Koch and Ball State University

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Follow the money in the Koch wiki.

On March 1, 2016, Ball State University (BSU) received a $3.25 million grant from the Charles Koch Foundation and the John Schnatter Foundation, (CEO of Papa Johns), to create the John H. Schnatter Institute for Entrepreneurship and Free Enterprise. Schnatter agreed to donate $2.17 million of the grant and the Charles Koch Foundation pledged $1.08 million, according to the grant agreement. [1]

The grant agreement was signed by Ball State University Foundation President and CEO Cheri E. O’Neil and Ball State University’s acting President Dr. Terry King. The grant is intended to help the university establish an office space where entrepreneurial studies can intersect into the education of all students. The grant will do this by assisting with expenses for the new institute’s programs and the salaries of four professors, an operations manager, and two graduate assistants employed specifically for the institute.

According to the agreement, to maintain funding BSU must submit an annual written report to CKF and the Schnatter Foundation to verify money is being spent in accordance with the mission of the institute as described in the contract. The agreement also requires “the university agree to keep confidential and not to disclose to any third party the existence of or contents of this Agreement without express written approval from the Donor.” [1]

Koch money at BSU: 2009-2014

Koch foundation grants to BSU totaled $38,600 from 2009-2014, according to data compiled by Greenpeace USA, using Koch Family Foundations IRS tax filings and Annual Reports from BSU's Sponsored Programs Office.

2009:[2]

  • $8,300 - "Liberty Project"
  • $8,300 - External Awards Funded
  • Individual faculty funded: Anca Cotet, Cecil Bohanon, Norman T. Van Cott

2010:[3]

  • $8,000 - "Entrepreneur-in-Residence and Guest Speaker Programs"
  • Individual faculty funded: Michael Goldsby
  • $8,300 - “The Liberty Project”
  • Economics: Anca Cotet, Cecil Bohanon, Norman T. Van Cott

2011:[4]

  • $3,000 - “Koch Speaker Program and Undergraduate Student Travel”
  • Economics: Tung Liu, Cecil Bohanon

2012:[5]

  • $2,000 - “BSU Economics and Finance Student Field Trips"
  • (recorded as $3,000 for general support in CKF 990PF data)
  • Economics: Cecil Bohanon

2013:[6]

  • $2,000 - “Educational Programs” (according to CKF 990PF data)

2014:

  • $9,000 -"Ball State University Economics Department Programs Spring 2014” (according to CKF 990PF data)

The Muncie Star-Press writes that CKF gave $20,000 for the 2014-15 school year.[7]

Terms of the Schnatter-Koch BSU Grant

The contract for “Papa” John Schnatter’s contribution of $2,165,000 and CKF’s of $1,085,000 is set to last eight years.[8]

The first clause of the grant agreement between BSU and CKF is titled “Promoting Academic Freedom,” a clause added to Koch university contracts after academic freedom concerns[9] became widespread.

Financial commitments to BSU of CKF and Schnatter Foundation:[1]

  • CKF grants $1.085 million
  • $217,000 annually from 2016-2019
  • Schnatter Foundation grants $2.17 million
  • $250,000 within first 60 days of grant initiation
  • $400,000 in 2016
  • $505,000 annually from 2017-2019

The continuation of these agreements for the final four years of the contracts is contingent upon the donor's’ satisfaction that the terms of the agreement are being fulfilled. If these requirements are satisfied, more money will be disbursed.

Conditions Attached to Grant Pledges

The terms to be met by BSU are as follows:[1]

  • Maintain a qualified director for the John H. Schnatter Institute for Entrepreneurship and Free Enterprise.
  • Hire individuals for the four professorships by Aug. 14, 2017.
  • The University has to invest at least $500,000 annually for the compensation of the director and four professors until 2021. For the remainder of the agreement’s term this sum must total $600,000 annually.
  • Provide office space for the institute.
  • Support the institute in manners consistent with the vision of the proposal.

