A new threaded post on this topic can be found here. For previous posts about the Harreld hire, click the tag below.
For previous posts about the Harreld hire, click the tag below.
03/12/20 — I don’t know where J. Bruce Harreld and J. Brooks Jackson are, but even if they are lurking on the University of Iowa campus, they should both just stay out of Theresa Brennan’s way and give her whatever she needs to do her job. From the Daily Iowan’s Alexandra Skores: UI Hospitals and Clinics to open new clinic, conduct video doctor visits amid COVID-19 cases.
* The dissonance between academics and athletics is now deafening. From the Daily Iowan’s Brooklyn Draisey: Hawkeye Service Breaks cancels student trips.
So it’s okay for Iowa’s athletic department to send the men’s and women’s basketball teams off to various tournaments, and for the wrestling team to head up to Minnesota for the NCAA tournament, but domestic travel for academic purposes is being curtailed. Kind’a seems like revenue is the determining factor in which UI students are placed at risk. (Gonna be interesting watching Gary Barta — a great humanitarian and mentor of college athletes — explain himself if one or more students are hospitalized.)
* Sarah Hanson has been named the new UI VP for Student Life, replacing the interim Laura McLeran, who will now go back to black ops in the president’s office. Press release includes another disembodied quote from J. Bruce Harreld.
* Someone at the UI Office of Strategic Communication finally got around to writing up a very short press release about how the university completed the financial close on the UI P3 two days ago. Incredibly, however, despite using the words “financial close” in the headline, there is no mention of the fact that UI just pocketed $1.17B as a result of the deal. Instead, we are given yet another disembodied quote from illegitimate UI president J. Bruce Harreld, which is of course also a lie:
“We’re pleased to have found an innovative way to bridge a meaningful gap in available resources in order to help continue delivering on our mission of education and research excellence,” says UI President J. Bruce Harreld. “We’re looking forward to our partnership with ENGIE and Meridiam and appreciate the involvement of university shared governance members, academic leadership, and the campus community during this whole process.”
As detailed endlessly in these virtual pages, the “meaningful gap in available resources” that Harreld takes pains to mention is itself a fraud perpetrated by Harreld.
* Well this is a relief: Big Ten Cancels Remainder of Basketball Tournament.
Apparently, somewhere in the office of the Big Ten Commissioner — which, in better days, usually focuses on denying any knowledge of decades-long sexual abuses perpetrated against student athletes on its storied campuses (so far Penn St., Ohio St., Michigan St. and now Michigan) — there is at least one person smarter than UI AD Gary Barta and UI Head Men’s Moron Fran McCaffrey, who should both be fired for cause for pushing ahead with plans to attend the Big Ten tournament. If that is the level of intelligence and concern that UI administrators in athletics demonstrate in the middle of a global pandemic, then we know everything we need to know about those individuals and their warped, self-interested and potentially calamitous priorities. (As a direct result of their greed and idiocy, Barta will now be given another raise by J. Bruce Harreld, for his steady leadership in a time of crisis, and Barta will give McCaffrey a raise and contract extension that locks him in for another decade.)
* The committee for the nationwide UI AVP-DEI search has been announced. Following the TaJuan Wilson debacle, Harreld initially tried to put off a new DEI search indefinitely, but that obviously exposed his false claim that he was a big proponent of diversity, equity and inclusion at UI. (In reality Harreld demoted DEI from his cabinet, then kicked DEI out of the president’s office altogether.) Fortunately for Harreld, one of his fixers — Russ Ganim — was somehow miraculously named as a co-chair for the new DEI search committee, which will now take an extraordinarily long time to fine just the right person for that critical job, thus also giving Harreld the extensive administrative delay he originally wanted:
The search will begin in April, with a new associate vice president expected to be named during the Spring 2021 semester.
You can’t make this stuff up.
* Apparently the crony Iowa Board of Regents is suddenly cognizant of the fact that a bunch of bodies may start piling up, and are now eager to pass the buck to the crony toads they installed at the state universities, who were all hired primarily to rubber stamp directives from the crony Iowa Board of Regents. From the Daily Iowan’s Katie Ann McCarver: Iowa regents consider policy change to give president emergency-authorization authority. Next up: J. Bruce Harreld authorizes a $200M public-private partnership for body bags.
* Remember back in October, when the Iowa Center for Advancement brought four of the previous UI presidents together, and they also let Harreld tag along? And when those presidents were asked what their toughest challenge was on the job, Harreld talked about how badly he was treated after it became clear that he lied his way into the job he now holds, which was granted as a result of a rigged search process by the Iopwa Board of Regents? Well this is the man who will now lead the University of Iowa’s response to a global pandemic.
* Looking ahead to the aftermath of the coronavirus pandemic — which may yet leave us in a state of cultural limbo and ongoing risk — we can already see the contours of the economic shocks that the University of Iowa will have to endure. Whatever revenue is lost and cash expended in the near-term, in the fall there may also be a sharp decrease in enrollment depending on the aftereffects, and how safe the UI campus seems to students and parents who are considering enrollment. Any downward pressure on revenue will in turn provide yet another opportunity for Harreld and the board to increase tuition, but precisely because they have perpetrated a four-year cash grab by relentlessly hiking tuition there is no more elasticity in the system. Meaning a sharp increase in tuition, even if legitimate, may also prove to be a barrier to enrollment.
03/11/20 — Welp…the Iowa Board of Regents finally acted yesterday, belatedly, but now they have a new problem. By announcing that classes will be conducted online after spring break, 32,000 individuals from the sole coronavirus hotspot in Iowa will suddenly be traveling to four corners of the state if not the country, which is obviously not ideal. (The vain hope has to be that in the remaining days of this week, UI and UIHC will try to locate as many infected individuals as possible.)
What we did not learn yesterday was whether the UI public-private partnership closed on the contract that was agreed to three months ago, on 12/10/19. There wasn’t a peep anywhere, yet as reported by the Daily Iowan’s Katie Ann McCarver only five days ago, yesterday was the day and the deal kicked in at midnight:
Financial close in the partnership is slated for March 10, and the university will officially transfer management of its utilities system to ENGIE at 12:01 a.m. CT March 11, according to Thursday’s release.
The agreement between the UI and concessionaire Hawkeye Energy Collaborative, composed of ENGIE and Meridiam, involves an upfront lump-sum payment to the UI of $1.165 billion to manage over 50 years in an endowment fund, the DI previously reported.
Unless something changed in the last five days, that not only means the former UI utility workers are now working for a consortium of two French energy companies, but that University of Iowa just put a $1.17B check in the bank. Which is obviously a great relief given the economic shocks that UI is about to experience from the outbreak.
Finally what we also did not learn yesterday concerns the whereabouts of illegitimate UI president J. Bruce Harreld, and why he has been completely silent since late February. No reported appearances, no reported speeches, not even a stray quote for close to two weeks, even as the coronavirus is now in Johnson County, which is home to UI. If Harreld is on campus he is clearly failing to lead, and if he is off campus there has been on explanation for his absence. (But either way, he’s still making $50K a month.)
* From the Daily Iowan’s Alexandra Skores: UI Health Care admits patient with COVID-19 in ‘critical condition’. (More here from the Gazette’s Vanessa Miller, and here from the Des Moines Register’s Barbara Rodriguez.)
* The DI’s Marissa Payne has two stories out this morning about moving classes online at UI, and about the substantial uncertainties facing students as a result. (The cascading financial issues alone will reverberate well into the next academic year, for both students and university alike.) Note also that once again there is not a single mention of, let alone quote from, the UI president in either story. Where is J. Bruce Harreld, and why has he gone missing at this critical time?
* From the Editorial Board at the Daily Iowan: Editorial: Clearer communication needed from UI on coronavirus response. Again, as noted in recent posts, no place on the entire planet had as much lead time about the shockwave of disruptions emanating from China, yet the leadership at the Iowa Board of Regents and the University of Iowa — which, by their very nature, should have understood the magnitude of the coming impact — was frozen for weeks. I know none of these people are trained to deal with sudden systemic changes, and most of them are career bureaucrats, but we need to grant power now to people who can actually lead and get things done. (And once again, there is no mention of Harreld.)
* Assuming the UI P3 did conclude its financial close yesterday, here is a fun quote from the visionary J. Bruce Harreld himself, uttered on 12/09/19 and published on 12/15/19:
So, I sit down with Dan Collins and Tom Rietz and Dan is the chair of the accounting department for Tippie. The three of us met and I said, here’s what I’m beginning to see and to understand and how it would work. But boy, the risks of this are huge. And we need to be able to model how the financial markets may play out over 50 years. We need to be able to model how much money we would need to fund the gaps in our strategic plan. We need to — I can just keep going.
There are layers and layers and layers to this and so Tom, in particular, did an awful lot of modeling. In particular, once we started to get the structure reasonably well-defined, [we] started running various scenarios of a 2007, 2008, 2009: fiscal collapse, credit lock up in the US economy through P3. So we just look through scenario after scenario after scenario. This is not risk free, something like this will never be risk free.
* From the DI’s Marissa Payne: University of Iowa to move classes online for two weeks after spring break amid coronavirus outbreak. Given the cover-your-ass instincts of administrators generally, a tentative response was not unexpected. Unfortunately, this also makes clear that the primary concern at UI right now is not the physical health of the UI community, but protecting revenue — both in terms of minimizing the need for refunds to students, and avoiding lawsuits for criminal negligence in the future.
Notable in Payne’s report we also have the first ostensibly current action by UI president J. Bruce Harreld, who has not been mentioned in the press in weeks:
The UI message, signed by President Bruce Harreld and Provost Montserrat Fuentes, said colleges will share information with faculty following guidance from the Provost’s Office regarding virtual instruction.
Because Harreld has not issued even a single quote to the campus paper, however — let alone appeared on camera, demonstrating the high-profile leadership that this unprecedented crisis and his obscene salary demand — we are left to wonder if his signature was not produced in a mode made famous by the former Soviet Union.
* Some actual Harreld quotes here from the statement that was issued with his signature: All 3 Iowa universities suspend face-to-face instruction after spring break. No way of knowing whether he said any of that or not, and the end of the following sentence reads like it was written by a lawyer. On the other hand, this sentence also contains an easily disproved and self-serving lie, with are hallmarks of Harreld’s rhetoric:
We are making this decision proactively to maintain the health and safety of our students, faculty, staff, and patients and in conjunction with the governor and Board of Regents, State of Iowa.
As a factual matter, a proactive decision would have been made a month ago. This is a reactive decision, and a tentative one to boot.
* Okay…finally tracked down the statement that Harreld purportedly issued today, which was buried three layers deep on the UI Coronavirus Update page. Reads like an administrative press release/email that could have been written by anyone in the executive suite or the Office of Strategic Contagion. (Actually, it reads like multiple people contributed, and not at all like something Harreld penned himself. So I’m back to wondering where he is and what he’s doing.)
Update: Turns out there was an on-camera “media briefing” about the coronavirus outbreak today on the UI campus, at which Harreld did not appear. In his place — because Harreld has apparently been abducted by aliens — were Provost Montse Fuentes, perennial c-suite sidekick Rod Lehnertz, and Chief Medical Officer Theresa Brennan. (Listening to Lehnertz lead off with marketing blather — including pitching a “world-class educational experience for our students” — made me want to vomit.)
* We can see the root of the decision-making process at the University of Iowa by looking at the athletic side of campus — as reported by Mark Emmert at Hawk Central: Gary Barta: Hawkeye staff monitoring coronavirus news, but not changing tournament travel. Seriously, why would UI change its school-sponsored travel plans in the face of a global pandemic? It’s not like students athletes are made of the same genetic material as fans, who were just banned from attending March Madness in person. (So far the Big Ten is insisting that fans will be able to attend Big Ten tournament games, almost certainly because all of the schools want a share of the gate as well.)
Given that college athletes are immune to the coronavirus, and that the University of Iowa is certain nothing bad could happen as a result of stuffing all of those student athletes into airplanes and flying them around the country, why would the Athletic Director of a major college give up the television revenue and free publicity that comes with playing a meaningless sport for the gratification of people who like that sort of thing? In fact, here’s an Iowa coach putting it all in perspective:
“It’s business as usual as far as I’m concerned,” Iowa men’s basketball coach Fran McCaffery said of his team’s preparations to compete in the Big Ten Conference Tournament starting Thursday.
Business as usual. Could not have put it better myself. (Ruh-ro, some people are busting out lawyer talk. That does not bode well.)
* Apparently the NBA’s plan to continue playing the season has hit a snag….
From 8:30 p.m. — Coronavirus update: NBA plans to continue season playing games without fans, per report.
From 8:45 p.m. — NBA suspends season due to coronavirus.
So what happened? Well apparently, one of the players on the Utah Jazz was diagnosed with the caronavirus tonight, right before that game was about to begin.
But hey — at least UI AD Gary Barta, UI Men’s Head Brain Fart Fran McCaffery, and the revenue-obssessed cretins at the Big Ten still plan to keep playing games, because they know better than the epidemiologists and the CDC.
* From the Gazette’s Vanessa Miller and Michaela Ramm: Hills Bank confirms it sponsored group in Egyptian cruise linked to Johnson County coronavirus cases.
* After dragging their asses for weeks, late today administrators at the University of Iowa recalled students from Spain, France and Germany. The problem? Hours later the Degenerate of the United States finally decided to act himself — and this is his plan: Trump suspends travel from Europe to US. Good job everyone!
03/10/20 — Gonna be real interesting to see if we get all the way through the day today with no public notice or mention of the financial close of the UI public-private utility partnership. Then again, given that next year’s state budget is still not finalized, and there’s a pandemic and whatnot, I can see why UI might not want to draw attention to the fact that they are now sitting on $1B in unrestricted cash. Having gone to the trouble of lying about the need for a massive endowment to fund the UI Strategic Plan — which will then be used to fund an annual $15M game show on campus, which was in turn already paid for by tuition hikes that were approved two and a half years ago — it would obviously be disappointing to UI administrators to see a cut in appropriations, let alone to have to spend any of that endowment saving lives.
* One strong suit at the Iowa Board of Regents and attendant university campuses is that administrators are really good at covering up their own incompetence and abuses using other people’s money. From the AP’s Ryan Foley: Iowa State Paying Admissions Official to Look for Other Jobs.
For the second time this academic year, a public university in Iowa is paying an administrator to stay home and look for other jobs as part of a legal agreement to quit and not sue.
An agreement that was reached in December but only recently made public shows that Iowa State University is paying former senior admissions official Consuela Cooper to telecommute until June 15 or until she finds a new job, whichever comes first.
The first occurrence, of course, was the TaJuan Wilson debacle at the University of Iowa, which clearly taught the entire regents system an important lesson. If you have a personnel problem that you don’t want to become public, just throw a bunch of state money at that individual to silence them, and you’re home free.
* Remember back in January of 2019, when illegitimate UI president J. Bruce Harreld — who personally identifies as multi-cultural because a couple of his offspring married people who speak Mandarin — said that China was a “wonderful country“? Maybe not so much.
* To be clear, Mitch Daniels at Purdue is a hypocrite. While he relentlessly plays up his penny-pinching reputation, he has no problem taking the same kind of obscene salary that J. Bruce Harreld receives at UI, while simultaneously insisting that everyone else tighten their belts. Having said that, and acknowledging that there is a lot of credulous fawning in this fluff piece about Daniels — and also acknowledging that there are plenty of ways to bleed students while keeping tuition relatively low — this single fact is impressive: “Mitch Daniels has frozen Purdue’s tuition—at less than $10,000—for seven straight years.” Contrast that with the University of Iowa under Harreld, which is currently in the middle of levying nine tuition hikes over eight years.
* So if Harvard is closing its campus after spring break, due to the coronavirus, and J. Bruce Harreld has a Harvard MBA, does that mean Harreld — who has been completely absent in the face of the looming pandemic — will close the UI campus after spring break? Probably not. What he will do, however, is use the coronavirus outbreak as an excuse to increase tuition even more on any students that survive. (Gonna be some interesting lawsuits at colleges and universities which insist that students come back and continue taking classes and going to lectures.)
* Relatedly, it is genuinely fascinating watching elected officials and governmental appointees in the Upper-Midwest resist implementing changes that are happening on both coasts, even though it is a certainty that both the coronavirus itself and the resulting shock waves of disruption will arrive here in force. Nobody would do this in the face of a hurricane warning or even a tornado warning, but somehow a pandemic is reducing all of these people to quivering, cowering wretches. We had — and still have — more advance warning than any place on earth, yet even today the message is that everything is under control and you should just go about your regular daily existence.
* Underscoring the degree to which public higher-ed is already a profit-conscious industry, note also that there has been almost no sustained conversation about whether the spring NCAA sports — including particularly basketball and wrestling — should conclude with their usual national tournaments. This is not simply colleges and universities that are suppressing that conversation, however, but also the press and media, which profit handsomely from season-ending televised events. Once again, today the Ivy League threw a wrench into that conspiracy of silence by cancelling its own basketball tournament. Your move, Big Ten.
(If you’re bored, take a minute and scroll through the official NCAA March Madness twitter account, from which you would be hard-pressed to discern the unfolding global coronavirus pandemic. Never let a healthcare crisis get in the way of exploiting student athletes for money.)
* Private liberal-arts Grinnell College — which sits just off I-80 between Iowa City and Des Moines — is closing its campus and sending most of its students home. After spring break the 1,650 students on campus will finish the term online.
* From the Daily Iowan’s Marissa Payne, late this afternoon: Iowa regents ask universities to prepare to move class instruction online amid coronavirus cases identified in Iowa:
The state Board of Regents has asked Iowa’s three regent institutions to “move as quickly as possible towards the ability to deliver instruction virtually,” Regent President Mike Richards said in a statement Tuesday.
Richards said students, faculty, and staff should prepare for this eventuality this week before spring break. The universities will receive specific information no later than 8 a.m. Thursday.
As for J. Bruce Harreld at Iowa, we are past the point at which his absence can be excused. The Board of Regents and UI administration owe the UI community and the greater public an explanation as to why the unveristy’s genius president has been completely silent during this unfolding healthcare crisis. (More here on both Grinnell and the Board of Regents, from the Press-Citizen’s Aimee Breaux.)
* From the Gazette’s Vanessa Miller: Iowa’s public universities to move quickly toward virtual instruction amid COVID-19 fears.
The number of presumed positive COVID-19 cases in Iowa has grown to 13, state health officials announced late Tuesday.
The five more people who tested positive — still to be confirmed by federal officials — are among the same group that went on a cruise beginning in mid-February in Egypt. That means 12 of the 13 people in Iowa who have tested positive are in Johnson County, home of the University of Iowa and its 31,240 students. The other person is in western Iowa.
This concentration in Iowa City/Johnson County is not surprising for a whole host of reasons, but the fact that it is home to UI raises serious questions about now dispersing all of those UI students to far-flung locations, given that they will be coming from a town/city which is now the main hotspot in the state. To be clear, there are no good options here, but this is precisely why it was critical for the state and UI to act in concern and sooner rather than later, but that window of opportunity is now clearly lost.
I would also note that once again we have a report about IC and UI which does not contain a single mention of UI president J. Bruce Harreld, and I find that inexplicable. The man is being paid close to a million dollars per year — and will soon reach that seven-figure amount — and he hasn’t even issued a ghostwritten press release. Why is he not front and center as this crisis unfolds? Is Harreld sick? Has Harreld quit? Has he deserted his post? What happened to the transformational visionary, deep strategic thinker and organizational guru who — with the help of a small cabal of crony co-conspirators — lied his way into the job that he is now clearly not doing?
03/09/20 — So it’s late Sunday/early Monday as I write this, and the Australian stock market is off 7%. I mention that because tomorrow — Tuesday, 03/10/20 — is the financial close of the UI P3, when the University of Iowa officially borrows $1.17B on a false pretext, in order to then make scads of money in the markets. And sure, it is a little disconcerting that the bloviating UI president has made himself scarce during a pandemic, but nobody hired him to be a hero, or even to be responsible, or even to be mediocre. In 2015 the Iowa Board of Regents hired J. Bruce Harreld to tell lies in service of privatizing a state university, and here we are.
Oh — and speaking of borrowing money, this seems relevant somehow:
Hey just FYI, we now have negative real interest rates on the 30 year treasury. So if you have any very long term public investments that might have any positive return, we should probably consider doing them.
Still, I’m sure the university’s private sector partners — including particularly those mysterious Iowa investors no one will talk about because having cronies mooch money from state government qualifies as a trade secret now — are quite giddy at the prospect of locking up a long-term guaranteed return while the U.S. economy tanks.
* The core argument for public higher education is that in exchange for taxpayer revenue, public colleges and universities return what is called a ‘public good’: a broadly distributed value or benefit to those same taxpayers. (The Iowa State extension office is a good example.) Because we can’t have nice things, however, the money-grubbing entrepreneurial class has waged a decades-long war against the idea that we should expect any public good from state-subsidized institutions of higher learning, and instead insists that we should focus on money and profits and cash flow above all else — just like private-sector businesses do in the dog-eat-dog marketplace.
