4. Influence over Student activities
A. Graduate Fellowships
1. Florida State University
I. Students And Dissertation Topics Must Comply With Terms Of Koch's Donor Agreement
II. Fellows Screened By Donor Advisory Board
III. Donor Controls Number Of Fellowships
IV. Constraints Applied To Non-Koch Fellowships
V. Documented Departmental Harms Of Fellowships
Some of the most startling findings among the Koch network's oversteps of academic freedom and faculty governance come in the form of influence over graduate fellowships.
At Florida State University, the Koch foundation and their partner donor BB&T created a graduate fellowship program that granted them excessive influence over the selection, retention, and research topics of graduate fellows.
FSU’s 2011 Faculty Senate investigation expressed an initial concern about the system of graduate fellowships:
The Koch fellowships for graduate students may have targeted a specific type of graduate student that is not representative of the diversity of the Economics department and determination of awards have not been implemented with input from the Graduate Admissions Committee (Standley report, pg. 4).
The report's recommendation was to:
Re-establish the role of the Graduate Admissions Committee guidelines and recommendations for selection of graduate students for all fellowships, including the Koch ones (Standley report, Recommendation 4.c)
This is made clear by an email discussing donor expectations sent in 2007 by the recipient of Koch's FSU donation (and department chair) Dr. Bruce Benson:
The Koch Foundation agenda is to expose students to free-market ideas, and to provide opportunities for students who want to study with faculty who share Koch’s appreciation for markets and distrust of government. The proposal is, therefore, not to just give us money to hire anyone we want and fund any graduate student that we choose. There are constraints, as noted below. . . .
As we all know, there are no free lunches. Everything comes with costs. In this case, the money for faculty lines and graduate students is coming from a group of funding organizations with strong libertarian views. These organizations have an explicit agenda. They want to expose students to what they believe are vital concepts about the benefits of the market and the dangers of government failure, and they want to support and mentor students who share their views. Therefore, they are trying to convince us to hire faculty who will provide that exposure and mentoring. If we are not willing to hire such faculty, they are not willing to fund us (Benson Memo, pgs 1 and 3).
The BB&T donor letter describes the fellowships in FSU's department of Finance:
The BB&T Program of Free Enterprise Graduate Fellows . . .will support doctoral fellows in Finance and Economics each year. Fellows will assist in leading the discussion series on Atlas Shrugged, assist in the teaching of the undergraduate Financial Institutions and Investments courses and serve as teaching assistants for the Morals and Ethics in Economic Systems class (2008 BB&T letter).
In 2013, the Koch network’s donor-advised fund, DonorsTrust, contributed $207, 140 from an anonymous donor to the FSU foundation for "for (4) four-year PhD fellowships in economics. “ In 2014, DonorsTrust gave $109, 116 for the same purpose.
i. Students and their dissertation topics Must comply with terms of Koch's donor agreement
Although the student fellowships are not included in the 2008 or 2013 MOU, they are subject to identical conditions as those specified in the MOU, and considered part of the CKF program. Fellows funded by Koch/BB&T are required to comply with Koch’s “Objectives and Purposes”: the provision that binds all of the “Affiliated Programs and Positions” in the MOU. The 2008 and 2013 MOU state the Koch foundation’s Objectives and Purposes:
1. Objectives and Purposes. (a) The purpose of the Affiliated Programs and Positions is to advance the understanding and practice of those free voluntary processes and principles that promote social progress, human well-being, individual freedom, opportunity and prosperity based on the rule of law, constitutional government, private property and the laws, regulations, organizations, institutions and social norms upon which they rely. (2008 MOU, Section 1.a).
The emphasized text above is identical to (and appears to be directly quoted by) the language in the department’s public facing description of the Koch/BB&T fellowships:
The BB&T and CKF fellowships are part of a larger grant-supported set of programs: the program for the Study of Political Economy and Free Enterprise (SPEFE) and the program for Excellence in Economic Education (EEE). Their purposes and objectives are “to advance the understanding and practice of those free voluntary processes and principles that promote social progress, human well-being, individual freedom, opportunity and prosperity based on the rule of law, constitutional government, private property and the laws, regulations, organizations, institutions and social norms upon which they rely.” Therefore, these fellowships are to support students who wish to pursue a course of study that combines rigorous technical economic training in the core areas of applied economic theory and applied econometrics with a focus on the political economy of contemporary economic issues, and particularly, on the roles and impacts of institutions on market processes and economic well-being ((External CKF/BB&T fellowship description). (Emphasis added.)
