SLU Economics Professor on Inappropriate Donor Influence

Note: The following post is by Professor David Rapach and is reproduced with permission from the Academic Capture blog, where it appears as “Academic Capture in Action: A Case Study in Crony Philanthropy at Saint Louis University.”

I have dedicated much of my career to academic research. Indeed, I consider myself singularly fortunate to be able to spend much of my time engaged in it. I still have not found a cure for the sweet addiction of research.

As I have come to appreciate over my career, a crucial and defining aspect of academic research is its independence. To protect the integrity of academic research, it is vital for research to remain independent of external pressures that work to bias research toward predetermined answers. Independence allows academic research to more closely conform to the ideal of the unbiased pursuit of knowledge—researchers follow theoretical arguments and rigorous data analysis where they lead, striving to minimize the role of inappropriate preconceptions in determining conclusions. By promoting the objective search for knowledge, independent academic research offers substantial benefits to society.

To best serve society, it is thus vital for our institutions of higher education to protect the independence of academic research. Unfortunately, our colleges and universities are increasingly failing society along this dimension: we now regularly learn of cases where, in exchange for their “donations,” financial elites are granted inappropriate influence over academic research. Such influence typically takes the form of input in hiring decisions and control over the disbursement of funds for individual research projects. This state of affairs enables a powerful elite to parasitically associate questionable and biased research with the “brand” of a quality host institution. (Numerous examples of inappropriate financial donor influence are provided on the Academic Capture webpage.)

Inappropriate financial donor influence violates well-established norms that are explicitly designed to protect the independence and integrity of academic research. By compromising the integrity of academic research, inappropriate donor influence risks transforming our once proudly independent institutions of higher education into something more akin to agenda-driven “think tanks” that offer degrees (Rapach and Wilson 2018). Analogous to regulatory capture (Stigler 1971), such a transformation represents the academic capture (Zingales 2013) of colleges and universities by financial elites, who work to corrupt independent academic research with their own narrow agendas. Just as regulatory capture leads to crony capitalism, academic capture leads to crony philanthropy, so that rather than generating independent research that serves the public interest by objectively pursuing knowledge, institutions of higher education become susceptible to producing biased research that serves the narrow and often suspect interests of financial elites, with dire consequences for society.

To my dismay, I recently had a close-up view of academic capture in action at my institution, Saint Louis University (SLU). (I am currently taking a leave of absence from SLU to serve as a visiting professor at Washington University in St. Louis.) In August of 2018, SLU announced a $50 million donation from Rex and Dr. Jeanne Sinquefield. Rex Sinquefield is a SLU graduate and billionaire, who is known for his aggressive financial backing of political causes that he favors, as well as his think tank, the Show-Me Institute, that promotes his political agenda.

Around the time of the announcement of the donation, the dean of the SLU Chaifetz School of Business informed the Department of Economics that part of the Sinquefield donation would be devoted to establishing the Sinquefield Center for Applied Economic Research (SCAER) at the Chaifetz School. Furthermore, the dean indicated that at the request of Rex Sinquefield, he would hire Mike Podgursky, a member of the Board of Directors of the Show-Me Institute, as the “Sinquefield Professor of Economics” and director of the center.

Needless to say, I was dumbfounded that in utter disregard of the basic principle of shared governance, the dean was willing to establish an economic “research center” at the Chaifetz School of Business without following the usual collaborative process of consulting with the Department of Economics (or any academic department, for that matter). Moreover, I was shocked that in flagrant violation of well-established academic norms, the dean readily granted the financial donor input in hiring a researcher.

The establishment of the SCAER at SLU is a classic case study in crony philanthropy. A dean enters into an agreement with a financial elite to establish what they call a research center and hire the financial elite’s hand-picked crony, all without working through the appropriate academic department. From the standpoint of crony philanthropy, working through appropriate academic departments via meaningful shared governance is a nuisance, as “resistant” faculty members (such as yours truly) may point out obvious violations of academic norms. In fact, earlier negotiations with Sinquefield under previous deans to establish a research center at the business school broke down when faculty in the Department of Economics indicated that it was inappropriate for the donor to have a say in hiring. In true crony-philanthropy fashion, the current dean simply disregarded inconvenient academic norms by not working through the Department of Economics and allowing the donor to hand-pick the director of the center.

