For Richard Parsons, controversy is inescapable, even in paradise.

Chosen by University of Hawai'i at Mānoa Chancellor Virginia Hinshaw as the 2009 Dan and Maggie Inouye Distinguished Chair in Democratic Ideals, Parsons, chairman of the board at Citigroup Inc. and former chief executive of Time Warner, is at the heart of the national economic crisis. For many members of the university community, that distinction should have disqualified him for an award that, in the past, has honored champions of the oppressed.

"Parsons has a deserved reputation as a corporate leader who has been willing to devote considerable time to charitable and civic causes," said economics professor Sumner La Croix. "That said, he has been a director of Citigroup since the mid-1990s and bears direct responsibility for failing to rein in Citigroup's reckless business decisions over the last six years."

Ira Rohter, a professor of political science at UH Mānoa, agreed, adding that the selection was likely made to boost the institution's bottom line.

"One of the roles of the chancellor is to raise funds to run the university, so obviously you go to those connected to the elites who run things to do that successfully," he said. "Parsons has lots of finance and political connections, including being an associate of New York City mayors and an economic adviser to President Obama, which explains how all the guys who caused the financial crash are bailing out their buddies."

Some faculty members felt that honoring Parsons, who co-chaired former President Bush's commission on social security, will enhance the reputation of the Mānoa campus.

"Richard Parsons is a very good choice," said Vance Roley, dean of the Shidler College of Business. "He was just appointed as the Citigroup chair about three months ago and was not part of the problem, but will hopefully be part of the solution. This should help our public image."

Participants in the award's nominating committee, composed of faculty from the department of American studies and the William S. Richardson Law School, asked Parsons to address the financial meltdown in his keynote address on April 7, however, because of his relationship with companies affected by the recession.

"When we selected Parsons, who is known as an excellent crisis manager in the business world, our intent was to bring in someone to discuss the business of media in a time of economic turmoil," said Robert Perkinson, graduate chair of UH Mānoa's American studies program. "Because of the controversy surrounding Citi, though, we asked him to change the topic of his keynote speech from business management to the financial crisis he is part of."

To Perkinson, events held by Parsons this week are an opportunity to ask tough fiscal questions of one of the nation's highest financial executives.

"Just because he's been asked to serve as the Inouye Chair doesn't mean the committee agrees with everything that he and Citi have done," Perkison said. "For example, it was recently reported that Citi's CEO, Viktor Pandit, received $38.2 million in total compensation last year and, as it turns out, Richard Parsons chaired Citi's compensation committee at the same time."

No state funds were used to bring the business leader to campus, according to UH Mānoa spokesperson Gregg Takayama, who said that all expenses were paid through a privately funded endowment hosted by the UH Foundation.

"An honorarium is offered to all Inouye Chair holders," Takayama said. "Again, this honorarium is not funded through UH, but through the Inouye Chair endowment."

Established in 2005, the Dan and Maggie Inouye Distinguished Chair in Democratic Ideals has raised nearly $3 million from more than 1,000 donors, said Margot Shrire, director of communications for the UH Foundation. The honor recognizes the public service of Senator Inouye to Hawai'i, as well as his late wife's work in education.

Parsons, who attended UH Mānoa from 1964 to 1968 and met his wife at the college, did not address questions surrounding his reception of the Inouye Chair during a meeting with reporters, but instead focused on the causes and consequences of the recession.

"As financial engineers began to see a desire for higher yields on investments, they began to create products to match that desire," Parsons said. "Then, guys who created new products and models convinced rating agencies to rate those products at the level they wanted."

Collectively owned sets of mortgages, called collateralized mortgage obligations, hastened the economic crisis once the real estate market plummeted, Parsons said.

"With collateralized mortgage obligations, the poison got outside individual bank portfolios and was sold to investors all around the world," he said.

Credit default swaps, which Parsons referred to as "nothing more than insurance policies for investments," are also part of the problem.

"Companies like AIG started issuing billions and billions and billions of insurance policies in a completely unregulated way," he said. "That accelerated everything. Today, economists estimate the nominal value of credit default swaps at $62 trillion. By comparison, the world's entire gross domestic product is estimated at $65 trillion."

Bankers are being unfairly targeted by the public and the media, Parsons said.

"There's no doubt the compensation structure that Wall Street has implemented needs to and will undergo some serious change and modification,"he said. "That said, to demonize the bankers alone for creating this financial meltdown is both inaccurate and shortsighted."

Instead of pointing fingers, Parsons believes people need to look inward and examine their own role in amplifying the recession.

"Everybody participated in pumping up this balloon, but now the balloon has deflated," he said. "Everybody, in reality, shares some part of the blame, but it's much more in the culture to find a villain and vilify the villain."