In keeping with the rest of Koch’s programming, the donor retains the right to approve the renewal of funding on an annual basis:
The Department of Economics at Florida State University has received grants from the Charles G. Koch Charitable Foundation (CGK) and the BB&T Bank Foundation (BB&T) to support four-year fellowships for students entering the PhD program in economics. Grant proposals must be submitted each year to obtain CGK fellowships as they are subject to annual funding decisions by CGK (External CKF/BB&T fellowship description) (Emphasis added.)
An internal department description of the Koch/BB&T doctoral fellowships reveals details of the fellowships that are not found elsewhere, including the fact that dissertation topics of Koch/BB&T fellows must comply with Koch’s Objectives and Purposes 1.a:
The student must be advised by a faculty member who is a SPEFE associate. This means that a SPEFE-faculty associate must chair, co-chair, or be an active member of the student’s dissertation committee. At this point, the SPEFE faculty associates are: Bruce Benson, James Gwartney, Randall Holcombe, Mark Isaac, Shi Qi, and Danila Serra . . .
The dissertation project must be one that is considered by the selection committee to be consistent with the purposes and objectives of the SPEFE program discussed above (Internal CKF/BB&T fellowship description).
ii. Fellows screened by donor advisory board
An internal university report describes the fellowships screening process, including the “Fellowship Screening Committee”:
The Graduate Committee then screens this group for applicants that might be eligible for a Koch Fellowship. Any such applicants are then forwarded to the Fellowship Screening Committee (made up solely of department faculty in the Markets and Institutions group, none of whom currently serve on the Graduate Committee), which then reviews and selects applicants for funding. The department states that no applicant has ever been denied admission and/or funding because of interests that were inconsistent with those of the Koch Foundation. Students on Koch funding are also instructed that should their interest ever change, they will be switched to a department teaching assistantship (provided they are in good academic standing) (GPC report, pg. 8).
In addition to monitoring fellows for compliance, the requirements of compliance are narrow enough that “students on Koch funding are also instructed that should their interest ever change, they will be switched to a department teaching assistantship.” This is severe consequence according to the report, resulting in a substantial pay cut and a doubled workload (GPC report, pg. 8).
The selection process is described as a screening committee made up of SPEFE faculty, whose scholarly actions are tied to Koch’s Objectives and Purposes 1(a). This is revealed in a publicly available description of the Koch/BB&T fellowships:
After the Graduate Committee decides on admission and eligibility for funding, the Graduate Director will forward the application files for Fellowship candidates to the Principal Investigator (PI) on the CKF and BB&T grants, currently Bruce Benson. These files will include those applicants who have been chosen for admission with funding and who: (a) indicate in the application that they want to be considered for the fellowships, (b) are recommended for fellowship consideration in a letter of recommendation, or (c) appear to have goals or interests that are consistent with the purpose and objective of the SPEFE-EEE programs quoted above. The PI will then distribute the files or relevant information from the files to the rest of the SPEFE Fellowship Committee. This committee will review the files and choose the applicants who are to be awarded the fellowships (External CKF/BB&T fellowship description). (Emphasis added.)
In direct conflict with both the GPC’s description and the public facing description, records requests reveal that the “SPEFE Screening Committee” contains a Koch representative, as well as the full SPEFE advisory board:
The PI will then distribute the files or relevant information from the files to the rest of the CGKBB&T Fellowship Committee made up of senior SPEFE faculty associates (currently Benson, Gwartney, Holcombe, and Isaac) and members of the SPEFE-EEE advisory committee (currently Mark Isaac, David Macpherson and Anne Bradley but Isaac and Macpherson will soon be replaced by other FSU faculty members, and Bradley, who no longer works at CGK, will be replaced by a CGK representative) (Internal CKF/BB&T fellowship description, pg. 7).