Crony philanthropy regards well-established academic norms as quaint and inefficient—they stand in the way of doing business. Of course, academic norms are precisely designed to protect the independence of academic research from such things as biases due to inappropriate financial donor influence. Yet, despite the unparalleled achievement of universities as an American success story of the last 100 years, some financial elites apparently view the system as a menace to efficiency and effectiveness—particularly when academic research runs counter to their ideology. When a financial elite such as Sinquefield seeks to establish what is essentially an agenda-driven think tank with the imprimatur of independent academic research, well-established norms that are designed to protect independent research get in the way. “Relationship-based” agreements (i.e., agreements that effectively ignore norms) are the modus operandi for crony philanthropy. By disregarding well-established academic norms, a relationship-based approach at SLU led to the capture of a dean by a financial elite, with that dean agreeing to hire the elite’s crony from his think tank—academic capture in action via crony philanthropy.

Soon after the announcement of the Sinquefield donation, my colleague Bonnie Wilson and I wrote a series of memos pointing out the obvious violations of academic norms in the donation. We also pointed out that the hiring of Podgursky as the Sinquefield Professor of Economics violated the established contract between SLU faculty and the Board of Trustees, as codified in the SLU Faculty Manual, because it failed to engage in a proper faculty search. The SLU administration was forced to admit that the hiring of Podgursky as faculty did violate the faculty manual. Administrators subsequently explained—with straight faces—that the position was never actually intended to be a “faculty” position, despite the position having the title of Sinquefield Professor of Economics. When I asked a group of administrators how they thought that the Sinquefield Professor of Economics was not a faculty title, I was met with complete silence.

As if changing the brand name of the same product for popular consumption, the administration reacted by reclassifying the director position from “faculty” to “staff,” so that Podgursky would be hired as the staff Director of the SCAER. However, a number of faculty in the Chaifetz School remained concerned about donor influence in hiring, which the change in title failed to address. At the request of faculty, the dean agreed to go to Sinquefield and ask if he would be willing to conduct a search for the position, where he would play no role in the process. The dean reported back that a search committee for a new director would be formed and that Podgursky would instead be hired as a consultant in the Office of the Vice President for Research (OVPR). (Because he was hand-picked by the donor, the hiring of Podgursky as a consultant—or in any capacity—by SLU constitutes a clear violation of academic norms; the SLU administration’s insistence in hiring Podgursky signals that his hiring is a quid pro quo for the Sinquefield “gift.”)

What happened subsequently is something straight out of the theater of the absurd. Instead of conducting the search for the director of an economic research center through the Department of Economics, the dean hand-picked the members of the search committee. Unbelievably, Podgursky then applied for the position. When a member of the committee informed me of this, I stated the obvious: the whole point of forming the search committee in the first place was to hire someone other than Podgursky to direct the center—that is, to hire someone that was not hand-picked by a financial donor. I pointed this out to the dean in a meeting, and he indicated that he would speak to the committee about the matter. After Podgursky applied, another member of the search committee approached me, asking if I would be willing to make a presentation to the committee to address the issue of inappropriate financial donor influence in hiring. I said that I would certainly be willing to make such a presentation, given the importance of protecting the hard-earned independence, integrity, and quality of academic research in the Chaifetz School of Business. However, I never received a formal invitation to make a presentation to the committee, and the dean recently announced that, indeed, Podgursky would be hired at the recommendation of the hand-picked search committee.

So, in the space of less than a year, Podgursky went from being the Sinquefield Professor of Economics to the staff Director of the SCAER to Consultant in the OVPR then back to the staff Director of the SCAER. Despite all the changes in office name plates, crony philanthropy prevailed. In exchange for a financial donation, the university hired a crony of a member of the financial elite with a well-known political agenda. In fact, while serving as a consultant in the OVPR, Podgursky used resources of the Chaifetz School of Business to direct research on behalf of the Sinquefield-funded “Better Together St. Louis” campaign. Podgursky can now direct research in support of Sinquefield’s political agenda under the auspices of the SCAER at SLU. In other words, what is effectively a politically motivated think tank will gain legitimacy for its pronouncements, press releases, and papers as it parasitically feeds off the legitimacy of the reputation of the Chaifetz School of Business. This is academic capture, and it is what you should expect when you violate academic norms in financial donations.

