George Mason University’s Donor Problem and the Fight for Transparency

The public stakes of private donor influence.
By Bethany L. Letiecq

As states have divested from higher education, public universities have become increasingly reliant on private philanthropic giving. However, relationships between universities and private donors can be fraught with conflicts of interest and challenges to academic independence, especially when private gifts come with strings attached. The terms and conditions of donor gift agreements can unduly influence faculty hiring and retention, academic programming, and research production and, over time, can alter a university’s mission and structure.  

In the past, philanthropic giving to public universities was often unrestricted and directed to an institution’s endowment or general fund; in other words, colleges and universities could use donor gifts for whatever purposes they deemed appropriate. Donors presumably believed in the public educational mission and trusted universities as stewards of their philanthropy. However, as state divestment took hold in the 1980s, there was a concomitant shift in the philosophy behind philanthropic giving. It is now common for donors to target and restrict their gifts through terms and conditions specified in gift agreements to safeguard their charitable intent. Rather than subscribe to the mission of the university, many donors now seek to influence the university to ensure that their own mission is furthered, even if—as is often the case when donors seek to advance a free-market, antitax, antigovernment agenda—that mission runs counter to public higher education itself.

The growing dependence on philanthropic giving, coupled with the shift toward donor empowerment to restrict gifts, has rendered universities vulnerable to undue outside influence. The lack of transparency in gift agreements—particularly in states without robust sunshine laws—also makes it difficult, if not impossible, for faculty members, students, and the public at large to follow the money and determine whether those agreements compromise an institution’s academic independence and commitment to the public good.

My own institution, George Mason University, is a case in point. GMU, which was established in 1972, is a relatively new public institution of higher education with a very small endowment. Like so many other public universities, it has aggressively pursued private philanthropic giving from wealthy donors. One of its most significant and secretive benefactors has been Charles Koch, the billionaire industrialist who promotes a libertarian ideology and free-market economics. For nearly ten years, GMU faculty and students have asked the university to make public the Koch-GMU gift agreements in order to understand how the agreements were structured and what Koch got in exchange for his targeted giving. Then, in 2016, the first of several Koch-funded gift agreements surfaced, exposing undue donor influence and egregious violations of academic freedom and independence.

These revelations propelled a campaign for transparency at GMU involving the local AAUP chapter, the faculty senate, a student-led organization, and allied groups. Together, these groups ultimately succeeded in pushing the university to undertake an internal gift-agreement review and develop a new gift-agreement policy.

Charles Koch, Benefactor

Beginning in the 1980s, Charles Koch took an interest in GMU for its proximity to Washington, DC, and its potential to become a stronghold of libertarian economics. Between 2005 and 2015, Charles Koch and the Charles Koch Foundation contributed what is estimated to have been nearly $100 million to GMU, directing most of those funds to the economics department (which is now dominated by libertarian-leaning economists) and the GMU law school’s Law and Economic Center, which provides corporate-backed “free-market” educational workshops for federal and state judges and attorneys general.

The Charles Koch Foundation also funds two other entities housed on GMU’s campus: the Mercatus Center, a libertarian think tank known for its lobbying efforts in connection with the American Legislative Exchange Council and other conservative “bill mills,” and the Institute for Humane Studies (IHS), which recruits faculty and students to advance a libertarian ideology and free-market economic principles in higher education, among other goals. Mercatus and the IHS have complicated and curious affiliations with the university: they pay little to no rent for their campus offices; the entities use the Mason brand liberally; their staffs receive university benefits, such as tuition waivers; and the entities have their own private gmu.edu servers. Charles Koch, Charles Koch Foundation representatives, and Koch-funded faculty sit on the boards of both entities, and Koch is chair of the IHS. GMU has virtually no oversight of either corporation, yet both benefit from their affiliation with GMU, which provides them with a veneer of academic and intellectual legitimacy.

Like most other universities, GMU has a foundation to cultivate and manage philanthropic giving. Money flows from the Charles Koch Foundation through the GMU Foundation to the unit, entity, or faculty member, along with the terms and conditions stipulated by the gift agreement. Because the GMU Foundation, Mercatus, and the IHS are all 501(c)(3) nonprofit organizations, they are not subject to Virginia’s Freedom of Information Act. Thus, it is nearly impossible to follow the money at our public institution, to uncover the terms and conditions of gift agreements, or to protect against undue donor influence and academic abuses. Unless the GMU Foundation willingly makes gift agreements public, we cannot know if gifts have troubling strings attached that may violate the university’s mission or principles of academic freedom, academic control, or shared governance. At GMU and at many other public universities, only the university president, the president of the foundation, and a few others are privy to the terms and conditions of gift agreements.

