which, in effect, reduced him to a figurehead.

Acting president Kenneth McLennan confirmed at a Thursday press conference that Rust no longer has “operational or direct control over any function of the university.”

In mid-December, the university’s board had announced that Rust would step down as president of the troubled school but would be named to a newly created post of chancellor.

Reached at his home in Rancho Bernardo Thursday, Rust appeared stunned by the action, which eight members of the 12-member board approved.

“I don’t have any comment. . . . I’ve been away,” Rust said. “I’m not going to comment on something. . . . Let’s just say I will comment later. Later, I will have something to say.”

“He’s a man of enormous capacity and endurance,” McLennan, 64, a former Marine Corps general, said of Rust. “He’s the hardest worker I’ve ever met, and, as a military man, I met a lot of hard workers. He had a wonderful vision of education and the role of education in promoting world peace. He’s an absolute visionary.

“But he readily admits he is not a good administrator, and it was weakness in this area that, unfortunately, led to the man’s demise. He helped to create many of the problems the university now has.”

McLennan said USIU has had “severe” problems with the Western Assn. of Schools and Colleges (WASC), which regulates academic accreditation.

The school has 3,450 students, 1,700 in San Diego and the rest on campuses scattered from London to Mexico City to Nairobi.

But, McLennan said, the academic irregularities pale in comparison to the school’s far more serious problem of money, or the lack of it, “because it threatens our survival.”

USIU, which owns 74% of KUSI-TV (Channel 51) hopes to sell its interest in the station, as well as “a substantial amount of real estate,” McLennan said, adding that the school has debts topping $25 million, with an annual budget of $20 million and annual expenses of about $12 million. He said the university’s assets, particularly in television and real estate, total $125 million, “but until we can sell some of those things, they won’t do us much good.”

McLennan said negotiations are proceeding with the Arby Corp., which owns TV stations in Boston, Cincinnati and other cities, and which wants to buy KUSI. The problem, he said, is that minority stockholder Michael McKinnon, who owns 26% of the station, does not wish to sell his shares and, because of a stipulation in their agreement, USIU cannot sell the station without McKinnon’s approval.

“The arrangement with McKinnon is such that he can block the sale,” McLennan said. “As it is, the considerable profit earned by the television station is reinvested in the station and provides no income to the university at all. We have enormous income in terms of assets, but, at the moment, it’s not helping in terms of cash flow. We’re committed to selling the station and hope that, eventually, we can.”

In commenting on a recent newspaper article in which a disgruntled graduate student equated Rust’s fall with the tearing down of the Berlin Wall, McLennan chuckled and said Rust “is a very strong character. He has a host of enemies and friends. He’s the kind of guy you’re either for or against. People on either side of the Rust issue tend to be visceral about their feelings. But I think to accomplish what he accomplished took an enormous amount of courage and drive and tenacity.”

McLennan characterized those accomplishments as the setting up of a campus that provides “an alternative education “while producing world leaders.” But in hoping to execute that vision, Rust’s critics say, he became overzealous and insensitive, and in the words of W. R. Coulson, former chairman of the psychology department, “The Rust dream ended up a nightmare.”

Coulson, who was fired last August and now has a lawsuit pending against the school, said his problems with Rust began over “an ethical issue” involving accreditation.

He said that USIU set up a division in Canada without the permission of WASC, the recognized accreditation agency, and was later forced to shut the division.

“I was appointed chair of the department, and when the students brought the matter to my attention, I didn’t know we even had students in Canada. . . . So, I wrote about this to WASC, and when the agency came on campus, I, of course, was the first person they wanted to talk to. . . .

“Now, the university has to show cause by March 15, 1991, about why accreditation shouldn’t be taken away.”

Acting president McLennan, who expects to have the job only until the end of the year, called the Canadian accreditation episode “an administrative failing on the part of the university.”

“We’ve since acknowledged our error in this respect and hope we can develop a program that meets the requirement for continued accreditation.”