Unfortunately, the violations of academic norms in the Sinquefield donation extend beyond the hiring of Podgursky. The funds for the Sinquefield donation are not housed in SLU. According to the administration, they reside in an external “public charity” formed for such purposes: the Sinquefield Center for Research, Inc. (SCRI). More specifically, the SCRI is a Type III Supporting Organization, a type of public charity that affords maximal control to donors. As admitted by the Interim Provost last fall, “The donors will provide final approval for requests to the Sinquefield fund.” In other words, the disbursement of any funds from the Sinquefield donation—whether they are used for funding individual research projects or hiring faculty under the auspices of SLU—thus requires the final approval of the donors via the SCRI. Stating the obvious, this is a clear violation of academic norms. Most perniciously, it allows the donors to deny funding to potentially worthwhile proposals that conflict with their political agenda, which risks biasing research at SLU towards the views of the donors. To reiterate, academic norms that preclude a role for financial donors in hiring and the approval of funding for individual research projects are precisely designed to prevent such biases and thus to promote independent research.

Sinquefield’s SLU strategy is straight out of Charles Koch’s playbook. The Charles Koch Foundation is a serial violator of well-established academic norms in financial donations to institutions of higher education, as we have learned in large measure from the indefatigable work of UnKoch My Campus. Such tainted donations undermine academic freedom and the independent pursuit of knowledge, with Koch parasitically exploiting the hard-won reputation of host universities to legitimize research with an overtly political agenda. Indeed, revelations of tainted Koch donations to George Mason University caused a furor and garnered national attention in early 2018. Coming on the heels of the revelations at George Mason University, the violations of academic norms in the Sinquefield donation have generated substantive negative publicity for SLU, adversely affecting its reputation.

By violating well-established norms that protect the independence and integrity of academic research, financial elites with political agendas implicitly acknowledge that they cannot gain support for their ideas in the competitive world of academic research. Instead, they distort competition by violating norms that are designed to protect the independence, integrity, and quality of academic research. Such norms have helped to make American universities the envy of the world. Financial elites seek the imprimatur of independent academic research—which is why a think tank is insufficient—but research inappropriately influenced by powerful elites with distinct political biases lacks the appropriate independence to be regarded as authentically independent academic research.

To be clear, as an academic and pursuer of knowledge, I believe that there is a role for research produced by think tanks like the Show-Me Institute in the marketplace of ideas. However, it is important to realize that such think-tank research is guided by preconceived political agendas. It is thus advisable to treat the sometimes useful research from think tanks like the Show-Me Institute as lacking independence and reflecting biases. Locating a body that was not established according to well-accepted academic norms in a college or university—such as the Sinquefield-funded SCAER at SLU—confuses agenda-driven think-tank research with independent academic research, thereby enabling the former to masquerade as and feed off the hard work of the latter. This does a grave disservice to the public, which has come to have high expectations for American universities.

By recognizing the influence of financial elites in what is inaccurately presented as independent academic research, informed citizens can help to minimize the costs to society of academic capture. To this end, I am working with Samantha Parsons and Bonnie Wilson to construct the Academic Capture Warning System database. The database will aggregate information on clear violations of well-established academic norms in financial donations and make the information conveniently available online to the public.

Why are college and university administrators willing to violate well-established academic norms and thereby compromise the independence and integrity of academic research? What can policy do to help prevent academic capture and promote independent academic research? I will take up these issues in future posts.

Additional information on the events discussed in this post, including supporting documentation, is available on the Academic Capture webpage.

If you have a case study in crony philanthropy from your institution, please feel free to share it with the Academic Capture Warning System.

I thank Penny Weiss for very helpful comments on an earlier draft. I am solely responsible for the views expressed in the post.

David E. Rapach, Professor of Economics, John Simon Endowed Chair in Economics, SLU

Addendum: Response to Committee Member

On July 14, I shared the post with the members of the hand-picked search committee, and I received an email message from a person on the committee regarding the post. However, I do not have permission to share the person’s name or message. I provide my response below, as I believe that it helps to further highlight the relevant issues. I also want to be transparent and put my cards on the table.

