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WINSTON-SALEM, NC—In 2014, Lauren Windsor of online news organization “The Undercurrent” leaked audio from a summit of wealthy conservative donors organized by the libertarian billionaire Koch brothers that was held near Laguna Beach, California.
One of the meetings was titled “The Long-Term Strategy: Engaging the Middle Third.”
Robert Fink, former longtime political advisor of the Koch brothers and current Vice Chairman of the Board of Directors at the Charles Koch Foundation, explained that the power to control the direction of the country lay with political moderates, the “middle third.”
The problem for the Koch brothers and like-minded donors, however, was that these moderate Americans generally did not agree with them. They were unsure of whether greed or ideology motivated the political aspirations of big businesses and those associated with them.
Thus, Fink said that the path to political success was presenting libertarian goals as an apolitical “movement for well-being.”
Wake Forest professor and director of the Eudaimonia Institute Jim Otteson was also in attendance. In a different session, he called the term “well-being” a “game changer.”
“Who can be against well-being?” he said. “The framing is absolutely critical.”
The Eudaimonia Institute (EI) at Wake Forest was founded several years later in 2016.
Otteson joined Wake Forest as Executive Director of The BB&T Center for the Study of Capitalism and teaching professor of political economy in 2013, and later became an economics professor at the university in 2013.
He is also the director of EI, which is dedicated to the interdisciplinary study of eudaimonia, or “genuine human flourishing.”
Since its establishment, the institute has funded research and hosted conferences without much public comment. It has funded the research for a book on Alexander the Great by Wake Forest professor Michael Sloan and hosted a conference titled “Rethinking Community” in October 2017.
The beginnings of EI, however, were clouded by debate about whether politics has a place in higher education and its funding. The acceptance of a $3.69 million grant for the institute from the Charles Koch Foundation sparked controversy and resulted in an initial flurry of protest and national media coverage.
Those that held concerns centered them on academic integrity. Gifts from the Koch brothers to other universities have contained clauses in donor agreements that gave them influence in faculty hiring and firing, among other things. Many connected Otteson’s past and his politics to his role as director. Moreover, some held initial concerns about how broadly “human flourishing” would be interpreted.
The news of the donation also caused some dissent in the university’s faculty senate. An ad hoc committee was created to research and report on the academic integrity of EI and the Charles Koch Foundation.
The final report, written by Jay Ford, Doug Beets, Simone Caron, Claudia Kairoff, and Kathy Smith stated, “due to the Charles Koch foundation’s unprecedented effort and documented strategy to co-opt higher education for its ideological, political and financial ends, the Committee moves that Wake Forest University prohibit all Koch network funding for any of its centers or institutes.”
Despite the vote of the faculty senate that the university should reject the funding in 2017, the administration accepted the funds. Per the university’s precedent, Wake Forest’s donor agreement with the Charles Koch Foundation is not public.
The preface of the Declaration of Research Independence for the Eudaimonia Institute emphasizes the center’s “nonpartisan and nonideological” nature. It also notes that the center receives funding from more than one source and conducts research without considering the viewpoints of its donors.
“We wish to examine the institutional and cultural requirements for eudaimonic lives, and we believe this aim is too important to be restricted to any particular methodology or worldview,” it reads.
Charles and David Koch are the inheritors of Koch Industries, although David Koch died August 23, 2019. Forbes listed the business as number two in their 2018 list of America’s Largest Private Companies with a revenue of $110 billion in the 2017 fiscal year.
Koch Industries encompasses a variety of businesses, including Dixie Cups, oil refineries, fertilizers, pollution control equipment, electronics, energy, investments, Brawney paper towels, and Georgia-Pacific Lumber.
The brothers have specific politics that have been the target of some of their fortunes. They are libertarian disciples of free-market economics. Lowering personal and corporate taxes, deregulation, and shrinking the size of the social safety net all fall under the broad umbrella of minimizing the size and role of government.
At one point in time, the brothers were explicitly involved in politics. David Koch ran for office in the 1980’s.
Since then, they’ve participated more quietly, although the scale of their involvement hasn’t decreased. The Kochs have funded political and policy organizations, advocacy groups, lobbyists, political campaigns, and think tanks. A study by Harvard scholars Thea Skocpol and Alexander Hertel-Fernandez put the scale of the Koch brothers’ level of political involvement on the same level as an American political party.
The political interests of the Koch brothers are intertwined with their personal business interests.
Fink, unaware that he was being recorded, made this relationship clear at the 2014 donor summit.
“We want to decrease regulations. Why? It’s because we can make more profit, O.K.?” he said. “Yeah, and cut government spending so we don’t have to pay so much taxes. There’s truth in that.”
The Koch’s giving has also seeped into other areas including the arts, medicine, and higher education.
The brothers gave $150 million to higher education institutions between 2005 and 2015. Their foundation has given to over 350 colleges and universities, including Duke, UNC Chapel-Hill, and UNC Greensboro.
