March,, 2016
Lincoln -- It was only a matter of time before an academic researcher blew the whistle loudly on attempts to suppress his research. The case of South Dakota-based entomologist Dr. Jonathan Lundgren, whose work on pesticide dangers to pollinators was not welcome at the USDA, is quickly getting the national attention it deserves. USDA has essentially ruined his career. He has been forced to leave the Agricultural Research Service.
This hit home for me in three ways:
First, we raise bees on our prairie property northwest of Lincoln and would like the benefit of Lundgren's taxpayer-supported research. Federal agencies violate their own missions when they do not permit the public to see the research that we have paid for.
Second, I have a soft spot for whistleblowers, being acquainted with many personally: Michael Winston (Countrywide); Sherron Watkins (Enron); Jesslyn Radack (DOJ); Tom Drake (NSA); Frank Casey (Madoff); and Lincoln's own Kathy Bolkovac (UN). Typically, whistleblower stories don't end well. The sacrifices of these individuals are much too unappreciated.
Third, not long ago I wrote a post about the need for the next UNL chancellor to have research skills and to stand strong for research integrity. The four candidates recently interviewing for the job appear to qualify on the former but how they view the latter is an appropriate and unanswered question. Research universities like UNL must not act like federal agencies, which are customarily captured over time by the interest groups they are supposed to regulate. Do the four chancellor candidates have a record of standing up for research integrity, even when the research is not popular with powerful lobbies?
The inspector general at USDA will review the Lundgren case, but inspectors general in the federal government have a spotty record when it comes to cracking down on their own agencies. For one thing, an agency secretary is not required to act on inspector general findings and recommendations; many go ignored. The integrity of the research process at universities, conversely, has traditionally been safeguarded by peer-review across institutions. But in recent years this too has been threatened by universities so eager to get research dollars from interest groups that they might as well hang out a Research For Sale sign. Does anyone doubt that the interest groups offended by the Lundgren research are plying universities with money to counter his findings? Does anyone doubt that university researchers, under great pressure to bring in research dollars, are usually able to come up with findings that comport to interest group wishes? If there are doubts, take it from a former federal researcher and research administrator: these things happen across the research spectrum.
Much has been made of a recent bill in the Nebraska legislature, introduced on behalf of the university board of regents, that would allow the regents and the president to conduct chancellor searches behind closed doors, so the public does not know who might be applying and who might be in contention. There are plausible arguments in favor of this approach but the passage of the bill would further limit the public's ability (let alone the faculty's) to ask questions about the views and records of candidates on challenges to research integrity. Those in the legislature skeptical of further excluding the public from the selection process might at least propose, in return, a beefing up of the state's enforcement of other disclosure, accountability, and auditing standards with regard to higher education, which currently is woefully inept.
Switcheroo Algorithms
February, 2016
Washington -- Last Tuesday at a public hearing at the Maryland statehouse in Annapolis, legislators were taken aback to learn that the scholarships they award to their financially needy student constituents may actually leave the students no better off when paying for college. And they were surprised to find out that it's the same way with private scholarships awarded by organizations such as the Baltimore Foundation and Central Scholarship.
It seems the colleges and universities back out their own grant aid in a like amount and then redistribute it to other, more favored students, or use it for other purposes. This is known as scholarship displacement. Actually, it's been going on for a long time, and not just in Maryland. It happens everywhere. But in Maryland, several state senators and delegates have now introduced legislation to stop the practice.
Opponents of the bills -- Maryland colleges and universities -- threw up smokescreens at the hearing to blame federal regulations for their actions, or to say they don't do scholarship displacement, or to say if they do it, it is because they know better than the donors who needs aid. They were especially opposed to any new law requiring disclosure of the practice, saying that if the practice were disclosed, who would donate to scholarship funds?
It was a shameful performance by the opponents. There are no federal regulations requiring scholarship displacement as it is practiced. It is a rare instance where a student would have so much grant aid that loans and work-study could not be reduced to comply with any federal regulations against grant overaward situations. Of course donors would stop giving if these displacement practices were widely known, so why not change the practices rather than jeopardize scholarship giving? It is as if colleges want to see everyone possible burdened with loans.
One opponent conceded that the scholarship displacement practice is widespread and gave a reason why colleges do it. Colleges must send students financial aid packages in time for students to make a decision as to whether they can afford to enroll. Often the packages include institutional grant aid that the colleges plan on withdrawing if the student later brings scholarship awards to help pay the bills. The colleges are therefore taking a risk with their own money to get a student to enroll. In exchange for taking this risk on behalf of students, the colleges feel entitled to pull their institutional funds back whenever they can. But to manage the risk that students won't be bringing in a local civic club or a charitable foundation scholarship, colleges develop complicated algorithms to predict how much money they can recover through their now-you-see-it-now-you-don't displacement practices. (Before anyone is tempted to conclude that the colleges should be entitled to a risk premium for their actions, they should consider that these risks are also typically covered by the same shell-game used to displace federal student grant funds, especially Pell grants, which research has shown are also vulnerable to displacement.)
Moreover, these algorithms are typically part and parcel of elaborate enrollment management plans to improve the prestige rankings of the institutions, which often are a much higher priority than holding down student debt. The plans use techniques such as "aid-gapping" less desirable students to discourage them from enrolling, shifting institutional aid to "merit" awards to enroll more desirable non-needy students, and the latest technique, "drowning the bunnies," one college president's description of his effort to get weaker students to drop out before they can be counted in retention rate statistics favored by those who award coveted prestige. Dare we ask how much these switcheroo algorithms are contributing to growing socioeconomic and racial inequalities that are identified by researchers as being linked to student debt?
Solutions are available. One is to pass the Maryland legislation. Another is for Maryland legislators to provide more state money for need-based student aid, so colleges do not have to rob Peter to pay Paul under the table. Another is for the federal government to re-balance more of its student aid spending toward SEOG and other matching programs, so that colleges that do not displace scholarships but use their institutional aid to reduce student debt would be rewarded with more funding. Yet another is for the Secretary of Education to require colleges to disclose their financial aid distribution practices under the Student Right to Know Act. Making the colleges honest would be doing right by all scholarship donors who only want to help relieve needy students of debt, a most worthy cause.
Washington -- Last Tuesday at a public hearing at the Maryland statehouse in Annapolis, legislators were taken aback to learn that the scholarships they award to their financially needy student constituents may actually leave the students no better off when paying for college. And they were surprised to find out that it's the same way with private scholarships awarded by organizations such as the Baltimore Foundation and Central Scholarship.
It seems the colleges and universities back out their own grant aid in a like amount and then redistribute it to other, more favored students, or use it for other purposes. This is known as scholarship displacement. Actually, it's been going on for a long time, and not just in Maryland. It happens everywhere. But in Maryland, several state senators and delegates have now introduced legislation to stop the practice.
Opponents of the bills -- Maryland colleges and universities -- threw up smokescreens at the hearing to blame federal regulations for their actions, or to say they don't do scholarship displacement, or to say if they do it, it is because they know better than the donors who needs aid. They were especially opposed to any new law requiring disclosure of the practice, saying that if the practice were disclosed, who would donate to scholarship funds?
It was a shameful performance by the opponents. There are no federal regulations requiring scholarship displacement as it is practiced. It is a rare instance where a student would have so much grant aid that loans and work-study could not be reduced to comply with any federal regulations against grant overaward situations. Of course donors would stop giving if these displacement practices were widely known, so why not change the practices rather than jeopardize scholarship giving? It is as if colleges want to see everyone possible burdened with loans.
One opponent conceded that the scholarship displacement practice is widespread and gave a reason why colleges do it. Colleges must send students financial aid packages in time for students to make a decision as to whether they can afford to enroll. Often the packages include institutional grant aid that the colleges plan on withdrawing if the student later brings scholarship awards to help pay the bills. The colleges are therefore taking a risk with their own money to get a student to enroll. In exchange for taking this risk on behalf of students, the colleges feel entitled to pull their institutional funds back whenever they can. But to manage the risk that students won't be bringing in a local civic club or a charitable foundation scholarship, colleges develop complicated algorithms to predict how much money they can recover through their now-you-see-it-now-you-don't displacement practices. (Before anyone is tempted to conclude that the colleges should be entitled to a risk premium for their actions, they should consider that these risks are also typically covered by the same shell-game used to displace federal student grant funds, especially Pell grants, which research has shown are also vulnerable to displacement.)