Tenure-track Faculty, Research Funds Approved for Use of Koch & Schnatter Funds

The "Institute Program" was approved by the Koch and Schnatter foundations under the condition that their funds are used to support the following:

  • A "New Tenure-Track Entrepreneurship Professorship,"
  • A "Tenure-Track Entrepreneurship Professorship,"
  • Two "Tenure-Track Economics Professorships,"
  • An "Operations Manager,"
  • The "Entrepreneurial Learning Academy,"
  • The "Entrepreneurial Leadership Academy,"
  • Two "Graduate Assistants,"
  • Support for "Undergraduate Programs,"
  • "Entrepreneurship Center Support,"
  • "Research,"and "Research and Education Support."

Annual Approval From Koch, Schnatter Required

Both agreements are void if either the CKF or Schnatter contracts are terminated. Koch or Schnatter can choose to stop writing checks to BSU if they deem the "Institute Mission" is not being followed by the university.[1]

John H. Schnatter Institute for Entrepreneurship & Free Enterprise

Staff

  • Michael Goldsby, "Chief Entrepreneurship Officer" and Executive Director
  • Rob Mathews, Director and Operations Manager
  • Margo Allen, Institute Coordinator and Secretary to the CEO
  • Steve Horowitz, John H. Schnatter Distinguished Professor of Free Enterprise[10]

Concern for Academic Freedom

From Students

Levi Todd, an undergraduate English major, wrote an OpEd for the Ball State Daily in reaction to the university’s acceptance of CKF money.[11]

After debriefing his audience on the far-reaching arms of the wealthy “Kochtopus,” Todd said:[12] [13]

“The reason I explain this all is to highlight a key point — the Koch Brothers are known for making large donations when they want something.”

Here are some other key quotes that summarize Todd’s attitude towards the BSU partnership with CKF:

“The fact that the recent donation to Ball State will fund a “free enterprise institute” doesn’t surprise me — the Koch Brothers clearly want to instill libertarian ideals in students (and, more importantly, future voters and workers).

What scares me more is the potential political sway the Koch Brothers may have just bought at Ball State.”

“My trust in the university has never been lower, and many of my peers have reflected the same sentiment. The administration will deny that there is an ulterior motive behind this donation, just like they denied ulterior motives behind [former BSU president] Ferguson’s resignation.”

Another student voicing their concerns is chemistry major Logan Edwards. Edwards attended the 2016 final public forum on the presidential search.[14] When one of the trustees assured there was no conflict of interest between donors and trustees, Edwards asked:

“So am I to understand that the committee right now is pleading its Fifth Amendment right against self incrimination?”

Edwards pointed out that the trustees had been appointed by Gov. Mike Pence--a man who has received more campaign contributions from Koch than any other candidate nationwide. Edwards describes the kind of president he wants for BSU as one without problematic political ties to the Kochs.

Edwards also wrote “An open letter to James Wells and Board of Trustees” in The Ball State Daily. Through a delicate balance of sympathy and criticism, Edwards attempted to advise the board on what he considers the moral course of action which upholds academic integrity.[15]

From Faculty

Professor of English, Cathy Day, attended the 2016 final public forum on the presidential search. There she made clear her disappointment with the BSU’s transition from immersive learning to entrepreneurial learning. She would not have agreed to teach at BSU if she had been aware of the school’s plans back when she accepted the professorship in 2010.[14]

Professor of architecture and Director of the Center for Energy Research, Education and Service, Robert Koester, was also at this forum. He asked for a president committed to sustainability and fighting climate change. The Koch brother’s market minerals, operate petroleum pipelines and sell lumber, among other endeavors[16], that benefit from climate change denial.[13]

John H. Schnatter

John H. Schnatter, better known as "Papa John" of Papa John’s Pizza chain, is a BSU alumni and VIP donor to the American Legislative and Exchange Council (ALEC).

