Koch and a smile

Some GMU students recently took the university to court over alleged influence by the Koch brothers, and their $96 million in donations, on the university's hiring practices.

A committee charged with examining George Mason University’s gift agreements with private donors found that the public university’s policies fall short of established best practices in some areas.

GMU President Ángel Cabrera called for a review of all active donor agreements in April after The Washington Post and the advocacy group UnKoch My Campus released agreements with the Charles G. Koch Foundation and other donors that raised concerns about the public university’s ability to maintain academic independence.

A gift agreement internal review committee authorized by the GMU Board of Visitors in May released a report of its findings to the board on Oct. 10. A copy of the report can currently be found on Mason’s website under the office of the provost and executive vice president.

The gift agreements reviewed by the committee were posted online to supplement the report on Wednesday.

“Trust and transparency are indispensable to academic freedom and independence for academic institutions,” the 11-person committee said in its report. “…As such, the university is embarking on an effort to enhance transparency and ensure academic independence in the gift acceptance and agreement process.”

Assembled by Cabrera in June, the committee consisted of two Board of Visitors liaisons, GMU Provost and Executive Vice President S. David Wu, the university’s faculty senate chair, two additional faculty representatives elected by the faculty senate, a representative from the Office of University Advancement and Alumni Relations, the vice president of compliance, diversity, and ethics, student representatives, and individuals from the third-party accounting firm Baker Tilly.

According to a letter to Cabrera from Wu, the review committee met 11 times between June and September.

The George Mason University Foundation, a non-stock corporation that solicits and manages private fundraising on the university’s behalf, received 16,000 gifts in Fiscal Year 2018 alone, according to the report.

The review committee’s scope included all gift agreements there were active from 2014 to 2018 regardless of when they were initiated. Some examined agreements originated in the 1990s.

In total, the committee identified 314 gift agreements within its scope and narrowed those down to 29 agreements that were marked for further review based on academic freedom, outside party influence, financial burdens, transparency, exclusions or preferences, donor notification and partner requirements, and intellectual property restrictions.

Six agreements that met the selection criteria contained provisions requiring that they remain confidential. Those agreements all came from a single donor in support of the same program and amounted to a less than $3 million over a six-year period that ended in December 2016, according to the report.

The committee says it “did not find any egregious practices,” but it identified “some issues that require further action and policy improvements, including the need for further consideration of the implications of certain gift agreement provisions.”

The committee also determined that GMU’s gift acceptance policies lack “certain provisions found in leading practices,” including ones related to donor involvement requirements and restrictions, processes for canceling and disposing of gifts, gift restrictions, and institutional conflicts of interest.

In addition to proposing that Mason and the GMU Foundation clarify language in the specific gift agreements that needed further review, the committee recommended that GMU strengthen its gift acceptance policies and procedures by establishing a list of conditions for gift agreements that would require additional review.

The committee also suggested improving communication and training and developing a policy to make available gift agreements governing the use of funds for academics or other areas of public interest.

The university gift acceptance committee that evaluates donor agreements should be revised to increase faculty representation, the report says.

The committee called for GMU to encourage transparency at all levels and by all parties in the gift acceptance process, and to continually reevaluate for “emerging risks related to academic independence that may require adjustment of gift agreement-related policies or escalation criteria."

The committee also made some broad recommendations that were related to gift acceptance and management but fell outside its specified purview.

Along with suggesting a comprehensive institutional conflict of interest policy, the committee said that GMU should consider whether to require individual disclosures for scholarly work and publications completely or partly supported by gift funds, develop a process to evaluate spending related to gift agreements, and review potential considerations for gifts to centers and institutes affiliated with but not directly controlled by Mason.

“I am pleased that the committee did not find any major deficiencies and I appreciate the recommendations it proposes for the future,” Cabrera said in an email sent on Oct. 10 to the GMU community. “I will be working with our advancement team, our provost, and other members of our community to evaluate those recommendations and identify specific changes that will strengthen our gift acceptance policies and bolster transparency.”

The documents that prompted Cabrera’s call for a review of GMU’s gift agreements showed that the university agreed to create a tenured faculty position at the Mercatus Center, an affiliated research center for the economics department, in exchange for a $1 million donation to the GMU Foundation.

The gift agreement included a provision allowing the Koch Foundation to appoint two people to the five-person selection committee that would award the new faculty position.

GMU has been a prominent recipient of funds from the Koch Foundation, a conservative-leaning charitable group that reportedly funded the Mercatus Center when it was founded in the 1980s, according to The New Yorker.

The Associated Press reported in 2016 that the Koch Foundation gave nearly $48 million to GMU from 2011 to 2014.

George Mason renamed its law school after the late Supreme Court Justice Antonin Scalia in response to a donation that included $10 million from the Koch Foundation, and the university announced on Mar. 22 that a $5 million donation from the Koch Foundation would be used to support the hiring of three new economics faculty members.

Mason’s relationship with the Koch Foundation was the subject of a lawsuit filed in February 2017 against the GMU Foundation by the student group Transparent GMU, which sought to obtain gift agreement documents between the university and the Koch Foundation under the Virginia Freedom of Information Act.

The Fairfax County Circuit Court ruled on July 5 that the GMU Foundation is not a public body and, as a result, has no FOIA obligations to release its records to the public, though Transparent GMU is appealing the decision to the Supreme Court of Virginia.

Bethany Letiecq, an associate professor for human development and family science at GMU and a member of the faculty senate’s ad hoc institutional conflict of interest policy committee, says she was pleased to see the gift agreement review committee’s recommendations, particularly those regarding increased faculty engagement.

However, the gift agreements released as part of the committee’s report also revealed some new potential issues, including ones where donors required a budget increase before accepting an agreement, Letiecq says.

She also believes that GMU should reexamine its relationship with affiliated institutes like the Mercatus Center and the Institute for Humane Studies, a nonprofit organization founded in 1961 by libertarian and former Cornell University economics professor Dr. Floyd Arthur Harper.

“The first step is changing our policies with regards to gift agreements, but the second step is really looking at some of these affiliations and rethinking them,” Letiecq said. “I think that’s important to restoring our reputation as a public university of higher education.”

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