Moreover, these algorithms are typically part and parcel of elaborate enrollment management plans to improve the prestige rankings of the institutions, which often are a much higher priority than holding down student debt. The plans use techniques such as "aid-gapping" less desirable students to discourage them from enrolling, shifting institutional aid to "merit" awards to enroll more desirable non-needy students, and the latest technique, "drowning the bunnies," one college president's description of his effort to get weaker students to drop out before they can be counted in retention rate statistics favored by those who award coveted prestige. Dare we ask how much these switcheroo algorithms are contributing to growing socioeconomic and racial inequalities that are identified by researchers as being linked to student debt?
Solutions are available. One is to pass the Maryland legislation. Another is for Maryland legislators to provide more state money for need-based student aid, so colleges do not have to rob Peter to pay Paul under the table. Another is for the federal government to re-balance more of its student aid spending toward SEOG and other matching programs, so that colleges that do not displace scholarships but use their institutional aid to reduce student debt would be rewarded with more funding. Yet another is for the Secretary of Education to require colleges to disclose their financial aid distribution practices under the Student Right to Know Act. Making the colleges honest would be doing right by all scholarship donors who only want to help relieve needy students of debt, a most worthy cause.
Recalling an Old Budget Controversy
February, 2016
Lincoln -- My last two posts have dealt with current issues in postsecondary education finance at both the national and state levels. While writing them I remembered a couple of old budgeting and finance issues that have been dormant for many years, but which deserve a final visit for the historical record. Discussing them may also shed light on current issues and conflicts in Nebraska.
In 1995, Professor Robert Knoll of the University of Nebraska-Lincoln's English department wrote a history of the university, appropriately titled Prairie University. It's a wonderful book, full of facts and overflowing with engaging people. Best of all, Professor Knoll does not shy away from making judgments; he praises and he punishes. From what I know based on my own fairly close association with the university over many decades, and having dealt personally with many of those in university leadership positions, Robert Knoll almost always gets it right.
There is one episode, however, that needs elaboration if not outright correction. It deals with the contretemps between NU President Woody Varner, State Senator Richard Marvel, and Governor Jim Exon in the mid-1970s.
Varner did not like Marvel's legislated earmarks that tied the university's hands on how it spent appropriated funds. Varner convinced the Board of Regents to take the matter to court to give the university more expenditure flexibility. But procedurally, the university could not sue the legislature, so the Regents sued Governor Exon and those in his administration who administered the budget earmarks. Varner told Exon personally that the suit was not against him, it was just that he had to be named in the suit to get the issue before the courts. Exon, for his part, did not like the earmarks either. He was of the philosophy that appropriated funds should be made available to the university in a lump sum.
Meanwhile, the university budget proposals that Varner submitted to the governor and legislature were full of their own problems. For example, the university would underestimate enrollment and tuition revenue in any one year so as to make a case for more state tax support. After the legislature appropriated the tax support (general funds) and tuition support (cash funds) based on the university's tuition estimates, the university would come back to the legislature later, in mid-academic year, for a supplemental appropriation to spend the additional tuition revenue based on higher enrollment than projected. Varner would say with a straight face that the additional cash fund monies must be immediately appropriated by the legislature, conveniently forgetting that less than a year before he had leveraged additional state tax support for the university by low-balling the original estimates of cash funds available.
Exon pointed this out through his own budget proposals. Marvel was not pleased that his Appropriations Committee seemed to be played for fools and chastised Varner publicly at committee hearings, albeit on somewhat different grounds than Exon. (Marvel and Exon were not close, Marvel having run for governor himself in 1974 against Exon, who defeated him easily.)
Knoll records part of this in a chapter on Woody Varner. Knoll writes,
When the governor presented his budget, he and his fiscal officers used data about cash balances which University officials thought inaccurate. "I don't know the origin of his figures," Varner told...the Lincoln Journal.... "I wouldn't argue that such figures could be found, but the conclusions he reaches are simply wrong. It is a bad use of data." Exon reacted angrily. (p. 171)
Woody Varner resigned not long afterward, to become president of the NU Foundation, taking everyone by surprise. As his reason for resigning, he cited bad relations with the statehouse. In 1977, the Nebraska Supreme Court ruled in favor of the Regents, technically against Exon but essentially against the legislature. The controversy over the cash funds was addressed in a concurring opinion by Justice Harry Spencer, who summed it all up nicely in one sentence, slapping down both Marvel's earmarking and Varner's now-you-see-it-now-you-don't treatment of cash funds:
I concur with the majority opinion herein, with the understanding that the opinion holds that the Legislature cannot control the use of cash funds generated by University activities, but that it can consider them in the making of appropriations.
Robert Knoll can be forgiven for not telling the whole story, which he may not have known. Or perhaps he did not want to put Woody Varner in a bad light, being the "D.B. and Paula Varner Professor of English." Before publishing, Knoll ran his book by State Senator Jerome Warner, Marvel's successor as chairman of the appropriations committee. Warner, a man with his own agenda, likely was only too happy to leave the last word with Varner's version of events.
I rather liked Woody Varner and do not disagree with Robert Knoll's placement of him as among the best NU leaders of all time. Varner was a prodigious fund-raiser. He was the man behind the Lied Center in Lincoln. He made many friends for the university and for the whole state. He had his faults. He would try to come between people to create rifts, which he would then try to exploit. His reorganization of the university, making himself president of all the campuses under a central administration, would later backfire. Creation of a separate UNL and UNMC eventually, in 2011, cost UNL membership in the prestigious Association of American Universities, a huge blow which he could not have foreseen. But I'll wager Woody could have kept UNL in the AAU had he still been around; he would have have charmed AAU presidents to no end and come away with UNL membership in AAU intact.
The moral of this story, if it has one, is that when it comes to budget and finance, it's better to be transparent in the first place and not to engage in flim-flam. In the end, it really doesn't pay off. That was true in the 1970s (it brought down an excellent university president) and it should be even more apparent today, if anybody's paying attention.
Postscript: I know this history because I was an eyewitness to it as well as an active participant. When President Varner and Governor Exon met to discuss these and other budget matters, I was customarily present. I was intimately familiar with the Governor's budget numbers and knew the care with which they had been worked up and reviewed. When Senator Marvel went after President Varner in open hearing, I was in the hearing room and felt the tension. Marvel himself was still miffed about his loss in the previous gubernatorial race. He had tried to position himself with voters as a friend of the university through his earmarked appropriations, only to lose the election and then have the university object to his way of writing appropriations bills. It was salt in the wound. When the university prevailed in its lawsuit, unfortunately it was not only Marvel's appropriations bills that were found to be unconstitutional, but several longstanding statutory provisions dealing with procurement and personnel as well, which were not intended to invade the university's prerogatives but merely to remove inequities across state government. This is an unfortunate legacy of the ambition and overreach of Richard Marvel.
Lincoln -- My last two posts have dealt with current issues in postsecondary education finance at both the national and state levels. While writing them I remembered a couple of old budgeting and finance issues that have been dormant for many years, but which deserve a final visit for the historical record. Discussing them may also shed light on current issues and conflicts in Nebraska.
In 1995, Professor Robert Knoll of the University of Nebraska-Lincoln's English department wrote a history of the university, appropriately titled Prairie University. It's a wonderful book, full of facts and overflowing with engaging people. Best of all, Professor Knoll does not shy away from making judgments; he praises and he punishes. From what I know based on my own fairly close association with the university over many decades, and having dealt personally with many of those in university leadership positions, Robert Knoll almost always gets it right.
There is one episode, however, that needs elaboration if not outright correction. It deals with the contretemps between NU President Woody Varner, State Senator Richard Marvel, and Governor Jim Exon in the mid-1970s.
Varner did not like Marvel's legislated earmarks that tied the university's hands on how it spent appropriated funds. Varner convinced the Board of Regents to take the matter to court to give the university more expenditure flexibility. But procedurally, the university could not sue the legislature, so the Regents sued Governor Exon and those in his administration who administered the budget earmarks. Varner told Exon personally that the suit was not against him, it was just that he had to be named in the suit to get the issue before the courts. Exon, for his part, did not like the earmarks either. He was of the philosophy that appropriated funds should be made available to the university in a lump sum.