Schnatter was quoted in a news release as saying the grant will support the university’s goal to become a national model for values- and ethics-based entrepreneurship, developing research and talent to solve modern problems.[17]

“I have always been grateful for the quality education I received at Ball State, and I hope that students and scholars alike will participate in all that the Institute will have to offer,” Schnatter, who graduated in '83, said in the press release. “We’re proud to support this effort for the next generation to learn and think critically about free market principles and to equip aspiring entrepreneurs with the know-how to launch successful businesses.” -- J.H. Schnatter

BSU Faculty Involved

Michael G. Goldsby

Initial Director of John H. Schnatter Institute for Entrepreneurship and Free Enterprise, Chief Entrepreneurship Officer, Stoops Distinguished Professor of Entrepreneurship, Professor of Management, and Director Emeritus

Professor Michael Goldsby, currently the institute’s director, explained in a speech at the L.A. Pittinger Student Center on March 30, 2016, three of the programs funded by the grant: Launch Indiana, Launch Fishers, and an Entrepreneurial Learning Academy.[18]

Launch Indiana will be a program through which the Schnatter Institute enlists a group to solve the economic shortcomings of a given town on a foundational level. A minimum of 5 areas are to be attended to each year. Through Launch Fishers, students are to be paired for work with companies in Fisher, IN. This supports BSU’s vision of providing students an education through immersion.

The Entrepreneurial Learning Academy will be made up of 10 professors whose classes are encouraged to be taught with an economic spin. This is meant to foster a campus-wide entrepreneurial mindset for everyone, regardless of major.

In regards to accusations about undue influence by the Koch brothers through the new grant agreement, Goldsby told the Star Press:

"We have autonomy in this situation. It's been a very good working relationship. We are the ones who will, if there is any hiring (of faculty), we will do the hiring. When it comes to speakers and programs, we will put that together. That's our job. That's what we are being charged with, to be good stewards of the gift and put on world-class educational opportunities and events. I'm 100 percent confident we will be able to do that."

The grant appears to be for four years of funding, which could be renewed after that.

"If we do good work with this and we are a good partner with our external funders, then we truly see this from both sides as being something that will be ongoing and sustainable.” --Goldsby

“This helps us do a lot more of what we’ve always been doing. We’ve had this entrepreneurship program for 33 years. What this now allows us to do is to build this institute that stands outside the College of Business to help promote entrepreneurial thinking and entrepreneurial learning throughout the university and into communities in Indiana … We can now train faculty in other (BSU) colleges, we can give students across campus a lot more opportunities.” --Goldsby

Goldsby says the Schnatter/Koch agreement comes with no strings attached.

Michael Hicks

George and Frances Ball Distinguished Professor of Economics and Business Research and Director

"We need more private sector research dollars, not less." --Michael Hicks[19]

Professor Michael Hicks’ research interest is in state and local public finance and the effect of public policy on economic activity. His weekly column on economics and current events is syndicated by a variety of media outlets across the state.[20] [21]

One such article of his attacked UnKoch My Campus as being a project Greenpeace created after receiving funding from billionaire (opposite to the Kochs on the political spectrum) George Soros. This accusation was quickly disproved by Greenpeace, which has never received any sort of money from Soros. Greenpeace Researcher and Co-Founder of UnKoch, Connor Gibson, wrote in an article:[22]

“Professor Hicks did not reach out to Greenpeace USA before publishing his article in numerous newspapers. When I asked him to provide a source for his claim, Professor Hicks could not do so. The misinformation remains on BSU’s website.”

The matter didn’t end there. Hicks published a response to Gibson, continuing to call the UnKoch efforts hypocritical. Hicks did not include a source for his claims against UnKoch.[23]

Professor Hicks himself is affiliated with political organizations financed by Charles Koch. Hicks intended to present at the 2016 gathering of Associate of Private Enterprise Education (APEE) in Las Vegas. APEE is a nationwide association of teachers and scholars that supports private enterprise. APEE, itself sponsored by Koch nonprofits and managed with the help of Koch personnel, receives funding from the Kochs. At the 2016 APEE conference, Hicks’ co-author of a study, Michael LaFaive, presented because Hicks was not prepared to do so. From an UnKoch recording of his speech, LaFaive said:

“We have dedicated staff whose main objective is to get articles in newspapers to get our stuff read by policy makers and to market our stuff to a broad audience.”