The very fact that the University of Iowa — which is not only an R1/AAU research university, but has a cutting-edge hospital and medical college on campus — has been effectively mute throughout the unfolding coronavirus pandemic, as opposed to taking a leadership position on local containment, makes clear that the entrepreneurial class has won in Iowa, and taxpayers should expect no public benefit from throwing hundreds of millions of dollars at the University of Iowa each year. Adding insult to injury, Iowa taxpayers are also paying the non-traditional president of UI a scandalous $800K per year (soon to increase to $1M), only for him to completely disappear during this unfolding public health crisis. In any legitimate function of government service this would constitute dereliction of duty and cowardice, and compel termination.
* Am already anticipating someone at UI saying the market crash and coronavirus pandemic represents a tremendous buying opportunity for the $1.17B loan the university will close on tomorrow. The only real question I have is whether Bro Bruce Harreld himself will make that nauseating claim, or someone else will do it.
* Five more “presumptive positive” cases of coronavirus in Iowa, bringing the total to eight. Whatever this says about the spread of the disease in Iowa, it is a scathing indictment of federal and state officials to have aggressive testing programs in place. People should lose their offices or jobs for this, if not go to prison for criminal neglect.
03/08/20 — The entire state of Iowa is effectively an old folk’s home, but for the past decade former governor Terry Branstad and current governor Kim Reynolds have relentlessly encouraged the easing of regulations and the exploitation of workers at care facilities for the elderly. What could possibly go wrong?
Nursing Home Hit by Coronavirus Says 70 Workers Are Sick.
There is no one in the entire state of Iowa who is prepared to deal with something like this, even after weeks of advance warning. The elected and appointed leaders in state government and at the state’s two AAU universities are pom-pom waving hacks whose only allegiance is to the political and business cronies who put them in office. If you have elders in your family you are going to have to protect them not only from the coronavirus, but from the lethal incompetence of state and federal authorities. (Here is a good example of this incompetence at the federal level. At the state level, all you need to know is that Iowa Governor Kim Reynolds is a Trumpist Republican to the core, and takes her marching orders from the White House. If she has to choose between following Trump’s official line and putting your family at risk, she will put your family at risk.)
* For any of the brain-dead, morally bankrupt administrators at the University of Iowa who still listen to J. Bruce Harreld about anything, don’t do this.
* And speaking of UI, I was heartened to see that the cover of the new UI Alumni Magazine features an African-American basketball players from the 1970’s, along with a retrospective look at how we all came together over sports during the nastiness of the Civil Rights era and the Vietnam War, thus proving that diversity, equity and inclusion can’t possibly be a problem today. (Such a relief. I was so worried.)
* Apparently the announcement yesterday by Iowa Governor Kim Reynolds that her crack team of crony coronavirus experts would be holding twice-weekly briefings was not enough to appease growing concern about the outbreak. I say that because Reynolds is now scheduled to hold a “news conference” tonight (Sunday), at which she will undoubtedly attempt to portray herself as in-command without contravening the insanity coming out of the Trump White House. Still, we should learn whether the wheels are going to come off completely in Iowa, or only partially, based on whether Reynolds can take and answer the most basic questions.
Update: There are three “presumptive positive” coronavirus tests in Johnson County, Iowa, from people who took a cruise in Egypt. Not a surprise that the virus is here and not a surprise it showed up first in Johnson County, which is of course also home to the cosmopolitan University of Iowa, which also sponsors trips around the world through the Center for Advancement.
* Speaking of UI, I looked back through press reports over the past few weeks, and the last comment I can find from illegitimate president J. Bruce Harreld is a quote on February 26th, but it’s not clear the quote was uttered on that date. So where is Bro Bruce, and why isn’t he out front on the coronavirus — particularly now that we know it’s in Johnson County?
* Unquestionably the most coherent statement of purpose regarding our collective response to the coronavirus from any individual in the state of Iowa:
But the danger of an overwhelmed hospital system is one reason public health officials are so concerned about the lack of testing. It’s also why they are so determined to slow the spread of the disease, to avoid a sudden, massive spike, even if they can’t stop it altogether.
“Flattening the curve means reducing the rate of spread in order to keep from completely overwhelming the health care system,” Dan Diekema, director of infectious disease at the University of Iowa Medical Center, told HuffPost via email.
And by “overwhelming the system,” he said, he means “bringing it to a breaking point where dire decisions have to be made, such as rationing ventilators and/or being unable to provide supportive care for some critically ill patients due to lack of capacity.”
Also a searing explanation about why you don’t run any hosptial — let alone a major public hospital — at 90% capapcity, while slashing medical and support staff. When you decide to do that as a money-grubbing administrator you are gambling, and sooner or later you are going to lose the bet you are making with other people’s lives. (Have I mentioned that the president of the Iowa Board of Regents, which oversees UIHC, is part-owner of a casino? I think maybe I have.)
* From the Daily Iowan’s Charles Peckman, Marissa Payne and Sarah Watson:
Iowa previously had no reported cases of the novel coronavirus, and state health officials had maintained that the state’s risk was low for an outbreak.
“While this news is concerning, it’s not cause for alarm,” Reynolds said during the news conference. “The most important thing that we can do right now is remain calm, understand the situation, and stay informed in the days and weeks ahead. We are committed to transparency and keeping the public informed.”
There are no state officials in Iowa who are committed to transparency. What they are committed to is keeping the state economy humming for their political and business cronies, so it won’t be long until Kim Reynolds is telling everyone to go out and buy thirty pounds of pink slime per-person.
03/06/20 — First U.S. Colleges Close Classrooms as Virus Spreads. More Could Follow.
The University of Washington said it would move to online classes for its 50,000 students. With colleges nationwide about to empty for spring break, students fear they might not be coming back.
The shock waves of disruptions emanating from Asia are now on the West Coast of the U.S. and in Western Europe, and will soon converge in the Midwest. The fact that UI is set to go on spring break after this coming week would seem to be a godsend, allowing for critical changes to be made during that week of relative downtime, yet I have seen no indication that the Iowa Board of Regents or UI administration intends to do anything except other than drag its feet until compelled to take action by the same federal authorities who only just this morning encouraged investors to “buy on the dips“. Which is to say that even though the entire executive suite at UI has been corrupted by the siren song of entrepreneurial expediency, someone not named J. Bruce Harreld needs to seize control of the university’s bureaucratic apparatus and maximize this rapidly closing window of opportunity.
* The UI Novel Coronavirus Updates page continues to improve, and yet…the school can’t resist the temptation to treat a global pandemic as a marketing opportunity. Here are the first two questions from the FAQ on that page, in order:
Is the University of Iowa prepared to respond to COVID-19?
Where can I find the most up-to-date information on COVID-19?
Why not throw in a link to officially licensed UI pandemic merch? (For the children, of course.)
* South by Southwest Is Canceled as Coronavirus Fears Scuttle Festival.
If you’re not familiar with South by Southwest (SXSW), it is a large annual gathering in Austin Texas — meaning the Great Plains, meaning due south of Iowa. At the end of last week the promoters and organizers insisted they would not cancel the convention, almost certainly because they would have to refund tens of millions of dollars that had already been spent. And yet still I’m reading quotes today that there are no confirmed cases in Iowa so everything is fine. This is an IQ test and we are failing.
* While today’s outbreak reports may seem concerning, remember that state government officials still insist that Iowans are at low risk for the coronavirus virus, even though doing so is irresponsible and self-defeating. Then again, these are completely different Iowa officials from the ones who planeed to conduct sex experiments on citizens with severe intellectual disabiliites, so we are obligated to ignore common sense.
03/05/20 — Iowa Board of Regents cancels all university-sponsored international travel. (More here from Kelsey Harrell at the Daily Iowan, and here from the Gazette’s Vanessa Miller.)
* Late yesterday the Gazette’s Vanessa Miller reported on an audit performed by the State Auditor, which determined that a now-emeritus professor at the University of Iowa failed to report a conflict of interest for years if not decades. (More here from the DI’s Rachel Shilke.) On its face this seems like good oversight, and I don’t condone what the professor did, but in reading the details it not only seems like this abuse was hiding in plain sight, but UI — which is loaded with plenty of auditors itself — could have easily brought this matter to the attention of that individual years ago. All of which makes me think this is more about saving money today by cutting someone lose from an ongoing salary, pension and/or benefits, than it is about maintaining the letter of the law on a campus that is defined by deceptive practices, if not outright crimes at the highest levels of administration.
* The University of Iowa is reporting that all of the employees who had guns put to their heads over the holidays, when the school rammed through the privatization of its state-owned utilities, have either transitioned to working for UI’s private-sector partners (meaning they changed shirts), or accepted jobs elsewhere in the university. Transparency and justice for all. (Details and backstroy here from the DI’s Katie Ann McCarver.)
* HHS to Procure N95 Respirators to Support Healthcare Workers in COVID-19 Outbreaks.
As part of the government-wide efforts to respond to the global outbreak of the 2019 novel coronavirus infection (COVID-19), the U.S. Department of Health and Human Services intends to purchase 500 million N95 respirators over the next 18 months for the Strategic National Stockpile (SNS).
Anybody who thinks this is going to blow over in thirty days needs to resign from the Iowa Board of Regents.
* Granted, Arizona State University president Michael Crow is a self-promoting gasbag, but still — given that a new and potentially lethal coronavirus is making its way around the globe, it seems appropriate for any college or university president to put out basic information for students who are about to go on spring break. Speaking of which, not only haven’t I seen any mention of Harreld in press reports since his last DI interview was published on 02/16/20, but spring break at UI starts at the end of next week. (If Harreld is off working on his tan again, maybe someone at UI could just crank something out and sign his name, to at least keep up the pretense that the university cares.)
03/04/20 — I have had a tab open in my browser about this young man for the past three and a half months, and I have thought about him often while reading the latest round of self-congratulatory propaganda from the Iowa Board of Regents and/or University of Iowa, replete with crony back slaps and head pats. And all that time his parents and loved ones have been living with unimaginable grief. Sheriff: Body recovered from Iowa River had ID of missing student.
* Italy to close all schools and universities through March 15 as coronavirus death toll rises.
* After a month or more of stumbling, bumbling and downplaying the coronavirus threat, the messaging from the University of Iowa has finally improved to the point that quoted administrators are saying the right things. I would add that illegitimate UI president J. Bruce Harreld has been notably absent in articles about the coronavirus impact on the university, but the truth is when tough decisions have to be made Harreld usually passes the buck to his underlings and makes himself scarce. And speaking of Harreld and messaging, we are once again well into a UI semester in which Harreld has failed to post even a pro forma, self-plagiarized or ghost-written welcome to new and returning students. That’s pathetic in its own right, but in the context of a global health threat it’s also a reminder that you literally cannot count on Harreld to get even the small things right.
* While the state of Iowa and its affiliated governmental agencies continue to promote the fact that no coronavirus cases have yet been detected in the state, it is worth noting that not only are the elderly disproportionately at risk from this new disease (and Iowa’s population skews markedly older), but the state has been notoriously if not criminally negligent in requiring nursing homes to have appropriate levels of licensed staff. Which is another way of saying that Iowa is particularly vulnerable to a pathogen which could end up killing multiple elderly patients at those facilities, much like the nightmare in Washington State. (Whether low-wage and minimally trained employees will continue to come to work if that means putting their own lives, or the lives of their family members, at risk, is yet another concern.)
* From the Daily Iowan’s Marissa Payne: Email to Tippie students says University of Iowa instructors are prepared to hold classes online in case coronavirus spreads.
The Tippie College of Business can probably get away with that because it’s a small college and there are a lot of data-driven courses. I don’t see any way the massive College of Liberal Arts & Sciences could complete all semester coursework via computer, which raises the question of whether different groups of students will be asked to face different levels of risk in order to get the credits they paid for. As for “University of Iowa officials” saying “they’re confident the state’s risk for the virus remains low”, anyone who actually said that on the record should be fired, along with the AWOL and derelict president of the university for allowing anyone to make that claim.
You know who is at low risk from the coronavirus outbreak? People stationed in Antarctica — but only if they shoot down any incoming planes.
* I mean look at the lede from this report by the Gazette’s Vanessa Miller:
The University of Iowa-based State Hygienic Lab has about 250 test kits for the spreading coronavirus and was expecting more, the lab director told reporters Wednesday.
If UI “officials” think “the state’s risk for the virus remains low”, then why does UI have any test kits, let alone more on the way? Shouldn’t UI give those test kits to states that need them, now that we know Iowans have some intrinsic immunity — perhaps from only traveling in buggies and living on farms without electricity? (Better yet, Harreld could sell those pointless test kits on Amazon at profiteering prices, and in so doing cover the made-up costs of the UI Strategic Plan for the fourth time.)
03/02/20 — The good news on the local coronavirus front is that after a solid month of treating even the most basic outreach like a tedious chore, as exemplified by allowing the 2019 Novel Coronavirus Updates page to languish, someone in the Office of Strategic Communication at the University of Iowa is taking time away from generating propaganda for illegitimate president J. Bruce Harreld and connecting people with reliable sources of information. The bad news is that despite the fact that UI, like Iowa State in Ames, is an R1/AAU public research university — but unlike ISU, also has a cutting-edge medical facility on campus — most of the information being communicated to the citizens of the state is still coming from the governor’s office and related agencies, which, incidentally, are also looking into sex experiments that the governor’s administration planned to conduct on severely disabled Iowans. (Because more than a year has passed since one of the governor’s old drinking buddies — who was running the Iowa Finance Authority for her — was also outed as a pervert, the average Iowan may not realize that sexual abuse is a persistent problem in her administration, but the governor’s credibility has still undeniably taken a hit, and deservedly so.)
All of which is to say that whether we’re talking about Harreld or the governor, the state has a massive credibility problem when it comes to being straight with the populace about anything, and I don’t see that changing any time soon. One person who could speak to both the UI campus and state with some authority — having so far avoided the stain of crony corruption which defines most of state government — would be UI’s VP for Medical Affairs and Dean of the UI College of Medicine, J. Brooks Jackson. Oddly enough, however, we haven’t heard anything from Jackson so far, despite the fact that he not only holds one of the most powerful positions on the UI campus, but one which obviously relates to public health. (Maybe he’s golfing? Or perhaps he’s busy lining up a corporate partner to privatize University of Iowa Hospitals and Clinics, like the University of Minnesota did when he worked there?)
* One of the reasons it would be good to get someone from UI out in front of the coronavirus threat is that we only have about two weeks before an attendant economic shock wave hits the Upper-Midwest. For example, a couple of days ago the annual Game Developers Conference — which attracts thousands of attendees from the global gaming community to the Bay Area each year — was postponed (and likely cancelled), and that is the leading edge of a wave of disruptions which are radiating from Asia to both the east and west. Similar disruptions have been happening for weeks in Japan and Korea, and the Middle-East and Europe, and it’s only a matter of time before they circumnavigate the globe and affect Iowa as well, including UI. In fact, to underscore the potential magnitude of these disruptions, note that there is currently a very real debate about whether Japan will have to cancel or delay the 2020 Olympics, which has been in the works for seven years.
Not surprisingly, similar conversations are just beginning about sporting events in the United States. Again, this past weekend a group voiced concerns that March Madness — the nationwide NCAA basketball tournament and expense-account orgy — would have to be modified in some way, perhaps by playing games in front of empty arenas. And of course that kind of half-baked problem solving merely presages the extent of the disruptions, and the difficult decisions, which will soon confront conflicted if not corrupt administrators all over the country.
How do you minimize transmissibility while still protecting revenue, which is really the only thing you genuinely care about? Playing college basketball in front of empty stands would still allow cameras to broadcast the games, but what happens if a player subsequently dies from coronavirus? And how smart is it, really, to fly groups of players back and forth across the country over the course of a month, merely to determine which particular group is this year’s anemic NCAA champion?
Who should ultimately make those fateful decisions? The President of the United States? The presidents of the respective schools? The athletic directors? The governors?
Of course the answer is that a television executive will ultimately make that determination, but only after he (it’s always a ‘he’) determines whether his network will have any legal exposure if somebody drops dead. Which is not to rip on greasy television executives, but simply to point out how weak and pathetic many college and university presidents are — and of course we have one of those at the University of Iowa, whose last great act of administrative heroism was trying to kill off any investigation into abuses against the UI Marching Band, before he got caught and had to reverse course. (And of course there was that one time UI actually tried to defraud thousands of Iowa students and families out of $4.2M in scholarships that the university was legally obligated to pay, but that was years ago now so we pretend it didn’t happen.)
The bottom line is that we have to slow this disease down so we can get a handle on what we’re dealing with — which we still don’t know — and the only way we have to do that is to limit transmissibility. So who will decide where the UI sports teams go for the remainder of the year, including the sweaty Iowa Men’s Wrestling squad? Who will decide about concert performances large and small on the UI campus? Who will decide about lecture halls and classrooms, where students are obligated to congregate to get the course credits they’re paying for? Will it be someone who is concerned about health, or a ratty little weasel who is only concerned about revenue generation?
Update: Here is the shock wave coming east-to-west, through Europe, as reported by the Gazette’s Vanessa Miller: Iowa, Iowa State cancel popular study abroad programming in Italy. That this was not done weeks ago is a scathing indictment of the Iowa Board of Regents, and a reminder that UI and ISU are still well behind the curve in coming to terms with this disruption. This is a crisis which clearly calls for a proactive response, yet the state schools are engaging in administrative foot dragging.
We can also see how economics and revenue play into this foot dragging in this quote:
“It is our understanding that your program provider is developing protocols to allow you to complete as much coursework as possible for the Spring 2020 semester,” [UI International Programs Associate Provost and Dean Russell Ganim] wrote. “The University of Iowa and the Office of the Provost are committed to facilitating the completion of your academic work for this term.”
They’re committed because they don’t want to have to eat any costs as a result, which they might have to do if students can’t earn the credits they paid for. And this is a tiny example of the decisions that are going to play out around the globe, and in the U.S., and in Iowa in the coming months. We are just now at the beginning of March, and have two and a half months of the spring term left to go in the 2019-2020 academic year. The pressure on the Iowa Board of Regents — which, as a governing agency, is spectacularly ill-prepared to deal with a crisis of this consequence — will be to complete the term even if doing so inevitably puts people at increased risk of infection.
* Speaking of the greater cultural collapse of the Upper-Midwest, South Dakota is poised to kill off the faculty union at its state universities. This is obviously not a surprise, but it is a reminder that if you care about academic freedom or anything other than converting state institutions of higher education into engines of economic development for political and business cronies, you’re living in the wrong part of the country.
* When I point out that Iowa state government is steeped in crony corruption, this report from the Gazette’s Erin F. Jordan is a perfect example: State of Iowa signs $50 million computing contract without typical competitive bidding.
02/29/20 — While the UI P3 is, in itself, a scandalous betrayal of fiduciary responsibility to the citizens of Iowa, there is an unexpected satin lining in the fact that the University of Iowa is about to take possession of a billion dollars in cash. If the coronavirus pandemic proves truly tragic — meaning hundreds if not thousands of Iowans die as a result — the university is sitting on a massive pile of money that can immediately be diverted to prevention and perhaps even researching a cure.
Granted, such a diversion might require the legislature to step in and liquidate the endowment that UI intends to fund to generate revenue for the UI Strategic Plan, but as a factual matter that money will belong to the state, just like any other university asset. And of course neither J. Bruce Harreld nor any of his crack staff would want to explain why they were refusing to release that money in the face of a health crisis, when in fact — as detailed in a recent post — they already paid for the UI Strategic Plan many times over with tuition hikes, and consummated the UI P3 under false pretenses to begin with.
02/28/20 — I have made this point on multiple prior occasions, but in this period of global uncertainty it bears repeating. There is a reason you don’t hire money junkies like J. Bruce Harreld to squeeze every last dollar out of government institutions, and that reason has everything to do with the fact that government institutions, first and foremost, do not exist to generate revenue. Yes, you can certainly repurpose them to that money-grubbing end, and you may be tempted to do so in periods of relative calm or plenty, but in accepting that devil’s bargain you also inevitably expose governmental institutions to risks that make citizens less safe.
In pushing the UI P3 through to fruition in early December, illegitimate crony UI president J. Bruce Harreld had this to say about risk:
So, I sit down with Dan Collins and Tom Rietz and Dan is the chair of the accounting department for Tippie. The three of us met and I said, here’s what I’m beginning to see and to understand and how it would work. But boy, the risks of this are huge. And we need to be able to model how the financial markets may play out over 50 years. We need to be able to model how much money we would need to fund the gaps in our strategic plan. We need to — I can just keep going.
There are layers and layers and layers to this and so Tom, in particular, did an awful lot of modeling. In particular, once we started to get the structure reasonably well-defined, [we] started running various scenarios of a 2007, 2008, 2009: fiscal collapse, credit lock up in the US economy through P3. So we just look through scenario after scenario after scenario. This is not risk free, something like this will never be risk free.