Meanwhile, the university budget proposals that Varner submitted to the governor and legislature were full of their own problems. For example, the university would underestimate enrollment and tuition revenue in any one year so as to make a case for more state tax support. After the legislature appropriated the tax support (general funds) and tuition support (cash funds) based on the university's tuition estimates, the university would come back to the legislature later, in mid-academic year, for a supplemental appropriation to spend the additional tuition revenue based on higher enrollment than projected. Varner would say with a straight face that the additional cash fund monies must be immediately appropriated by the legislature, conveniently forgetting that less than a year before he had leveraged additional state tax support for the university by low-balling the original estimates of cash funds available.
Exon pointed this out through his own budget proposals. Marvel was not pleased that his Appropriations Committee seemed to be played for fools and chastised Varner publicly at committee hearings, albeit on somewhat different grounds than Exon. (Marvel and Exon were not close, Marvel having run for governor himself in 1974 against Exon, who defeated him easily.)
Knoll records part of this in a chapter on Woody Varner. Knoll writes,
When the governor presented his budget, he and his fiscal officers used data about cash balances which University officials thought inaccurate. "I don't know the origin of his figures," Varner told...the Lincoln Journal.... "I wouldn't argue that such figures could be found, but the conclusions he reaches are simply wrong. It is a bad use of data." Exon reacted angrily. (p. 171)
Woody Varner resigned not long afterward, to become president of the NU Foundation, taking everyone by surprise. As his reason for resigning, he cited bad relations with the statehouse. In 1977, the Nebraska Supreme Court ruled in favor of the Regents, technically against Exon but essentially against the legislature. The controversy over the cash funds was addressed in a concurring opinion by Justice Harry Spencer, who summed it all up nicely in one sentence, slapping down both Marvel's earmarking and Varner's now-you-see-it-now-you-don't treatment of cash funds:
I concur with the majority opinion herein, with the understanding that the opinion holds that the Legislature cannot control the use of cash funds generated by University activities, but that it can consider them in the making of appropriations.
Robert Knoll can be forgiven for not telling the whole story, which he may not have known. Or perhaps he did not want to put Woody Varner in a bad light, being the "D.B. and Paula Varner Professor of English." Before publishing, Knoll ran his book by State Senator Jerome Warner, Marvel's successor as chairman of the appropriations committee. Warner, a man with his own agenda, likely was only too happy to leave the last word with Varner's version of events.
I rather liked Woody Varner and do not disagree with Robert Knoll's placement of him as among the best NU leaders of all time. Varner was a prodigious fund-raiser. He was the man behind the Lied Center in Lincoln. He made many friends for the university and for the whole state. He had his faults. He would try to come between people to create rifts, which he would then try to exploit. His reorganization of the university, making himself president of all the campuses under a central administration, would later backfire. Creation of a separate UNL and UNMC eventually, in 2011, cost UNL membership in the prestigious Association of American Universities, a huge blow which he could not have foreseen. But I'll wager Woody could have kept UNL in the AAU had he still been around; he would have have charmed AAU presidents to no end and come away with UNL membership in AAU intact.
The moral of this story, if it has one, is that when it comes to budget and finance, it's better to be transparent in the first place and not to engage in flim-flam. In the end, it really doesn't pay off. That was true in the 1970s (it brought down an excellent university president) and it should be even more apparent today, if anybody's paying attention.
Postscript: I know this history because I was an eyewitness to it as well as an active participant. When President Varner and Governor Exon met to discuss these and other budget matters, I was customarily present. I was intimately familiar with the Governor's budget numbers and knew the care with which they had been worked up and reviewed. When Senator Marvel went after President Varner in open hearing, I was in the hearing room and felt the tension. Marvel himself was still miffed about his loss in the previous gubernatorial race. He had tried to position himself with voters as a friend of the university through his earmarked appropriations, only to lose the election and then have the university object to his way of writing appropriations bills. It was salt in the wound. When the university prevailed in its lawsuit, unfortunately it was not only Marvel's appropriations bills that were found to be unconstitutional, but several longstanding statutory provisions dealing with procurement and personnel as well, which were not intended to invade the university's prerogatives but merely to remove inequities across state government. This is an unfortunate legacy of the ambition and overreach of Richard Marvel.
More Transparency Needed in Higher Education Finance, Again
February, 2016
Lincoln -- The question reverberating around the State of Nebraska this morning, surely, is why the Omaha World-Herald, owned by Warren Buffet, is calling into question the business practices of fellow Omaha civic leader Walter Scott, Jr. The articles at issue -- fine ones at that -- are by Kate Howard and prominently featured in the newspaper.
Some of us had nearly given up on reading any real news in Nebraska papers, unless we were looking for stories about Nebraska football, which are legion. By the way, can it be that my fellow Nebraskans are really that interested in this continual football prattle? Can't we at least save it for the football season, so we can read real news the rest of the year?
The OWH news articles, which show that investigative reporting still has at least a pulse in Nebraska, point out how many Scott foundation charitable contributions come with strings attached and how University of Nebraska officials are only too eager to keep the details hidden when the donations are to one or more of the NU campuses. Much action seems to take place within various facade entities featuring interlocking and overlapping directorships. Whether all of this is legal depends on whom you ask. Former Attorney General Robert Spire didn't think so, but he left office many years ago.
It might well be that the Scott foundation is doing such wonderful things that the Scott family should be enshrined in a new civic temple created especially for them by grateful Nebraskans. Based on what I know, I'm inclined to think so, or at least to give them the benefit of the doubt.
Not so with others, whose jobs are to protect us from bad things going on behind closed doors. Here are some concerns:
1. Where are the auditors? I've written before on how the behavior of university officials anywhere can be distorted based on what is or is not auditable public information. Such officials can be tempted to act improperly in situations where they think their actions will never come to light. Auditors should be careful to report dealings between public and private entities in sufficient detail to allow the public to know how tax dollars are being used, and if they are being used in conjunction with private dollars to permit kickbacks and circumvent open records. Auditors themselves are sometimes drawn into this trap. In a Kansas State case, about which I have previously written, Grant Thornton auditors should not have agreed to a confidential audit, good as it was.* The Kansas state auditor should have required appropriate public audits in the first place. Good for the press association in Kansas to have forced the Kansas Regents to release the Grant Thornton audit exposing money-juggling to cover up a kickback scheme. Auditors are too often beholden to those paying the bills for their services, and left too unsupervised by officials elected to oversee them. Where does the Nebraska state auditor stand on such matters? Two years ago I wrote this:
The need for greater transparency in higher education auditing has never been greater, inasmuch as state cutbacks in tax support for many institutions have left them more dependent on proprietary entities and foundations, to include large corporate donors eager to move in on, and to control subtly or otherwise, university research and outreach. Agreements of dubious legality, conflicts of interest, attached strings, and ethically challenged behavior that strike at the heart of universities' integrity are correspondingly on the rise.
2. Where is tax law enforcement? If you or I give a charitable contribution to a public television station and get a mug and tote bag in return, we get a tax statement noting that the tax deduction value of the contribution is net of the premiums we received. Are contributions to a university that involve a premium back to the contributor, in the form of a no-bid contract, treated similarly? According to the OWH, the no-bid premiums were explicit; in one case they were even delivered before the contribution was made. Perhaps there is a small army of accountants at work in the facade entities calculating and reporting the premiums involved. If not, I will still reduce my tax deduction by the value of the mug and tote bag, but I won't feel as good about it.
3. What about conflicts of interest? I can't help but note the OWH's mention of the Tetrad company, headed by a Scott family member, and how it was chosen without public input to develop the Innovation Campus in Lincoln. This is the same Tetrad company that is building a large anhydrous ammonia plant in Geneva, Nebraska. Had the Innovation Campus selection process been open to the public, perhaps someone would have asked how friendly Tetrad would be to prospective innovators on the Lincoln campus who want to decrease reliance on chemical agriculture to supply our food. There is a growing movement in the country to bring back cover crops to cut back on products like anhydrous ammonia. This could be seen as a threat to Tetrad. Likewise, Tetrad owns large livestock operations. Would it be open to innovators who see grass-fed beef as the future? Perhaps Tetrad could have defended itself against conflict of interest charges, but the point is that when these decisions are made behind closed doors, no one has a chance to point out potential conflicts of interest and to deal with them.