Hicks is among several BSU professors to interact with APEE. Professors James Mclure, Cecil Bohanon, and assistant professor Nicholas Curott have presented at past APEE conferences.

Hicks serves on the board of scholars for the Mackinac Center for Public Policy, a Michigan think tank funded in part by the Koch network.

Thomas Holtgraves

Professor of Psychology

Professor Holtgraves wrote an article warning of the ways in which donors can hold influence over research, even when not explicitly granted power in signed documents. He said that the Kochs would not fund things that don’t promote their world view, such as current understandings of income inequality or climate change. Therefore, chances are that to keep the money flowing in, research projects that align with Koch desires are more likely to have priority--if not be selectively chosen. His parting request is that citizens advocate for more transparency in funding and refrain from criticizing such efforts.[24]

Cecil Bohanon

Professor of Economics

According to Ball State’s annual reports, Cecil Bohanon is a Koch-funded professor. He, along with economics professors Anca Cotet and T. Norman Van Cott have been receiving money from the Charles G. Koch Foundation for “The Liberty Project” since 2009.[7]

Concern for Koch Influence in BSU Presidential Election

Research presented by UnKoch My Campus researcher, Ralph Wilson, at a May 23, 2016 Board of Trustee’s meeting explained how the CKF donation can alter the course of the university’s presidential election.[25]

The University is in charge of hiring the four professorships stipulated in the CKF/Schnatter-BSU grant, but the donors have the power to withdraw funding at any time.

Wilson asserted that the University’s vested interest in keeping the grant may alter BSU decision making so that the donors remain satisfied with the school’s activities. This pledge from Koch and Schnatter came at a time when Ball State was not meeting its research funding goals.[26] For example, in 2014-2015, BSU only obtained $11.1 million in research funding when their goal was $25 million. Though the report has yet to be released, for 2015-2016 an estimated $15 million was obtained when the goal was $29 million. For BSU to achieve its aspirations, they will need more research funding.

BSU Research & Teaching Assistant Morgan Aprill told The Star Press:

“[I share] concerns about the connections of the [BSU presidential] search committee and the board of trustees to the Koch brothers and the implications a president that supports them fully would mean for not only our campus but the deterioration of higher ed and government across the nation."[19]

Aprill has been trying to rally students to voice their opinions at forum meetings with the Board of Trustees. She has been working closely with UnKoch to try bringing awareness to the risks and corruption that could come with Koch involvement at BSU.

On what motivated her involvement with UnKoch, Aprill said:

“I mean, when you look at it and you see the events, it's questionable. Our campus's commitment to alternative energy resources, the Koch brothers are big in oil and coal… Why are they interested in our university? It's sort of a question that some of us have.”[27]


Ball State APEE Speakers

2016:

  • James E. McClure - Presenter of paper titled “Debunking Exceptions to the Law of Demand has Become Less Fashionable, But Why?” for session titled “What’s Wrong With How We Teach Economic Principles?”
  • Michael Hicks - Coauthor of paper titled "Are State Promotion Efforts Effective?" for session titled “Scholarship at the Crossroads of Policy and Academia”

2015:

  • Cecil Bohanon
  • Nicholas Curott
  • James E. McClure

Quotes from BSU Administrators

Terry King

Acting Ball State President

After giving the commencement speech for BSU’s class of 2015, John Schnatter agreed to meet with university administration at a later date to discuss the advancement of the school’s current entrepreneurship program.

This meeting took place in Fall of 2015, about which President Terry King said:

“Mr. Schnatter was very impressed and said, ‘I think this is something important for my alma mater to do.’ We had the institute in mind and were blunt. We told him, ‘With your support, we can accelerate our efforts.’"