The obvious question, of course — as the Dow Jones Industrial Average and the greater market bleed out this week — is whether J. Bruce Genius and his risk-management team considered a global pandemic while running their projections, and I’m guessing probably not. And yet even if you only have half a brain, like Harreld, you know that a key component of risk-assessment is acknowledging that you can’t actually model every potential risk, which is why it is generally not a good idea to borrow $1.17B and then put that money to work in the markets, on the literal hope that you can make back the principal and interest you need to pay in order to avoid defaulting on that loan.
(In the case of the UI P3, my assumption would be that the $1.17B is sitting in escrow in cash, and has not been directly impacted by the largest market selloff since the Great Recession, but with these clowns who knows? The blood loss on Wall Street may even represent a buying opportunity, but given that the financial close on the UI P3 is supposed to take place in the next two weeks, when does UI get into this market? One thing I can guarantee is that every private-sector party to the UI P3 is going back through the contract they just signed, to see if there is any wiggle room on committing money to that deal if they suddenly need a mountain of cash themselves.)
At University of Iowa Hospitals and Clinics, J. Bruce Harreld has had both the new and old management regimes running that medical facility at roughly 90% occupancy for years, while simultaneously drawing down the available nursing and support staff in order to generate as much revenue as possible. And I’m sure that all looks great on a spreadsheet right up until the premier medical facility in the state suddenly needs to accommodate a global pandemic, but doesn’t have enough beds or staff on hand to deal with even a moderate spike in admissions, let along a tidal wave of patients.
At the University of Iowa Hospitals & Clinics — the only hospital in the state certified to take on tertiary- and quaternary-level complex cases — daily occupancy typically hovers around 90 percent. At other hospitals in Iowa, the typical daily occupancy rate is around 50 percent, according to UIHC CEO Suresh Gunasekaran.
Even if you know nothing about the practice of medicine, imagine what the custodial responsibilities alone will be like if UIHC is dealing with a crush of critically ill pandemic patients. Does UIHC have enough trained housekeepers and cleaning and sterilizing personnel on staff, let alone sufficient individuals in reserve to take up the slack when some of those front-line workers get sick? And what incentive do those workers have to come to work at all if the hospital itself becomes an engine of contagion?
Those are all important questions, yet last time we checked in on UIHC the administrators were trying to figure out how to accommodate their own managerial incompetence by warehousing patients in a discharge lounge, so as to free up beds more quickly for new revenue-generating cases. (See 02/11/20 below.) Flash forward to today and the prospect of dealing with a global pandemic, and every lounge at UIHC could be become a discharge lounge — and I’m not talking about patients coming and going.
From the point of view of entrepreneurial hustlers like J. Bruce Harreld, the concept of stewardship is synonymous with being a sucker. If there’s money on the table you take that money and worry about the consequences later, and if things get really bad you just take your cut and move on, as he did when Boston Market imploded. Unfortunately for the people of Iowa, the state will still be saddled with a 50-year deal that could go belly-up even before it is consummated, and with a hospital that is understaffed and administratively unprepared for exactly the kind of national emergency that a governmental institution like UIHC should be ready to meet head on.
02/27/20 — A grab-bag of news today….
* Updating the ongoing investigation of several University of Iowa fraternities, we had reports yesterday by the Daily Iowan’s Brooklyn Draisey, and by the Gazette’s Vanessa Miller.
* In following the University of Iowa through the work product of local reporters, one thing I have learned — and have sympathy for — is that language itself can constrain what a reporter says, and that’s especially true if an organization or institution that is being reported on conducts itself like a propaganda operation. Case in, point, this short item today from the Daily Iowan’s Rin Swann, about a woman who was charged with attacking several staffers at the University of Iowa Hospitals and Clinics:
According to the arrest affidavit, Johnston was a guest at the Behavioral Health Unit at UIHC. While there, Johnston punched a plastic hand dispenser and shattered it, creating an improvised weapon.
If there is one word in that sentence that jumped out at me it is the word “guest”, and I’m pretty sure from the context that the DI reporter didn’t choose that word herself. Instead, it seems to come from the “arrest affidavit”, but that really only kicks the can down the road. Whether or not you know anything about the Behavioral Health Clinic at UIHC, and whether or not the woman in question was admitted or presented voluntarily, people who are seen in that clinical setting are not guests, they are patients — yet somewhere along the line someone decided they didn’t want to use that word.
Clearly no one should be attacking anyone else for any reason, but once you cross the threshold into behavioral health it’s also understood that the whole point of such a clinic is that there are people who have behavioral problems, who may not only lose control of themselves but become violent — and everyone at UIHC knows that. So why was this woman described as a “guest” when it is self-evident from her actions that she needed help? Again, that doesn’t excuse what she did, but it is more than a little insulting to her — and telling of the marketing mindset of UIHC administrators — that this report makes it sound like someone went berserk at a day spa.
Invalidating human beings who are in crisis, let alone doing so when you are supposed to take care of people who are in crisis, is about as low as it goes, yet here we are.
(I intend to come back to this subject in an extended post, following the financial close of the UI P3 in the next week or two. UI routinely perverts words and language in order to portray itself in the best light, and that’s particularly pathetic at an institution of higher learning, where students would marked down for the same practice.)
* In between hawking merch and flacking for Casey’s breakfast pizza, Iowa State Auditor Rob Sand found time to propose a new law which I fully support. From Perry Beeman at the Iowa Capital Dispatch:
A bill pushed by Iowa State Auditor Rob Sand, a former prosecutor, would require jail terms for most public employees convicted of taking large amounts of money from taxpayers.
Sand said he wants to stop public employees — including, for example, state lawmakers and people working for schools, cities and counties — from treating their employers like banks offering no-interest loans. To Sand, that’s what happens when public employees embezzle money from taxpayers and are merely required to repay their employer without serving time in prison.
The corruption in state government in Iowa is entrenched and systemic, and includes a lot of people who think state, county and municipal treasuries are their personal bank accounts. Just because the people who embezzle money don’t do it at the point of a knife, that doesn’t mean they shouldn’t spend time in the slammer.
* Earlier today there was a weird story out of Northern California which strongly suggested that Arizona State President Michael Crow might be in the running to head up the vast University of California system. Were that true it would be interesting on a number of levels, not the least of which is that it would signal the impending collapse of the UC system as a serious academic institution, and usher in the kind of entrepreneurial lunacy that Harreld has been practicing at UI. (The original inspiration for hiring J. Bruce Harreld almost certainly came out of the Arizona desert, where Crow practices his higher-ed voodoo, and where Harreld’s buddy Jerry Stead happens to reside.)
Mike Crow bailing for UC would also be an admission that he failed to elevate ASU to the ranks of AAU member institutions, which was something he pursued with evangelical abandon for the better part of a decade. Late today, however, ASU released a statement that Crow was not a candidate for the presidency at UC, and would remain at Arizona State. As to who floated the idea that the unabashadly self-promoting Crow might be in demand in CA, or looking to quit on ASU after effectively trapping himself there due to his gonzo fixation on revenue generation at the expense of institutional credibility…that remains a mystery.
Update: Did not realize both the UC and CSU systems were looking for new presidents. Relatedly, both systems are also playing the ‘secrecy’ card with regard to their searches, insisting they can only hire the best people if they do so behind closed doors with no accountability. (In the case of the UC search, they aren’t even faking a shared-governance process at the committee level.) I don’t know what will replace public higher education when it has finally been killed off by political and entrepreneurial parasites, but new college and university models focused on education (as opposed to revenue and vanity) should be iterated until something works.
* The Des Moines Register’s Barbara Rodriquez reports that the state of Iowa can now test for the coronavirus, but it is not clear whether the test kits Iowa received are the same ones that were just rejected by New York as flawed. (As a practical matter, the test kits are important for hospitals so they can diagnose people who are critically ill and begin the proper treatment protocols. There aren’t going to be enough test kits in the world to test everyone who gets the coronavirus and is symptomatic, let alone those who prove to be asymptomatic and may even test negative.)
* The Daily Iowan released an extensive fact-check by Kelsey Harrell, about whether Ohio continued to fund Ohio State after OSU, in 2017, also borrowed a billion dollars under the pretense of a public-private utility partnership. The DI ranks a specific statement by Harreld sidekick Rod Lehnertz as “Mostly True”, but with “a bit of a twist”:
The Ohio General Assembly budgeted conservatively from fiscal 2017 to fiscal 2019 to keep the Department of Higher Education funding at a flat rate instead of providing an increase, but funding was not cut during this period, Jeff Robinson, department director of communications, wrote in an email to PolitiFact.
Kudos to Harrell and the DI for getting into the weeds and holding UI administrators accountable for their public statements.
* From the Press-Citizen’s Aimee Breaux: University of Iowa cuts off travel to South Korea over coronavirus concerns.
02/26/20 — The Daily Iowan’s Julia Shanahan had a story out yesterday about a bill that passed the Iowa House, which would mandate in-state admission requirements at the UI colleges of Medicine and Dentistry. I flagged that bill for myself at the end of January, following a Gazettte story by Vanessa Miller, but during every legislative season that are a spate of bills aimed at the regent schools which never survive. The fact that this bill passed the House (on a party line vote) is notable not so much for the bill itself, which is effectively grandstanding, but for the targeted nature of the bill, and the legislature’s desire to tell the University of Iowa how to handle its business. At some point Iowa’s legislators — including legislators hostile to the idea of higher education in general — are going to pass something that not only does real damage, but which bigfoots the toxic crony political power that has been concentrated in the Board of Regents over the past decade. Update: The DI Editorial Board came out hard against the bill late tonight.
* In the same recent Daily Iowan interview in which J. Bruce Harreld said being a well-intentioned white administrator is more important than the lived experience of persons of color who might be hired as administrators, he also offered a rambling answer about why the new VP for Student Life will be selected from in-house candidates, instead of conducting the kind of national search which led to the hire of the truly excellent individual who previously held that position, who was also a person of color. Apart from covering his ass because people of color don’t actually want to work for a rich old prevaricating white man who says insane things about race in 2020, it’s worth noting that in searching for a new Associate Ombudsperson — as reported by the DI’s Mary Hartel today — the university will be conducting a nationwide search.
* In today’s coronavirus news we have lots of coronavirus news, including: the Press-Citizen’s Aimee Breaux covering the possible economic impact in Iowa; the Des Moines Register’s Barbara Rodriquez on the status of perparedness in Iowa; The P-C’s Zachary Oren Smith with preparedness in Johnson County, and a very helpful disease-centric report from the Washington Post, which may help you dial down your slowly (or rapidly) rising panic. (Fashion bummer: masks are for people who are already sick.)
02/25/20 — From the Daily Iowan’s Charles Peckman, more evidence that the University of Iowa is rapidly becoming a privatized government entity. On Monday (yesterday) the school announced it had hired Troon — an Arizona-based company specializing in club management, development, and marketing — to run the UI Finkbine Golf Course, including the snazzy new $10M club house that is being built as a result of a generous donation from Fritz Duda and his wife. No word yet on whether Duda or anyone associated with Troon is involved in the ongoing but very hush-hush real estate development that the university is also pursuing on adjacent university property.
* While the marginally helpful and dubiously titled 2019 Novel Coronavirus Update page on the UI website has not actually been updated since February 5th, the disease continues to spread around the globe, and most of the people who pay attention to such things don’t see any way it can be contained. In that context, I would simply revisit an earlier question, which is just how confident people are that J. Bruce Harreld and his corrupt administration are prepared to deal with a genuine crisis. It’s one thing to lie your ass off when you’re grifting for a public-private partnership or trying to steal scholarship money from students and families, but other than feeling to one of his multi-million-dollar homes, what evidence is that there we can expect any responsible leadership from a man who lied himself into the job he now holds.
If there is an outbreak on the UI campus, or in Johnson County — which has a very transient population — at what point does UI cancel classes, conceivably wiping out an entire academic semester? And who eats those costs? Do students get financial credit for courses that couldn’t be completed, meaning their tuition is covered for the next semester? If so, has Harreld squirreled enough money away in slush funds to take that hit, or would he have to tap into the principal of the UI P3 endowment?
(Of course I’m joking. If the profit picture at UI was even threatened by a pandemic, Harreld and the regents would pass emergency tuition hikes to cover any drop in revenue, with enough left over to fund new carpeting and office chairs at the board office.)
Update: More and apparently newer quotes from UI’s Stanley Perlman in this comprehensive piece from the Milwaukee Journal Sentinel, and thankfully Perlman seems to be acting more like an academician and researcher than a flack for the Iowa Tourism Office:
Perlman, at the University of Iowa, said that the search for a treatment begins with one sobering fact: “We don’t understand the disease that well.”
To uncertainty about the disease — which is considerable — we can also add that China is the only country currently reporting that progress of the disease is slowing down. Given the motivation of the Chinese government to lie, and the ruthlessness with which the Chinese government can impose restrictions on infected populations, it may very well be that the claim is false or the response inhumane in itself.
Update: From the NYT a click-baity headline and an article with another quote from Perlman, who seems to be a go-to guy for quotes: How to Prepare for the Coronavirus.
Most of the specifics provided you probably already know, but it’s equally clear that in the past forty-eight hours — particularly after today’s CDC warning — that the potential risk is being upgraded significantly. Nobody talks about closing schools or cancelling events during flu season, let alone stockpiling food or detergent for washing clothes.
She also suggested finding the website for your local health department so you will have a reliable source of news.
Name the last time anyone said something like that during flu season….
02/24/20 — Catching up on a few items from last week….
* On Wednesday of last week (02/19/20), the Gazette’s Vanessa Miller reported on some of the early email traffic at ISU and UI in the immediate aftermath of the assaults against the UI Marching Band. As ever with the Iowa Board of Regents and its affiliated campus employees, the most immediate concern was of course keeping up appearances, denying anything happened, attributing blame elsewhere and generally acting like the kind of clubby administrative trash that seems to thrive in higher-ed. (While you’re reading the piece remember that within days both UI president J. Bruce Harreld and ISU President Wendy Wintersteen tried to cover up the assaults as well.)
* On Thursday of last week (02/20/19) the University of Iowa announced that Public Safety Director Scott Beckner will be retiring after four years on the job. (More here from the Press-Citizen’s Hillary Ojeda.) Of all of Harreld’s hires to-date, I would rank Beckner as second behind only Melissa Shivers — so it’s obviously interesting that both of those people will now have bailed on Harreld and UI.
* From The Lantern on 02/20/19 we learned that the Big Ten Conference continues its domination of the Sexual Predators in Athletics Award, now adding Michigan to the storied institutional abuses perpetrated at Penn St., Michigan State and Ohio State. Interesting if only because once again we find higher-ed administrators uniformly doing everything possible to enable sexual predators preying on students. (The legacy of institutional abuse in the Big Ten alone should be a national scandal.)
* On Friday of last week (02/21/19) it was reported that Wells Fargo agreed to a $3B settlement in a civil case, which was brought against the bank after it committed wholesale fraud against its own customers. Wells Fargo is of course the financial services company which was given millions by the University of Iowa in exchange for brokering the UI public-private utility partnership.
* From the Press-Citizen’s Aimee Breaux, late today, we have this: Three University of Iowa fraternities under investigation for campus violations. It is a measure of both J. Bruce Harreld’s incapacity as a university president, and of his loyalties as a frat boy, that while he had no problem persecuting the Iowa Labor Center and no problem blowing millions of literal dollars waging war against Moder Piping in the courts — and getting his ass handed to him every step of the way — Bro Bruce doesn’t really seem to care that the frats on the UI campus routinely thumb their noses at his authority. And of course now that Melissa Shivers is gone, and one of Harreld’s ‘senior advisors’ is filling in as interim VP for Student Life, and Harreld has yet to pick whoever will have to clean up this latest mess from among the four internal finalists for the position, it is unlikely that Harreld is suddenly going to step in and do the job he’s being paid to do.
02/19/20 — The UI Utility P3 in Context — Part 8: J. Bruce Harreld and the Iowa Legislature.
02/17/20 — Every once in a while we get a harrowing glimpse into just how twisted and fragile the mind of J. Bruce Harreld actually is. How dependent Harreld is on denialism, and on perpetuating a fantasy in which he himself is never responsible for any wrong — including, for example, perpetrating serial tuition hikes on a discredited pretext like funding the UI Strategic Plan. In the bat-clogged belfry that is Harreld’s cranium, it is literally not possible that any University of Iowa students would protest his administrative abuses of power.
From the Daily Iowan’s latest interview with J. Bruce Harreld, here is the first question and the first part of Harreld’s immediate reply:
DI: At the Feb. 5 Board of Regents meeting, some students, a few of them from the University of Iowa, protested tuition hikes and support for underrepresented students on campus. They shared that higher education access is limited with tuition rising, particularly to underrepresented students — creating a barrier. So, what is your response to those concerns?
Harreld: Well, they have all the right in the world. It’s really interesting because I frankly did not recognize any of our students. Clearly a couple said they were students of ours, and they clearly spoke up, so I’m not challenging that. But, I think one of the issues I’ve noticed is when I ask them where they’re from, they’ve been from other universities or other colleges in the state. So, I’m really not so sure. I counted 32, and I don’t know how many of them are from the University of Iowa.
The clinical word for this is ‘invalidation’, and it is a rhetorical gambit that Iowa’s two-bit, shyster president routinely perpetrates in his speeches and comments to the press. What is particularly notable here, however, is not simply that Harreld is invalidating any UI students who did protest at the Board of Regents, but that he is also calling the staff of the Daily Iowan liars, because the question clearly states that “a few of [the students were] from the University of Iowa”. If Harreld knows for certain that no UI students protested at the board he could have simply said so, but instead he insinuated and invalidated as a means of sowing doubt and insulating himself in the process. (Which, now that I think about it, reminds me of someone….)
As to the idea that the belligerent president of the University of Iowa “did not recognize any of [the] students” as hailing from UI, that would hardly be surprising given that there are 32,000 students on campus, and it is unlikely that Harreld has made a close study of all of their faces. The fact that it clearly did not occur to Harreld that what he was saying was ludicrous is an additional concern, particularly given that when he is not memorizing student photos he is borrowing billions of dollars from foreign countries while lying about that too. But I digress….
(To underscore how completely deranged Harreld’s claim is that he can identify all 32,000 UI students on sight, note that ten months ago, in April of 2019, Daily Iowan videographer Ryan Adams asked students on campus whether they could identify Harreld — meaning after he had been on the job for three and a half years — and fifty percent of those questioned could not.)
As for the rest of the DI interview, which is equal parts embarrassing and colonial…is this J. Bruce Harreld calling former UI VP for Student Life Melissa Shivers lazy?
One of the reasons I decided not to go on a national search was for the reason we’re stout [sic] and starting to focus on it. We don’t need to have someone join us and spend six months or a year to come up to speed and get to know people. We will have somebody from our midst, hopefully. We’ve kind of started with that search process. But in other positions, all your points are well taken. I think what we need to do is when somebody joins our campus, we need to help educate them.
We’ve actually got some of this pretty well documented now, because if you go back, we have a long history of student and university-wide surveys on a number of these issues. So, we can analytically see our thoughts and concerns in a number of areas and see how they’ve improved. I think we’ve also got action plans and strategies in a number of areas. So, we need to orient new people to our campus.
But I also think it also falls on the new leaders that we put in these positions, if they’re sitting in their office and don’t get around, and don’t go to various groups and engage and listen in small groups and big groups, so it has a lot to do with who we hire. Hopefully we’re hiring people who are collaborative and are comfortable working around campus.
Or is that Harreld calling TaJuan Wilson lazy? (I honestly can’t tell. Maybe both, because each of them abandoned him after he deigned to give them a job?)
If you’re a fan of unintentional comic relief, I offer this bit of jaw-dropping obliviousness, from the unqualified carpetbagging dilettante who was jammed into the president’s office by, among others, his buddy Jerre Stead:
This may be an academic issue across the United States, where we actually have a tendency not to hire and promote from within. We actually go to the outside and bring a new leader in. Then we go through this phenomena, where they’re coming up to speed, and we’re coming to speed to get to know them, and they become productive. Now imagine what happens to the people who were here the last 10 years, and they actually see somebody coming over the top of them. Actually, in a sense, we’re stifling that growth of the development of people.
Well, at least the development of those people who didn’t already bail — like Meilssa Shivers and Tajuan Wilson, and another twenty or thirty leaders before them. (I guarantee you that not for one second did Harreld realize he had just disqualified his own hire. Which is of course doubly oblivious because after he was appointed, Harreld quite literally acknowledged that he would have to serve an extended apprenticeship just to know how to do the job he had been hired to do. And of course now, four-plus years later, the ongoing DEI disaster on campus makes clear that the university will never make up for that lost time.)