I have had a career in public budgeting and finance. Many years ago, I was the director of administrative services in the state capitol in Lincoln. DAS was charged statutorily with making certain that distributions of state funds were legal before my name and that of the state treasurer were attached to state warrants of payment. If we in DAS had a question as to the legality of a distribution, we would ask the attorney general. This applied to all state payments, including those on behalf of constitutional bodies such as the state board of education and the state board of regents. Certainly payments for no-bid contracts would have attracted our attention. Maybe we would have been advised to approve them. In any case, all state entities knew that someone was watching out for the state fisc, which deterred tomfoolery with state funds. Why do I get the feeling that no one's been minding the store for many years? Perhaps we are all supposed to be reading those stories about Nebraska football, rather than paying attention to what's going on behind closed doors.
* From the Grant Thornton audit of KSU:
The Foundation, the Alumni Association,.. and the Athletics Department view themselves, and are viewed by others, as part of or associated with the institution of KSU. However, they are all separate legal entities apart from the University. They all have as a common goal the advancement of KSU and have at times entered into transactions with one another in support of that goal. However, as separate legal entities, any transactions among them should be appropriately disclosed, approved and documented allowing for transparency of intent and substance. The failure to do so raises the question of the legitimacy of the transaction. Our report details numerous instances where transactions between the various entities did not meet this standard.
Lincoln -- The question reverberating around the State of Nebraska this morning, surely, is why the Omaha World-Herald, owned by Warren Buffet, is calling into question the business practices of fellow Omaha civic leader Walter Scott, Jr. The articles at issue -- fine ones at that -- are by Kate Howard and prominently featured in the newspaper.
Some of us had nearly given up on reading any real news in Nebraska papers, unless we were looking for stories about Nebraska football, which are legion. By the way, can it be that my fellow Nebraskans are really that interested in this continual football prattle? Can't we at least save it for the football season, so we can read real news the rest of the year?
The OWH news articles, which show that investigative reporting still has at least a pulse in Nebraska, point out how many Scott foundation charitable contributions come with strings attached and how University of Nebraska officials are only too eager to keep the details hidden when the donations are to one or more of the NU campuses. Much action seems to take place within various facade entities featuring interlocking and overlapping directorships. Whether all of this is legal depends on whom you ask. Former Attorney General Robert Spire didn't think so, but he left office many years ago.
It might well be that the Scott foundation is doing such wonderful things that the Scott family should be enshrined in a new civic temple created especially for them by grateful Nebraskans. Based on what I know, I'm inclined to think so, or at least to give them the benefit of the doubt.
Not so with others, whose jobs are to protect us from bad things going on behind closed doors. Here are some concerns:
1. Where are the auditors? I've written before on how the behavior of university officials anywhere can be distorted based on what is or is not auditable public information. Such officials can be tempted to act improperly in situations where they think their actions will never come to light. Auditors should be careful to report dealings between public and private entities in sufficient detail to allow the public to know how tax dollars are being used, and if they are being used in conjunction with private dollars to permit kickbacks and circumvent open records. Auditors themselves are sometimes drawn into this trap. In a Kansas State case, about which I have previously written, Grant Thornton auditors should not have agreed to a confidential audit, good as it was.* The Kansas state auditor should have required appropriate public audits in the first place. Good for the press association in Kansas to have forced the Kansas Regents to release the Grant Thornton audit exposing money-juggling to cover up a kickback scheme. Auditors are too often beholden to those paying the bills for their services, and left too unsupervised by officials elected to oversee them. Where does the Nebraska state auditor stand on such matters? Two years ago I wrote this:
The need for greater transparency in higher education auditing has never been greater, inasmuch as state cutbacks in tax support for many institutions have left them more dependent on proprietary entities and foundations, to include large corporate donors eager to move in on, and to control subtly or otherwise, university research and outreach. Agreements of dubious legality, conflicts of interest, attached strings, and ethically challenged behavior that strike at the heart of universities' integrity are correspondingly on the rise.
2. Where is tax law enforcement? If you or I give a charitable contribution to a public television station and get a mug and tote bag in return, we get a tax statement noting that the tax deduction value of the contribution is net of the premiums we received. Are contributions to a university that involve a premium back to the contributor, in the form of a no-bid contract, treated similarly? According to the OWH, the no-bid premiums were explicit; in one case they were even delivered before the contribution was made. Perhaps there is a small army of accountants at work in the facade entities calculating and reporting the premiums involved. If not, I will still reduce my tax deduction by the value of the mug and tote bag, but I won't feel as good about it.
3. What about conflicts of interest? I can't help but note the OWH's mention of the Tetrad company, headed by a Scott family member, and how it was chosen without public input to develop the Innovation Campus in Lincoln. This is the same Tetrad company that is building a large anhydrous ammonia plant in Geneva, Nebraska. Had the Innovation Campus selection process been open to the public, perhaps someone would have asked how friendly Tetrad would be to prospective innovators on the Lincoln campus who want to decrease reliance on chemical agriculture to supply our food. There is a growing movement in the country to bring back cover crops to cut back on products like anhydrous ammonia. This could be seen as a threat to Tetrad. Likewise, Tetrad owns large livestock operations. Would it be open to innovators who see grass-fed beef as the future? Perhaps Tetrad could have defended itself against conflict of interest charges, but the point is that when these decisions are made behind closed doors, no one has a chance to point out potential conflicts of interest and to deal with them.
I have had a career in public budgeting and finance. Many years ago, I was the director of administrative services in the state capitol in Lincoln. DAS was charged statutorily with making certain that distributions of state funds were legal before my name and that of the state treasurer were attached to state warrants of payment. If we in DAS had a question as to the legality of a distribution, we would ask the attorney general. This applied to all state payments, including those on behalf of constitutional bodies such as the state board of education and the state board of regents. Certainly payments for no-bid contracts would have attracted our attention. Maybe we would have been advised to approve them. In any case, all state entities knew that someone was watching out for the state fisc, which deterred tomfoolery with state funds. Why do I get the feeling that no one's been minding the store for many years? Perhaps we are all supposed to be reading those stories about Nebraska football, rather than paying attention to what's going on behind closed doors.
* From the Grant Thornton audit of KSU:
The Foundation, the Alumni Association,.. and the Athletics Department view themselves, and are viewed by others, as part of or associated with the institution of KSU. However, they are all separate legal entities apart from the University. They all have as a common goal the advancement of KSU and have at times entered into transactions with one another in support of that goal. However, as separate legal entities, any transactions among them should be appropriately disclosed, approved and documented allowing for transparency of intent and substance. The failure to do so raises the question of the legitimacy of the transaction. Our report details numerous instances where transactions between the various entities did not meet this standard.
An Enforcement Office to Combat College Fraud, At Last
February, 2016
Washington -- "Long overdue..." "Better late than never..." Those are my sentiments exactly upon learning that the U.S. Department of Education is finally going to estblish an office to crack down on college fraud. What took so long?
Some of us have been making suggestions along these lines for a long time, especially with regard to for-profit schools. I've previously written to ask the Secretary to use his program review teams to look at fraud, waste, and abuse at any and all institutions -- regardless of ownership -- that misuse "enrollment management" techniques to subvert the purposes of student aid programs under Title IV of the Higher Education Act. If the program review teams find evidence of intentional financial aid "gapping" of low-income students to discourage their enrollment, or intentional displacement of federal student grant funds to fund other institutional priorities, or any number of similar gimmicks that have become a cancer on enrollment management and cost taxpayers billions of dollars, he should use his statutory powers to give institutions notice to change their ways or be dropped from Title IV participation.
Federal funds must be used at colleges for the statutory purposes for which they are appropriated. It is also axiomatic that colleges cannot do indirectly what they cannot do directly with federal funds. College manipulation of federal funds amounts to misappropriation. The Secretary has clear statutory authority under his Limitation, Suspension, and Termination powers to send signals to institutions to cease misappropriation practices.
