During the past several weeks, the traditional media and blogs dedicated to watching academia have been filled with stories about an obscure Cambridge, Mass.-based company called eSapience. This company, which “specializes in designing and executing highly targeted strategic policy campaigns in support of high-stakes business issues,” i.e. putting “spin” on unpopular activities by corporations and prominent business people, filed suit in early March against the former CEO of AIG Insurance, Hank Greenberg, for failure to pay more than $2 million in fees owed to eSapience.

A lawsuit by a public relations, media management firm against a disgraced executive is hardly worth news coverage these days. What makes the eSapience case so interesting is that, apparently, eSapience hires prominent professors, including the dean of the Massachusetts Institute of Technology’s Sloan School of Management, to put on conferences at various places, including universities of the caliber of New York University.

One of the purposes of these conferences is to give their clients an opportunity to state their cases in a positive light and rehabilitate themselves in the public eye. Indeed, according to memorandum published by the New Republic, eSapience promised to “blunt and/or change the conversations that influential people, including public intellectuals, have about the set of issues we are asked to manage.”

Today, very few university professors aspire to live in an “ivory tower.” Instead, most of today’s ambitious professors work toward becoming public figures, with guest spots on television talk shows, op-ed pieces in major national newspapers and, best of all, being called a “public intellectual” by the media. Indeed, universities encourage this and often publish lists of faculty who are willing to speak out on current issues.

Universities today also expect faculty to be entrepreneurial and to use their research to produce products and services that will benefit the community. There has grown up a whole industry devoted to technology transfer just for this purpose.

These activities are, in my opinion, a good thing. Universities ought not to be isolated from their communities. They should help their states and the nation, if not the world, not only through their teaching but also their research. And there is no reason why both universities and individual members ought not derive some economic benefit from such activities.

But the eSapience case demonstrates that universities need to develop sophisticated codes of ethics for faculty members who engage in such activities and need to monitor them carefully. One must ask whether using the academic reputations of faculty and universities to help disgraced business executives is a proper activity for university-based consulting. Universities are already very careful to monitor potential donations that might carry inappropriate conditions or undesirable purposes. The activities of eSapience, which have caused the current media frenzy, are just the sort of thing what can backfire.

Rather than help the client, they taint both the faculty and the universities involved. Universities should never sell their reputations or permit faculty to do this on their behalf, even if there are lucrative rewards. The eSapience case can stand as a reminder for all universities, their faculty and their administrators of the dangers of such things. As the saying goes, “but for the grace of God :”