If you’re not in the mood to laugh, but would prefer to feel steam coming out of your years, there’s this bit of wisdom from a very rich, very old, very white man who got his job the old-fashioned way — by having other rich old white men give it to him on the sly:
DI: Going back to the VP for Student Life search specifically, there have been some questions at those forums about the candidate’s role, should they be chosen for the job, in a predominantly white President’s Cabinet. With you, of course, being the leader of that core group of administrators, how would you ensure that the next VP for Student Life feels supported in that space, and that they also serve students from all backgrounds — whether they’re one of the candidates from an underrepresented community themselves, or whatever the situation may be?
Harreld: If they’ve got an open mind, have an appropriate skill set, and have a broad set of collaborative skills, they’ll be fine. I think in a lot of this, we’re trying to find another Melissa, and I think that is a mistake. Melissa is Melissa. She’s wonderful. But now we need to find somebody else that can actually do the job here. So, now we’re focused on how we have just an overly white cabinet. We’ll be fine. So, if this is the only position on campus in the senior leadership that will actually improve our diversity, we’re really in trouble, and I don’t buy that. Behavior is most important. Representation is important, but behaviors are by far more important.
So there you go. If white people have an open mind and behave themselves, that more than compensates for the life experiences of people of color — at least according to Boss Harreld.
Finally, although this is by no means the end of the interview, I’ll leave you with this flagrant, bald-faced, self-serving lie by illegitimate UI president J. Bruce Harreld:
You know that we had that $14 to $16 million gap every year in our Strategic Plan. And that’s how we got to the $15.
And, and where did the gap come from? We have a Strategic Plan created in 2016. It had originally three key platforms and we had the fourth of Diversity, Equity and Inclusion.
You can see the 2016-2021 UI Strategic Plan here. The three objectives of that plan are Research & Discovery, Student Success, and Engagement, and there is no fourth. And of course Harreld either knows that, in which case he’s lying again, or, he doesn’t know that, in which case his brain is melting — except for his phenomenal ability to identify all 32,000 Iowa students on sight.
02/15/20 — The Press-Citizen’s Zachary Oren Smith published an extensive story yesterday about the Iowa City City Council, and their long-running debate about whether a new, close-in student housing complex should be limited to eight stories, or allowed to climb to fifteen stories. There are a lot of dynamics in play in that debate, and Smith covered most of them, but if you read the piece it’s also worth considering how that massive new project (800 units and 1,500 beds) will impact the University of Iowa’s dorm prices and fees, along with other private-sector developers who currently have, or are poised to develop, student-housing in IC. (And of course one of those private-sector developers would be none-other than frisky regent David Barker, who is almost certainly poised to become the new board president, perhaps as early as this May.)
That the university and private-sector companies and individuals will inevitably be impacted by what the city council decides, however, is not sufficient cause to deny those additional seven stories to the developers of the project in question. From the point of view of the students there are better landlords and worse landlords in Iowa City, but from the point of view of the city itself the more people who live downtown not only means a more vital downtown community, but some of the residential houses that have been subdivided into rabbit warrens could then also be returned to single-owner status, thus making those neighborhoods less transient and more invested. (For over thirty years the Iowa City City Council got this exactly backwards, and instead built parking ramp after parking ramp to attract people to downtown who did not live downtown. Not surprisingly, because of the ease of access to suburban shopping malls, that bass-ackward approach did not work.)
As to the question of cost for students, and concerns that this new housing project may constitute luxury housing for rich kids, it is also important to remember that there are no people in the student housing market — whether in the private sector or at the University of Iowa — who care about students. The only way students will ever benefit is through heated competition between off-campus housing and that provided by the university, and in that regard this project raises the stakes considerably. Will fifteen-story apartment buildings be a blight on the skyline? Of course, but that’s what a downtowns are for. That’s where you build up, so you don’t have to tear down residential housing in the surrounding neighborhoods. (Just having that many new, close-in apartments coming online would also probably prevent UI from manufacturing its own housing crisis — and thus maximizing its revenue — by overbooking dorms, which inevitably leads to students being warehoused in lounges while the university cashes all of those fat housing checks.)
Update: The Iowa City Council approved the fifteen-story plan on 02/18/20. Will be interesting to see how the University of Iowa responds.
* Remember back in 2018, when the University of Iowa suddenly announced that it would be closing a bunch of moribund centers and institutes on campus, only one of the centers — the robust Iowa Labor Center — conducted valuable outreach, and there was immediate pushback from across the state, but illegitimate University of Iowa president J. Bruce Harreld made it his personal mission to kill off that center anyway, including repeatedly slighting and deriding the center’s director? Well, yesterday the Gazette’s Thomas Friestad provided incidental context about why pro-business forces in the state were eager to see the Labor Center silenced. Because it pays.
02/13/20 — From the Gazette’s Vanessa Miller: University of Iowa debuts $100,000 ‘distinguished professor’ rank.
During the first five years of their new appointment, distinguished professors will receive $20,000 annually to support research, teaching, and scholarship. The money will come from the UI Office of the Provost, although UI officials did not immediately clarify for The Gazette how the funds were made available.
Only collegiate deans can nominate faculty, and the provost’s office has encouraged them to suggest “women, underrepresented minorities, and other groups historically underrepresented in their discipline.”
Always good for morale to throw a relatively trivial amount of money at patronage and tokenism. Keeps people hungry — and compliant. (Also, I can actually feel Iowa’s U.S. News ranking increasing.)
02/11/20 — The insistence of state employees and university officials in publicly positioning University of Iowa Hospitals and Clinics as part of a deeply conflicted industry — instead of featuring the care-giving and lifesaving aspects of that institution — continues apace. As this report today from the Gazette’s Vanessa Miller makes clear —
Audit finds hourslong delays in University of Iowa hospital discharges –the people running UIHC really do just see it as a profit mill, albeit one that grinds through patients at an ever-increasing rate, squeezing out every penny until they have no more value:
To address transportation-related barriers to patient discharge, auditors suggested creating a “discharge lounge” and more consistently including patient transportation plans “as part of upfront care team discussions.”
UIHC managers said they’re developing the lounge “as an area where patients can await arrival of transportation once discharged,” freeing up beds earlier for patients waiting to be admitted.
A lounge! How nice! Maybe a piano player in the corner, free snacks at the bar, and discounted bandages for your draining wounds!
To be clear, this isn’t a patient problem, it’s a UIHC problem. Because there aren’t enough people to discharge patients on time, the geniuses at UIHC are thinking about creating a holding pen for people who haven’t been cut loose from the paperwork, but are otherwise preventing the hospital from billing the next patient for room, board and services. (What is left unanswered is whether UIHC is actually delaying discharges because they make money doing so — perhaps by maximizing provisions in government-funded healthcare reimbursement rates.)
But it gets worse:
In that auditors found UIHC does not have any contracts with medical transportation companies, “resulting in varying levels of service available to the hospital when these services are required to discharge a patient,” they suggested the hospital pursue more formal arrangements.
UIHC management reported plans to issue a call for proposals from companies interested in becoming a preferred medical transportation provider
“Participating vendors would be asked to charge standard rates in exchange for being included on a preferred vendor listing,” according to the audit.
So the good news is that warehousing people in discharge holding pens will also create a new market, which UIHC can then tout as yet anoher public-private partnership. (Kickbacks anyone?)
Having said that, one thing we know for sure, following endless exploitation by the Athletics Department and UIHC itself, and widely publicized donations in the millions, and hearts swelling nationwide because of the feel-good ‘wave’ at Kinnick Stadium, is that none of this will negatively affect the sick kids at the children’s hosptial, because that would obviously be indefensible:
The UI Steady Family Children’s Hospital currently has just one social worker per inpatient floor.
“Pediatric patients often require specialized social services support throughout their stay rather than only at the discharge process,” according to the audit. “When social workers are occupied by these pediatric-specific tasks, nurses often pick up the discharge processes typically assigned to social workers, such as finding facilities, arranging medical transportation, and working with insurance companies.”
Here’s a radical idea. Instead of solving the discharge problem by creating holding pens that will also take up valuable space (unless UIHC just plans to park people on the sidewalk in wheelchairs, perhaps behind a painted line), and then using that as an excuse to create and manage/police/exploit a complicated transportation hub that also gums up traffic, why not just hire the damn people you need to do the discharging in a timely manner? Or is that an outmoded way of thinking about how to run a business?
02/10/20 — Yes it does:
“Corporate culture warps people,” said Mihailis Diamantis, a University of Iowa professor who specializes in corporate crime. “They’ve been placed in institutions that facilitate lawbreaking and predispose them to break the rules.” Since 2009, the percentage of employees at large companies who report that they’ve been pressured to commit ethical breaches has doubled. In a 2015 study, more than half the auditors for the country’s largest companies said they had been asked to falsify internal audit reports. In Ernst & Young’s 2016 Global Fraud Survey, 32 percent of American managers said they were comfortable behaving unethically to meet financial targets.
Relatedly, I think the growing mania for hiring unqualified private-sector business executives to run government agencies is a desire not for better business practices, but for more corrupt business practices. Case in point, I do not know what role the illegitimate University of Iowa president, J. Bruce Harreld, played in attempting to defraud thousands of UI students and families of $4.2M in scholarships that the university was legally obligated to pay (because neither the Iowa Board of Regents nor the Iowa Attorney General thought that attempted fraud worth investigating when it was exposed), but until a small cabal of co-conspirators rigged Harreld’s hire in 2015, I’m pretty sure no former Iowa president ordered people at the university to commit felony fraud against the students themselves. And of course now we can add borrowing $1.17B from a foreign energy consortium, after Harreld brazenly lied about the basis for that deal for the great majority of 2019.
02/09/20 — Remember how a University of Iowa student died in 2017 at an out-of-state fraternity formal, and the UI Greek community immediately imposed a self-ban on alcohol to prevent the university from coming down on them even harder, only nobody learned anything and the frats kept breaking not only their own ban but subsequent prohibitions placed on them by the school, and as a result nine fraternities were banned in fall of 2018, but many of those frats just kept doing what they had been doing all along, and through all that J. Bruce Harreld — a fratboy himself — made former UI VP for Student Life Melissa Shivers the public face of discipline on the UI campus, rather than taking the heat himself, which in turn prompted the Iowa City Press-Citizen to name Shivers Person of the Year, while Harreld never publicly backed her even as the frats defied her authority, and now she’s gone?
From the Press-Citizen’s Aimee Breaux: Police visit house of UI frat that faced deferred suspension three times in one week.
UI officials investigated Phi Delta Theta for providing alcohol to underage members and violating the institution’s ban on providing alcohol at organization-sponsored tailgates.
The University of Iowa instituted a ban on alcohol at Greek events in 2017, following the death of a University of Iowa student at a fraternity formal event in Missouri.
University of Iowa officials have not yet responded to questions of whether they are aware of the charges and whether the charges would affect the fraternity’s deferred suspension status.
So there we go — just another higher-ed success story from transformational UI president Bro Bruce Harreld, who is so desperate to fill the vacant VP for Student Life position that he first tried to force an internal hire at the end of last semester, then plugged one of his two senior advisors into the job on an interim basis, but is still eschewing a national search in favor of a panicky promotion from within. What could possibly go wrong? (Meaning aside from irritating the Iowa City Police Department by making them clean up messes that Harreld doesn’t want to deal with himself.)
02/08/20 — Beset by everything from outward population migration to weak economic indicators to cultural rage, the consequent intellectual hollowing out of the Upper-Midwest affects everything from politics to business to education, and all in a negative way. Not surprisingly, the powers that be in those three areas of regional influence are collapsing into themselves at an ever-increasing rate, trying to make up for lagging revenue by converting state assets into ready cash. To whatever extent the state of Iowa has already begun gutting public higher education in service of that goal, the University of Wisconsin System is not only joining the club, but determined to catch up in a hurry.
Not only will the next president at UW almost certainly be a mediocre business crony like J. Bruce Harreld at Iowa, but like Iowa State in 2018, on multiple occasions, the University of Wisconsin is now selling the names of buildings to corporate ‘donors’. Funny stuff:
“It all comes down to the perception of how much influence that company will have,” O’Guinn said. “You don’t want a company preventing you from doing science in the public interest. It’s in everybody’s best interest that the production of knowledge stay walled off from government and corporate interests.”
At the University of Iowa, J. Bruce Harreld just borrowed $1.17B from a European energy consortium after lying about the nature of that deal in multiple ways over the course of a solid year. While that deal was still hanging in the balance, the University of Iowa not only refused to acknowledge that Greta Thunberg — who would go on to be named Time’s Person of the Year in 2019 — even existed, but barred anyone on faculty or staff from even mentioning that she would be giving a speech in Iowa City, which is where the University of Iowa resides. On the exact same day that the University of Iowa finally received formal approval for its massive loan from a foreign energy consortium, however, the lapdog UI Faculty Senate announced passage of a “climate-emergency declaration“.
Forget perception. The reality of public higher education in the Upper-Midwest is that it has already been corrupted by profit-seeking corporate interests. Unfortunately, as the most talented and productive faculty and staff move on to less-corrupt pastures in the Sun Belt and on both coasts, it is only going to get worse.
02/07/20 — One of the things I learned after J. Bruce Harreld and three co-conspirators stole the presidency of the University of Iowa in 2015, is that propelling yourself to the top of any org chart — whether legitimately or through illicit means — confers incredible benefits, not the least of which is that you then get to speak for and about anyone that you abused on your way to the top. Harreld did this routinely after he was appointed, and still does this, by characterizing people who oppose him as unprofessional, ignorant, or just plain nuts. Today we have a sterling example of this power one step down, in the personage of UI AD Gary Barta, who once destroyed the lives and careers of two women in his employ, at a cost to the state of $6.5M, yet never apologized.
Despite the fact that UI president Harreld and ISU president Wintersteen conspired to kill off any investigation into the assaults against the UI Marching Band last September, and the athletic departments at both schools necessarily contributed to that attempt — while spitting at each other, no less — here is how Barta is now describing the outcome of the just-concluded investigation, which was actually compelled by band members who would not be ignored. From Mark Emmert at the Des Moines Register today:
Barta does not oversee the band. But he said he, along with University of Iowa President Bruce Harreld, have met with the musicians, and he believes they are satisfied with the outcome.
“I get the sense that they appreciate how hard we’re working on this. They had a great experience the rest of the year,” Barta said.
Is that really how the band feels? Or is that the whole band, in aggregate, versus the people who were actually assaulted? And given that Barta doesn’t oversee the band, why is he taking time out of his busy day to let the world know how the band really feels? And of course the answer is because it advantages him, whether what he’s saying is true or not.
* The bulk of Emmert’s story concerns the fact that the UI Athletics Department closed out last year with a $5.7M profit:
For the second consecutive year, Iowa’s athletic department brought in millions of dollars more in revenue than it spent.
And that is allowing Hawkeye athletic director Gary Barta to build up a reserve fund that is now roughly $4 million, he told the Register on Thursday.
“One of the goals I have is to get it to $10 million,” Barta said. “There’s no mandate. We’re going to have debt service to pay every year. I want to make sure that, if we ever have a year where we fall short, we can pay our bills.”
So Gary Barta wants to build himself a $10M slush fund, and hey — who wouldn’t want $10M lying around when student athletes are suddenly quasi-empowered to make money?
What is particularly funny about this — meaning in a bureaucratic sense, not a comedic sense — is that only a few years ago, before teeny-tiny Bro Bruce Harreld realized that he works for BMOC Barta, there was actually a fairly public conversation about athletics contributing money to academics for the betterment of the school. Personally, I argued against that because Iowa’s athletic books are effectively separate from academics, and we wouldn’t want that flow of money to reverse if athletics found itself on the financial ropes, but MBA Harreld had a better idea. (You can follow the arc of that story in three links: 2016, 2017 and 2018.)
Now, here we are in early 2020, and in the reporting I have seen so far neither J. Bruce Harreld, Gary Barta, nor any of the sports reporters covering that beat have even raised the question of whether athletics should hand some of that money over to academics. It’s good to be the king.
* I don’t want to beat the messaging problems at UI to death regarding the coronavirus outbreak which originated in China, but the 02/05/20 update on the Iowa Now website is not progress:
The Iowa Department of Public Health will not be releasing the county or the region of Iowa where the persons being tested reside. The recommended actions for the public are no different than for any respiratory virus, including the flu.
The risk to the general public remains low at this time, as influenza is a much more significant threat to Iowans right now.
Raise your hand if you remember all of the times that flu season rolled around and the University of Iowa cancelled all of its programs in China. The risk from influenza may be greater for Iowans right now, and perhaps even greater in an absolute sense, but people are not panicking. They are watching what healthcare officials are doing, and healthcare officials are taking extraordinary steps to combat the coronavirus, which they do not take during flu season. (Which either means coronavirus is much worse, or we should routinely be constraining human interactions during flu season.)
02/06/20 — Just flagging the following report from late last night, because it goes to the heart of the next substantive post on the UI P3.
* From the Daily Iowan’s Kelsey Harrell: Iowa lawmakers question UI president on utility system public/private partnership. I don’t know whether Iowa’s state legislators are generally oblivious, or if they — like the governor — are in on the whole ‘regent theater’ scam, but the end result is the same. The Iowa Board of Regents lies with impunity and the students end up paying the price. (Also, as mentioned elsewhere, I think David Barker will be the next president of the Board of Regents, probably in May. And what that guy is going to do to accelerate the privatization of the state’s public schools will make Rastetter, Richards and Harreld look lazy.)
* Remember a little over a year ago, when illegitimate University of Iowa president J. Bruce Harreld called China a “wonderful country“? Maybe not so much.
02/05/20 — There was a one-day meeting of the Iowa Board of Regents today, and with it came the usual barrage of news….
* The most interesting story comes from the Gazette’s Vanessa Miller, reporting on an extended investigation conducted by the University of Iowa and Iowa State, following assaults on the UI Marching Band just after the annual Cy-Hawk game last September. The official conclusion is that there wasn’t enough evidence to file charges against anyone, but there were still plenty of mutual pats on the bag for a job well done. As regular readers know, however, both illegitimate UI president J. Bruce Harreld and legitimate ISU president Wendy Wintersteen initially conspired to quash any investigation of those assaults.
We took a look at that attempted cover-up shortly after it happened, in a post on 09/29/19. As noted in that piece, here is the cover-up as it occurred on 09/18/19 — by the Gazette’s Miller:
On Wednesday, UI officials told The Gazette their police department has no incident reports related to the Saturday game in Ames. ISU has not responded to requests it provide any police reports from the game.
When asked Wednesday about the issue, UI President Bruce Harreld said he thinks his institution has “investigated it as thoroughly as we could” and hopes for better behavior going forward.
“I would hope both schools sit down and think about safety for our fans and our players and our bands and come to some agreement of what the protocol is in Iowa City as well as in Ames,” he said.
ISU President Wendy Wintersteen also renewed her call for mutual respect between the opposing teams’ fans.
“We really want — whether we are at Iowa State or the University of Iowa — that our fans respect the band, our players and each other. That’s our goal for everybody.”
When allegations first came to ISU’s attention, Wintersteen said, her institution began an inquiry that she believes has been completed.
So who shattered that denial-fest, and compelled UI, ISU and the corrupt Board of Regents to take a closer look? Well, that would be several of the abused members of the UI Marching Band, who spoke out after it became clear that the people they trusted to deal with those incidents were in fact determined to look the other way in service of making money off of sporting events. (Yet another moment in the sorry administration of J. Bruce Harreld, in which we learn that the only people he really cares about in Iowa are the people who cut his checks.)
* As for the Board of Regents meeting itself, students from all three of the state schools interrupted today’s meeting to protest the onslaught of serial tuition hikes that began four years ago, and are slated to continue for another four years irrespective of state funding. Weirdly, after being victimized and taken advantage of for years, the students did not accept an offer from regent CEO/XD to talk about their concerns somewhere else — as also reported by the Gazette’s Miller:
Students from across Iowa’s three public universities on Wednesday shut down a Board of Regents by interrupting its afternoon session with loud chants, songs, personal stories and demands for a tuition freeze — pleading for a response, “Yes or no, will you implement a tuition freeze?”
At no point during the hourlong impromptu protest during the board’s regularly scheduled meeting at its office in Urbandale did any of the nine regents publicly respond to the dozens of students.
None of the university presidents spoke up either, and all three left the room at various times — as did Board of Regents President Mike Richards and the board’s Executive Director Mark Braun, who said he pulled aside members of the student group to try to coordinate a later discussion.
“I offered to them to sit down and figure out how we can get something worked out where there can be a dialogue, back and forth,” Braun told The Gazette after the board adjourned the meeting about an hour early. “They demanded that the board respond today.”
Because the regents are bound by state law to discuss only items outlined on their previously released agenda — and issues central to the student concerns weren’t on this week’s agenda — members couldn’t discuss them, Braun said.
There is just nothing quite like a group of weaselly bureaucrats using a sunshine law to avoid talking about something that is happening in the moment. Speaking of which, if Mark Braun dropped dead of a heart attack in the middle of a regent meeting, would it be a violation of state law to dial 911 because his heart attack was not on the agenda? Unfortunately, I’m afraid so. (The law is the law.)