The voting rule for this fellowship committee is made clear in the text above, but both the 2008 and 2013 MOU stipulate that “[t]he decision rule of the SPEFE-EEE advisory board in all matters will be a unanimous vote of all three members” (2008 and 2013 MOU, Section 7.b).
iii. Donor controls number of fellowships each year
A Graduate Policy Committee report on the Department of Economics revealed that the Charles Koch Foundation controls how many new fellows they annually fund:
Each year the Koch Foundation decides how many fellowships it wishes to provide to the department. This “number” is the only input of the Koch Foundation, and is determined before the admissions process starts.
In this way, the Koch foundation is given control of the program’s growth. According to an internal budget document obtained through records requests, the Koch foundation’s annual support for graduate fellowships has grown from $21,500 to $436,414 between 2009 and 2015. The 2009 funding would have supported a single full fellowship, whereas a 2015 grant letter proposed support for twenty-one fellows with Koch, BB&T, and Manley Johnson Fellowships for Fall 2015.
iV. Koch Stipulations applied to non-koch fellowships
Student research has uncovered that donor-controlled selection procedures are extended to fellowships that are not subject to the agreement. Internal emails reveal the discussion, with Bruce Benson (Principal Investigator of the FSU/Koch agreement) asking the Department Chair and the Dean about offering a non-Koch fellowship to a “Koch-type” student. (Note to the reader: in the following text, a “top up” refers to a smaller fellowship awarded in addition to department funding, thus raising the pay near or to the level of the Koch fellows). Bruce Benson asks clearly:
I want to ask about the Manley Johnson money. In particular, both students who got the $4000 top ups are in their 4th year (one, [redacted] , is graduating this semester), so we could offer one of these fellowships to a 2015 entrant (recall that the flow of funds should cover one, and that we gave two before because we had enough spendable funds built up to pay for it). Should we? If the answer is yes, then should it go to a "Koch-type" student or to some other student? (Benson email, October 27, 2014)
In another exchange, Benson clearly states that this would serve to please the donor:
I just got an e-mail from [CKF director of university relations] John Hardin indicating that he needs our fellowship funding request by next week. If we are going to offer a Manley Johnson fellowship (top up) to a Koch-type student saying so in the proposal will be helpful. If we are not going to offer the fellowship or we are going to make it a non-Koch-related fellowship it would be better not to mention it. What are your plans for these funds?
Ultimately, the Dean responds, clarifying that “the gift is for a graduate student but we might want to have a modest preference for free market type.” The department chair finally suggests that they split the fellowships between Koch and non-Koch types:
The issue that arose in the Department last time was that the corpus of this fund includes not only contributions from the Johnsons but also contributions from Department faculty and alumni, not all of who would find themselves aligned with the mission of [Koch’s] SPEFE/M & I. I propose that we deal with this issue by having the M&I group (i.e. Bruce's committee) choose one of the Johnson top-up candidates and the Graduate Committee and Chair choose the other Johnson top-up candidate. I checked with Jesse Colvin as to whether he thought this would satisfy donor intent and he was fine with it. Please let me know if this is OK with all of you because Bruce needs to convey this information in his grant proposal which has a deadline of next week. (Isaac email, Oct. 21, 2014)
According to the Dean, one set of donors, specifically “Department faculty and alumni, not all of who would find themselves aligned with the mission of SPEFE/M&I” have had the intent of their gift compromised in order to marginally bolster Koch’s intent.
V. Departmental harms of fellowships
The Koch and BB&T fellows who are told ”should their interest ever change, they will be switched to a department teaching assistantship” (GPC, pg. 8). While this may seem trivial, such a decision results in a severe consequence, leading to a substantial pay cut and a doubled workload.
Koch fellows work a maximum of 10 hours a week, under a Koch-affiliated professor, generally making up to $25,000 a year. Non-Koch fellows make approximately $17,000 a year, and work at least 20 hours. In other words, those identified as a “Koch-type” work 50% less, and earn nearly 50% more, than their peers.
In the Graduate Policy Committee report, they identify a problem with the “significant disparity between the stipends and duties of department teaching assistants and those on doctoral fellowships.” The committee’s finding noted ideological requirements on the larger stipends ultimately made recruitment of “first-choice” students more difficult because many were not ready to decide on a dissertation topic compliant with Koch’s Objectives and Purposes:
The lower stipend on department teaching assistantships made it harder to recruit first-choice candidates with undecided interests, or interests in fields like macroeconomics or industrial organization, which are not the primary focus of the largest research groups (GPC report, pg. 8).
