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Koch group contract offers 'in-kind services' to U. for guest speakers, curriculum, textbooks

Jordan Allred, Deseret News, File

Koch group contract offers 'in-kind services' to U. for guest speakers, curriculum, textbooks

By Ben Lockhart | Posted - Jul. 26, 2017 at 11:19 a.m.



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SALT LAKE CITY — The University of Utah's new quantitative analysis institute could in the future accept "in-kind services" from the Charles Koch Foundation, according to the two organizations' gift agreement finalized Monday.

U. spokesman Chris Nelson called the clause an innocuous, even largely insignificant inclusion in the contract, saying that no organization technically needs the authorization of a prior gift agreement in order to negotiate with the university to make in-kind donations. He added that no such donations have been specifically proposed by the foundation regardless.

The Charles Koch Foundation is slated to donate $10 million to the U.'s Marriner S. Eccles Institute for Economics and Quantitative Analysis by 2024, "solely to support the institute programs to advance the institute's mission," according to a copy of the agreement provided to KSL by the university. The payments are slated to be incrementally dispensed on a yearly basis.

Tentative allocation plans for the funds include $6.2 million given for the salary and benefits of tenure-track institute professors and other faculty, $1.2 million in salary support for the institute's founding director Professor Adam Meirowitz and $1.6 million in fellowship and scholarship money.

Below that financial breakdown, a small clause references the possibility of in-kind giving from the foundation.

"If the university and donor mutually agree, the donor may also contribute in-kind services to the university to help promote the work of the university, the institute, or the university faculty, students and staff," the stipulation reads.

Nelson confirmed the referenced in-kind services could include direct payments from the Charles Koch Foundation for certain guest speakers or curriculum materials, such as textbooks, for use by the institute.

"That can be anything from if we had a speaker, we may want them to cover the cost … or if (they) wanted to donate books to our students or wanted to pay for a faculty member to go do this, that or the other," Nelson told KSL.

The agreement document specifies that selection of faculty to operate the institute, as well as the choosing of the institute's fellowship recipients, "must follow the university's standard procedures, in accord with university policy for selecting such positions."

The George S. and Dolores Eccles Foundation, along with the Marriner S. Eccles Foundation, are also providing a combined $10 million to the institute, which is expected to launch this fall with a focus on attracting renowned companies to the U.'s business school to rub shoulders with top-performing students.

Donors and university officials met with the combined Deseret News and KSL editorial boards last week, where they were asked whether highly publicized donations to conservative and libertarian candidates by billionaire and foundation namesake Charles Koch would prompt questions about the goals of the institute's research.

Representatives from each foundation, as well as the U., responded by saying the mission of the institute would not be beholden to any one ideology about economics. Taylor Randall, dean of the U.'s David Eccles School of Business, alluded to the institute namesake's legacy as chairman of the federal reserve as being symbolic of the diversity of donor organizations who would like to see the institute succeed.

"You’ve got Marriner (Eccles) on one side who worked for Roosevelt and (President Harry) Truman and you’ve got some very free market thinking folks on our faculty," Randall said at the time.

John Hardin, director of university relations for the Charles Koch Foundation, told the editorial boards that his organization does not want to push an ideology at the U.

"What we would hope is that people would take a look at this program and see the results … and not get caught up in any of these other (political) distractions," Hardin said at the time.

Nelson said Tuesday that, during negotiations with the U., the Charles Koch Foundation has not indicated any aspirations to actually offer any in-kind donations.

"In terms of their 'in kind' types of donations they make, (Meirowitz indicated) that never even came up in the conversation. … Nothing was proposed that would be, from his perspective, included in that (clause)," Nelson said.

The spokesman said he wanted to be clear that the U. initiated the newly formed donor relationship with the Charles Koch Foundation.

"It's really our vision that they're signing onto," Nelson said. "It's not like the Kochs came to us and said we want you to start an institute. It is all very much university and faculty driven."

Another clause in the gift agreement states the U. must provide an update to the foundation in four years detailing "whether the activities of the institute have proceeded according to … plans."

Nelson said the metrics to determine whether the U. is proceeding according to plan are not expected to go beyond what is specifically listed in the agreement document. The document said those are as follows: "Was the institute timely established, were tenured-track faculty hired, have students received fellowships and matriculated in the economics major within the school, etc."

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Provisions about in-kind donations and an evaluation of the institute's progress after four years are not included in the U.'s agreements with either of the Eccles foundations.

Those agreement documents, signed last week, show the better known George S. and Dolores Dore Eccles Foundation is contributing $9,750,000 to the institute, with the Marriner S. Eccles Foundation giving a total of $250,000. Like the Charles Koch Foundation, both Eccles organizations are expected to dispense those donations via yearly payments through 2024.

Earlier this year, the Charles Koch Foundation provided $25 million to Utah State University's Jon M. Huntsman School of Business to help launch the Center for Growth and Opportunity there.

Combined with a simultaneous $25 million to the school from the Huntsman Foundation, the gift became the largest in school history. In protest of the Koch donation, a sign depicting Charles Koch and his brother David Koch was projected onto a side of the business school saying, "SOLD! Utah State University respected research institution! $25,000,000."

Utah State spokesman Tim Vitale said at the time that the university would "maintain absolute control over hiring" faculty at the new center and that it would function under the same academic regulations as every other department at the university.

The Charles Koch Foundation has come under controversy in the past for its agreements with universities such as Florida State, with critics saying they sought to manipulate which faculty could be hired there.

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Ben Lockhart

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