* Also at the regent meeting — and also as reported by the Gazette’s Miller — the University of Iowa unveiled plans to build a new hospital on land the school owns in North Liberty, which is to the northwest of the main UI campus:
The initial 300,000-square-foot building proposed for the first phase of development on the nearly 60-acre site in North Liberty would include a “level 4 emergency treatment center,” urgent care services, outpatient clinics, diagnostic services, surgical suites, and acute inpatient beds.
A proposal that on Wednesday went before the Board of Regents notes the development is aimed at improving patient access and easing congestion at its packed main campus.
Now, I know what you’re thinking. Some of you are thinking, ‘Gosh, UIHC is always pleading poverty, yet they never seem to run out of money for building new facilities!’ It’s a real poser, isn’t it? I mean, anybody else and you might start wondering if they were just flat-out lying all the time — like, say, UI president J. Bruce Harreld.
Others are thinking, ‘Wait a minute — wasn’t the Iowa River Landing built to “improve patient access and eas[e] congestion at the main hospital”?’ And of course it was, but can you really every have too much improvement and easing? Building a whole new hospital out in North Liberty, which is also right by the Oakdale Correctional Facility, will be a win-win unless it goes massively over budget. Speaking of which….
As for the cost of this new mini-hospital, the fully-transparent executives at UIHC managed to omit even a guesstimate about what they will be spending. (You can read more about the project starting on p. 4 here.) For context, the new 14-level children’s hospital is 500K square feet and cost $360M, after it went $100M over budget. So plan on UI blowing about $150M on this new facility, plus another $50M in change orders, cost overruns, mismanagement and outright waste.
Some of you may also be wondering why UI just announced that it was partnering with an out-of-state healthcare company to build a rehab facility, when it could obviously build its own rehab facility at this new mini-hospital. (More on that partnership here, from the DI today.) From the Gazette’s Miller:
Although Encompass more than a year ago announced plans to build its first inpatient hospital in Iowa — without collaboration or coordination from UIHC — the two entities since joined forces, with UIHC faculty agreeing to staff the facility.
The two parties will split the $27 million capital expense 50-50, according to UIHC Chief Financial Officer Bradley Haws. And the official UIHC entity partnering with Encompass on the project is UI Health System — a nonprofit created to support UIHC’s clinical, academic, and research programs.
Adding to the expanding health care options in Johnson County is another new 40-bed inpatient rehabilitation facility being built in Coralville via collaboration between Mercy Iowa City and Kindred Healthcare, of Louisville, Ky. The $7.5 million project next to Mercy Coral West at 2769 Heartland Drive is scheduled to open this summer.
The State Health Facilities Council in 2018 approved certificates of need for both that project and the Encompass what appeared to be the same thing, and UIHC CEO Gunasekaran told The Gazette he agrees there are enough patients to fill up both.
UIHC decided to get involved because it requires a certain degree of complex care for many of its sicker patients.
“The reason we’re partnering with Encompass is we’re going to provide the physicians for that rehab hospital so we know the Iowa Rehab Hospital, which is our partner, will be sophisticated enough to take our patients,” he said.
What Gunasekaran is saying here is that Mercy and Kindred are yokels, and as the CEO of UIHC, who would know better? (For more on the “sophisticated” happenings at UIHC, see this story.)
* In other news — as reported by Annie Fitzpatrick at the Daily Iowan — the University of Iowa announced that it had “canceled all programming in China” because of the coronavirus outbreak, which obviously seems like a good idea. From a related story by the Gazette’s Michaela Ramm:
Two Iowans who recently returned to the United States from China are being tested for novel coronavirus, the state public health department announced.
Testing will take several days, but both unidentified individuals are under voluntary home confinement as the Centers for Disease Control and Prevention conducts monitoring for the respiratory virus that has sickened thousands in China and across the world.
* Finally, only three days after TaJuan Wilson concluded his obligations to the University of Iowa, he was announced as the “first associate vice president for inclusive excellence” at Georgia Southern University. (Update: more here from the Gazette’s Miller on 02/06/20.)
02/03/20 — The Iowa Board of Regents is touting the fact that “over half” (52%) of the students at the three state universities are now graduating in four years. A closer look inside the numbers, however, shows that the recent collapse of diversity, equity and inclusion at the University of Iowa is not limited to administrators and faculty.
From the Gazette’s Vanessa Miller today:
While white students — collectively across the three universities — have a four-year graduation rate of 54 percent, up from 51 the year before, regent students identifying as racial or ethnic minorities have a four-year graduation rate of 41 percent, down from 43.
Six-year graduation rates for racial and ethnic minorities also dropped, the report said from 65 to 62 percent.
ISU, however, reported bucking the reversal in some subcategories, with its Hispanic, black, and Native American students achieving record four-year graduation rates, according to the most recent data.
“These records speak directly to the work the university has been doing to address the attainment gap between our multicultural and white populations,” ISU’s part of the report said.
But ISU collective racial and ethnic minority graduation rates — in the four- and six-year categories — dropped, as did minority graduation rates at the UI.
Yes, those records certainly do speak “directly to the work” ISU has been doing, and by extension to “the work” at UI, and what those records make clear is that non-white students at both schools are falling farther behind.
UNI was the only of the three campuses to report an increase in its six-year graduation rate for racial and ethnic minority students — from 55 to 59 percent. UNI officials heralded the “positive indicators” of progress toward its diversity and inclusion goals.
If those are “positive indicators” at UNI, then how would we describe the data from ISU and UI? (Hint: those would be ‘negative indicators’.)
* As you may or may not have heard, there is a new (and, importantly, non-profit) news outlet in the state called the Iowa Capital Dispatch (sign-up here). Led and staffed largely by former Des Moines Register reporters and columnists, I have been hopeful that the ICD would fill the conspicuous void which charitably describes the Register’s all-but-nonexistent coverage of the Board of Regents. (The Register feasts on and dominates sports coverage at all three state schools, but is notoriously derelict in covering administrative machinations — to the point where it is hard not to see a direct profit-driven correlation between those two stark extremes.)
On Friday we got our first indication that the ICD won’t be ignoring the Board of Regents, in the form of a from Clark Kaufmann: UI builds ‘public trust’ in Iowa charities, but without oversight.
The center tells Iowa nonprofits that “your listing on the register shows Iowa and the nation that your nonprofit makes a concerted effort to operate efficiently, effectively, and ethically.”
But officials at the center acknowledge they make no effort to review the nonprofits’ financial audits, tax returns, board structure, executive compensation or policies. If an organization has had its tax-exempt status revoked by the IRS, it might still appear on the Register of Accountability.
In fact, some of the entities that appear on the register aren’t nonprofits at all. They are for-profit companies, such as the Windsor Heights retail store Sports Fitness, and the consulting business Elizabeth Weinstein & Associates. There are also taxpayer-funded governmental entities on the list, such as the City of Council Bluffs, the Warren County Attorney’s Office, and Iowa Workforce Development.
More please.
02/02/20 — From the Daily Iowan’s Naomi Hofferber, on 02/01/20:
The Stonewall riots kicked the UI into action, UI President Bruce Harreld said at the event, leading to the creation of Spectrum UI — the longest running and first established LGBTQ university organization in the U.S.
Harreld and his wife, Mary, recently shared their experiences with their daughter’s gender transition in a UI Health Care video that resonated with members of the community.
“I’m very proud — this campus, you have the right to be who you are,” he said. “We will support you. We will do all the things we can to support you. Period. Full stop.”
The UI president mentioned the ways that the UI has supported LGBTQ rights, while also encouraging the community to keep pushing for equality.
“You need to keep pushing us,” he said. “So that’s part of this journey… My wife, she is [sic] leaned over after this evening’s performance and said, ‘Yeah, it’s one thing to tolerate it for a while, but at some point, by golly, you need to stand up and fight for yourself.’ This is what Stonewall’s all about. And we may think this is over, and it’s not, as we’ve just heard. This is a journey that will continue, and it’s an important journey.”
Now let’s look at how J. Bruce Harreld — the illegitimately appointed, crony, white, male, hetero president of the University of Iowa — has actually supported the LGBTQ community in his role not as a loving father or audience member, but as the administrative head of a major R1/AAU public research university.
* In 2016 the University of Iowa was sued for gender and sexual discrimination by a former employee of the UI Athletics Department, who specifically cited abuses by then-and-current AD, Gary Barta. Despite fighting the case tooth and nail, including lining up the pseudo-legendary football coach and other high-ranking athletics administrators to testify against the plaintiff, the jury found the university guilty, and it wasn’t even close:
Lundgren, chosen by fellow jurors to be the forewoman, talked Friday with The Gazette — one day after the verdict in the three-week trial.
She said the jury spent 10 hours over two days methodically going through each of Meyer’s five claims: gender discrimination, sexual orientation discrimination, retaliation, equal pay violation and whistleblower violation.
“Two to three of the counts we didn’t need to spend a lot of time,” she said. “It seemed ‘for sure this happened,’”
Ultimately, the jury was unanimous Meyer had proved her case by a “preponderance of the evidence” on all five counts. The group awarded Meyer $1.43 million for lost wages and emotional damages.
* In the aftermath of that crushing verdict, the University of Iowa — meaning J. Bruce Harreld — quickly decided to settle that case and a related case at a cost of $6.5M to the school.
* As to what happened to Gary Barta, not only was Barta not fired or reprimanded or punished in any way, but gutless, spineless, craven J. Bruce Harreld went out of his way to minimize Barta’s culpability, while smearing the entire university at the same time:
A Polk County jury found the university guilty of gender and sexual discrimination in May, which was followed by a settlement by the university, Meyer and Griesbaum — who had filed a second lawsuit in the same court. The university agreed to pay $6.5 million in the settlement.
Harreld then ordered a universitywide review of employment practices, beginning with the athletic department. UI’s president said Thursday, though, that it became quickly apparent that whatever issues that led to UI losing the lawsuit were not limited to athletics.
“It became quite apparent to me that it wasn’t just the athletic department,” Harreld said. “There was a lot of other people and parts of the university in that whole process. The General Counsel’s office was in that, the office of the President was in that. This notion it was just the athletic department is a nice story, but it’s a lot more complex.
“I decided we would bring in an outside group to evaluate our employment practices. What does that mean? It means how we hire, how we compensate, the feedback process and the termination process. Not only in the athletic department, but across the academic institution as well as the hospital.”
Harreld continued that he thinks, “this is a wonderful time to pause and make sure there’s no discriminatory practices and policies.”
* Not only did Harreld refuse to hold Gary Barta accountable in any way, but two years later Harreld rewarded Barta with a massive raise and contract extension.
* As for the employment practices review, as discussed below and endlessly in other posts, that review was subsequently slow-walked for two full years, then funding was poached, while the reporting requirements for any faculty and staff concerned about diversity, equity and inclusion (DEI) were actually designed to discourage people from speaking out for fear of retaliation.
Add to all that the fact that Harreld electively demoted DEI from his cabinet and kicked the CDO/AVP-DEI position out of the president’s office altogether, and the very premise that Harreld is fully behind the LGBTQ community is rendered as hollow as the legitimacy of his administration. There is an exceedingly small set of people that J. Bruce Harreld cares about, and the vast majority of LGBTQ individuals on the UI campus do not belong to that protected class. As long as the LGBTQ community doesn’t confront the white, male, hetero leadership culture on the UI campus, J. Bruce Harreld will happily exploit that community for public relations reasons, even as DEI collapses and minority resignations spike, but that’s as far as he’s willing to go.
01/31/20 — With the Iowa Board of Regents meeting next week on Wednesday, and other University of Iowa items in the news, there are a number of issues to track….
* In an earlier note I said TaJuan Wilson had come off the UI books in mid-January, but I was off by a couple of weeks. As the Gazette’s Vanessa Miller reported last night, Wilson’s employment with the University of Iowa ends today, even as he officially resigned from the job he was originally hired to do almost six months ago:
Wilson, 33, resigned from his position as UI associate vice president for diversity, equity and inclusion on Aug. 9, 2019, just weeks after he began. Under a settlement with the Board of Regents, he stayed on in a special assignment that wraps up Friday.
The deal allowed him to continue earning his $224,000 salary. It let him work off site and look for another job “during working hours,” although he had to be available for consultation if needed. So far, the UI has paid Wilson $185,559.85, a total that includes salary, benefits and moving expenses.
Whatever prompted Wilson to resign after only six weeks on the job, the Board of Regents and University of Iowa were so eager to make sure the details never got out that they paid Wilson a quarter million dollars while he was ostensibly working on special projects for transparency hero Peter Matthes. So what was Wilson doing all that time, at considerable expense to the state? He was preparing two PowerPoint presentations.
Wilson sent two PowerPoint presentations — one 17-slide report on sexual assault prevention efforts at Iowa’s peer institutions and the other on diversity efforts among that peer group — on Jan. 12 to UI Vice President for External Relations Peter Mathes.
He compiled the reports during his roughly five months as “special assistant to the vice president for external relations” — a position created for Wilson after his abrupt resignation.
The Gazette report doesn’t link to the presentations, but Miller has seen them and reports this:
In one of two PowerPoint presentations that former University of Iowa diversity chief TaJuan Wilson created while on special assignment, he posed a question to the UI: Would his successor be “a direct report to the university president?”
Toward the end of that 37-page report, Wilson reflected on UI diversity efforts, possibly shedding some light on what motivated him to abruptly leave after only six weeks on the job.
Among a list of 18 “questions to consider” he made in the report, Wilson asked: “Are we honest about where we are, and are we operating with integrity and transparency?”
Not only are those important questions, but as regular readers know the illegitimate president of the University of Iowa, J. Bruce Harreld, was adamant that changes in the reporting structure at UI not only had nothing to do with Wilson’s sudden resignation, but that Wilson was never promised a direct report to the president. From a Daily Iowan interview of Harreld on 09/30/19:
DI: The associate VP for Diversity, Equity, and Inclusion used to be in the president’s cabinet reporting directly to you. When Lena Hill and Georgina Dodge were here, their positions in the UI organizational chart were reporting directly to you, so why now are they reporting to the provost? Was that change intentional?
Harreld: No, we probably changed that quite a while ago and then Lena was actually on the cabinet and then Melissa was on the cabinet when she became interim and I started restructuring the cabinet from almost from the day one I got here. We had a number of other people on the cabinet as well, and I started making a tighter, smaller group, so it wasn’t with TaJuan or anything. We’ve been trying to get smaller and smaller as a group for a while now. We asked Melissa who was already on the cabinet that they take the DEI activities. So, I don’t view that one way or another as a substantive change. And to be sure, the offer letter that went to TaJuan never included that so that wasn’t a change. He knew that going ahead.
Unfortunately, because Harreld is a serial prevaricator we can’t take his word for anything, and because the University of Iowa takes it orders from that same serial prevaricator, we don’t have any corroboration about the offer that UI originally made to Wilson. And yet here we are, with Wilson on the way out, and it sure seems like Wilson is disputing Harreld’s characterization:
In one of two PowerPoint presentations that former University of Iowa diversity chief TaJuan Wilson created while on special assignment, he posed a question to the UI: Would his successor be “a direct report to the university president?”
As a factual matter we already know the answer is no, because at some point Harreld did demote DEI from his cabinet, then kick DEI out of the president’s office altogether. As a result, the new AVP-DEI position that Wilson briefly filled has now been foisted on the provost’s office, as if only the academic side of the university needs to be concerned about diversity, equity and inclusion. (You can read more about TaJuan Wilson’s resignation in prior posts here, here and here, and relatedly here in the context of the subsequent departure of Melissa Shivers.)
* Toward the end of Miller’s report on Wilson, she ties in new data from the Iowa Board of Regents regarding faculty resignations at the University of Iowa. Before we get to actual data, however, it is important to note that the Board of Regents effectively stalled the reporting of faculty resignations for two years, ostensibly because they decided to fold that information back into the larger annual human resources report. One problem with that assertion is that the board also seems to have made another change to the reporting of that data, and to have diminished the amount of overall information that will now be released. (Specifically, that data is now presented in a single graphic at the end of this executive summary, and in slightly more detail at the end of the full human resources report.)
The more recent reporting change that the board made was to break out resignations at UI into two groups: clinical (medical) and non-clinical. (You can see that on p. 1 here, in an infamous pair of graphs that do not actually line up on the y axis.) That new breakout was apparently designed to counter the narrative that J. Bruce Harreld’s fraudulent appointment triggered an exodus at UI, because the aggregate numbers did show that was the case. Now, however, the board is no longer breaking out resignation numbers at UI between clinical and non-clinical, suggesting that non-clinical resignations have spiked on the greater campus, and it is that increase that now needs to be obscured.
All of which brings us back to this, from the Gazette’s Miller, in yesterday’s report on Wilson:
The UI reported 26 minority resignations last year, or 32 percent. That was the campus’ highest minority resignation total and percentage in at least five years.
Weird, right? The Iowa Board of Regents hired a crony white man who had no prior experience in academic administration or in the public sector to run a state research university, and that white man subsequently demoted DEI from his cabinet and kicked what was the Chief Diversity Officer position, and is now the AVP-DEI position, out of his office, and people of color or other minority populations are increasingly looking for work elsewhere. And yet I am confident that the university would anonymously insist that there is no correlation between any of these events.
* On the UI P3 front, I recently pointed out that no one has explained what will happen if more than $15M or $16M is generated in any given year from the resulting endowment. While the UI Faculty Council and Faculty Senate busy themselves with fleshing out the allocation process for all that loot, it’s worth remembering that the group that will decide how much money UI gets each year is a three-person board that was established when the UI P3 was approved in early December.
You can see a description of that three-person board on p. 20 of the UI ‘informational webinar’, which was given a week before the approval meeting, and that board is specifically referenced at the 27:30, 43:00 and 55:20 marks of the webinar video. Although Harreld said in the webinar that the makeup of the governing board of the UI Strategic Initiative Fund was up to the regents, the board was approved one week later as originally described in the webinar:
The Board will consist of three members:
• An appointee from the State of Iowa Board of Regents
• Senior Vice President for Finance and Operations at the University of Iowa, and
•A member of the faculty of the University appointed by the Faculty Senate for a four-year term.
For reasons that are not explained but can be assumed, the Board of Regents is now amending its policy manual to included the following text:
A member of the Board of Regents serving as Board President, President Pro Tem, or Chair of the Investment and Finance Committee shall not be eligible for appointment to the University of Iowa Strategic Initiatives Fund Board of Directors during the term of their appointment as President, President Pro Tem, or Chair of the Investment and Finance Committee.
While this would seem to be an attempt to avoid some sort of internal conflict of interest, in reality these prohibitions mean nothing. Given that the members of the Iowa Board of Regents are political appointees, and the current board has been corrupted by the dominant political party in Iowa over the past decade, it doesn’t matter which board members can or can’t sit on the three-person board for the P3 endowment. Whoever that person is will inevitably take orders from that political machine, and specifically from the board president.
As to the other two board members, while it would seem on paper that there are two members with a vested interest in making sure UI gets the most money out of that endowment, the current VP for Finance and Operations works for the current corrupt president of the University of Iowa, who gets paid by the corrupt Board of Regents, so there’s is zero chance that the VP for Finance and Operations will buck any decision the regents want him to make. As for the board member from the Faculty Senate, that person is not only going to lose a lot of 2-1 votes, they are also going to spend a lot of time in closed or executive session, which will be imposed by the other two board members to obscure their decision making. (If you’re involved in shared governance at UI — by which I mean actually trying to govern, instead of just covering for Harreld’s abuses — see his hilarious response to concerns about transparency at the 55:20 mark of the webinar.)
* In the four-plus years that I have been reading reports and documents from the Board of Regents, I have had recurrent trouble parsing some of the ‘Personnel Appointments’ that appear in the agenda items for board meetings. Specifically, when one person ends up doing two jobs, or takes over a different job in an interim capacity, there is never any explanation as to how that affects their overall salary. For example, here’s the notice that Harreld’s other senior advisor, Laura McLeran, will now be the interim Dean of Students, because the University of Iowa still hasn’t been able to hire a Dean of Students after two years and two failed searches:
Appointment: LAURA MCLERAN as Interim Vice President for Student Life at an annual salary of $254,991, plus $5,000 monthly, effective January 1, 2020.
So is McLeran no longer one of Harreld’s senior advisors, or is she now doing two jobs? If she’s doing two jobs, is that new money her full state salary, or is she also banking whatever she is currently making as a senior advisor, and will now also be making another quarter of a million as Dean of Students?
In this notice we also get a sense of the absurd routine largesse of executive compensation at the University of Iowa from the inclusion of “plus $5,000 monthly”, as if that’s a parking allowance or something. Not only is there no explanation of what that extra $5K is for, on an annual basis that amounts to a $60K (or 25%) increase over and above her “salary of $254,991”. (Most people would probably agree that $60K a year would be a decent job for anyone in the real world, but at the University of Iowa it’s the equivalent of couch change, and treated as such.)