The Graduate Policy Committee that issued the report on the Koch-type fellowships was tasked with recommending whether to continue the graduate economics program as it currently stands. An FSU official describes in an email that the committee’s approval was a “close vote,” recommending increased transparency around the Koch, and less reliance on their funding:
• Overall positive review of Economics. GPC review group didn't have access to the external reviewer's report. Only sticking point is the recommendation that the dept. put more information about funding sources (e.g., Koch bros) on public website to defuse criticisms. Will send the GPC report. Close vote, but passed.
• Also recommended a broader mix of funding
(Buchanan email re: Dept. of Economics GPC report, Nov. 2014)
The student member of the GPC committee, Alice Crisp, had long and direct ties to the Charles Koch Institute and its affiliated organizations. Besides being a Charles G. Koch Doctoral Fellow at the time as well as a research assistant for Dr. James Gwartney, she participated in the Koch Internship Program, worked for the Atlas Economic Research Foundation and the Foundation for Economic Education (2013). Her vote may not have been impartial due to financial and professional conflicts of interest, which makes the six-person committee’s “close vote” appear all the more an impropriety.
Buchanan made an additional remark in the above email, regarding Graduate Teaching Assistant guidelines being “streamlined,” where teaching assistants are not being required to attend FSU’s Program for Instructional Excellence (PIE), which most graduate teaching assistants are required to complete as indicated in the University-wide TA Standards.”
Problems according to External Review
An external reviewer who performed a departmental review parallel to that of the GPC found that:
The major issue with the PhD program is the seemingly low retention and graduation rates. Approximately 50% of those entering leave the program or exit with a Masters degree. These numbers did decline with the class entering in 2011 (33%) but have risen again for the class entering in 2012 (41% with possibly more to come). There are two main reasons students who enter a PhD program in economics do not continue: they cannot do the work – indicated by failing to pass the core exams – or they find out it is simply not what they thought graduate economics would be.
The reviewer states “although I have not looked carefully at national numbers in some years, it does seem that the drop-out rate at FSU is somewhat above average, [sic] reasons for that are not be entirely the fault of the department.” He lists three potential reasons “not under the control of the department,” the second of which:
2. TAs are paid significantly less than students on fellowships. A fellowship pays $25,000 while a TA pays only $17,000. The fellowship rate is competitive with other programs; the TA rate is not. [...] Item 2 implies that the department loses many more 1st round admits who are offered TAs than those offered a fellowship. Thus, the quality of those on TA will be less than those on fellowships. Items 1 and 3 together imply that those on fellowship will generally be more prepared to begin graduate study and focus on that study than those on TA. [...] Item 2, the disparity in pay between fellowship and TA, can and should be addressed by increasing the TA stipend (FSU Economics 2014 QER, External Reviewer, pg. 5-6)
In 2013, DonorsTrust contributed $207, 140 from an anonymous donor to the FSU foundation for "for (4) four-year PhD fellowships in economics. “ In 2014, DonorsTrust gave $109, 116 for the same purpose.
At the University of Louisville, the a 2015 agreement with the Koch foundation created a Ph.D. Fellowship program, affiliated with the donor created Center for Free Enterprise. Within the proposal attached to the agreement, the fellowships are described:
The Ph.D. Fellowships will be available for doctoral students in the College' s Entrepreneurship program whose research interests coincide with the Center's Mission. The Ph.D. Fellowships will cover tuition and provide a stipend and may be renewed annually. The estimated cost of the tuition and stipend for four fellowships is $132,000 per year. (2015 MOU, Attachment A)
The agreement describes the role these fellowships play:
Through Ph.D. fellowships, four new faculty members, and various academic programs, the Center will become a hub for scholarship on the role of enterprise and entrepreneurship in society and the ideas and institutions that lead to well-being. (2015 MOU, Attachment A)
At Texas Tech University, a grant proposal between several Koch funded academics and the John Templeton Foundation revealed explicit outcomes that include policy change and shifting student's views on political issues:
This research project will study what causes countries or U.S. states to adopt institutions that support an environment of economic freedom that causes prosperity. Measurable outputs will include scholarly journal articles, edited volumes, dissertations research seminars, and newly minted Ph.D.'s who will have an appreciation of the benefits of free markets and were trained while researching this topic.