Hello [name omitted],

Thanks for your response. Rather than gaps in my telling of the story, I fear that there are gaps in your understanding of well-established academic norms. The issue isn’t Podgursky’s or any other candidate’s qualifications; instead, the issue is hiring a person who was requested/recommended/hand-picked at any point by a financial donor. Hiring such a person—even if the candidate were a Nobel laureate—is an obvious violation of academic norms.

The “adjustments” to the Sinquefield donation fail to substantively address the flagrant violations of academic norms. At the end of the day, SLU has hired a person hand-picked by a financial donor to direct a research center housed in the university, and the donors have final approval for the disbursement of all funds from the Sinquefield donation, including funding for individual research projects and potentially hiring faculty. To reiterate, these are violations writ large of academic norms.

Frankly, it’s naive to think that Sinquefield wasn’t interested in furthering his political agenda by securing influence in the donation. Indeed, while serving as a consultant in the OVPR, Podgursky directed research on behalf of the Sinquefield-backed “Better Together St. Louis” campaign. It doesn’t get much more obvious than that (and it didn’t take very long for Podgursky to get to work in support of Sinquefield’s agenda). Sinquefield’s Show-Me Institute now has a foothold in SLU, as Sinquefield seeks to masquerade agenda-driven think-tank research as independent academic research. Until SLU corrects the violations of academic norms, I will do all that I can to increase awareness of what’s occurring at SLU to help protect the public from being deceived.

I understand that people want to convince themselves that the Sinquefield donation doesn’t compromise the institutional integrity of SLU, as it looks like a lot of money. But it’s clear that the hiring of Podgursky is a quid pro quo for the Sinquefield donation, and it’s clear that the dean hand-picked the search committee to facilitate Podgursky’s hiring as the SCAER director. As discussed in the post, ignoring inconvenient academic norms and relying on hand-picked committees (instead of, e.g., appropriate academic departments) are defining marks of cronyism.

SLU needs to be honest with itself. It has not made substantive changes to the Sinquefield donation that address the violations of well-accepted academic norms. Let’s dispense with the Orwellian doublethink. If one supports the Sinquefield donation in it’s current form, then one needs to make the case that existing academic norms are inappropriate, so that it’s appropriate for SLU to violate well-established norms to receive Sinquefield’s money.

I’m certainly willing to talk with you further on this issue, as I obviously think that it’s an important conversation. To promote a wider conversation, would you be comfortable with me sharing our exchange with faculty colleagues? If you prefer, I can avoid using your name, simply indicating that you were a member of the search committee. If you like, I can also include our exchange at the end of the blog post, again not using your name if you prefer.

Thanks again for your response.

Best, Dave

Addendum: Message to the President

On July 15, I sent the following message to the president of SLU:

President Pestello,

I saw you at last Monday’s NIESR/CFM/OMFIF conference at WashU, but I didn’t get a chance to say hello. I presented a paper that I’m working on with faculty from WashU. My presentation was in the second session, and it looks like you had to leave after the first session.

Turning to the main point of my message, I have a new Academic Capture blog post:

Academic Capture in Action: A Case Study in Crony Philanthropy at Saint Louis University.

I shared the post with faculty colleagues in the Chaifetz School, as well as with the members of the search committee hand-picked by the dean. Given the stakes involved, I feel that it’s appropriate to share it with you.

The administration has failed to substantively address the violations of well-established academic norms in the Sinquefield donation. Indeed, as described in the post, we can already see that the violations of norms are allowing agenda-driven think-tank research to masquerade as independent academic research at SLU.

I confess that I’m dismayed by what you’re allowing to happen at SLU. I can only assume that you’re aware of all aspects of the Sinquefield agreement, so that you’re aware of the obvious violations of well-established academic norms in it. You thus appear to believe that existing academic norms are inappropriate, so that it’s appropriate for SLU to violate well-established norms to secure the Sinquefield “gift.” Maybe you believe that we need a new model when it comes to financial donations to institutions of higher education and that existing academic norms are somehow outdated.