* I don’t know how much influence Harreld had over this plan, which took shape shortly after he was hired, but if you want to see what happens when you try to make sweeping changes based on lofty ambitions, take a gander at this hot mess.
* Finally, here’s another one of those headlines the University of Iowa does not need: Univ. of Iowa researcher says majority of U.S. public is safe from coronavirus.
I think the quotes attributed to Perlman in this piece come from a prior article and/or UI press release, but you can see how this stuff hangs around. For contrast, here’s the NYT today:
Coronavirus Live Updates: U.S. Issues ‘Red Alert’ After Week of Skyrocketing Infections
The United States issued a Level 4 warning, its highest, urging Americans to avoid travel to China. Officials said the number of new cases had risen tenfold in the past week.
The only thing preventing the University of Iowa from properly managing and facilitating reporting about the University of Iowa is the University of Iowa. Confidence is high.
01/29/20 — From the Gazette’s Vanessa Miller: Iowa State bringing home students, barring travel to China amid coronavirus fears. UI is “urging communication” (whatever that means) and “discouraging travel”. Given the incubation period, we now get to wait a week or two to see if the outbreak already arrived in Iowa before those decisions were belatedly made.
* Having succeeded in jamming the UI P3 through to fruition in early December, the University of Iowa is now moving on to doling out the happy millions that will ostensibly be generated in perpetuity by an endowment which has not yet been created. As reported last night by the Daily Iowan’s Alexandra Skores and Marissa Payne: UI faculty discusses early stages of public/private partnership allocations.
While it is factually correct that Harreld and his crack team of entrepreneurial brigands have projected that the UI P3 endowment “will grow over 50 years to an estimated $3 billion”, almost $2.3B of that total (see p. 18 here), will go right back to the foreign energy consortium which provided the $1.17B loan to begin with — leaving only about $700M in total projected profits over a half-century, or about $14M per year. But of course if the economy tanks, or the endowment craps out, or someone down the line eats into the principal, then UI will be upside down on the loan and lose money, which students and/or the state will have to make up.
I don’t know whose idea it was to have Peter Matthes — who is one of Harreld’s two shadowy ‘senior advisors’ in the president’s office — talk to the faculty about how open and transparent the allocation process will be, but that choice of message and man was ironic for two reasons. First, on the message front — and as just detailed in Part 7 of the multi-part post on the UI P3 — the entire development process was premised on obfuscation and deceit, including outright lies from Harreld himself, prior to ramming the approval through with brute bureaucratic force. Second, as to the man, the last star turn that the normally invisible Matthes had in the press was just over four years ago, when he was reported to be managing crony no-bid contracts for political operatives in the state, under the nose of the previous UI president. At about the same time all of that was disclosed in the press, however, new crony president J. Bruce Harreld promoted Matthes to senior advisor, so don’t put a lot of stock in any promises Matthes or Harreld make about openness and transparency.
Speaking of which, nowhere in any public comments about the UI P3, or in any documentation, have I found even a single member of Harreld’s crack team talking about what happens if the UI P3 endowment generates more than $15M or $16M in a year. That’s what Harreld sez he is hoping to generate if the economy doesn’t crumble beneath his feet, but why is that amount capped? If you want to see how open and transparent Harreld and Matthes really intend to be, ask them that question, then get them to commit to the answer in a legally binding contract. Because if you don’t, then in a good year tens of millions of additional dollars are going to walk away from that risky endowment, and no one at UI will have to account for where that state money ends up. (The very fact that Harreld claims to have considered every possible contingency regarding the P3 endowment, yet no one in his office has addressed this question, is proof positive that Harreld and his administrative crew do not want to have to answer the question, or they would have asked and answered it themselves as part of the development and approval process.)
* After two years of suspense, we now know who is funding the new $10M clubhouse at the UI Finkbine golf course. As reported yesterday by the Daily Iowan’s Kelsey Harrell, the financing is coming from “Mary Lee Nagle Duda and Fritz L. Duda”, after whom the new facility will now also be named. (More here from the Gazette’s Vanessa Miller.)
To most people those names probably mean nothing, but UI is leaning heavily on the “Nagle” component because the Nagle family name carries some cachet in Iowa City. Given that it is their money to do with as they please, and the state isn’t spending any taxpayer money to fund this project — and the UI Athletic Department’s book are effectively separate in any case — none of this would seem to be a problem. Which of course also raises the question of why this charitable gift was keep secret for so long.
Concerns with the Finkbine project were never about the golf course or the club house per se (though it should be noted that J. Bruce Harreld took time out of his busy schedule to personally advocate for a new clubhouse, including by lying about the number of golf courses around the Big Ten), but about the fact that the new club house was going to be part of a larger real estate development at that location, which the university wanted to turn into a public-private partnership. Although that plan fizzled, we learned fairly recently that the university is still pushing ahead with that for-profit development, and has already specified components of that project even though there is ostensibly no developer attached.
The obvious concern all along has been that there might be some crony linkage between a mysterious benefactor throwing $10M at the new Finkbine golf course, and deriving future profits from the for-profit development on adjacent UI land. So who is Fritz Duda, and what does he do when he’s not marrying into the Nagle family? Well, it turns out Fritz “is the owner and founder of the Fritz Duda Company, a real estate investment and development company,” which raises questions about whether Mr. Duda is involved in the adjacent development. Is the Fritz Duda Company paying for UI to move ahead on that project? If not, is that money coming out of the university’s own budget?
01/28/20 This substantive press release/post on the Iowa Now website, regarding the coronaviris outbreak, is obviously much better than the initial statements from UI officials (see notes for 01/25/20 below), but the central problem remains. After turning the Iowa Now website into a propaganda organ for J. Bruce Harreld’s corrupt administration, what confidence can people have that this update is accurate and complete?
Credibility — whether personal or institutional — is fragile, and Harreld himself has destroyed the authority of the public facing integrity of the University of Iowa. For people who aren’t paying attention, maybe that’s enough, but the damnable fact is that the more you pay attention to what UI says, the more you have reason to doubt what UI says….
More here from the Daily Iowan’s Rin Swann, in a late update on the DI website. Again, much better overall from UI, and a reminder that when they stop behaving like conscienceless marketing weasels, the communications staff and spokespeople can actually serve the campus and public.
* I’m sure there will be more local reporting on this story shortly, but for now it’s worth noting two concerns about this new public-private partnership between UIHC and an Alabama healthcare company. First, if the prior plan to outsource dialysis at UIHC had not failed, this would be the second substantive privatization of UIHC services in less than a year, giving cause for concern that the entire University of Iowa Health System is on the block. Second, because of UIHC’s size and effective monopoly status in Iowa, it can crush local healthcare providers with a wave of its hand, as this new partnership will now do to local companies and individuals who currently provide rehabilitation services in the area.
That in turn is also why all of the routine whining coming from the UI and UIHC executive suites is so pathetic. Harreld and Gunasekaran hold all of the cards, and routinely treat local companies and healthcare providers like crap. You don’t grow a vibrant community in any sense by throwing your weight around and leveraging your government status to drive deals with out-of-state healthcare providers. On the other hand, that’s exactly what you do if you’re effectively breaking up and/or privatizing a government institution.
Update: a closer look at this murky deal from the Gazette’s Vanessa Miller:
The project is pitched as a 50-50 partnership, but UIHC did not immediately release details on how much of the $27 million capital cost would come from the UI Health System budget.
It also was not immediately known whether the Board of Regents must approve the partnership.
One of core objectives of private-equity vultures and other parasitic entrepreneurs is exploiting and water down brands which have genuine merit or value, and that seems to be an increasing focus of J. Bruce Harreld and now Brooks Jackson (UI’s VP for medical affairs):
UI Health Network is a new brand assigned to entities owned 50 percent or less by UI Health System, and this new hospital is the first time that network brand is being used, according to UI officials.
One obvious question, of course, is why UI/UIHC went looking for a partner in Alabama. Was there an RFQ/RFP process driving this deal? Were bids accepted? Or did corrupt government officials in Iowa simply cut a deal that benefits them in some way, either personally, professionally, or both?
* Given the self-described “multi-cultural background” of J. Bruce Harreld, and his consistent unqualified support for China — which he characterized as a “wonderful country” just little over a year ago — I’m gonna drop this here for future reference.
01/27/20 — There is a short write-up today on the Inside Higher Ed (IHE) website concerning the conclusion of the employment practices review which illegitimate president J. Bruce Harreld launched two years ago at the University of Iowa, in response to gross abuses of power in the Athletics Department. (Those abuses ultimately cost the state $6.5M after UI lost one of two related court cases that were then settled for that amount.) While few people outside or even inside the higher-ed industry will ever read that article, it’s probably doesn’t help the university’s image to have a headline like this appear anywhere, let alone on a website devoted to higher education:
Iowa Employees Report Discrimination, Bias and Retaliation
Over the course of that two-year period we now that the University of Iowa slow-walked, then ultimately poached funding from, what Harreld promised would be a thorough campus-wide review. From recent reporting we also now know that one of the things Harreld and Chief HR Officer Cheryl Reardon did to diminish any reports of abuses — which Reardon herself then dismissed as “anecdotal” — was to insist that the purportedly independent legal firm conducting the review compel respondents to “give their full name and employment unit”. As a result of that clear if not thuggish disincentive, as the short IHE report today makes clear, the university can now claim that only a small percentage of the people who were contacted did report any abuse:
Over 18,000 employees were invited to take part in an online survey as part of the study. Of those, only 102 — about half a percent — chose to participate.
On the other hand, among those who were not dissuaded by the administrative implicit threats from Harreld and Reardon, fully 56% did report abuses:
In order to take part in the survey, employees were required to give their full name and employment unit. Fifty-seven of the 102 participating employees “stated concerns of inequitable treatment based on protected class,” the firm reported. The concerns included unfair treatment based on race, age and gender. Faculty also reported incidents of favoritism and poor treatment by managers.
In fact, the conditions under which UI employees could report abuses were so antithetical to the purported aims of the campus-wide review, that even the legal firm itself was more than a little queasy about validating or signing off on the rigged outcome:
The firm noted in the report that fear of retaliation may have prevented some employees from participating in the survey or complaining to others.
Two things stand out here. First, in purporting to investigate concerns about retaliation, the University of Iowa adopted reporting practices which implicitly carried the threat of retaliation, and there is no conceivable scenario in which Harreld and Reardon could ever claim to have been oblivious to that negative effect. Second, the complaints and concerns which were lodged by individuals who were not dissuaded by Harreld and Reardon’s implicit threat of retaliation go to the heart of the collapse of diversity, equity and inclusion at the University of Iowa, which Harreld himself demoted from his cabinet and subsequently booted out of the president’s office. The net result for Harreld and Reardon, however, is that they now have a taxpayer-and-tuition-funded list of the people on campus who will be most likely to ’cause trouble’ on the DEI front at the University of Iowa, which they can systematically use to enact retaliation, or to compel others at UI to deprive those people of power and opportunities, thus driving them from the school.
01/25/20 — One thing that keeps coming back to me about the crony corruption at the Iowa Board of Regent and the University of Iowa is that the messaging apparatus at those institutions has been corrupted as well. The big problem with that is that when you’re used to hyping and lying, you don’t actually know how to tell the truth when it matters, or even why it matters.
* In the spate of press releases detailed below in the notes for 01/23/20, the University of Iowa announced the conclusion of a two-year employment practices review — which was, in turn, launched as a result of AD Gary Barta destroying the careers and lives of two women in his employ. The university also announced that as a direct result of that review, UI would be implementing required training for about 3,000 supervisors.
The project results from campus feedback and recommendations from Iowa’s employment practices review, which was completed this month.
One big problem with that sequencing, however, is that illegitimate UI president J. Bruce Harreld, and his loyal Chief HR Officer, Cheryl Reardon, not only decided to embark on that training program six months ago, but they diverted money from the employment practices review to fund the training that will now take place. From the Gazette’s Vanessa Miller, back on 08/08/19:
The UI now is “paring back the scope of the review” — which was to start with athletics and then move to academic and operational units, as well as UI Health Care — “to focus on the more immediate need of strengthening supervisor training,” according to the UI Office of Strategic Communication.
“The review will continue, but we are redirecting some of our resources to developing a proactive training model,” Cheryl Reardon, chief human resources officer and associate vice president, said in a statement. “This decision reflects the findings of the employment practices review thus far and the input we’ve received through the Working@Iowa and recent campus climate surveys.”
As to the final report on employment practices at UI, that UI press release took great pains to minimize the systemic problems that were uncovered, at which point Reardon then invalidated the statements of those UI employees who risked responding to the law firm that conducted the review:
“I want to thank the employees who took the time to come forward and share their experiences in order to help us improve,” says Reardon. “While anecdotal, this feedback underscores the importance of the diversity, equity, and inclusion action plan and the need for new training for Iowa supervisors. These initiatives are designed to address proactively and consistently expressed concerns like those reported in this review.”
Obviously we now have good cause to wonder if UI’s Chief HR Officer, Cheryl Reardon, also trivializes reports of sexual harassment or abuse, or gender or racial discrimination, as “anecdotal”, but here we will limit our derision and disgust to the matter at hand. Speaking of which, here is how the that same final report was described by the Gazette’s Vanessa Miller yesterday, on 01/24/20:
Few University of Iowa employees would reveal their identities as required to participate in a review of the institution’s personnel practices, but many of those who did told of workplace discrimination, hiring bias and fear of retaliation.
“Many employees stated they feared retaliation if they complained about unfair treatment,” according to a final report, released Friday, from Fredrikson & Byron P.A., a Des Moines law firm hired by the UI to conduct an employment practices study.
“Employees expressed that they did not trust the university, their supervisors, or (human resources) to protect them from retaliation.”
So the same university administrators who launched the employment practices review, because the Athletic Director discriminated against two women in his employ, and then retaliated against them when they pushed back against his discrimination, instituted a review process which required people to identify themselves in order to be included in the final report. At which point the Chief HR Officer, Cheryl Reardon, then devalued those courageous employees by trivializing their input as “anecdotal”. (I think we can fairly assume that the number of people who spoke up was suppressed by the requirement to identify themselves to an administrative bureaucracy which is known for using retaliation against employees. That Bro Bruce gave Barta a contract extension and raise after the fact also didn’t help.)
* A few days ago I ran across news that a coronavirus was not only on the loose in China, but had already escaped to other countries. Yesterday I then read this story, about an infected individual who was quarantined in Chicago after returning from China in mid-January. Because Chicago is in the Midwestern neighborhood, and because the UI campus still hosts a fair number of Chinese students despite fall-off over the past few years, I found myself wondering whether the corrupt, propaganda-driven administration of J. Bruce Harreld would be able to effectively respond if a local case did occur. And of course the answer — informed by everything from his rigged hire to the Visin debacle to Harreld’s deranged belief that he has a “multi-cultural background” because he has “four Mandarin speakers in my family” — is the last person you would want giving orders in a genuine crisis.
The good news, of course, is that the University of Iowa has a major medical facility on campus, which teaches and practices cutting-edge medicine, so you might think experts there would be able to address concerns in level-headed fashion. Sure enough, as news of the Chicago quarantine spread yesterday, the press rang up UIHC for quotes, and in the main the first sober responses acknowledged uncertainty while making clear that UIHC is aware of the threat. From KCRG via AP:
“It’s certainly a confirmation of something we worried about,” Dr. Stanley Perlman, a professor of microbiology and immunology at the University of Iowa who has done research on SARS and MERS, told ABC News of the human-to-human transmission cases.
Perlman told ABC News while it made sense that the outbreak started in a Chinese fish market, if there was no person-to-person transmission, it should have ended quickly, once the market was closed and fumigated.
Perlman cautioned that experts don’t yet have a good read on how severe the virus is.
“It’s a concerning development, but we don’t know the level of contagiousness or the number of cases,” he said to ABC News.
A bit later in the day, however, UIHC started to lose control of that narrative, as attested to by this Press-Citizen headline:
University of Iowa is prepared for coronavirus, says epidemiologist
If you read the whole article you won’t actually find a UI epidemiologist saying UI is “prepared”, because of course one can only prepare so much. (All of Southern California is prepared for a massive earthquake along the San Andreas Fault, but that doesn’t mean a lot of people won’t end up dead or badly injured when it finally busts loose.) So where did that headline come from?
University of Iowa Hospitals & Clinics epidemiologist Dr. Jorge Salinas said the hospital is developing screening tools and has procedures in place for potential patients.
“For this specific matter, the hospital is in close communication with state officials,” he said. “And, the university is a designated treatment center for high consequence pathogens.”
It’s not hard to see how “has procedures in place” in the copy became “is prepared for” in the headline, but when you’re an institution like UIHC you have to be as vigilant about that kind of rhetorical creep as you are about pathogens. Unfortunately, as the headline to a follow-up report from KCRG made clear, UIHC fell down in that regard:
UIHC Professor of Microbiology and Immunology: It’s not likely Iowa will see a case of coronavirus
Again, that’s not exactly what the body copy says, but you can kind’a-sort’a see where the headline came from:
“We really don’t know that much yet,” [Perlman] said. “We have to learn more about how the virus is transmitted, but unless you have recently been to China or have been in contact with someone who has, the odds are almost zero that you will get sick.”
The fact that the “odds are almost zero” certainly does mean “[i]t’s not likely Iowa will see a case of coronavirus”, but consider what happens if a case does appear in Iowa, or on the UI campus. Even if that isn’t exactly what the epidemiologist in question said, the press is reporting that UIHC officials say there is no cause for concern, even as it is abundantly clear that there is reason to be concerned. Is that the proper positioning for a major medical facility that could be called upon to comment about an actual incidence of coronavirus? (More here, here, here, here and here.)
Again, when your entire communications apparatus has been devoted to hype and lying for years, it’s hard to tell the truth in a responsible fashion. I think UIHC gave it a go, but they still ended up promising more than they can guarantee. And that means if a patient infected with Wuhan coronavirus is found on the UI campus, the university is an immediate disadvantage because the hospital effectively promised that wouldn’t happen.
* Following up on the most-recent post about the UI P3 (Part 7), the Daily Iowan published a letter to the editor on Thursday, 01/23/20, which pushed back against the idea that shared governance supported that plan. Notably, that LTE also addresses a concern that will be the focus on Part 8:
The main concern which faculty raised at every meeting, and to which no one from president on down had a satisfactory response, was how this scheme would affect state appropriations. What’s to stop the Legislature from reducing them in proportion to the millions of dollars we will now be competing over in the coming years? The answer: Nothing.
I have added a note to Part 7 pointing to that LTE, which affirms a number of points raised in that post, including the degree to which Harreld has perverted the meaning of ‘shared governance’.
01/23/20 — Now that J. Bruce Harreld and his shared governance supporters have the approval of the UI P3 in their rear-view mirrors, it looks like Harreld is relieving himself of a bunch of constipated administrative obligations….
* Yesterday the Daily Iowan’s Marissa Payne reported that the search for a new Assistant Vice President of Diversity, Equity and Inclusion (AVP-DEI) is officially back on. Not so coincidentally, the former AVP-DEI finally came off the UI books after being paid for six months, despite having resigned under mysterious circumstances after only six weeks. The new search is scheduled to begin in April, but that probably means this will be yet another example of J. Bruce Harreld’s infamous hiring stalls, and the position won’t actually be filled until late next fall — if then.
* Because J. Bruce Harreld kicked the UI diversity officer out of his cabinet, while grinding through four such officers in four years, the University of Iowa has lately been on a crusade to prove that central administration is not racist. The main means of achieving that objective seems to be touting the so-called DEI Action Plan, which, at any other school, would simply be business as usual in the twenty-first century. At UI, however, the DEI Action Plan is an endless opportunity for heavy use of bold-face fonts and bullet points, as this Iowa Now post attests.
* With UI AD Gary Barta having overcome two gender and sexual discrimination suits that cost UI $6.5M, it is now apparently the perfect time to close out the campus-wide employment practices review which J. Bruce Harreld initiated after losing one of those cases in court, then settling both. This termination comes after Harreld effectively stalled that campus-wide review for two years, then poached funding from the review to provide training sessions through HR. (Note that this report also includes more bold font and references to DEI, even as the man who perpetrated the original abuses continues to be employed at the university and worshiped by Harreld.)
* And here is today’s simultaneous announcement that the money that was and is being poached from the sudden conclusion of the largely toothless employment practices review is funding what the university is now belatedly characterizing as mandatory training, because — as you can see from all of the press releases — the university is serious about prioritizing diversity, equity and inclusion, at least in their messaging.
* Even though the University of Iowa effectively put a gun to the head of a hundred-plus employees by ramming through the fake privatization of the university’s utilities (over the holidays no less), the university itself is here to report — using intentionally deceptive euphemisms — that those employees have “actively engaged with” the new private-sector energy partner. Kind’a like how hostages engage with captors, after being sold out for cash.
* Continuing the theme of time and money well-spent, the Gazette’s Erin Jordan reports that the FAA is investigating what prompted the University of Iowa to fly a brand-new ‘drone’ — which had an eighteen-foot wingspan, and weighed one hundred pounds — into a yard near the Iowa City Airport, thus converting that vehicle into a smoking $300K hole in the ground.
