Why are the super wealthy – including those who have made their money under global kleptocracies – so keen to donate to academia?
For some, the motivations may be purely altruistic and the outcomes of no personal benefit. But for the politically exposed, the picture is more complex.
In our report Paying for a World Class Affiliation: Reputation Laundering in the University Sector of Open Societies, written with our colleagues Alexander Cooley and Tom Mayne, and published by the National Endowment for Democracy on 25 May 2021, we argue that increasing reliance on donations from the super wealthy raises serious questions of transparency and accountability for universities, which currently govern donations in a manner that is often inconsistent and secretive.
In the US, from 2013-2019 we saw a quadrupling of the value of publicly reported donations to around $4 Billion, and estimated near-tripling in UK and Irish universities from 2009-2019 to £1.3 Billion per annum, but there is no systematic data on the country of origin of donations.
Individual donations to academic programmes can be used to launder the reputation of individuals facing corruption allegations. Reputation laundering occurs when wealthy individuals make philanthropic donations to universities in rule-of-law settings to boost their international reputation and offset reported controversies or malfeasance.
For example, Dimitri Firtash’s £6 Million donation to Ukrainian Studies at Cambridge was used to help defend his reputation in an English court in 2011. A later £1.95 million donation to Cambridge was frozen.
Invitations to speak and naming rights are also used in the UK to launder reputations. In 2013, Nigeria’s Minister for Petroleum, Diezani Alison-Madueke, spoke at the University of Oxford, praising the Nigerian government and maintaining that it “actively sought out the perpetrators of [corrupt] actions”. Less than two years later, it emerged that she could have supervised the looting of over $6 billion from Nigeria’s public resources during her tenure.
In order to study this phenomenon, we conducted a short survey of the US Top 20 and the 24 UK Russell Group universities, as well as 13 interviews with the gift assessment officers of these universities. We also did an analysis of published cases, pulling together the many scattered examples from the last decade.
While the issue of reputation laundering at universities ? has only recently begun to be taken seriously in the US, in the UK it rose up the agenda ten years ago. Managerial oversight of due diligence was supposedly transformed by the Woolf report that followed the Saif Qaddafi scandal at LSE in 2011. It found that LSE had conducted minimal due diligence on a gift made after the award of a doctoral degree to the son of the late President, based on a dissertation suspected of plagiarism.
Our research found that many UK institutions are still lacking in their vetting. Only seven out of seventeen Russell Group universities we assessed have independent gifts committees and publish the guidance they use to assess donations, and instead senior leaders and managers approve donations.. The University of Exeter, for example, has an ad hoc system of senior management approval and guidelines which are only available internally.
Table 1. Gift acceptance procedures at UK Russell Group Universities: overview of the transparency of ethical guidelines and oversight
|Name of University||Ethical guidelines||Highest level decision-making body|
|Durham University||Public||Senior management approval system|
|Imperial College London||Internal Only||Senior management approval system|
|King’s College London||Public||Dedicated independent gifts committee|
|London School of Economics and Political Science (LSE)||Public||Dedicated independent gifts committee|
|Newcastle University||Upon Request||Senior management approval system|
|University of Birmingham||Public||Senior management approval system|
|University of Bristol||Public||Dedicated independent gifts committee|
|University of Cambridge||Public||Dedicated independent gifts committee|
|University of Edinburgh||Public||Senior management approval system|
|University of Exeter||Internal Only||Ad hoc senior management approval|
|University of Liverpool||Upon Request||Dedicated independent gifts committee*|
|University of Nottingham||Public||Senior management approval system|
|University of Oxford||Upon Request||Dedicated independent gifts committee|
|University of Sheffield||Internal Only||Dedicated independent gifts committee*|
|University of Southampton||Public||Dedicated independent gifts committee*|
|University of Warwick||Internal Only||Dedicated independent gifts committee|
|University of York||Public||Dedicated independent gifts committee|
Source: Cooley, Prelec, Heathershaw and Mayne, 2021 (fieldwork: summer 2020-spring 2021).
Note(*): Liverpool, Sheffield and Southampton all have or are in the process of establishing dedicated independent gift committees, however, we do not have sufficient information on their composition to ascertain their independence from senior management and inclusivity to academic staff and students.
Moreover, when universities consider the history and origins of the individual benefactors’ wealth, it is in relation to the “reputational risk” to their institution. But such criteria are unclear and are deployed in a context where transparency around donations is lacking.
Scrutiny procedures differ greatly amongst institutions. Current events and media stories have a big influence on vetting. The 13 interviewees admitted very few donations being turned down, ranging from 0 to 4, with some claiming that this was because suspicious donors were not allowed to proceed (pp.19-20).
In the US, universities are legally required to report data on donations over $250,000 but this responsibility is routinely neglected. Wee know that the Chinese education ministry provided $158 Million to 100 colleges and universities for Confucius Institutes but nearly 70% of those receiving donations over $250,000 had failed to disclose this information (p.16)
In the UK, there is no such requirement.. UK university gift officers admit that vetting is difficult for overseas donors. One admitted: “This is a disadvantage and an advantage, because [in the case of adverse publicity repercussions] we can say that we honestly didn’t know” (p.19)
ilful ignorance and an absence of transparency are no longer defences for universities. The draft model code of conduct of the UK’s Academic Freedom and Internationalisation Working Group demands that universities make all Memoranda of Understanding (MOUs) public, and that they not enter into non-disclosure agreements with donors and partners (p.19)
Students are also becoming more active in both the UK and US, raising the issues of transparency and potential complicity with authoritarian regimes in hard-hitting articles in their institutions’ student newspapers (e.g. at the Universities of Exeter, Harvard, and Pennsylvania).
What can be done to regulate this competitive market for donations? Our report recommends the creation of a comprehensive and searchable public list of all donations (foreign and domestic) over a modest threshold ($15,000/£10,000), including the identity of the donor, the amount, and the major stipulations.
Universities should also make the ethical guidelines, policies and principles for assessing donations public – and refuse to enter into Non-Disclosure Agreements in all but the most exceptional circumstances. Universities are public institutions whose funding should not be a matter of privacy or secrecy.
John Heathershaw is an associate professor and director of impact at University of Exeter. His research addresses conflict and security in authoritarian political environments, especially in post-Soviet Central Asia. It considers how and how effectively conflict is managed in authoritarian states. Heathershaw convenes the Exeter Central Asian Studies (ExCAS) research network and directs its Central Asian Political Exiles (CAPE) project. Heathershaw completed his Ph.D. at the Department of International Relations at the London School of Economics and Political Science in 2007.
Co Authors :
Tena Prelec (PhD, Sussex University, School of Law, Politics and Sociology) is a Research Fellow at the Department of Politics and International Relations of the University of Oxford. Her research focuses, broadly, on issues of good governance and anti-corruption, with a specific focus on how transnational kleptocracy is enabled by the global financial architecture. At present, she is conducting work on Russian foreign policy and illicit financial flows in collaboration with the University of Exeter, UK, while also looking into the specific form kleptocracy takes in South Eastern Europe as a Fellow of the Centre for Advanced Studies of the University of Rijeka, Croatia. She is also an established analyst on the Western Balkans, including as Region Head at Oxford Analytica, Research Associate at LSEE-Research on South Eastern Europe (London School of Economics and Political Science), and member of the Balkans in Europe Policy Advisory Group (BiEPAG). Other research interests include transnational authoritarianism, academic freedom, and the intersection between governance and geopolitics. She is part of the latest cohort of Marshall Memorial Fellows, the flagship leadership development programme of the German Marshall Fund of the United States.