Perhaps at some point we can have a substantive discussion about the role of well-established academic norms. I sincerely hope that it’s a discussion that can move beyond the largely anodyne pronouncements that I’ve routinely heard from SLU administrators regarding the violations of academic norms, as I would truly like to understand your point of view.

In the meantime, I feel duty-bound to do all that I can to protect the independence and integrity of academic research by informing the public of clear violations of well-established academic norms in financial donations. (I appreciate the support that I’m receiving from UnKoch My Campus and Chicago Booth’s ProMarket in this mission.) I’m saddened that I need to inform the public of such violations at SLU.

Thanks for your attention.

Regards, Dave

Addendum: Response to Mike Podgursky

On August 8, Mike Podgursky sent a message to SLU Chaifetz School of Business faculty. That same day, I subsequently sent a message in response. To further promote transparency, I include my response below. I will include Podgursky’s message if/when I receive his approval.


Dean Higgins sent a message on behalf of Mike Podgursky earlier today. As described below, it’s not clear that Podgursky’s message addresses the relevant evidence that generated my concerns regarding BT-related research at SLU. Moreover, his message fails to address the underlying issue—namely, that his hiring by SLU after being “requested” by financial donor Rex Sinquefield constitutes a flagrant violation of well-established norms that are designed to protect the independence and integrity of academic research.

Podgursky says, “Professor Rapach has never discussed this allegation, or any related research matters, with me. He cites no evidence for his allegations, so I can only assume that he is referring to my work with the student as described below.” I was hesitant to describe the relevant evidence, as it involved a graduate student, and I didn’t want to put the student in an awkward situation. In response to Podgursky reporting that I never discussed the particular issue with him, the following explains the situation:

  • Last November, I accepted Podgursky’s invitation to have coffee, where I hoped to substantively discuss the violations of academic norms surrounding his hiring by SLU. While initially agreeing to meet with me, he abruptly canceled the meeting. Some of the messages that I received from Podgursky during that exchange were far from civil, so that his request near the end of his recent message for “civility” lacks sincerity. My messages from the exchange were seen by Dean Higgins and my department colleagues. Podgursky’s messages to me are quite revealing, and in the interest of transparency, I asked Podgusrky if he were willing to share his messages to me with my colleagues, but he wasn’t willing to do so.
  • After learning of Pogursky’s BT-related research with graduate students in the Chaifietz School, I raised the issue in a meeting with Dean Higgins. The dean indicated that he was unaware of the research, but would look into the matter. However, I never heard back from him.
  • I also raised the issue of BT-related research in a Department of Economics meeting. Perhaps unwittingly illustrating my concerns, Department Chair Hailong Qian suggested that it’s appropriate to do research supporting BT, because as economists we know that BT benefits the region.

In sum, I accepted an invitation to meet with Podgursky. However, displaying an unwillingness to engage in substantive professional debate, he abruptly canceled the meeting and made it clear that he wasn’t willing to talk with me. (If Podgursky has changed his mind, I remain willing to meet with him in any setting.) I also expressed my concerns to Dean Higgins, but he failed to get back to me regarding the issue. In addition, I raised the issue with my department, but I haven’t heard anything from the department chair regarding the issue since the meeting.

With respect to how I learned about BT-related research in the Chaifetz School, the MS-AFE student that Podgursky described was in my ECON 6520 Forecasting Macroeconomic and Financial Variables class during the spring semester. The student approached me outside of class and said that along with another student they were working with Podgursky to gather data on different tax rates across the region. Reminiscent of Qian’s remark at the department meeting, the student indicated that the tax rate structure was problematic and that there were economic benefits to a merger. The student further expressed a desire to learn the R programming language that I use in my class for the research project. I also heard from a colleague that graduate students were working with Podgursky on BT-related research.

It’s not clear that Podgursky’s message addresses the particular project that the student discussed with me. In any event, after learning the information in the previous paragraph, it was appropriate to conclude that Podgursky was directing research to support BT, especially since, as Podgursky himself states in his message, “Better Together was very much in the news.” Furthermore, we know that Sinquefield was the major financial backer of BT and that he wanted SLU to hire Podgursky. Indeed, in light of the violations of academic norms surrounding Podgursky’s hiring, it would be a dereliction of my duty as an academic researcher not to voice my concerns regarding BT-related research at SLU.