* As context for most of the items above, note that J. Bruce Harreld specifically kicked diversity, equity and inclusion out of his cabinet, and demoted the position from Chief Diversity Officer to Assistant Vice President for Diversity, Equity and inclusion, because he felt that office and position was an obstacle to his own success. From the DI interview Harreld gave on 09/29/19:
DI: The associate VP for Diversity, Equity, and Inclusion used to be in the president’s cabinet reporting directly to you. When Lena Hill and Georgina Dodge were here, their positions in the UI organizational chart were reporting directly to you, so why now are they reporting to the provost? Was that change intentional?
Harreld: No, we probably changed that quite a while ago and then Lena was actually on the cabinet and then Melissa was on the cabinet when she became interim and I started restructuring the cabinet from almost from the day one I got here. We had a number of other people on the cabinet as well, and I started making a tighter, smaller group, so it wasn’t with TaJuan or anything. We’ve been trying to get smaller and smaller as a group for a while now.
If you know anyone who’s thinking about applying for the AVP-DEI position at the University of Iowa, be sure to let them know that J. Bruce Harreld doesn’t want diversity, equity or inclusion getting in the way of cutting deals out of the executive suite. On the academic side, yeah, whatever — but nobody is to impose those concerns on J. Bruce Harreld and his small, tight cabinet.
01/22/20 — Articles/links of interest:
* From the Gazette’s Vanessa Miller, more on the Iowa Board of Regents flouting the law.
* A flattering report from the University of Iowa itself on all of the things the school is doing to make first-generation students more likely to succeed, which omits any mention of how students are being brutalized with serial annual tuition hikes, which of course causes them to incur more debt and to drop out. (You don’t get credit for putting bandages on people you abuse.)
* From the Daily Iowan’s Charles Peckman, a look at UI Counseling Services, which has been and remains scandalously underfunded. Again, if you keep raising the cost of tuition on students you’re going to stress them even more, with a consequent increased in demand for services that J. Bruce Harreld and his executive team don’t want to pay for.
* And speaking of tuition-raising dilettantes from the private sector, the University of Wisconsin has paved the way to hire their own private-sector dweeb. The fact that the UW governing board excluded faculty from the search committee altogether — as opposed to simply limiting them to inconsequential representation, as was done when former regent president Bruce Rastetter rigged the 2015 UI search — is as bad a sign as there is in higher-ed. (The hollowing out and cultural collapse of higher-ed in the upper-Midwest continues apace, and over a staggeringly short amount of time.)
01/19/20 — The UI Utility P3 in Context — Part 7: Shared Governance Sells Out.
01/15/20 — From the Gazette’s Vanessa Miller, a now almost routine reminder that the Iowa Board of Regents, as a body, is corrupt:
Although Judge Jeffrey Farrell conceded in his ruling this week that the facts in the case “scream out for something greater than a cease-and-desist order,” he noted, “The case is not that simple.”
“This is a clear instance of one party winning by engaging in an illegal practice,” he wrote. “(The Board of Regents) learned that it would be advantaged in negotiations if it could delay long enough for the legislation to pass. That is exactly what it did.
If the Iowa Board of Regents needed twenty bucks for booze it would just beat the hell out of someone in an alley.
01/14/20 — This report from the Gazette’s Vanessa Miller, on Casino Kim’s proposed regent funding, does not surprise me, because as Miller points out the legislature is not obligated to — and often does not — follow the governor’s recommendations, even though the governor in Iowa has line-item veto power. Personally, I will be surprised if the legislature funds Ui at the same level as ISU, let alone at a higher dollar amount, because UI is about to be ‘paid’ $1.17B in cash from the UI P3, which ISU and UNI do not have access to. With this budget Reynolds can look magnanimous while the regents can still play the disinvestment card at all three schools, and then jack up tuition that much more. (The reality is that ISU and UNI got hurt last year because of plummeting enrollment and subsequent hits to tuition revenue, while UI fared much better. Even at that, however, tuition revenue at UI fell off by about $5M.) Given that the board already has four more years of tuition hikes in the pipeline, and UI is now obscenely cash-rich, I wouldn’t be surprised if UI gets less money than ISU or even UNI, with any difference split between those two schools.
01/13/20 — The schedule of open forums for four internal candidates for the UI VP for Student Life position has been posted. That position became vacant last fall when Melissa Shivers suddenly announced that she was leaving UI for Ohio State, which in turn left a gaping credibility void on multiple administrative fronts. True to form, however, rather that launch a national search to find the best person for the job, Bro Bruce Harreld immediately announced that an internal candidate would be promoted by the end of last semester, following a panicky search. As it turned out, however, jamming an important appointment through at such a busy time of year proved to be problematic even for Bruce the Fixer, so Harreld instead pushed the appointment process out a couple of months, while naming one of his two ‘senior advisors’ as interim VP for Student Life until the position can be filled with whomever Harreld already wants in that role. (Anyone who thinks the UI P3 is going to heal the sickness at the heart of UI, even if it produces astounding returns, needs to have their head examined.)
01/13/20 — As we slide into another legislative season, it is important to keep two things in mind about appropriations to the state universities in Iowa. First, and as a general observation, almost all of the communications, and a good deal of the policies, emanating from the Iowa Board of Regents, are intended to deceive the public. Second, and as a specific example, when the board recently approved five years of prospective annual tuition hikes, and implemented the first hike last year, those hikes were approved regardless of any subsequent increase or decrease in appropriations. Meaning the board granted itself five annual raises even if the state also shovels money at the state schools, which of course makes it much less likely that the state will do so, which will then allow the regent schools to cry poverty even as they rake in more money. Important context as you read this report from the Gazette’s Vanessa Miller.
01/11/20 — There are a lot of things one might say about this story yesterday from the Gazette’s Vanessa Miller, which was also reported out later in the day by the Daily Iowan. As a general rule, however, relative to the administration of the University of Iowa we are focused not on people who make mistakes, but on people who are serially incompetent, routinely derelict and/or corrupt. So while this particular individual obviously made some poor life choices, we are going to allow that people really do have ‘wake-up calls’ in life, that it is possible to avoid making the same potentially catastrophic decisions in the future, and that this person will hopefully get the help they need.
Conversely, from the point of view of the University of Iowa as an employer, let alone as a institution of state government, it is worth noting not only that policies should obviously have been in place to prevent this sort of oversight in the hiring process — meaning as a separate issue from the question of the hire itself — yet UI actually failed to meet this same test two years ago. From Miller’s reporting on Friday, 01/10/20:
UI officials said they were not aware of Racevskis’ arrest at the time of his appointment. And, when hiring from an internal applicant pool, the College of Liberal Arts and Sciences does not require a criminal-background check.
The first thing to note here is that “UI officials” took pains to single out the College of Liberal Arts and Sciences (CLAS), as if CLAS has a separate hiring policy relative to the rest of the university — which, if true, would seem to warrant an explanation in itself. Second, on the point of when a criminal background check is and is not required, note that this same issue came up in the disturbing case of Jeffrey Nock, who was also an internal hire, but not in the College of Liberal Arts and Sciences. In the Nock case, not only was he given a new contract at the Tippie College of Business even after the university’s own department of public safety issued warnings to him about sexually harassing women on campus, but Nock also had a prior serious complaint lodged against him through the Iowa City Police, which the university did not know about because it never asked. (More on the Nock debacle here, here, here, here and here.)
In the Nock case, the university was so invested in protecting his role at the business college that Nock was ultimately terminated not as a result of disclosures about his prior conduct, but because women actively protested the fact that UI was determined to employ an individual who had been warned, by the university’s own campus police, not to enter specific buildings on campus. And yet now here we are a year and a half later, and we have yet another example of the university’s obliviousness to employee interactions with local law enforcement, even when those interactions are part of the public record, and could easily be ascertained. Whose fault is that?
The obvious answer is that it is the fault of Cheryl Reardon, who is and has been the Chief HR Officer at UI since September of 2016. If you know you have a problem, and you fail to rectify that problem, then by definition you have failed in your responsibilities. And clearly one of the core responsibilities of any HR department is determining whether or not individuals who are being offered a job have had any prior interactions with law enforcement, and what those interactions were.
As to how Reardon came to be the Chief HR Officer at UI, we know from prior reporting by the Gazette’s Vanessa Miller, on 09/22/16, that she was appointed without a search by the current and illegitimate president of the university, J. Bruce Harreld, after he himself had been on the job for less than a year. Reardon was then also immediately charged with implementing changes to the UI HR Department which were recommended by a task force led by…wait for it…Cheryl Reardon. As reported by the Press Citizen’s Jeff Charis-Carlson on 09/23/16, this was the most important component of that reorganization:
The president of the University of Iowa is reorganizing the university’s human resources offices into an independent organization that will report to the President’s Office directly.
To lead this new organization, UI President Bruce Harreld is appointing the person who chaired the committee that recommended the reorganization.
Notwithstanding the persistent incapacity of UI to determine who has and has not run afoul of law enforcement, this cozy administrative relationship has produced benefits for Harreld and Reardon. Most notably, after the University of Iowa settled two sexual and gender discrimination cases for $6.5M, Harreld immediately instructed Reardon to initiate a multi-phase, campus-wide review of employment practices. Now, over two years later, that meaningless review has progressed only through the first and smallest phase, and is now having funds diverted to pay for other initiatives in the — wait for it — HR department.
Along with a demonstrated lack of seriousness about diversity, equity and inclusion, and a lack of seriousness about preventing discrimination on campus — even after forking over $6.5M for prior abuses — we can now say, definitively, that the UI HR department, and the university generally, is completely derelict in performing even the most basic background checks on its own employees. However you want to apportion blame for those failings to the administrative tag team of Harreld and Reardon, the only conditions I would impose are that neither is blameless, and Bro Bruce’s share should not be less than fifty percent. (Does anyone think UI is a ‘world-class’ institution under Harreld’s leadership? No, no one thinks that.)
One of the very real problems with people who have a lot of big ideas — to say nothing of big egos — is that they tend not to be very detail oriented. When you can’t make even routine contact with law enforcement, or write up a set of policies which require employees or prospective employees to disclose contacts with law enforcement, then you’re failing in your responsibilities. And that’s particularly true if you’re the head of HR, or the person who hired the head of HR without conducting a search. Something isn’t working at the University of Iowa, but because we know J. Bruce Harreld is incapable of holding himself responsible for anything, it would seem incumbent on Cheryl Reardon to either take the lead and solve this persistent problem, or resign.
01/09/20 — Back in early October, the University of Iowa — which was, at that time, racing headlong to conclude a secretive public-private utility partnership — went into an absolute panic about the fact that Greta Thunberg (who would subsequently be named Time’s Person of the Year) was appearing in Iowa City. Members of the UI staff and faculty were explicitly told they could not use any official UI communications to talk about or promote Thunberg’s visit, as reported by the Gazette’s Vanessa Miller on 10/04/19:
“We cannot use our channels to publicize or promote policy change,” replied Jason Kosovski, director of marketing and communications in the Engineering College. “We are always free to publicize our research, even if it has policy impacts, but Greta’s visit does not fit under the umbrella of university research.”
He stressed faculty and staff not use college, center, or department channels to promote Thunberg’s visit.
“I have consulted with UI Government Relations, and they have emphasized that this event does not fall within the scope of something we can promote,” Kosovski wrote.
Today, however, the University of Iowa’s Center for Diversity — along with the UI Department of Performing Arts — is promoting a “Stonewall 50th Anniversary Celebration” on Twitter, on Facebook, and on the university’s own website. While I personally think that’s great — even as I also wonder if this is part of J. Bruce Harreld’s efforts to distract people from the fact that his administrative commitment to diversity is atrocious — I cannot help but think that even on the UI campus, let alone across the greater reaches of the state, some people might deem such a celebration to be political, or “advocat[ing] for policy change” at the university or across American.
Specifically, how does the “Stonewall 50th Anniversary Celebration” fit “under the umbrella of university research”? Because if the answer is that it fits in a historical context, I’m pretty sure Greta Thunberg’s visit to Iowa City could also have been promoted in that context. Except of course for J. Bruce Harreld’s determination to borrow $1.17B from a foreign energy consortium, so he could then gamble that money in the markets. (You never want to upset the people you’re borrowing from.)
01/07/20 — Annual beat coverage from the Gazette’s Vanessa Miller: Regents to review university leadership. Four years ago, when I first started paying attention to how higher education actually works, and particularly so in Iowa, I naively assumed there were real assessments and deliberations in these meetings. Now I tend to think the regents and university leaders sit around and giggle about whatever they got away with in the previous year, then game out their schemes for the coming year. Speaking of which….
Having just borrowed $1.17B at UI to make inherently risky bets in the markets, and backed by a governor whose primary goal is cutting services and outsourcing care in order to facilitate corporate tax benefits and programs for the business community, the next obvious target for the regents and toad Harreld would be the University of Iowa Hospital and Clinics — which, coincidentally, the new CEO just talked about in a couple of interviews over the past few days. (Becker’s Hosptial Review here; Gazette here.) And of course the idea that UIHC might be on the block, or wedded to a corporate partner through yet another sham public-private partnership, got a big boost last year when UIHC hired a Navigant consulting executive as its inaugural ‘chief growth officer’. (If you want to make UIHC attractive to potential corporate bidders, there is no better way to do so than by putting a corporate drone in charge of reshaping UIHC’s structure from the inside out.)
01/06/20 — As noted in the previous post (Part 6 of our ongoing, multi-part look at the UI P3), the entire con hinges on pretending that the University of Iowa is being paid $1.17B, instead of taking out a massive loan for the same amount. It’s not even a particularly sophisticated scam, but because everyone involved is playing along — from the governor right down to the shared-governance leadership at UI — it seems quasi-compelling even as the truth is blatantly obvious. Case in point, UI says that the ‘financial close‘ of the deal will take place in early March, roughly 90 days after the ‘commercial close’ on 12/10/19 — but even the term ‘financial close’ is a euphemism. Here’s how a trade website describes the same milestone in the headline to a paywalled article about the deal: University of Iowa utility P3 debt close expected Q1. ‘Financial close’ = ‘debt close’. The UI P3 is a loan, and Iowa intends to pay that loan back, plus make a profit, by investing most of that leveraged (borrowed) $1.17B in the markets.
12/31/19 — The UI Utility P3 in Context — Part 6: J. Bruce Harreld’s Long Con.
12/31/19 — This unsigned year-end summary of the UI P3 in the Gazette is disappointing not because of what it includes, but what it leaves out. Even J. Bruce Harreld himself — along with everyone else involved in the plan’s formal approval — acknowledged that there are real risks, but you wouldn’t know that from reading this assessment. So yeah, not only was the deal itself a win for Harreld, even if it ends up costing Iowans tens of millions of dollars over the next fifty years, but Harreld couldn’t have asked for more favorable treatment in this instance if the UI Office of Strategic Communications wrote this year-end summary themselves. (And we also still have no proof that the remaining $999M will be placed in an endowment, without any other cash being diverted to fund near-term objectives.)
12/30/19 — Jonathan Muller started a new blog here. Fortuitously, his second post addressed a question I had been wondering about, which was how to evaluate the current extended stock market run in the context of the UI P3. It certainly seems like any subsequent university endowment will be ‘bought’ at a market high, but until today I didn’t realize just how high.
12/30/19 — It would be easy to dismiss this terse little letter to the editor in the Gazette, concerning the UI P3, but you shouldn’t. J. Bruce Harreld’s fallback for the entire P3 is that if the private-sector company does not do a “first-class” job, UI has the legal right to bail on the partnership. Unfortunately, there are two huge problems with portraying that as a contractual advantage for the university. First, if UI bails before the $1.17B loan is paid back, with interest, the school — and thus the state — are still on the hook for all of that money. Second, as the LTE points out, the private-sector partner could effectively kill the P3 at any point simply by failing to perform, meaning it is the private-sector partner who actually controls the fate of the partnership. If, in true private-equity fashion, they can bleed any profits from the partnership early on, and they are guaranteed a return on their debt capital over fifty years whether the partnership fails or not, what incentive would they possibly have to be good stewards of Iowa’s state resources?
12/27/19 — Another personnel departure at the University of Iowa — this time at UIHC. Is $440K a lot of money? Of course. On the other hand, the strength coach for the University of Iowa football team makes $800K per year, and he’s not even a doctor. On the other-other hand, UIHC probably freaked out and tried to throw a lot more money at Dr. Chen when they realized he was serious about leaving, but he probably wasn’t leaving because of the money. Iowa’s inability to keep someone with Dr. Chen’s talents on staff is symptomatic of much greater ills. (Note also that after blowing off the most recent faculty resignations report — ostensibly to fold those numbers into the comprehensive human resources report — the Board of Regents has still not released those FY2018 numbers.)
12/27/19 — Three interesting and related articles in the Gazette — one yesterday, two today. From Vanessa Miller, a look at how the legalization of marijuana in Illinois may affect the regent campuses in Iowa. From Michaela Ramm, a story about how the state of Iowa will now mail a free opioid overdose-reversal kit to Iowans. From Robert Connelly, writing for the Quad City Times, a short piece about how Western Illinois University is exploring a cannabis curriculum. (UIHC is involved in the naloxone program.)
12/27/19 — One of the most important things I have learned over the past four years, while following the bureaucratic corruption at the University of Iowa and Iowa Board of Regents, is that there is often no connection between knowledge and action at those institutions. Where education and research are, philosophically, premised on truth, the administration of higher education in Iowa is largely premised on whim and vice, with students paying for the privilege of being victimized by both motives. Then again, Iowa isn’t alone in this basic betrayal.
From Kathryn Miles, writing for the MIT Technology Review on 12/17/19, in an article concerning the installation of high-tech ‘assistants’ (listening devices) on college campuses, and even in college dorms:
Administrators at some of these schools told me they believe Alexa will bolster enrollment and reduce dropout rates. Several also said they believe voice technology can increase their students’ success and boost their overall happiness.
Now, if you know anything about higher-ed, you know that: “bolstering enrollment” drives revenue; that “reduc[ing] dropout rates” improves rankings; that “[student] success” is a feel-good euphemism for anything that generates revenue and/or improves rankings, that “boost[ing] their overall happiness” is snake-oil grade marketing hype posing as concern for student well-being. Which is of course why that sentence includes “…they believe…” twice — because none of the people pushing these devices have any actual data to back up their self-interested claims.
(Flagged for the topic, for a stray UI mention, and for the mention of Arizona State, which bodes ill for UI students. Given J. Bruce Harreld’s tech background at ‘BM’, and his propensity for selling off the university — when he isn’t giving pieces of it away to his crony pals — his first move here will probably be changing UI leases to allow these devices to be installed by administrative fiat.)
12/25/19 — The Gazette’s Vanessa Miller has a story up today titled, University of Iowa opts against multimedia marketing partner. While it isn’t particularly surprising that UI is now characterizing itself as ‘opting out’ of a process which it initiated — like ‘opting out’ of asking someone on a date — it is worth noting that for those proposals which do not include UI borrowing a billion dollars at interest — and at significant risk to the university — Harreld’s vaunted P3 initiatives are now a perfect 0-3. (Characterize that.)
The first high-profile P3 attempt to fail @UIowa involved a 44-acre Finkbine real estate development. The second high-profile P3 attempt to fail involved dialysis services @UIHC. And now the third high-profile P3 attempt to fail involves the marketing of the entire UI campus. (The university is still apparently looking for a private-sector company to >run the UI Finkbine golf course, with its snazzy new $7M mixed-use club house, which was largely funded by a single anonymous donor. That club house, in turn, sits next to the 44-acre real estate development that nobody wants to partner on, which UI is now continuing to develop, apparently with its own money — which is probably a violation of both university and board policy, if not also state law, which prohibits competition with private industry.)
12/16/19 — So much information about the UI P3 was disclosed over the past two weeks, including the 1,800 page contract, that it is going to take a while to log everything, let alone understand it in context. The good news is that we now have a better understanding of the lies that were told during the development process, including Harreld’s consistent and utterly inexplicable lie that the P3 would not involving leasing any state assets. The bad news is that the Iowa Board of Regent is effectively its own governmental oasis, and if it wants to abet the deception of the public by its own employees there is no other agency which can curb the board’s excesses and abuses. The upshot is that we now simply have to wait to see if Harreld’s gamble pays off or cripples the university, but that in itself goes to the heart of the problem. No concerned steward of state resources would have suggested or approved that gamble in the first place.
12/10/19 — A good explainer from the Gazette’s Vanessa Miller here, covering today’s belated disclosures and breakneck approval of the UI P3. Bottom line: the University of Iowa — and thus the state — is not only borrowing $1.16B from an international consortium, in order to invest as much as $999M in the markets, but profits from those investments will be required to repay that money. That’s called leverage, which none other than Warren Buffett, among many, has long cautioned against. To say that this is a risky plan would be an understatement, and in the context of state affairs it qualifies as reckless. Note also that about 22% of that $1.16B is coming from investors in Iowa, which means they will be generating a personal profit at state expense. Not surprisingly, the board currently has no plans to disclose who those investors are, so we can presume conflicts of interest.
