UA-R-GC-1914-01-01-1984-02-22_Page-025

.. MINUTES GOVERNMENT RELATIONS COMMITTEE CAIRO, FEBRUARY 1983 PRESENT: Mr. Aldrich, Dr. Bartlett, Mrs. Bartlett, Mr. Dutton, Mr. Eilts, Dr. Pedersen, Mr. Schieren 1. Indirect costs General explanation of what indirect costs are, their effect on the University's budget, and the status of negotiations with AID concerning our own figure. Dr. Pedersen noted that he expected the final figure to be somewhere aroun 130%. The final figure could mean an additional $1 million per year to the University. It was expected that there would be a settlement by April. 2. Long Range Financing a. Discussion of Trust Agreement Option for LE income after 1985/86. Dr. Pedersen explained that if we successfully negotiated a Trust Agreement for funds from the U.S./Egyptian special LE account we could establish an endowmennt for AUG as a protective device while maintaining U.S. Government support. AUG has already received LE100,000 for this account for the Brown Lectures and there have been two precedents for use of these funds by "development" agencies -­Catholic Relief Services and CARE. Drawbacks to pursuing this option included possible resistance by the Egyptians, as the Trust Account Agreement had been vigorously opposed in the mid-1970's by Hegazi. Dr. Bartlett suggested asking for a percentage of the entire amount in the Special Account (funds accumulated from internal Egyptian sales of U.S. commodi­ties), rather than a fixed figure. He emphasized the opportunity that AUC has at this point in time to secure a large future income, and that we should take advantage of any chance we can. b. Endowment vs. Straight Budget Support Dr. Bartlett admitted that the use of Egyptian pounds as endowment for an American institution would have an inflationary effect on the Egyptian economy, an objection t .he Eqyptian Government should be expected to raise in negotiations for a Trust Account Agreement. Mr. Aldrich and Mr. Eilts suggested that maybe a compromise between endow­ment and Straight Budget Support could be worked out, where AUG could work off ~nterest from the endowment, but have the right to invade the principal should lt need to do so. . The consensus among members of the committee was that we should take a more op:n~minded approach at least until we see how the Egyptian government re­celves our proposals