How economic freedom is improved is much less understood than the benefits freedom provides. . . Ph.D. Students will research the topic as assistants and in their own dissertations. (Benjamin Powell's TTU Templeton grant, 2013)
The project would employ these graduate students as a cadre of free market advocates:
. . . We will have trained successful new scholars (4 Ph.D. students and 3 post -doc fellows) who support economic freedom and private enterprise and who continue to research these topics while being successful academics and inspiring students to follow in their footsteps.
Short term outcomes during the period of the grant that provide evidence of this:
. . . the four Ph.D. students each formulate research papers on the topic that lead to dissertation proposals that their committee accepts.
Long run Outcomes after completion of the grant:
. . . All seven (post-doc and Ph.D. students) earn tenure and continue to publish research related to economic freedom.
All seven inspire their students to become academics that do research related to free markets and private enterprise. Evidence of this will be students of theirs getting Ph.D.s and publishing pro free enterprise research (TTU Templeton grant, 2013)
These academics would be expected to have an immediate and measurable impact on student public policy views through their work in the classroom:
Assuming a normal academic teaching load of 6 courses per academic year and an average of 25 students in each course, these 7 newly trained academics should reach 1,050 students per academic year after they graduate. We could measure how much they change their students' views by administering a quiz on the students' public policy beliefs at the beginning and end of each semester to see how their views change after having been exposed to these faculty members (I've done this in some of my classes). (TTU Templeton grant, 2013)
The grant specifies policy change as an explicit objective:
Countries and the U.S. states will become freer as a result of this research.
Long Run: we observes increased in the economic freedom score of countries and U.S. states where our work has had an influence (as evidenced by outcome 4). We can measure changes in the economic freedom within the Economic Freedom of the World Annual Report the Economic Freedom of North America Report.
The enduring outcome this research hopes to achieve is the ability to achieve a freer and more prosperous society through the knowledge generated by this research. . . Some factors may be beyond human control (geography, history) but other economic forces can be a policy choice. . . .
Evidence of an enduring impact from this research could be observing free-market think-tanks change their strategy of promoting social change to more closely mirror the findings of our research. Other evidence may include pro-freedom policy makers changing their strategies to mirror the findings of our research. Ultimate measurable evidence of our long-term enduring impact would be increases in the economic freedom scores of countries and U.S. states. (TTU Templeton grant, 2013)
These scholars are not just encouraged to collaborate with free-market think tanks to effect policy change, but specifically with the State Policy Network, a network of think tanks funded by Koch's network of donors:
This research will change the way that supporters of private enterprise and free markets agitate for more freedom.
Short Run: research scholars associated with this project are invited to lecture on this topic at major conferences concerned with freedom, such as the Mont Pelerin Society a the international level, and the State Policy Network the domestic level.
Long Run: think-tanks concerned with increasing freedoms cite our research when establishing their strategies for social change. We can measure this by canvassing members of the Atlas Foundations internal think -tank network and the State Policy Network's domestic think tanks. (TTU Templeton grant, 2013)
At Syracuse University, the Koch foundation donated $1.75 million in 2017 to create the Institute for an Entrepreneurial Society (IES).
According to the website of the Institute for an Entrepreneurial Society, the program is based around what appears to be a donor created Ph.D program:
Syracuse University now offers a political economy trac as part of its well-established Ph.D. program in entrepreneurship, currently accepting applications . . . to recruit an elite group of four Ph.D. students for this new track in its Ph.D. progra. (IES webpage)
Documentation of Koch’s relationship with Syracuse has not been made public, but similar programs at Florida State University may shed light on the specific donor stipulations of the IES.
Political economy students will be fellow of the Institute for an Entrepreneurial Society (IES). (IES webpage)
This would require fellows to abide by the mission of the institute, which according to the IES website:
IES fellows will examine the legal, social, and political institutions that foster societal well-being y unleashing human creativity and productivity. (IES webpage)
As noted by several internal departmental self studies at Florida State University, was that the Koch fellows made up to 50% more than fellows on departmental support. The income inequality had a negative impact on the program’s retention (Academic Crime, pg 147).
The IES fellows are advertised in such a way that these concerns appear to be relevant:
Institute fellows will receive full-tuition coverage, a stipend for the whole calendar year, i.e. 12 months, plus generous benefit. (IES webpage)