According to King, the idea behind the institute was to accelerate dreams of an immersive entrepreneurial mindset at BSU. The effects of this program are meant to have a university-wide influence on faculty, students, administrators, and staff, regardless of department or area of study. King claims the type of learning this grant will fund aims at solving real-world problems.[7]

Quotes from Charles G. Koch Foundation

John Hardin

Director of University Relations at the Charles Koch Charitable Foundation

John Hardin told The Star Press that CKF supports a wide variety of programs and disciplines at more than 300 universities and colleges across the country. He continued that the overarching reason for the foundation’s support of higher education is its commitment to ideas and values that enable people to improve their own lives and society. [28]

SourceWatch Articles

Sources Cited

  1. 1.0 1.1 1.2 1.3 1.4 BSU,CKF,SF, Ball State University agreement with Charles Koch Foundation followed by agreement with Schnatter Foundation, DocumentCloud, Mar. 1, 2016
  2. Sponsored Programs Office, Annual Report 2009-2010, Ball State University, 2010
  3. Sponsored Programs Office, Annual Report 2010-2011, Ball State University, 2011
  4. Sponsored Programs Office, Annual Report 2011-2012, Ball State University, 2012
  5. Sponsored Programs Office, Annual Report 2012-2013, Ball State University, 2013
  6. Sponsored Programs Office, Annual Report 2013-2014, Ball State University, 2014
  7. 7.0 7.1 7.2 Seth Slabaugh, Papa John, Koch Gift $3.25M to BSU, The Star Press, Mar. 3, 2016
  8. Kara Berg, Only 1/3 of grant for entrepreneurship center comes from Charles Koch Foundation, Ball State Daily, Mar. 17, 2016
  9. John K. Wilson, The Koch Foundation and Academic Freedom, Academe Blog, Jan. 18, 2015
  10. Staff John H. Schnatter Institute for Entrepreneurship & Free Enterprise, Ball State University
  11. Levi Todd, LEAVE IT TO LEVI:Koch brothers' donation to Ball State raises red flags, Ball State Daily, Mar. 3, 2016
  12. Kochs Spend Big Money To Promote Their Agenda At Ball State University, Real Koch Facts, Mar. 18, 2016
  13. 13.0 13.1 Charles Koch University Funding Database, PolluterWatch
  14. 14.0 14.1 Seth Slabaugh, UnKoch My Campus confronts Ball State trustees, The Star Press, Jun. 1, 2016
  15. Logan Edwards, LETTER TO THE EDITOR:An Open Letter to James Wells and Board of Trustees, Ball State Daily, May 25, 2016
  16. Koch Industries' Company Overview, Koch Industries, 2016
  17. Todd Smekens, Ball State Expands Shilling for Koch Brothers, Muncie Voice, Mar. 3, 2016
  18. Sara Barker, Schnatter Institute to encourage entrepreneurship across majors, campus, Ball State Daily, Mar. 30, 2016
  19. 19.0 19.1 Seth Slabaugh, 'UnKoch My Campus' to campaign at Ball State, The Star Press, Jun. 1, 2016
  20. Michael J. Hicks Professor Profile, Ball State University
  21. Michael J. Hicks, Weekly Commentary, CBER Data Center
  22. Connor Gibson, Greenpeace: Soros not funding UnKoch My Campus at Ball State or elsewhere, South Bend Tribune, Jun. 2, 2016
  23. Michael Hicks, More free speech shenanigans, USA Today, Jun. 6, 2016
  24. Thomas Holtgraves, Strings often attached to university research funds, The Star Press , Jun. 2, 2016
  25. Rebecca Kizer, Ball State, Muncie community members offer input at presidential search forum, Ball State Daily, May 24, 2016
  26. Seth Slabaugh, Ball State not meeting research funding goals, USA Today, Jun. 9, 2016
  27. Cite error: Invalid <ref> tag; no text was provided for refs named BSD6
  28. Valerie Strauss, Charles Koch Foundation's unique definition of 'academic freedom', Smoky Mountain News, Nov. 7, 2014

Additional References

Academic Freedom References

Koch and Academic Freedom

Shared Governance References