A question arises about where in the Department of Education the new office should be located. If it is located at the office of Federal Student Aid (FSA), there must be safeguards to protect against a conflict of interest, inasmuch as FSA has organizational lines of authority reflecting orientation toward so-called partnerships with institutions at the expense of enforcement. Unfortunately, FSA has given its blessing (or looked the other way) more than once to practices that are wasteful and even fraudulent. I know from first-hand experience; I have witnessed suppression and misuse of program review team findings on more than one occasion within FSA.
It is noteworthy that Congress has seen fit to keep the research and evaluation function (such as it is at the Institute for Education Sciences, where I used to work) separate from both FSA and from the Office of Postsecondary Education. Researchers and evaluators must be independent, of course, to be credible. Why not the new enforcement office as well? Should it not be somewhere outside of FSA?
Washington -- "Long overdue..." "Better late than never..." Those are my sentiments exactly upon learning that the U.S. Department of Education is finally going to estblish an office to crack down on college fraud. What took so long?
Some of us have been making suggestions along these lines for a long time, especially with regard to for-profit schools. I've previously written to ask the Secretary to use his program review teams to look at fraud, waste, and abuse at any and all institutions -- regardless of ownership -- that misuse "enrollment management" techniques to subvert the purposes of student aid programs under Title IV of the Higher Education Act. If the program review teams find evidence of intentional financial aid "gapping" of low-income students to discourage their enrollment, or intentional displacement of federal student grant funds to fund other institutional priorities, or any number of similar gimmicks that have become a cancer on enrollment management and cost taxpayers billions of dollars, he should use his statutory powers to give institutions notice to change their ways or be dropped from Title IV participation.
Federal funds must be used at colleges for the statutory purposes for which they are appropriated. It is also axiomatic that colleges cannot do indirectly what they cannot do directly with federal funds. College manipulation of federal funds amounts to misappropriation. The Secretary has clear statutory authority under his Limitation, Suspension, and Termination powers to send signals to institutions to cease misappropriation practices.
A question arises about where in the Department of Education the new office should be located. If it is located at the office of Federal Student Aid (FSA), there must be safeguards to protect against a conflict of interest, inasmuch as FSA has organizational lines of authority reflecting orientation toward so-called partnerships with institutions at the expense of enforcement. Unfortunately, FSA has given its blessing (or looked the other way) more than once to practices that are wasteful and even fraudulent. I know from first-hand experience; I have witnessed suppression and misuse of program review team findings on more than one occasion within FSA.
It is noteworthy that Congress has seen fit to keep the research and evaluation function (such as it is at the Institute for Education Sciences, where I used to work) separate from both FSA and from the Office of Postsecondary Education. Researchers and evaluators must be independent, of course, to be credible. Why not the new enforcement office as well? Should it not be somewhere outside of FSA?
Nominations Open for Nebraska Hall of Fame
January, 2016
Lincoln -- The state Hall of Fame Commission is taking nominations, until the end of 2016, to add a 26th member to Nebraska's officially recognized list of its most outstanding citizens. This link provides more information about the process.
To be eligible, nominees must have made great contributions to society and been deceased for at least thirty-five years. So who are some possible nominees this year?
• Howard Hanson died in 1981, making him eligible for the first time. The internationally famous composer and conductor was born in Wahoo of Swedish heritage. He won the Prix de Rome, a Pulitzer Prize, and was the director of the Eastman School of Music for forty years. His music, much of which was inspired by his upbringing in Nebraska, is still played in concert halls around the world. His boyhood home in Wahoo is now a museum on the National Register of Historic Places.
• Rachel Lloyd, who died in 1900, is the subject of a new book about her contributions to Nebraska, especially to agriculture. She was the first American woman to earn a Ph.D in chemistry and was on the University of Nebraska faculty from 1887 to 1894. Her laboratory work to establish Nebraska's sugar beet industry was untiring; she had a remarkable effect on her students and the university; she worked herself to a premature death on behalf of the state and must be considered a worthy nominee.
• Lawrence Bruner would make a good addition to the Hall of Fame. He was born in Cuming County and became a world-famous entomologist at the University of Nebraska. He undertook international missions on behalf of the federal government. His work in Argentina was appreciated so much that the country held a 50th anniversary celebration of his arrival to combat an insect plague. A governor's commission once named him Nebraska's most distinguished citizen.
• Elizabeth Dolan was one of the country's greatest fresco artists and should be recognized with a nomination. Her works in two of the state's most noteworthy interior spaces, the State Library in the Capitol and Elephant Hall on the UNL campus, have inspired Nebraskans for decades. She studied art in Lincoln, Chicago, New York, and Paris, but spent most of her working career in Lincoln.
At least four previous nominees should be considered in this round.
• Two recent biographies of Louise Pound recount her remarkable career and accomplishments. Her selection to the Hall of Fame would recognize her leadership on behalf of women's athletics, as well as highlight her academic contributions to the American language.
• Leta Stetter Hollingworth is the subject of a 2002 biography, A Forgotten Voice. Selection of Dr. Hollingworth (who indeed has been much too forgotten since her honorary degree from NU in 1937) would recognize her pathfinding contributions to psychology.
• Frederic Clements was the founder of the discipline of plant ecology and gave the world the Clementsian theory of nature. It is still the benchmark against which all other such theories are measured. Frederic Clements' contribution to theory is matched only by his heroic work, in spite of his failing health, to save the Great Plains from the Dust Bowl.
• Edith Schwartz Clements was the wife and full professional partner of Frederic Clements. Their work is inseparable. She was the first woman to receive a Ph.D from the University of Nebraska. She was the force behind the Alpine Laboratory, where the Clementses trained Nebraska botanists and ecologists from 1900-1940.
A question inevitably arises about the fact that, so far, only twenty-five Nebraskans have been included in the state's Hall of Fame. Is Nebraska so lacking in people who have made notable contributions to society that only twenty-five – soon twenty-six – can be duly recognized? Surely not. One reason why deserving Nebraskans will never be sufficiently recognized by the Hall of Fame is that the governing state statute allows only one person to be inducted every five years.
In the last round, I nominated Edith and Frederic Clements as a team – indeed, they had once been called the greatest husband-and-wife scientists since the Curies. Of course they could not be considered under the existing statute, which should be changed. If nothing else, the statute should be amended to allow the Commission to select a small number of new honorees that have been overlooked.
Another solution would be to give more recognition to those who reach the "finalist" stage of consideration. The Commission appropriately winnows out nominees who do not meet the admittedly tough qualification standards, suggesting that those who make the final cut are, in its opinion, worthy of honor. The Commission already has a web page of honorees; it could also permanently maintain a web page of finalists, which would be an honor in itself.
This is already happening to some extent. A new Wikipedia web page on Edith Clements notes that she was nominated for the Nebraska Hall of Fame. This new web page employs and cites her nomination materials. I hope the Commission discusses a permanent finalist web page option during its upcoming deliberations, so more people can become acquainted with Nebraska's greatest citizens whether they are in the Hall of Fame or not.
Lincoln -- The state Hall of Fame Commission is taking nominations, until the end of 2016, to add a 26th member to Nebraska's officially recognized list of its most outstanding citizens. This link provides more information about the process.
To be eligible, nominees must have made great contributions to society and been deceased for at least thirty-five years. So who are some possible nominees this year?
• Howard Hanson died in 1981, making him eligible for the first time. The internationally famous composer and conductor was born in Wahoo of Swedish heritage. He won the Prix de Rome, a Pulitzer Prize, and was the director of the Eastman School of Music for forty years. His music, much of which was inspired by his upbringing in Nebraska, is still played in concert halls around the world. His boyhood home in Wahoo is now a museum on the National Register of Historic Places.
• Rachel Lloyd, who died in 1900, is the subject of a new book about her contributions to Nebraska, especially to agriculture. She was the first American woman to earn a Ph.D in chemistry and was on the University of Nebraska faculty from 1887 to 1894. Her laboratory work to establish Nebraska's sugar beet industry was untiring; she had a remarkable effect on her students and the university; she worked herself to a premature death on behalf of the state and must be considered a worthy nominee.
