Arabian Gulf Money and US Universities (Continued)

May 7, 2008

As I established in my last post, gifts and contracts from Arabian Gulf countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) are a large portion of all foreign funds given to US universities.  And those countries give much more relative to the size of their economies than do almost all other countries.

Before discussing where that money is going and what it means, I should state my preferences upfront.  To the extent that Arabian Gulf money in US universities is reducing criticism of those regimes and increasing criticism of the US and Israel, I think that is a negative development.  Gulf countries, principally Saudi Arabia, are currently governed by fundamentally illiberal regimes that are relatively oppressive toward political, religious, and cultural dissent within their countries.  They also promote a foreign policy agenda that is antithetical to desirable US values and interests.  And while the US and Israel are certainly worthy of criticism, they are generally forces for good in that they offer relative freedom within their countries and generally promote positive values outside.  To dwell on the errors of the US and Israel while neglecting the abuses of Arab states is an inversion of moral priorities. 

I understand a full defense of these views would require a longer argument and am prepared to offer one at a later time.  For our purposes, I assume (and think most readers would agree) that promoting more criticism of the US and Israel while suppressing criticism of Arab states is a bad thing.

 So where does Arabian Gulf money go in US higher education?  Most of what is reported is categorized as “contracts,” not gifts.  Of the almost $322 million from Gulf states, nearly $234 million is labeled as contracts.  The contracts appear mostly to be for the purchase of support and research related to Arabian Gulf oil production.  For example, $111 million of the $234 million in contracts went to Carnegie Mellon University from the Supreme Council for Information and Technology in Qatar.  Another $19 million went to the Colorado School of Mines from the  Adu Dhabi National Oil Company.  There may be political effects of these contracts, but they appear to be largely related to economic activities.

That leaves a little more than $88 million in total gifts (not contracts) from Arabian Gulf donors since 1995 that have gone to 14 US universities.

Recipients of Arabian Gulf Gifts Since 1995
American University (The) $500,000
Boston University $1,500,237
Columbia University $500,000
Cornell University $10,900,000
George Washington University $11,953,519
Georgetown University $16,232,667
Harvard University $11,871,563
Howard University $250,000
MIT $10,000,000
Michigan State University $926,740
Rice University $2,750,000
Texas A&M University $1,498,671
Tufts University $1,000,000
University of Arkansas $18,312,524
Total $88,195,921

 While $88 million feels like a lot of money, it is an extremely small portion of university endowments.  According to the National Association of College and University Business Officers, the 785 higher education institutions they surveyed had a total of $524 billion in endowments as of fiscal 2007.  That makes the Arabian Gulf contributions .02% of the total.  Even at the 14 receiving universities listed above, the Arabian Gulf money is a small portion of their individual endowments.  For example, at Georgetown the reported gift constitutes 1.5% of their endowment.  At the University of Arkansas, where I am a professor but not a beneficiary, the Saudi gift is little more than 2% of the endowment.  Nowhere else is the gift amount in excess of 2% of endowment.

The income generated from these gifts is an even smaller portion of the annual operating budgets of these institutions.  Normally less than 5% of endowment gifts can be spent annually, meaning that $88 million dollars would generate less than $4.4 million in money that could be spent each year.  At George Washington University the FY 2008 budget calls for $553 million in revenue, while the almost $12 million Arabian Gulf in gifts should produce roughly $600K, or .1% of annual revenue.  At Columbia University the FY 2006 budget reports almost $2.7 billion in revenue, while Arabian Gulf gifts would produce roughly $25,000 of that, which is basically rounding error.

While the Arabian Gulf countries are dispropotionately large foreign donors to US universities, the size of their gifts pales in comparison to the total endowments or annual budgets of these institutions.  American universities may be cheap dates, willing to do quite a lot for that marginal dollar, but they aren’t that cheap.  It’s unlikely that Arabian Gulf money is buying a significant change in the priorities of the universities to which they are donating. 

It’s true that the 14 recipient universities include a disproportionate number of academics who are willing to offer apologies for Arab atrocities while inflating US and Israeli misdeeds.  For those who would rely on David Horowitz’s list of the 101 most dangerous professors as a guide (and I am in no position to endorse or refute his list), 16 are housed in these 14 universities.  Given that there are almost 1,000 colleges and universities in the US, having almost one-sixth of the “dangerous professors” at these 14 universities is a fairly high concentration. 

Arabian Gulf money tends to go where there are professors friendly to their world view.  The money may give those professors a larger megaphone, but for the most part they were already at these institutions and their views were unchanged by receiving the gift.  So, Arabian Gulf money is unlikely to be buying much of the priorities of universities or the views of the recipient professors.

But before we breath a sigh of relief, we need to consider the scale of these gifts relative to pre-existing funding in Middle Eastern Studies.  Having $4.4 million to spend each year may not be a large amount of money to US universities, but it is quite a lot of money within the relatively limited world of Middle Eastern Studies.  People wishing to have productive careers in that field may alter the emphasis of their work in the hopes of attracting another $18 million gift.  And the power of recipients of these gifts to reward like-minded friends and punish critics is enhanced.  This all helps populate Middle Eastern Studies programs and the State Department and CIA, which hire their graduates, with people inclined toward a Gulf Arab view.