To be sure, restricted donor giving occurs across the political and ideological spectrum, and GMU is not unique in its practices or structure or in its lack of transparency. However, there is a great deal of evidence that conservative donors like Charles Koch, often as part of larger, ideologically motivated “dark-money” donor networks, have set their sights on the academy, seeking to influence it for their own political and economic gain. The journalist Jane Mayer has documented these hidden networks and their motives in her book Dark Money, as has historian Nancy MacLean in Democracy in Chains. UnKoch My Campus, a nonprofit organization working to expose undue donor influence in education, and other investigative groups have likewise detailed the antigovernment, antitax, and anti-public-education agenda of Koch and his affiliated donor networks.

At GMU, when asked about the terms and conditions of gift agreements, administrators say, in effect, “Trust us, we would not allow donors to violate our mission or the principles of academic freedom.” Yet, these same individuals receive significant portions of their salaries from the very university foundations that are funded by wealthy donors seeking to safeguard their charitable intent (GMU’s president, Ángel Cabrera, receives an estimated 75 percent of his salary from the GMU Foundation). Without complete transparency, it is difficult to be aware of, let alone manage, institutional or individual conflicts of interest.

Calls for Transparency

In February 2011, after reading Jane Mayer’s New Yorker exposé on the relationship between Charles Koch and GMU, several members of the GMU faculty senate established a task force to examine the agreements between GMU and private donors. The task force was charged with evaluating the impact of these agreements on the teaching and research missions of the university, the university’s mission to serve the public good, the university’s resources, and the university’s image. The faculty senate, in explaining its rationale for forming the task force, cited “growing concern both within higher education and among the general public about conflicts of interest and lack of transparency in the scholarship, public presentations, and official testimony of university professors and researchers.”

Students, meanwhile, formed their own organization, Transparent GMU, to investigate possible donor overreach. Whereas the faculty had simply requested documents from the GMU Foundation, the students took other approaches, from using FOIA requests to attempt to obtain Koch-GMU gift agreements to “bird-dogging” the president. Yet, it wasn’t long before both the faculty senate and Transparent GMU were stymied by the walls of secrecy protecting donor interests from the public’s right to know.

The fight for transparency came to a head in 2016, when the Koch Foundation and an anonymous donor gave $30 million to the GMU law school. The donors sought to change the school’s name to the Antonin Scalia Law School and create a merit-based scholarship program. The gift agreement also stipulated that the university would provide funding for at least ten years for twelve new faculty lines in the law school. In making the gift agreement public, the administration insisted that the donations came with no strings attached. However, many faculty members, students, and concerned citizens saw the gift agreement as not only providing donors with too much influence but also violating principles of academic freedom and governance. The requirement in the gift agreement that the university provide ten years of funding for twelve faculty lines also raised questions about a donor’s ability to influence the makeup of faculty in a school and whether such provisions essentially subsidize the donor’s intent. Such funding schemes can alter the structure of the university, increasing tenure lines in one area at the behest of donors while potentially reducing university funding in other disciplines.

The gift agreement also stated that the law school’s dean, Henry Butler, who has deep ties to Koch and to Charles Koch Foundation affiliates, was “a critical part of the School’s Mission.” Therefore, the agreement stated, “if the individual holding the Dean position changes, the University shall immediately notify the Donor.” Many suggested that such a provision gave too much power both to the donor in university decision-making and personnel matters and to the dean. If GMU parted ways with Butler, the law school could risk losing tens of millions of dollars.

AAUP Advocacy

After the administration ran roughshod over faculty senate resolutions objecting to the law school’s renaming process and ignored faculty and student protests, it was clear that the faculty needed a new structure for organizing. GMU’s AAUP advocacy chapter had been dormant for several years, but it was the perfect vehicle for such organizing, enabling us to start building our collective power and forming stronger coalitions with student organizations such as Transparent GMU as well as with labor unions, public education advocates, and other local allies. Our AAUP chapter at GMU also aligned itself with UnKoch My Campus, whose cofounder, Samantha Parsons, had also cofounded Transparent GMU. UnKoch was vital in helping the faculty and students not only to understand the complexities of undue donor influence but also to identify the strategies used by Charles Koch and others in his network to manipulate universities, faculty members, and students. Finally, our advocacy chapter connected us to our statewide AAUP conference and to the national AAUP, allowing us to better leverage resources and putting us in contact with faculty across the state and country who shared our concerns over donor influence.