• Lawrence Bruner would make a good addition to the Hall of Fame. He was born in Cuming County and became a world-famous entomologist at the University of Nebraska. He undertook international missions on behalf of the federal government. His work in Argentina was appreciated so much that the country held a 50th anniversary celebration of his arrival to combat an insect plague. A governor's commission once named him Nebraska's most distinguished citizen.
• Elizabeth Dolan was one of the country's greatest fresco artists and should be recognized with a nomination. Her works in two of the state's most noteworthy interior spaces, the State Library in the Capitol and Elephant Hall on the UNL campus, have inspired Nebraskans for decades. She studied art in Lincoln, Chicago, New York, and Paris, but spent most of her working career in Lincoln.
At least four previous nominees should be considered in this round.
• Two recent biographies of Louise Pound recount her remarkable career and accomplishments. Her selection to the Hall of Fame would recognize her leadership on behalf of women's athletics, as well as highlight her academic contributions to the American language.
• Leta Stetter Hollingworth is the subject of a 2002 biography, A Forgotten Voice. Selection of Dr. Hollingworth (who indeed has been much too forgotten since her honorary degree from NU in 1937) would recognize her pathfinding contributions to psychology.
• Frederic Clements was the founder of the discipline of plant ecology and gave the world the Clementsian theory of nature. It is still the benchmark against which all other such theories are measured. Frederic Clements' contribution to theory is matched only by his heroic work, in spite of his failing health, to save the Great Plains from the Dust Bowl.
• Edith Schwartz Clements was the wife and full professional partner of Frederic Clements. Their work is inseparable. She was the first woman to receive a Ph.D from the University of Nebraska. She was the force behind the Alpine Laboratory, where the Clementses trained Nebraska botanists and ecologists from 1900-1940.
A question inevitably arises about the fact that, so far, only twenty-five Nebraskans have been included in the state's Hall of Fame. Is Nebraska so lacking in people who have made notable contributions to society that only twenty-five – soon twenty-six – can be duly recognized? Surely not. One reason why deserving Nebraskans will never be sufficiently recognized by the Hall of Fame is that the governing state statute allows only one person to be inducted every five years.
In the last round, I nominated Edith and Frederic Clements as a team – indeed, they had once been called the greatest husband-and-wife scientists since the Curies. Of course they could not be considered under the existing statute, which should be changed. If nothing else, the statute should be amended to allow the Commission to select a small number of new honorees that have been overlooked.
Another solution would be to give more recognition to those who reach the "finalist" stage of consideration. The Commission appropriately winnows out nominees who do not meet the admittedly tough qualification standards, suggesting that those who make the final cut are, in its opinion, worthy of honor. The Commission already has a web page of honorees; it could also permanently maintain a web page of finalists, which would be an honor in itself.
This is already happening to some extent. A new Wikipedia web page on Edith Clements notes that she was nominated for the Nebraska Hall of Fame. This new web page employs and cites her nomination materials. I hope the Commission discusses a permanent finalist web page option during its upcoming deliberations, so more people can become acquainted with Nebraska's greatest citizens whether they are in the Hall of Fame or not.
Where is Grace Abbott When We Need Her
December, 2015
Lincoln -- With much loose talk these days about refugees and immigrants, it would be good for all of us to take a deep breath and reflect on the life and teachings of Grace Abbott. She is in the Nebraska Hall of Fame as a tireless worker in the cause of protecting refugees and immigrants, especially children. She was born in Grand Island, educated at the University of Nebraska (among other places), worked at the highest levels in the federal government and in many charitable organizations. She died in 1939 and is buried in Grand Island. She was inducted into the Nebraska Hall of Fame in 1976. Her papers, along with those of her sister Edith Abbott, are at the UNL library archives and special collections.
From 1915 to 1917, she headed the Immigrants' Protective League and from 1917 to 1921 worked in the Children's Bureau of the U.S. Department of Labor. Thereafter she was the chief of the Bureau until 1934. In 1931, Good Housekeeping named her one of the twelve greatest living American women.
Grace Abbott was a Republican, she explained, because that was the party of most civil war veterans' families in Nebraska. Herbert Hoover considered her for nomination to be Secretary of Labor, which would have made her the first woman to be appointed to the cabinet. She had much bipartisan support for the position, but ultimately Hoover declined to nominate her, knowing of her outspokenness without regard for political party considerations. She endorsed Franklin Roosevelt for president in 1932 and went on to assist in writing the children's aid provisions of the Social Security Act of 1935.
Grace Abbott is a person we should remember for her courage in standing up for the defenseless throughout her career and for her political courage, even at the expense of becoming famous as the first woman to head a cabinet department. (Frances Perkins went on to be so honored.)
We should likewise be standing up for defenseless refugees in our own time; it is also incredibly counterproductive geopolitically not to do so.
If you are reading this in the vicinity of the Nebraska state capitol, drop in to pay your respects and gain courage with a visit to the Grace Abbott statue in the Hall of Fame. It's easy to find. If you are at the governor's office (or if you are the governor), exit left, turn right down the hallway, and find Grace Abbott for inspiration.
Lincoln -- With much loose talk these days about refugees and immigrants, it would be good for all of us to take a deep breath and reflect on the life and teachings of Grace Abbott. She is in the Nebraska Hall of Fame as a tireless worker in the cause of protecting refugees and immigrants, especially children. She was born in Grand Island, educated at the University of Nebraska (among other places), worked at the highest levels in the federal government and in many charitable organizations. She died in 1939 and is buried in Grand Island. She was inducted into the Nebraska Hall of Fame in 1976. Her papers, along with those of her sister Edith Abbott, are at the UNL library archives and special collections.
From 1915 to 1917, she headed the Immigrants' Protective League and from 1917 to 1921 worked in the Children's Bureau of the U.S. Department of Labor. Thereafter she was the chief of the Bureau until 1934. In 1931, Good Housekeeping named her one of the twelve greatest living American women.
Grace Abbott was a Republican, she explained, because that was the party of most civil war veterans' families in Nebraska. Herbert Hoover considered her for nomination to be Secretary of Labor, which would have made her the first woman to be appointed to the cabinet. She had much bipartisan support for the position, but ultimately Hoover declined to nominate her, knowing of her outspokenness without regard for political party considerations. She endorsed Franklin Roosevelt for president in 1932 and went on to assist in writing the children's aid provisions of the Social Security Act of 1935.
Grace Abbott is a person we should remember for her courage in standing up for the defenseless throughout her career and for her political courage, even at the expense of becoming famous as the first woman to head a cabinet department. (Frances Perkins went on to be so honored.)
We should likewise be standing up for defenseless refugees in our own time; it is also incredibly counterproductive geopolitically not to do so.
If you are reading this in the vicinity of the Nebraska state capitol, drop in to pay your respects and gain courage with a visit to the Grace Abbott statue in the Hall of Fame. It's easy to find. If you are at the governor's office (or if you are the governor), exit left, turn right down the hallway, and find Grace Abbott for inspiration.
Public Policy Failures: A Personal Account
November, 2015
Washington -- Of success in higher education policy I've had my share; it's the failures over the years that still rankle. Did I do my best? Given the regrettable current state of higher education in America -- we have slipped far on many measures -- all of us should reflect on where we might have done better.
1. One failure of mine involved trying to encourage private non-profit colleges to serve more lower-income students as part of their missions (for which they are also given tax exemptions). Such students often have better chances for graduation at these colleges, for whatever reasons. By the 1980s, when I was a college association executive, much progress in this direction had already been made. Many private colleges, helped by federal and state student financial grant programs, were enrolling more students from lower-income families than were the public universities. The progress didn't last. The leadership of private colleges at the national association level came under the sway of those who valued elitism and prestige rankings above the charitable aspects of the institutions. Granted, there is much diversity among private colleges, and many do exemplary work, but the national associations in Washington have dug in their heels at every opportunity to prevent sharing of data publicly and to fight implementation of reasonable accountability measures. Worse, this behavior has been emulated by associations of public colleges and universities, undermining the effectiveness of virtually all the programs of the Higher Education Act. These once-admired associations have lost credibility, which has shifted to think tanks that are more honest about how rapidly American higher education opportunity has been slipping compared to other countries. It is no wonder that the nation now senses a crisis in college affordability on top of a student loan debt crisis, and that undesirable higher education gaps have been widening. I regret not engaging the associations more about their direction when I had the chance, both from inside and outside.