Martin Kramer articulated the problem: “Of course, this is why we can’t ever expect to get the straight story on Saudi Arabia, Wahhabism and oil from people who operate within Middle Eastern studies. If you want a fabulously wealthy Saudi royal to drop out of the sky in his private jet and leave a few million, you had better watch what you say — which means you had better say nothing.” 

But if the problem is that prospective (not established) Middle East experts can be bought on the cheap, an obvious solution presents itself.  People who think there should be more criticism of Saudi Arabia and less of the US and Israel should make their own gifts to universities.  Countering $88 million over a dozen years from the Gulf Arabs shouldn’t be beyond the collective financial reach of supporters of US and Israeli world views.

Of course, working out the details with universities can be a tricky business for people wishing to promote greater emphasis on certain issues, but there are organizations that can help facilitate that process.  For example, the Veritas Fund for Higher Education Reform, run by my friend David DesRosiers, works with donors to ensure that their intent is followed.

And people can only effectively counter Arabian Gulf influence if they are aware of how much money is being given and to where it is going.  Toward that end, Stanley Kurtz has called for legislation that would enhance the transparency of foreign donations while worrying that the existing information, on which I base my analysis, may be incomplete.

In sum, the problem of Arabian Gulf influence in US higher education is real, but can effectively be countered and contained by those with opposing views.

Arabian Gulf Money and US Universities

May 6, 2008

A number of observers have noted some large gifts originating from Saudi Arabia and other Arabian Gulf countries to US universities.  The purpose of this post is to put in perspective how large those gifts are.  In subsequent posts I’ll discuss where the money is going and what it may mean.

The motivation for this post comes from Stanley Kurtz, who has a piece over at National Review Online with a list of gifts and contracts from foreign sources to U.S. universities.  Kurtz rightly emphasizes: “To treat all or even most foreign gifts to American colleges or universities as somehow nefarious would be a serious mistake. America’s institutions of higher education — with their superb programs in science, medicine, and engineering — rightly benefit from the largesse of America’s foreign friends and allies, many of whom have benefited directly from the technical expertise developed in these institutions.”

But he continues: “On the other hand, there are reasonable grounds to fear that some foreign donations may purchase undue influence over the way in which highly controversial subjects are treated in American lecture halls.”

I would add a further caveat that gifts to universities rarely, if ever, lead professors to alter the views they hold.  The slogan, “follow the money,” is a gross oversimplification of how academia works.  While one can’t simply buy ideas in academia, it is important to examine donations as an indicator of priorities in those institutions.  The money doesn’t buy ideas, but it can buy emphasis on some issues and some types of academics over others.

That being said, Arabian Gulf money is clearly a significant issue in higher education.  According to the federal filings Kurtz reproduces, Arabian Gulf gifts and contracts to US universities have exceeded $321 million since 1995.  That’s more than 16% of all reported gifts and contracts from foreign sources. 

To put the magnitude of those gifts in perspective, the Arabian Gulf states from which the money came have economies that represent less than 2% of global GDP (excluding the US).  So, their share of foreign gifts to US universities is eight times as large as their foreign share of global wealth production.  The Arabian Gulf states are exceptionally interested in US higher education.  The breakdown by country can be seen in the table below: 

Gifts and Contracts from Arabian Gulf States to U.S. Universities Since 1995
  Gifts and Contracts % of Total Foreign Gifts Share of Global GDP (ex US)
BAHRAIN $8,199,058 0.42% 0.05%
KUWAIT $7,639,854 0.39% 0.27%
OMAN $9,046,801 0.46% 0.12%
QATAR $151,702,156 7.75% 0.13%
SAUDI ARABIA $92,972,720 4.75% 1.10%
UAE $52,058,098 2.66% 0.28%
Total Gulf States $321,618,687 16.44% 1.95%

How do these figures compare with gifts and contracts from other foreign sources to US universities?  If we look at donations from the 10 largest trading partners with the US (excluding Saudi Arabia, which ranks 9th), we see that they are roughly proportionate to their share of global GDP.

Gifts and Contracts from Top Trading Partners (ex Saudis) to U.S. Universities Since 1995
  Gifts and Contracts % of Total Foreign Gifts Share of Global GDP (ex US)
 Canada  $73,418,414 3.75% 2.45%
 Mexico  $21,272,215 1.09% 2.60%
 China  $53,266,855 2.72% 13.55%
Japan $257,196,140 13.15% 8.36%
Germany $207,624,660 10.61% 5.45%
 United Kingdom  $163,232,433 8.34% 4.13%
 Korea, South  $42,893,079 2.19% 2.32%
 France  $62,638,953 3.20% 3.98%
 Netherlands  $34,800,500 1.78% 1.23%
Total $916,343,249 46.84% 44.09%

The highest ratio of share of foreign gifts to share of GDP is 2 to 1 among these major trading partners.  Certainly none of these countries gives at a rate that is 8 times out of proportion with its wealth. (Although as South Park would say, we have to watch those Canadians, with their floppy heads and pointy eyes.)

Tune in here for a discussion of why the Arabian Gulf states may have such a strong interest in US universities and what it may all mean.

This Piece Continues Here.

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