Charles G. Koch Foundation Hires and Fires Economists at Public University

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According to news reports, the Charles G. Koch Foundation has bought "the right to interfere in faculty hiring at a publicly funded university." Kris Hundley of the St. Petersburg Times reports that the elder Koch brother's foundation "pledged $1.5 million for positions in Florida State University's economics department. In return, his representatives get to screen and sign off on any hires for a new program promoting 'political economy and free enterprise.'"

Unlike most university donors, who retain little control over chairs they've funded lest universities be seen to lose academic freedom, the Times reports that the Charles G. Koch Foundation's "contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it's not happy with the faculty's choice or if the hires don't meet 'objectives' set by Koch during annual evaluations."

Apparently, the deal was signed in 2008 with little public controversy. However, on May 1 two FSU professors -- Ray Bellamy and Kent S. Miller -- revived the issue in a letter to the Tallahassee Democrat. In their letter, Bellamy and Miller point out that "George Mason University received over $23 million from Koch brothers foundations to hire seven libertarian professors, subjecting the college to the charge that the university had been 'bought'".

David W. Rasmussen, dean of the College of Social Sciences, responded to the letter on May 10 by saying, "I'm sure some faculty will say this is not exactly consistent with their view of academic freedom.... But it seems to me it would have been irresponsible not to do it."

But FSU is not the only school where the Charles G. Koch Foundation has made such arrangements. The Times article adds that, "In addition to FSU, Koch has made similar arrangements at two other state schools, Clemson University in South Carolina and West Virginia University."

One wonders how many Koch economists there are in the world.

Gerald Epstein and Jessica Carrick-Hagenbarth of the Political Economy Research Institute at the University of Massachusetts, Amherst have led the charge this past year to encourage the economics profession to adopt a code of ethics and disclose conflicts of interests. In a recent paper, they found that many economists involved in last year's debate over how how to overhaul Wall Street regulations did not disclose their roles as corporate directors, advisers or consultants when testifying before Congress or in the media. The issue was also brilliantly highlighted in the movie Inside Job, about the origins of the financial crisis. Inside Job won an Oscar this year.

The Rachel Maddow Show also picked up this story and aired it on May 10, 2011.

Update

On May 13th, the St. Petersburg Times published a response to Kris Hundley's May 10th article, penned by Florida State University president Eric J. Barron. He states that Hundley misconstrued the facts and that "Florida State University makes decisions to establish programs and hire the appropriate faculty based on academic needs, not political motivations of donors or anyone else."

The bulk of president Barron's argument is that, regardless of the stipulations of the contract signed with the Charles G. Koch Charitable Foundation, the two professors hired were not on the Advisory Board's short list and, nevertheless, "the advisory board accepted those choices." The Advisory Board he refers to is the board, consisting of three members—as he says, "two FSU faculty members, both Eminent Scholars in Economics, and a Ph.D. economist appointed by the Koch Foundation"—created, according to the Memorandum of Understanding between the Charles G. Koch Foundation, the Florida State University Board of Trustees and the Florida State University Foundation, Inc., "in order to preserve and safeguard the philanthropic and educational intent of CGK [Charles G. Koch] Foundation, its donor partners, as well as the educational objectives of FSU."

President Barron's argument does not address the question of what would have happened had the Advisory Board not accepted the choices of the Executive Committee. The contract also stipulates that "no funding for a Professorship Position or any other Affiliated Program or Position will be released without the review and approval of the SPEFE-EEE Advisory Board." With $1.5 million on the line if the candidates had not been approved by the Advisory Board, president Barron's statement that "the gift will not compromise that integrity or infringe on the academic freedom of our highly regarded faculty" rings hollow.