2. Another underachievement came in the late 1990s when I was in the Office of Legislation and Congressional Affairs at the Department of Education. I was the only person in this small office (and one of the few in the Department) who had experience at both state and institutional levels of higher education and who appreciated the importance of federal funding incentives in influencing state and institutional behavior. I was a vocal advocate for matching programs and maintenance-of-effort provisions in federal programs such as the Campus-Based and State Student Incentive Grant programs. I even wrote a paper on how such "cooperative federalism" programs were superior to federal programs that did not work through states and institutions; it was published in Publius, The Journal of Federalism. The following year I had an ally for a time in Deputy Secretary Mike Smith, who pushed OMB to shift more funds to cooperative federalism programs in the budget. OMB went along with only half of the request. It was the last time the programs received any real attention (until recently, when the virtures of "skin in the game" have been rediscovered). Meanwhile, states and institutions have predictably diminished their support for college affordability.
3. A temporary success in which I played a part turned into failure in the misadventure of writing federal regulations for the GEAR UP program. This matching program was established by Congress in 1998 to give disadvantaged junior and senior high school students help in preparing for college. One component was a substantial college scholarship, the intent of which was to reduce the need for at-risk students to borrow heavily or work excessively long hours to pay for college. The Department of Education proposed regulations that required colleges to administer these scholarships accordingly, so that the participating students would have lighter debt and work burdens. National higher education associations uniformly opposed the rules, insisting that colleges had the right to take the federal money but reduce their own support for the students in question so as to leave these students no better off. Their argument was "equity." GEAR UP scholarship recipients, they said, should be no better off than counterpart students who were not in the GEAR UP program. The colleges wanted to take the money but essentially, through the process of displacement, spread it around according to the colleges' own priorities. The Department of Education argued that it would be impossible to evaluate the success of the program if the funds were subject to such manipulation. The night before a showdown over the issue, Deputy Secretary Frank Holleman came over to my office and said he saw no choice but to concede to the united front of six national higher education associations. We went over the issues and arguments. The next day, the deputy secretary and I met with the heads of the six associations. They said if they didn't get their way, they would refuse to take GEAR UP scholarships and would work through Congress to kill the program. Frank Holleman held his ground and sent them all packing, to his great credit, and the federal regulations as the Department had drafted them were promulgated. Several months later, in 2001, another administration came into office and quickly withdrew the GEAR UP scholarship regulations. To my knowledge, no GEAR UP scholarships have ever been awarded, and if they have, it would be very difficult to determine who received the benefits. Who really receives benefits from many federal student-aid programs, given their fungibility, is a problem that has bedeviled researchers for decades. Which is precisely the way the national associations want it.
4. Another disappointment occurred after I retired, when I communicated with the committees of jurisdiction drafting the new GI Bill, which became law in 2008. The way the legislation was being written would not work, I was convinced. I feared the VA had too little experience administering student financial aid and my fellow veterans would not get what they were promised. I saw great confusion ahead and veterans being taken advantage of, which is what happened. The mess has still not been straightened out. It even spilled over to the great disadvantage of non-veterans in that unscrupulous for-profit schools were allowed to count federal GI bill benefits as if they didn't come from federal taxpayers, so as to be able to remain in business under a law that requires these schools to get at least ten percent of their revenues from other than gullible Uncle Sam. This was a windfall to them and kept several of them in existence before state attorneys general and others finally started to catch up with their multiple violations of other laws. Taxpayers will pay dearly for these mistakes. Veterans have been soaked and many are deeply in debt.
I take these public policy failures personally. It's not that I was especially prescient about how these predicaments would evolve, or that my judgment was always better than others, but I had the experience and often the occasion to speak up and yell STOP! I look back and regret not trying to engage others to throw more sand into the gears of these public policy misfortunes as they were happening.
Washington -- Of success in higher education policy I've had my share; it's the failures over the years that still rankle. Did I do my best? Given the regrettable current state of higher education in America -- we have slipped far on many measures -- all of us should reflect on where we might have done better.
1. One failure of mine involved trying to encourage private non-profit colleges to serve more lower-income students as part of their missions (for which they are also given tax exemptions). Such students often have better chances for graduation at these colleges, for whatever reasons. By the 1980s, when I was a college association executive, much progress in this direction had already been made. Many private colleges, helped by federal and state student financial grant programs, were enrolling more students from lower-income families than were the public universities. The progress didn't last. The leadership of private colleges at the national association level came under the sway of those who valued elitism and prestige rankings above the charitable aspects of the institutions. Granted, there is much diversity among private colleges, and many do exemplary work, but the national associations in Washington have dug in their heels at every opportunity to prevent sharing of data publicly and to fight implementation of reasonable accountability measures. Worse, this behavior has been emulated by associations of public colleges and universities, undermining the effectiveness of virtually all the programs of the Higher Education Act. These once-admired associations have lost credibility, which has shifted to think tanks that are more honest about how rapidly American higher education opportunity has been slipping compared to other countries. It is no wonder that the nation now senses a crisis in college affordability on top of a student loan debt crisis, and that undesirable higher education gaps have been widening. I regret not engaging the associations more about their direction when I had the chance, both from inside and outside.
2. Another underachievement came in the late 1990s when I was in the Office of Legislation and Congressional Affairs at the Department of Education. I was the only person in this small office (and one of the few in the Department) who had experience at both state and institutional levels of higher education and who appreciated the importance of federal funding incentives in influencing state and institutional behavior. I was a vocal advocate for matching programs and maintenance-of-effort provisions in federal programs such as the Campus-Based and State Student Incentive Grant programs. I even wrote a paper on how such "cooperative federalism" programs were superior to federal programs that did not work through states and institutions; it was published in Publius, The Journal of Federalism. The following year I had an ally for a time in Deputy Secretary Mike Smith, who pushed OMB to shift more funds to cooperative federalism programs in the budget. OMB went along with only half of the request. It was the last time the programs received any real attention (until recently, when the virtures of "skin in the game" have been rediscovered). Meanwhile, states and institutions have predictably diminished their support for college affordability.
3. A temporary success in which I played a part turned into failure in the misadventure of writing federal regulations for the GEAR UP program. This matching program was established by Congress in 1998 to give disadvantaged junior and senior high school students help in preparing for college. One component was a substantial college scholarship, the intent of which was to reduce the need for at-risk students to borrow heavily or work excessively long hours to pay for college. The Department of Education proposed regulations that required colleges to administer these scholarships accordingly, so that the participating students would have lighter debt and work burdens. National higher education associations uniformly opposed the rules, insisting that colleges had the right to take the federal money but reduce their own support for the students in question so as to leave these students no better off. Their argument was "equity." GEAR UP scholarship recipients, they said, should be no better off than counterpart students who were not in the GEAR UP program. The colleges wanted to take the money but essentially, through the process of displacement, spread it around according to the colleges' own priorities. The Department of Education argued that it would be impossible to evaluate the success of the program if the funds were subject to such manipulation. The night before a showdown over the issue, Deputy Secretary Frank Holleman came over to my office and said he saw no choice but to concede to the united front of six national higher education associations. We went over the issues and arguments. The next day, the deputy secretary and I met with the heads of the six associations. They said if they didn't get their way, they would refuse to take GEAR UP scholarships and would work through Congress to kill the program. Frank Holleman held his ground and sent them all packing, to his great credit, and the federal regulations as the Department had drafted them were promulgated. Several months later, in 2001, another administration came into office and quickly withdrew the GEAR UP scholarship regulations. To my knowledge, no GEAR UP scholarships have ever been awarded, and if they have, it would be very difficult to determine who received the benefits. Who really receives benefits from many federal student-aid programs, given their fungibility, is a problem that has bedeviled researchers for decades. Which is precisely the way the national associations want it.
