Mixed Verdict on Koch Grant

Florida State finds nothing inappropriate in two faculty hires, but says pact with foundation could have led to "undue outside influence."
July 18, 2011

A special faculty panel at Florida State University on Friday released its findings on a controversial grant the institution received from the Charles G. Koch Charitable Foundation.

A key finding -- and the one the university says is the most important -- was that two faculty members hired with Koch funds were reviewed and offered positions in ways that were entirely consistent with normal academic standards, and without the foundation playing a role in the decision-making. But the report also identified numerous instances in which the language in the agreement left the university vulnerable to "undue outside influence." And the authors of the report called on the university not to make similar agreements in the future.

The report also states in a footnote that foundation officials attempted to contact candidates for the faculty position for discussions -- without notifying the faculty search committee.

Florida State pledged to avoid the type of language that led to the controversy over the Koch grant. But officials said that there was no need to renegotiate the grant at the center of the controversy.

The Koch grant was accepted by the university in 2008, and was largely ignored until May, when an op-ed in The Tallahassee Democrat suggested that the university had given too much power to the Koch Foundation for a $1.5 million grant. Initially, the university defended the grant as nothing out of the ordinary, but President Eric J. Barron appointed the faculty panel amid widespread criticism of the university for accepting the grant.

Many faculty critics said that they were upset about the idea that an outside donor would play any meaningful role in reviewing and approving candidates for faculty jobs. Many outside academe were also intrigued by the controversy, given that the Charles Koch of the foundation is one of the Koch brothers who have been influential funders of Republican candidates and conservative movements.

The faculty panel consisted of four former presidents of the Faculty Senate at the university and one former president of the university. They found that the foundation ended up playing no inappropriate role in the hiring of two economics faculty members. (The grant was to support a series of hires and programs to promote the study of free enterprise economics, a major focus of the foundation.)

One of the reasons that the faculty hires were brought on without deviating from university procedures, the report found, was that the department didn't follow language in parts of the grant agreement -- language that could be interpreted in troublesome ways. Here are some of the issues identified by the report:

Advisory committee power: The faculty hires were to be determined by both the relevant Florida State department and an advisory board appointed by the foundation. The advisory board ended up consisting of two Florida State faculty members and a program officer from the foundation. The agreement gave the advisory board the right to approve faculty hires, with the board having to sign off unanimously. The report notes that because the agreement does not stipulate any university representation on the board (even though faculty members ended up on it) and because of the requirement of unanimity, the university effectively gave "veto power" to any one board member, including those without any university affiliation. These provisions, the report said, "open the possibility" of inappropriate outside influence, even if there was no evidence of such influence in the initial searches.

Foundation contact with job candidates: A footnote in the report noted that when the Florida State search committee was interviewing job candidates at the annual meeting of the American Economic Association, the foundation asked to join interview sessions, a request that the search committee "appropriately refused." But the footnote also said that search committee members learned that "a donor representative was nevertheless making independent contact with candidates at the convention for lunch or similar information conversations, without notifying the FSU interview team."

Review of faculty members: The university agreed to let advisory board members play a role in the review of faculty members hired with the Koch grant, the report said, even though the university's contract with the faculty union explicitly bars such outside roles in faculty reviews. The report noted that the department "properly" has ignored this provision in the grant agreement.

Influence over who would serve as department chair: The report noted that the foundation communicated that it was willing to support administrative costs associated with the grant only if the department chair did not change. The report found fault with this arrangement because it involved the foundation in the process of selecting (or opting to keep on) a chair -- a decision normally made by deans in consultations with the faculty. Further, the report said that this provision created a conflict of interest in that the chair was involved in reviewing the proposal -- and yet was named (and favored with continued service in that position) by the grant agreement.

Review of a new course without full information: Consistent with the agreement with the Koch Foundation, the university created a new economics course called "Market Ethics: The Vices, Virtue, and Values of Capitalism." Also consistent with the agreement, the course features the work of Ayn Rand. The course was vetted, the report said, through standard processes at the departmental and university level, but the faculty panels doing the reviews were never told that the course was part of a pledge to a donor. "The committee is concerned that this new course moved through the approval process without a clear indication that it was donor-prescribed with donor-prescribed content," the report said. "These faculty committees need the opportunity to determine whether such prescriptions constitute undue outside influence."

Teaching of undergraduate courses: The agreement provides for the hiring of a non-tenure-track instructor to help with "gateway" introductory courses. The report noted faculty concerns that because those hired through the grant have a focus on the benefits of free market economics, "the staffing and supervision of these gateway courses for all majors are being ceded to a subset of the department that may not be representative of the diverse intellectual interests in the department."

In a memo to the university released on Friday, Barron, the president, said that he was very pleased with the report. "Simply put, the integrity of the university's hiring process was maintained. Future donor agreements will continue to support stewardship but will not include language related to external evaluations as part of the annual review of the faculty," he said.

In an interview on Saturday, Barron said that any future agreements the university makes with donors would reflect the issues raised by the report. But he said that there was no reason to change the current agreement. "The primary issue is the hiring of faculty, and we already hired the faculty and the faculty committee saw that we hired scholars," he said. "So it seems to me that it's rather a moot point."

Asked about the various other issues raised by the report, he said that they could be handled without changing the agreement with the Koch Foundation. He said he was committed, working with appropriate university bodies, to deal with all of those issues.

Over all, he said, the university learned that it has to "be more careful when we are looking at all of these agreements so we don't have either the perception or reality get in the way of our academic integrity."

The Koch Foundation released a statement from Ryan Stowers, director of higher education programs, that said in its entirety: "We are pleased that this review of the facts by the faculty committee confirms what FSU administrators have said – that the agreement with the foundation protected academic integrity and added significant value to FSU. We agree with the committee that the [memorandum of understanding] has solid guiding principles, and we are open to modifying the agreement as long as it continues to ensure a strong commitment to academic freedom, faculty governance and donor intent. We appreciate the opportunity to partner with FSU, and we look forward to helping this good work continue in the future."

The foundation's spokeswoman, asked about the footnote about Koch officials meeting with job candidates, released an additional statement from Stowers: "The meeting was a short, informal conversation during the conference. It was a casual interaction, and foundation staff regularly meets with professors at such events to introduce ourselves and our work."

It is unclear whether the Florida State report will end the controversy. Faculty leaders were still reviewing the study.

Officials at Florida Progress, a group that has been organizing a petition campaign to urge Florida State to end the Koch agreement, said that the report confirmed their concerns, but that the university wasn't going far enough to respond to the issues identified in the report.

Damien Filer, political director for the group, said that "it doesn't make sense to say that we'd never sign a contract like this again, but we still don't see a need to change the current contract."

If the current document is problematic, Filer said, the university should get rid of it and negotiate a new agreement with the foundation.

Supporters of the Koch Foundation have suggested since the controversy broke out that the critics are motivated by political dislike of the foundation's values. Filer said it was certainly true that his organization and the Koch Foundation disagree on most political issues. And he said that there was some relationship between the Koch politics and the current controversy. "The Kochs support politicians in Florida and all over the country who have gutted funding for education and who have put universities in the position where they would consider something like this," he said.

But Filer said that the objection to the agreement was not based on politics. He said he would have the same objections to a grant from a liberal foundation. And he said he had no problem with Koch giving money, provided that there were not these sorts of strings attached.

"I have no qualms about a university accepting a gift from anyone," he said. "The problem comes when that someone can dictate curricular policy and hiring decisions. That's to me where the bright line needs to be."


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