Podgursky closes his message by stating, “We will produce scholarly and objective research.” However, Podgursky cannot have it both ways: he cannot be complicit in violations of well-established norms that are designed to protect independent academic research and also credibly claim that his research at SLU will be “scholarly and objective.” His anodyne statement provides no reason to believe that his research at SLU won’t be affected by his relationship with Sinquefield.

Based on Podgursky’s message and what we hear from the administration, we are apparently supposed to simply trust Sinquefield and his hand-picked ally Podgursky that the latter’s research at SLU will be “scholarly and objective.” However, given the clear violations of well-established academic norms in Podgursky’s hiring and revelations about Sinquefield’s activities in the Sentencing Memorandum for Steve Stenger, we trust Sinquefield and Podgursky at our own peril.

I’m willing to openly discuss the issues in this message with anyone in any venue. I’ll also include this message as an addendum to my July 14 blog post. (I will include Podgursky’s message as an addendum if Dean Higgins and/or Podgursky indicate that they would like me to do so.)

Thanks for your attention.

Sincerely, Dave Rapach

Addendum: Responses to Hailong Qian

On August 8, Hailong Qian sent a message concerning my response to Podgursky. To continue to promote transparency, I provide my response to Qian.


Your [typo—You’re] categorically wrong. You did not say that “it was a legitimate academic research topic to examine the potential benefits and synergy of the county and city merger.” Instead, you said that research to support BT was good because as economists we know that the merger would be good for the region. Indeed, you added that there was strong support for the merger in the region. However, Bonnie Wilson and I pointed out that this wasn’t the case, as many in the African-American community adamantly opposed the BT plan.

As the school knows, you have been an unreliable source of department information. Specifically, you denied that the department previously had substantive discussions concerning a Sinquefield-funded research center in the department and that the negotiations broke down when Sinquefield wasn’t granted influence in hiring decisions. However, the school has seen evidence (eg, a department memo and an email message from Jack Strauss) that demonstrates that you were wrong.

I’m disappointed that you don’t have the intellectual honesty to admit what you said in the department meeting and the courage to defend its merits.

Best, Dave

Qian subsequently sent another email message, and again for transparency I include my response.

Hello Hailong,

Your last message constitutes a baseless ad hominem attack that is easily refuted.

1. I’ve never claimed that my “view/opinion/perspective is the only truth/reality.” I learn much from hearing opposing views, as it sharpens my thinking. Indeed, in numerous cases in my intellectual journey, I’ve been presented with evidence that has compelled me to fundamentally change my view. However, the more that I learn about the Sinquefield donation, the more evidence I find of flagrant violations of well-established academic norms. As I mentioned in my response to Podgursky’s message, I was looking forward to a substantive discussion with him about academic norms, but he was unwilling to engage in such a discussion. I’ve been transparent about presenting evidence and making a substantive case that the Sinquefield donation violates academic norms, thereby compromising the independence and integrity of academic research at SLU. You’re certainly welcome to try to make a substantive case that somehow the Sinquefield donation doesn’t violate well-established academic norms or perhaps that such norms are inappropriate, but you’ll have to do better than ad hominem attacks to make any progress.

2. I certainly don’t believe that whoever disagrees with me is dishonest. Indeed, I welcome open and honest academic debate with those who hold opposing views. It’s straightforward to establish that you’ve said things that are inaccurate and dishonest, and it would be intellectually dishonest for me not to challenge you in that regard. Indeed, by your failure to make substantive arguments, it is your ad hominem attack that is slanderous.

3. I agree that a person’s reputation is earned. Unfortunately, in making your point, you’re hoisted on your own petard. When you’re complicit in violations of academic norms, you should expect to suffer repetitional [typo—reputational] damage in the eyes of those who are concerned with the independence and integrity of academic research. Your actions have duly earned you a reputation as a person who engages in violations of academic norms, and you should be prepared to live with the consequences. Based on the merits of my arguments and the strength of the evidence that I’ve presented in support of them, I’m willing to live with whatever reputation I’ve earned by standing against violations of academic norms.

Best, Dave

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