4. Another disappointment occurred after I retired, when I communicated with the committees of jurisdiction drafting the new GI Bill, which became law in 2008. The way the legislation was being written would not work, I was convinced. I feared the VA had too little experience administering student financial aid and my fellow veterans would not get what they were promised. I saw great confusion ahead and veterans being taken advantage of, which is what happened. The mess has still not been straightened out. It even spilled over to the great disadvantage of non-veterans in that unscrupulous for-profit schools were allowed to count federal GI bill benefits as if they didn't come from federal taxpayers, so as to be able to remain in business under a law that requires these schools to get at least ten percent of their revenues from other than gullible Uncle Sam. This was a windfall to them and kept several of them in existence before state attorneys general and others finally started to catch up with their multiple violations of other laws. Taxpayers will pay dearly for these mistakes. Veterans have been soaked and many are deeply in debt.
I take these public policy failures personally. It's not that I was especially prescient about how these predicaments would evolve, or that my judgment was always better than others, but I had the experience and often the occasion to speak up and yell STOP! I look back and regret not trying to engage others to throw more sand into the gears of these public policy misfortunes as they were happening.
Food and Innovation
October, 2015
Berlin -- The fast-food chain McDonald's has put up billboards all over Berlin, trying to convince us that its food is really "bio" (organic). Or at least the meat is. The campaign is an effort to stem the closure of its franchises in the face of changing consumer preferences for fresh, healthy food. In my neighborhood there are few such franchises anyway, the result of an effort over the years, mostly successful, to keep chains out. The fast food of choice here is the Döner Kebap, sold out of hole-in-the-wall storefronts.
Meanwhile, the food processing giant ConAgra is leaving its Nebraska headquarters in favor of Chicago. It, too, is looking for a way to turn itself around in response to changing consumer demand. ConAgra is moving into the Merchandise Mart, the famous old riverfront warehouse where its employees can mix with innovators like The Good Food Business Accelerator, with connections to companies that have thrived on offering healthier food.
The ironies are head-shaking. ConAgra tore down the historic warehouses in Omaha's Jobbers Canyon. Now it moves into a giant warehouse. ConAgra partnered with the Nebraska Innovation Campus in Lincoln seeking an atmosphere of food innovation. It remains in that partnership; perhaps it will send to Lincoln some of what it discovers about innovation in Chicago.
Nebraska state taxpayers spent tens of millions to keep ConAgra in Omaha and are putting millions into the NIC. That spending does not look so good in retrospect, although I believe support for NIC will eventually prove to be a wise investment. But the lesson to be drawn right now is that at least ConAgra doesn't think much of NIC for looking to the old, failing ConAgra as its innovation partner.
Unpleasant as all this is, it may be for the best. Our diets need a shake-up.
Berlin -- The fast-food chain McDonald's has put up billboards all over Berlin, trying to convince us that its food is really "bio" (organic). Or at least the meat is. The campaign is an effort to stem the closure of its franchises in the face of changing consumer preferences for fresh, healthy food. In my neighborhood there are few such franchises anyway, the result of an effort over the years, mostly successful, to keep chains out. The fast food of choice here is the Döner Kebap, sold out of hole-in-the-wall storefronts.
Meanwhile, the food processing giant ConAgra is leaving its Nebraska headquarters in favor of Chicago. It, too, is looking for a way to turn itself around in response to changing consumer demand. ConAgra is moving into the Merchandise Mart, the famous old riverfront warehouse where its employees can mix with innovators like The Good Food Business Accelerator, with connections to companies that have thrived on offering healthier food.
The ironies are head-shaking. ConAgra tore down the historic warehouses in Omaha's Jobbers Canyon. Now it moves into a giant warehouse. ConAgra partnered with the Nebraska Innovation Campus in Lincoln seeking an atmosphere of food innovation. It remains in that partnership; perhaps it will send to Lincoln some of what it discovers about innovation in Chicago.
Nebraska state taxpayers spent tens of millions to keep ConAgra in Omaha and are putting millions into the NIC. That spending does not look so good in retrospect, although I believe support for NIC will eventually prove to be a wise investment. But the lesson to be drawn right now is that at least ConAgra doesn't think much of NIC for looking to the old, failing ConAgra as its innovation partner.
Unpleasant as all this is, it may be for the best. Our diets need a shake-up.
Twenty-fifth Anniversary of German Reunification
October, 2015
Berlin -- Twenty-five years ago, on October 3, 1990, Germany reunited. I was living then in southern Berlin at Zerbsterstrasse 42, working hard on a writing project. But the weather that historic day was splendid so I ventured over to the Brandenburg Gate and to the Palast der Republik. What a crowd. What a celebration.
Today, October 3, 2015, is another cloudless sky so I left Mariannenplatz, near the old Berlin Wall, and headed west to central Berlin to see anniversary festivities. Unter den Linden was full of tourists. Strasse der 17 Juni was full of carnival booths. The area is not the same. Couldn't be. Lots of people under twenty-five, for one thing, who could not remember.
This time, nearby Gendarmenmarkt was much different for me as I walked by the dome of the French church. A few weeks ago I discovered that my paternal grandmother's family has roots in northeastern France. They became part of the migration of Protestants out of France and Germany to British colonial America in the mid-18th Century. Other French refugee Protestants (Huguenots) migrated to Berlin. The French cathedral at Gendarmenmarkt dates from 1784. That's when my migrating ancestors, the Wimers, were acquiring land in Virginia, now West Virginia. The French migration to Berlin made up a third of the city's population at the beginning of the 18th Century and grew to twenty thousand. Likely there are common ancestors among my family and the Berliners of today of Huguenot extraction. This is also a reminder that Berlin has always been a destination for refugees, which helps explain the current welcoming attitude toward today's newcomers from the Middle East.
Today over at Potsdamer Platz, just a short walk from the American Embassy, there was a discordant note questioning the purpose of German reunification. A huge banner proclaimed that the border was lifted so that the countries could wage war together as one. ("Die Grenze wurde aufgehoben, damit wir gemeinsam wieder in den Krieg ziehen.") Pamphlets and posters identified the non-celebrants as former East Germans who still take the view that their country was annexed.
The biggest difference for me over twenty-five years is the new presence of the memorial to the Holocaust victims, which occupies acres of former no-man's-land stretching from the American Embassy almost to the site of Hitler's last bunker. It is like no other. My family and I looked out over the expanse in 1989 from a wood observation scaffold, never imagining what the future would hold.
Berlin -- Twenty-five years ago, on October 3, 1990, Germany reunited. I was living then in southern Berlin at Zerbsterstrasse 42, working hard on a writing project. But the weather that historic day was splendid so I ventured over to the Brandenburg Gate and to the Palast der Republik. What a crowd. What a celebration.
Today, October 3, 2015, is another cloudless sky so I left Mariannenplatz, near the old Berlin Wall, and headed west to central Berlin to see anniversary festivities. Unter den Linden was full of tourists. Strasse der 17 Juni was full of carnival booths. The area is not the same. Couldn't be. Lots of people under twenty-five, for one thing, who could not remember.
This time, nearby Gendarmenmarkt was much different for me as I walked by the dome of the French church. A few weeks ago I discovered that my paternal grandmother's family has roots in northeastern France. They became part of the migration of Protestants out of France and Germany to British colonial America in the mid-18th Century. Other French refugee Protestants (Huguenots) migrated to Berlin. The French cathedral at Gendarmenmarkt dates from 1784. That's when my migrating ancestors, the Wimers, were acquiring land in Virginia, now West Virginia. The French migration to Berlin made up a third of the city's population at the beginning of the 18th Century and grew to twenty thousand. Likely there are common ancestors among my family and the Berliners of today of Huguenot extraction. This is also a reminder that Berlin has always been a destination for refugees, which helps explain the current welcoming attitude toward today's newcomers from the Middle East.
Today over at Potsdamer Platz, just a short walk from the American Embassy, there was a discordant note questioning the purpose of German reunification. A huge banner proclaimed that the border was lifted so that the countries could wage war together as one. ("Die Grenze wurde aufgehoben, damit wir gemeinsam wieder in den Krieg ziehen.") Pamphlets and posters identified the non-celebrants as former East Germans who still take the view that their country was annexed.
The biggest difference for me over twenty-five years is the new presence of the memorial to the Holocaust victims, which occupies acres of former no-man's-land stretching from the American Embassy almost to the site of Hitler's last bunker. It is like no other. My family and I looked out over the expanse in 1989 from a wood observation scaffold, never imagining what the future would hold.
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