Over the past decade, the Koch network has increased the funds given to higher education institutions. In 2017, the Charles Koch Foundation, a 501(c)(3) nonprofit that is part of the Koch brothers’ larger political operations, spent about $100 million on higher education. It is also the source of the $3.69 million grant given to EI.
There is evidence to suggest that the Koch brothers’ donations to institutions of higher education are part of a concerted effort to change the national dialogue and ultimately result in policies favorable to the Koch brothers and their industries.
Investigations by the Center for Public Integrity, a nonprofit investigative journalism organization, found in 2015 that the programs and institutions funded by the Koch brothers tend to teach theories that match up with the brothers’ libertarian politics and business interests.
“Koch officials routinely cultivate relationships with professors and deans and fund specific courses of economic study pitched by them,” read the report.
Other members of the uber-wealthy elite might also donate to higher education (Wake Forest accepted an $850,000 grant from the Andrew W. Mellon Foundation in 2018, for example), but the philanthropy of the Koch brothers is different because of its history of aligning with their own political and business interests.
“The goal of our philanthropy is to improve society,” reads the Charles Koch Foundation website.
Although the current giving standards of the Charles Koch Foundation state, “we work with universities to maintain the highest standard of academic freedom and foster an environment of challenge and open inquiry,” some of the donations to universities in the past have come with strings attached.
George Mason University is home to the Mercatus Center, a think-tank focused on the study of markets. It is funded by the Koch brothers. From 2005 to 2015, the university received an estimated $50 million, although it has received Koch money since the 1990s.
A 2018 lawsuit from a group on campus called Transparent GMU resulted in donor agreements and documents being released. They contained provisions that undermine academic integrity. For example, the donors had a decision-making roles in faculty appointments for the Mercatus Center.
The concerns about Koch influence in academics are not limited to George Mason University. A nonprofit called Unkoch My Campus, dedicated to ridding college campuses of Koch influence, has campaigns at Florida State and University of Arizona, among others.
Sara Dahill-Brown is an education expert in the Politics and International Affairs Department. She said the following about the Koch brothers and their donation:
“Part of what I think makes it different for universities to accept money from the Koch brothers is that their agenda is very clear and transparent. They have a long history of really problematic business practices, some of which are pretty straightfowardly deemed corrupt. And they have laid out a very clear agenda for what they want universities to look like and how they want them to be different from how they currently operate. So when universities take money from the Koch brothers, I think they are ceding more of that independence, more of that control over what students are exposed to, over what resources faculty have, over what their mission is.”
The faculty petition to create the ad hoc committee to look into the funding emphasized concerns about academic freedom and transparency, specifically in terms of the donor agreement and how the institute would be governed. Moreover, there were concerns about the reputation of the university as it accepted the gift, given the Koch brothers political and commercial history.
At Wake Forest, the decisions to create the Eudaimonia Institute and to accept the money from the Charles Koch Foundation rest with university officials.
Academic administrators are charged with vetting and ensuring the propriety of academic institutes and their line of study. Provost Kersch is the top academic officer on campus.
“The Eudamonia Institute was a well thought-out proposal to study ‘human flourishing’ from multiple disciplines,” Kersch said. “Such ‘flourishing’ seems very much in line with the aims of liberal-arts education generally, and interdisciplinary work is a foundational priority for this centers/institutes program.”
Other officials oversee the acceptance of financial donations to the university. Although the trustees and the President of the university ultimately hold the power to accept gifts, the Gift Acceptance Committee executes that role. Its representatives include the Provost, the chief financial officer, the general counsel, and development office representatives.
These people work out the details and conditions of the money that Wake Forest accepts from donors ranging from alumni to the Koch brothers. With a donation of this size and nature, a donor agreement was settled between the university and the foundation.
“We do not take gifts that dictate the faculty do a certain kind of research and therefore come to a certain type of conclusion,” said Mark Petersen, the Vice President of University Advancement. “There’s nothing in the agreement that I would hesitate about sharing with the world.”
The donor agreement is critical because it lays out the terms of what donors do and do not have control of in terms of how their money is used. It is of particular interest in the case of the Koch brothers because of the inclusion of problematic clauses restricting academic freedom at other universities.
The Charles Koch Foundation has begun to make many of its donor agreements with universities public.
However, the donor agreement between the Charles Koch Foundation and Wake Forest University is not public, as is precedent for the university.
Without access to the donor agreement between the Charles Koch Foundation and the university, it has been unclear if the donors have any influence over allocation of funds. For faculty members on the Ad Hoc committee and others that took issue with the donation, this was a major sticking point.
Petersen thinks that those who are concerned about the donation from the Koch brothers need to trust the academic committees that review institutes and centers at Wake, the Provost and Dean, and the Gift Acceptance Committee for taking and using gifts responsibly.
If donors did have an influence in the institute, one might think that it would show up in the research conducted at the institute and what conclusions that research came to.
“My confidence remains high that these funds have been and will continue to be used as described in the gift agreement: to advance the study and understanding of human flourishing, in ways that enhance Wake Forest faculty and students’ pursuit of knowledge,” said Kersh.