Several other strategic decisions bolstered our organizing efforts and our campaign for transparency. First, the faculty senate chair and I (as president of our AAUP chapter) spent nearly a year visiting academic units at GMU to cultivate relationships, inform faculty colleagues of our efforts, and spark engagement in faculty affairs. Then, in 2017, with support from the Virginia AAUP conference, I attended my first AAUP Summer Institute, where I met like-minded colleagues from across the country who were working to strengthen faculty governance and academic freedom. The workshops and courses at the Summer Institute inspired me, strengthened my resolve to keep organizing, connected our chapter with AAUP staff, helped me better understand AAUP principles, and provided me with organizing tools and strategies to continue to build our chapter.

Our chapter also hosted several educational forums with faculty, students, and the public at large to examine undue donor influence, the loss of academic freedom and independence, the value of transparency, and the public stakes of private donor influence. We invited experts from the national AAUP and UnKoch My Campus to lead these panels and reached out to our coalition partners to help us spread the word and build support beyond GMU’s campus. We worked strategically as well with the faculty senate and Transparent GMU to coordinate our efforts for maximum impact. And lastly, we engaged the local and national media. Media engagement was particularly vital to our campaign for transparency, because negative press coverage caught the administration’s attention and forced the president to take action.  

Gift-Acceptance Policy Reform

While our AAUP chapter was going through this revival, the students of Transparent GMU were developing a new strategy of their own. Frustrated by the administration’s unwillingness to engage with them and by the limits of the Virginia Freedom of Information Act, they had found a pro-bono lawyer and launched a lawsuit against the GMU Foundation and GMU. This action fundamentally altered the battle for transparency. As the lawsuit proceeded in the courts in spring 2018, the GMU faculty senate, with support from the AAUP chapter, introduced and passed motions calling on GMU and the GMU Foundation to make public all gift agreements and to add new provisions for faculty oversight to the university’s gift-acceptance policy.

Then, on April 27, 2018, President Cabrera sent a jaw-dropping email to both faculty and students. “Last week I was made aware of a number of gift agreements that . . . raise questions concerning donor influence in academic matters,” he wrote. “These agreements fall short of the standards of academic independence I expect any gift to meet.” The university, it turned out, had been sloppy about housing all gift agreements in the GMU Foundation and, because of the lawsuit, had to turn over to the courts a trove of gift agreements found in a GMU file cabinet. These agreements revealed egregious violations of academic freedom and independence that had been carried out for years. Because of our prior organizing work, coalition building, and engagement with the media, we were all ready for this moment, which quickly garnered press coverage and went viral on social media.

With the release of ten “tainted” gift agreements, we finally had our smoking gun. No longer could the administration suggest that we were all conspiracy theorists or that we were opposed to “intellectual diversity.” The gift agreements made plain how donors like Charles Koch were granted access to faculty selection committees and retention decisions, how they were influencing faculty and student scholarship, and how they were placing undue financial burdens on the institution. As a result of these revelations, the administration and the faculty senate called for an internal review of all gift agreements housed in the GMU Foundation.

That summer, the administration convened an Internal Review Committee made up of an outside auditing firm, university administrators, GMU Foundation staff, faculty representatives elected by the faculty senate, and student representatives. This committee delimited the scope of review (focusing on donor agreements supporting faculty positions) and found that twenty-nine of 314 agreements contained a total of forty-four “potential” violations involving academic freedom, transparency, outside party influence, and financial burden, among other problems. The review committee also produced a series of recommendations for policy reform, with particular focus on changing GMU’s gift-acceptance policy and the gift-agreement review processes. If implemented as written, these reforms will increase gift-agreement transparency within the university—a major victory in a long-fought battle.

The GMU Foundation, however, remains off limits to public scrutiny. Indeed, in the midst of the internal review, the judge ruled on the Transparent GMU lawsuit, finding that, “as a matter of law, the foundation is not a public body under [the Virginia Freedom of Information Act] as it is presently situated. . . . This decision does not absolve the university of the responsibility, as a public body, to maintain records of the use of funds and programs it decides to develop.” Transparent GMU is appealing the decision, which may be taken up by the Virginia Supreme Court this year. While we wait for a final decision on whether foundations are subject to the Virginia Freedom of Information Act, AAUP chapter members and students have begun to work with members of the state legislature to advocate for reforms that would require public colleges and universities in Virginia to make transparent the terms and conditions of gift agreements.

UnKoch My Campus, with AAUP Foundation support, has also developed its own model gift-acceptance policy and is seeking to promote policy reform across the United States. These national efforts, in addition to faculty and student organizing and activism, are vital if we are to safeguard AAUP-supported principles and protect academic independence at a time when wealthy donors hold excessive influence over our public institutions.

Bethany L. Letiecq is an associate professor of human development and family science, a faculty senator, and president of the George Mason University chapter of the AAUP.

photo credit: Mark Bonica/CC x 2.0

 

Add new comment

We welcome your comments. See our commenting policy.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.