The twelve members of the faculty advisory board for EI advise on what research is funded.
“I’ve seen eudaimonia interpreted broadly and funded broadly to the extent that it has on Wake’s campus,” said Will Walldorf, a professor in the Politics and International Affairs Department and member of the institute’s faculty advisory board. “I don’t see any kind of hidden agenda, per say, or any kind of dark hand behind it all.”
Although he was unsure if the staff of the institute might have a say in what proposals reach the Faculty Advisory Board, Walldorf said that each grant proposal is reviewed by two members of the board, who then recommend a decision on whether it should be funded to the entire board.
In addition to the donor agreement and issues with academic integrity, some have pointed to Otteson’s connections with the Koch brothers in light of his role as director of the institute and the power that position holds in terms of making decisions. There was concern that the Charles Koch Foundation mandated that he was given the position.
When asked about his connection with the Koch brothers, Otteson said that he received a $20,000 grant from the Koch Foundation for a speaker series before he came to Wake Forest, and that he had spoken at a conference hosted by the Koch Foundation.
“Other than that, I have no particular connection to them,” he said.
It was at that 2014 donor summit that he referenced where he noted that the term “well-being” was a “game-changer.”
“Yeah they are close terms. I mean I can’t speak for the Koch Foundation’s own agenda,” he said when asked about these comments.
“If there is a connection between what we’re interested in and what the Koch Foundation wants to fund or what any other foundation wants to fund that’s great,” Otteson said. “But from the institute’s perspective we have no particular ideological agenda or litmus test.”
Otteson and university officials all maintained that safeguards ensure that the center is appropriate to the university’s needs, remains non-ideaological in nature, and pursues non-interested and trustworthy academic work.
The EI has a declaration of research independence on its website that states that it is “committed to the highest standards of academic quality and credibility for our research.”
Petersen stated that it is typical for those that initiate a contact for a gift are close to the donors.
“I think when some people have seen that they’ve assumed ‘oh, well he’s in their pocket’. You know there is a belief that he can’t have the integrity or the freedom because he’s so close to those folks,” he said.
“If he were a puppet, there would be a whole lot of stuff that has been funded that wouldn’t have been funded,” said Walldorf. “There’s been an openness to funding things, generally, that don’t fit within the Koch mission.”
“Were we concerned about Jim’s relationship with Koch?” Petersen continued. “No, not at all.”
Even so, others see problems nonetheless.
Although the faculty senate’s recommendation that the school not accept the money was not followed back in 2016, some members have remained vigilant about the Eudaimonia Institute since the Charles Koch Foundation money was accepted.
The faculty senate submitted new guidelines regarding gift acceptance in March 2019 to be reviewed by the university. They involve including faculty more in the gift acceptance process.
All of this has taken place in the midst of an ever divisive and polarized political environment.
The donation was accepted in the midst of the 2016 election, and some think that the concerns surrounding the donation are a symptom of the times.
“There are people who would be conservative who would look at the mission statements from a lot of the nation’s leading foundations and charge the exact same criticism,” said Petersen.
Others say that all donors to the university have their politics.
“Just about every funder has their own political worldview and they all have things they would like to see supported,” said Otteson. “But as a university, I think that we should not be doing is trying to look into the individual politics of everybody who gives us money.”
Those that still hold concerns maintain that the way the personal politics of the Koch brothers have intertwined with their philanthropy in the past is the root of the issue.
“Even if they might try to instill some firewalls, I do think that the universities are accepting money that looks quite different from a lot of the other money that comes to them,” said Dahill-Brown. “This is a coordinated, national campaign that’s clearly linked to a broader political campaign and funded with money that comes from antidemocratic practices and in some instances corrupt and exploitative practices.”
Ultimately, the differences in perspective on the issue have immense consequences about the purpose and integrity of the university itself, and whether politics has any place in that space or its funding.
“I’d be hard-pressed to start singling out one source of funds as ‘unworthy’ of supporting our faculty’s research and creative work,” said Kersh. “What matters most, in my view, is how we expend gifts and grants that are properly vetted: is our faculty and students’ academic freedom upheld? Do donors exercise improper influence in our utilization of those funds?”
I asked Otteson if he personally agreed with the Koch brother’s views.
“I just don’t think about it, and I think from the perspective of the institute itself, it’s very important that we don’t think about it,” he said. “That’s not what we do, we’re not a political institute. We’re an educational institution, so we want to let the chips fall where they may.”
For those with concerns, the history of the Koch brothers is the point.
“The university is about a vigorous debate that pushes good thinking by our students and good thinking by our faculty,” said Walldorf. “If the university just becomes another bullhorn in the political battles that we have in the world and in our country, then it loses its relevance.”
EDIT: Since the original reporting was done for this article, the donor agreement between the Koch Foundation was released on the Charles Koch Foundation website. A link to it is not available on the Eudaimonia Institute website. The agreement can be found here, and the grant can be found here.