12/08/19 — The UI Utility P3 in Context — Part 5: A P3 Betrayal.
12/06/19 — Despite the fact that the Iowa Board of Regents said, only yesterday, that they would be reviewing four final bids over the weekend, today’s short update from the AP confirms that the University of Iowa has already selected a winner for its public-private utility partnership, and negotiated a contract with that winner — and, as Harreld alluded to in the UI webinar on Tuesday, is already working with that winner. (This P3 process is throwing off so much radiation right now it’s hard to see how it ends well.) Related op-ed from Iowa Senator Joe Bolkcom here. Report on Bolkcom’s concerns here.
12/05/19 — I don’t know what is behind this hiccup in the regents’ approval process of the UI P3 — as reported by the Gazette’s Vanessa Miller — but it is definitely a divergence from the glide path the board laid out as recently as two days ago. Now, instead of next week announcing the winner of a bidding process that already concluded, we’re being told, laughably, that the regents will receive four final ‘bids’ this week, then choose the winner after crunching the complex financials for all of four days at most. Notably, this new plan is a carbon copy on the rigged 2015 presidential search at Iowa, where four finalists were sent to the Board of Regents, which had already determined who would win. Update: In this video from the UI P3 ‘informational webinar’ this past Tuesday, you can see, definitively, that the university has already started working with a specific company, which means the statements from the regents today are lies of commission.
12/03/19 — You can see the full webinar by following the link below. It was about what was to be expected, yet so much less. No indication about who the UI P3 partner will be, or how much the ‘up-front payment’ will be, even though UI knows the answers to both questions. And no one from the Board of Regents asked, so we know the webinar was staged to provide some plausible deniability about fiduciary responsibility. As reported by the Press-Citizen’s Aimee Breaux, after putting forward a blizzard of projected financials today, the university hopes to receive board approval for the P3 only hours after finally revealing the critical elements — and it can be assumed that the regents will faithfully comply. (There is no scenario in which a legitimate governing board would participate in such a rigged process, or approve a plan after only being informed of key specifics hours earlier.)
12/03/19 — The University of Iowa’s absurd ‘informational webinar‘ for the Iowa Board of Regents, covering the pending public private utility partnership, is today at 2 p.m., and you can watch the live proceedings here. If you’re up to speed on the general premise of the P3, what you should be listening for are not outright lies — which could conceivably constitute a fireable offense, or even a violation of state law — but key omissions or elisions around issues and information the university and/or board does not want to disclose. The very fact that the regents do not even want to appear in the same room as the administrators from UI, however — and are instead conducting this passive ‘receipt’ of the webinar by technological means, gives us insight into just how radioactive this plan is, even before divulging any of the details. (If you’re not from Iowa, UI is about two hours from the board office by car, and administrators routinely make that trip multiple times a year for board meetings and other obligations.)
12/01/19 — The UI Utility P3 in Context — Part 4: Intent to Deceive.
11/26/19 — The Gazette’s Vanessa Miller has a story out today about how the Iowa Board of Regents intends to jam the UI P3 through in short order. It is not surprising that the regents waited to announce these new meetings in the shortest time allowed by state law, but it is revealing — as is the fact that $150M in bond debt will be retired when the deal goes through. For the past year Harreld and the hucksters at UI and the board have all promised that any upfront payment would be put into an endowment, while no one raised even the slightest possibility that any of that money would be used to pay off bonds. This is the kind of naked deception that passes for entrepreneurship in Iowa these days.
11/24/19 — The UI Utility P3 in Context — Part 3: The Up-Front Payment.
11/20/19 — The UI Utility P3 in Context — Part 2: The Services Agreement.
11/17/19 — The UI Utility P3 in Context — Part 1: Cause for Concern.
The UI Utility P3 in Context — Part 1: Cause for Concern
In this multi-part post we will attempt to expose the business dynamics at the heart of a proposed public-private utilities partnership (P3) between the University of Iowa and a yet-to-be-determined — or at least yet-to-be-announced — energy company. That we are obligated to speculate about the deal structure of this pending proposal, which has been in the works for the better part of a year or more, is a concern in itself, particularly given that UI is a public institution, and thus derives a great deal of its support from the taxpayers of Iowa. Should the university and the Iowa Board of Regents lock the state into a money-losing or inordinately expensive long-term contract, the people of Iowa will pay that price — although the board does have one deeply cynical out, which we will discuss at the conclusion of this post.
Unfortunately, despite their status as state employees, the president and other high-ranking administrators at UI have devoted themselves to obscuring key aspects of the proposed utility P3. Where you might expect that interested parties or concerned citizens could visit a web page or download a document that spelled out what will likely be a half-century business commitment, the university has instead posted an anemic P3 FAQ, and that document provides only the most general information, while intentionally obscuring or eliding over critical components of the proposal. (Even the four ‘information sessions’ which were held on the UI campus over the course of this year — which are listed in the timeline on the FAQ — were conducted not to inform the public, but merely to create the appearance of administrative disclosure, which can then be cited as proof that UI fully communicated its intent.)
From the official UI P3 FAQ, here are the only sections which provide any specific insight into the prospective deal:
Even if you know nothing about public-private partnerships — and I certainly didn’t until this deal was announced in early 2019, and I began reading up on the subject — these sections from the UI P3 FAQ should prompt one question in particular. Why would an energy company provide the University of Iowa with a “lump sum upfront payment”, when said company will also take responsibility for providing the power produced by the UI power plant? In the abstract it’s not hard to imagine there might be some mutually beneficial tax advantage to having a private-sector company run the university’s power-generation, and other utilities, but why would that company give UI a lump-sum upfront payment for that privilege? (As noted in a prior post on the subject, you wouldn’t expect an upfront payment if you hired a lawn-care company.)
Not only does the P3 FAQ not address this question, but the question is avoided and evaded in every single public comment I have read about this prospective deal. That there will be an upfront payment is heavily promoted — apparently to prompt avarice in the UI community — but why that money will be given to UI is never fully explained. And the very fact that it is not explained, including particularly in the official UI P3 FAQ, should make clear that the university does not want to answer that question. The president and administrators at UI are thrilled to talk about the big pile of money UI will get, and how they’re going to put that money in an endowment and generate revenue “today and into the future”, but not why that money is being given to UI, or, more importantly, what that big pile of money will cost the state.
We know definitively that the question is being avoided because the current president of the University of Iowa — J. Bruce Harreld — is not only a product of the private-sector, as opposed to being an academic administrator, but he has a Harvard MBA, and is thus well-versed in the importance of understanding all aspects of a business deal. If we don’t know why UI is getting a “lump sum upfront payment”, the reason we don’t know is not because we’re stupid or lazy, but because Harreld has intentionally omitted that explanation. (Unfortunately, under Harreld’s leadership UI no longer functions like a public university, but like a private-sector entity itself.)
The whole premise of Harreld’s appointment — which was rigged by the crony Iowa Board of Regents — was that he alone had the kind of super-colossal business brain that was necessary for UI to weave its way through a nationwide funding crisis in higher education. (Never mind that the same crony board subsequently promoted an academic lifer to lead Iowa State, which had and still has significantly greater financial issues than UI.) In that context, the fact that Harreld has not explained why UI is getting a massive upfront payment means he doesn’t want to explain that part of the deal, not that he can’t explain that part of the deal. Then again, to be fair to Harreld, that also applies to UI Chief Financial Officer and Treasurer Terry Johnson, and to UI Senior Vice President for Finance and Operations Rod Lehnertz, who have also avoided explaining why UI will receive a cash windfall for signing onto a utility P3. (Per the UI org chart for central administration, Johnson reports directly Lehnertz, and Lehnertz reports directly to Harreld.)
Not only has no one at UI answered that foundational question, but no one at the Board of Regents has either, despite weighing in on other aspects of the proposed deal. In fact, one board member in particular — David Barker, who was appointed just this year, and as a former economist at the Federal Reserve Bank of New York also clearly has a super-colossal business brain — recently commented on the P3 in specifics. That Barker likewise avoided explaining why a private-sector company would throw a massive pile of cash at UI means he, like Harreld, also chose to omit that explanation, not that he couldn’t explain it.
Despite the universal conspiracy of silence on that question, however — whether coordinated or not — it is also worth noting that while Harreld and Barker both have super-colossal business brains, they diametrically disagree about another core aspect of the proposed deal, which is whether the UI P3 will involve leasing university assets. From his earliest comments at the beginning of the year, to the following recent quote, Harreld has been entirely consistent in saying that the university will not be leasing any assets. From the Daily Iowan’s Charles Peckman, on 10/10/19:
Barker, on the other hand, recently asserted that the P3 will involve leasing UI assets to a private-sector company. From the Gazette’s Vanessa Miller, on 10/24/19:
To our concerns about the UI P3 based on a consistent lack of candor from the very people who are advocating for that murky proposal, we can now add concerns about the fact that two people with super-colossal business brains are giving us mutually exclusive explanations about how that deal will work. Just as we would be uneasy if a pilot and copilot gave us contradictory inflight briefings, it is not illogical to wonder whether we should have any confidence in either of these business geniuses. (Fortunately, in the case of leasing UI assets, we will in due course find out whether Harreld or Barker was correct, and that in turn will provide us with yet another substantive basis for questioning the crony appointment of whomever is wrong.)
Exacerbating our concerns about both the omission of critical information and the presence of contradictory information, not only is the UI P3 FAQ silent on the question of why UI will be given an upfront payment, it is also silent on the question of leasing, despite explicitly stating that any public-private partnership will not involve the sale of any university assets. Even after multiple statements from the university president in the negative, and contradictory statements between the university president and a member of the university’s governing board, no one has updated the P3 FAQ to provide that information or clarify that contradiction. And again, that can’t be by accident, because that’s the whole point of having an FAQ.
While they both undeniably have super-colossal business brains, and their professional backgrounds are indeed relevant to the analysis of public-private partnerships, it is also important to remember that Harreld and Barker are in a position to influence the outcome of the P3 not because of their professional experience, but because of crony politics. There are in fact plenty of people in the world who have the same qualifications or better, but the reason Harreld gets to drive the UI P3 debate is because he’s the little buddy of UI mega-donor Jerre Stead, and was hired on that basis. Likewise, although Barker is a former economist, the reason he’s on the Board of Regents is because he shoveled $63K at a bunch of Republican politicians, including spending tens of thousands of dollars to fly Iowa Governor ‘Casino’ Kim Reynolds around on private airplanes, which is her political fetish.
But still! Other than the fact that they are in diametric disagreement about a key aspect of the prospective UI P3, and both men are only in a position to comment on that prospective P3 because of crony appointments, we can still say with one hundred percent confidence that they are both lying by omission about why a private-sector company would want to give UI a “lump sum upfront payment”, in exchange for the right to then also run UI’s power plant and utilities. They clearly must know, but neither man — nor any of the other individuals who have commented on the P3, either at UI or at the board — have offered an explanation. (If either or both of them really don’t know, that’s obviously an additional concern, because it would mean the people at the bargaining table on behalf of Iowa’s taxpayers are also imbeciles.)
Finally, and further eroding our confidence, while multiple participants have variously described the P3 selection process as nearing completion, if not rapidly so, we also have multiple instances of UI spokespeople insisting that the development process is only in the exploratory stage. From the Daily Iowan’s Eleanor Hildebrandt, on 10/08/19:
So which is it? Is the UI utility P3 about to be concluded, or is it still only in the “exploration phase”?
From the Gazette’s Vanessa Miller, two days later, on 10/10/19, reporting on a speech that same day by J. Bruce Harreld:
Whether this administrative dissonance is the result of incompetence, or part of a deeply cynical if not corrupt attempt to jam this deal through before anyone understand what it entails, I leave for you to decide. Knowing what you now know, do you have confidence in the people who are breathlessly driving this process to fruition, or do you share the concerns outlined above? At minimum, this is precisely why this post is necessary, because a $4B public research university cannot explain what it is doing even when granted endless opportunities to do so. Unfortunately, because we are saddled with omissions and incoherence, and this kind of deal making is not particularly well understood by the general public, it is entirely possible that we may get some things wrong in trying to understand what is happening — but again that’s only because the people who do know aren’t talking.
Unlike the intentionally vague UI P3 FAQ, however, or the mutually contradictory and evasive statements emanating from the university and the regents, this blog is open to the public, and anyone from private citizens to public officials are welcome to add comments that clarify uncertainties or correct mistakes. (In fact, from the absence of any subsequent commentary or corrections we can infer that we are on the right track, which would be reassuring.) If there’s one thing I believe we can agree on, however, it’s that the taxpayers of Iowa should have all the information they need in order to understand this prospective deal, before a few hand-picked cronies commit the University of Iowa to a half-century contract which could ultimately cost more than any revenue generated by a consequent endowment at UI.
In order to structure the remainder of this multi-part post, we will pare down the excerpt from the UI P3 FAQ quoted above to the following single sentence, which we will then parse in the context of any other relevant or illuminating information that we have at our disposal — which is admittedly not much:
In this single sentence we have all three of the main components of the proposed UI utility P3: a long-term “services agreement”, an “upfront payment”, and an “endowment” which will be funded by the upfront payment. What we do not know, because no one has provided a detailed explanation, is how those components relate to each other, and how the state will profit — or at the very least, preclude taking a loss over the course of the deal. Still, it should be possible to come to some plausible if not likely explanation as to why the university is considering this deal, and that in turn may explain why UI and the regents have consistently deprived the public of information.
And no, often-invoked concerns about trade secrets or confidentiality do not apply, precisely because no deal has yet been struck. If full public disclosure would have had no effect on the outcome, or improved the outcome, then Harreld would have already explained what he was up to, if only to impress. That Harreld has not done so means publicly disclosing the deal structure would actually make approval of the UI utility P3 less likely, even though that structure has been freely communicated to all of the private-sector energy companies who are currently bidding on the deal.
Part 2: The Services Agreement
The UI Utility P3 in Context — Part 2: The Services Agreement (Part 1)
While the basic idea of a public-private partnership (P3) is straightforward, such deals can be impenetrably complex even if they are otherwise legitimate. Unfortunately, in such complexity we also have an obvious opportunity for corruption, and that’s particularly true in instances where the public party confers confidentiality on the negotiations and subsequent contract, under a pretense of protecting the private-sector party’s trade secrets. As such — and based on prior statements by the University of Iowa about this particular deal — we can fairly assume not only that we are never going to get an advance look at the details of any consequent agreement, we will likely never be privy to specifics of the deal at all. What we can do, however, is get our minds around how a P3 might work in the absence of any intent to deceive, then compare that ideal to the messaging and information we have been getting from the University of Iowa and the Iowa Board of Regents.
In the context of a utility P3 at the University of Iowa, imagine you are in charge of a public university, which owns a power plant that provides energy for your campus. On an annual basis that plants costs $1M, but you don’t have to pay for any of the resulting power. (The UI power plant costs considerably more than $1M to operate each year, but here we’re just trying to understand the basic concepts. We will wrestle with larger and more likely numbers later, particularly regarding the upfront payment.)
In researching ways to decrease your energy costs, your administrative teams comes across a section of the tax code which is advantageous, but the fine print says you can’t take those deductions because you’re a government entity. If you were a private-sector university you could take advantage, but because you’re publicly funded you can’t — so what are your options?
Because tax laws apply to legal entities, one way to get around that problem would be to partner with a private-sector company that could take advantage of those tax deduction — which is indeed what UI intends to do. If the tax code offered savings of $100K per year, and you leased your power plant to a private-sector partner who satisfied the applicable requirements, you could then split that savings and both come out ahead. In reality nothing would change except a private-sector energy company would be acting as a front for tax purposes, most likely by leasing your power plant under the guise of a “professional services agreement”.
Assuming a fifty-fifty split of the profits, here’s how that would work for both parties:
Before P3:
Power plant cost to school: $1M
Energy cost to school: $0K
After P3 Tax Advantages:
Power-plant cost to school: $0K
Power-plant cost to private-sector partner: $900K
Energy cost and/or services fee to school: $950K
The original cost of energy production on your campus was $1M. In exchange for signing a professional services agreement, and nothing else, your energy cost drops to $950K, which you pay to your private-sector partner. Your partner also profits by $50K, because after they exploit the tax benefits you could not use, their cost is only $900K. It’s the exact same power plant, it’s producing the exact same energy, but because a private-sector company slapped their name on your operation — thus qualifying as the ‘owner’ of your power plant under the tax code — everyone comes out a winner, except for whichever treasury got stiffed for $100K.
Regarding the University of Iowa, this example seems to be what J. Bruce Harreld was talking about when he said the following — as reported by the Gazette’s Vanessa Miller, on 10/10/19:
Notwithstanding Harreld’s tendency to characterize himself as uniquely perceptive, there is nothing unique or perceptive about the proposed UI P3, which comes to us from a similar deal at Ohio State in 2017, which was in turn modeled on a pioneering utility partnership at the University of Oklahoma in 2010. To the extent that federal, state and/or local tax codes can be legally exploited to turn a profit, then yes, that “value” has “been there for a long, long time” at the University of Iowa — or at least as long as the applicable laws have been on the books. By the same token, however, one can perhaps see why leaders of good conscience in public higher-ed have been and still are reluctant to screw the general population out of revenue to generate a profit for themselves, let alone for a private-sector energy company.
Whether such trickery is now warranted in the face of declining legislative support for public higher education, or is simply a cynical rationale offered by a new breed of higher-ed mercenaries who are shafting the general public in service of their own profit-making aims, we will leave for another day. (And to be fair, if the government didn’t want private-sector energy companies screwing the public out of tax revenue, elected officials would not have passed those tax laws in the first place, after accepting large-scale campaign donations from the very people who ultimately profit from such loopholes.) In the context of the simple P3 example detailed above, however, the most notable feature of that deal is not the savings, but just how little substantive change took place in order to generate a profit for both parties.
On paper, the professional services agreement between your university and the private-sector partner you contract with makes it look as if you are now buying power from another source, but that would only be true in a narrow legal sense. The power plant would be the same, and whether the private-sector partner merely provided managerial oversight or took on your utility employees, many of the people doing the actual work of power generation would be the same. To you, the only real difference would be that instead of paying $1M per year for power, you would be paying $950K, while from the private-sector partner’s point of view, all they would have to do is front for you in the P3 deal, for which they would get an equal share of the savings, or whatever percentage was specified in the services agreement. As to any actual services being provided to you, there would essentially be none.
As previously noted, however, even in an otherwise legitimate and fully disclosed P3, the complexities and permutations could be impossible to follow if you were not fully versed in the arcana of federal, state and local tax codes, to say nothing of energy-industry best practices. For example, the private-sector company could act as more than a front, potentially reaping even greater tax benefits while also providing the same power at reduced costs — perhaps through more efficient equipment or operations. If you didn’t have the proper contract in place that would mean more profit for your private-sector partner, while you continued to pay $950K per year for power — which would still represent a savings — but there is also nothing to prevent you from taking a contractual cut of those additional benefits.
Before P3:
Power plant cost to school: $1M
Energy cost to school: $0K
After P3 Tax Advantages:
Power-plant cost to school: $0K
Power-plant cost to private-sector partner: $900K
Energy cost and/or services fee to school: $950K
After P3 with Tax Advantages, Upgrades and Efficiencies:
Power-plant cost to school: $0K
Power-plant cost to private-sector partner: $800K
Energy cost and/or services fee to school: $900K
In this scenario, as a result of actual services being provided by your private-sector partner, the total cost of generating the same amount of power has been cut by $200K. That means the university is now saving $100K per year for the same energy — half of the $200K savings — and the private-sector partner is also making $100K each year, which is the difference between their cost and what your school pays for power. (Because the split is still 50-50, everyone is also incentivized to continue the partnership, but those percentages would ultimately be defined by minutia in the contract between the two parties, which could easily run a thousand pages or more.)
In terms of the UI P3, we can see from reporting over the past year that tax advantages will indeed be a critical component of any services agreement that may be struck between the university and a private-sector energy partner. From a Daily Iowan interview with J. Bruce Harreld, on 03/11/19:
If you are genuinely interested in trying to understand the basis for the UI utility P3, you should read that entire interview because Harreld goes on at considerable length, beyond the quoted passages. As noted in a prior post, however, Harreld’s tendency to talk also routinely exposes fault lines in his reasoning, and here we have a logical chasm. Specifically, after insisting that UI “will still own the plant”, and UI is “not leasing the plant, we’re not selling the plant, so we’ll still own it”, Harreld then says “sometime in the future, it will revert back to our ownership”. Because we don’t yet know whether the UI P3 will or will not include a lease, we don’t know whether Harreld was merely being incoherent or outright lying, but in any event the logical contradiction is obvious. Not only does that contradiction add to our growing list of concerns about the UI P3, but given that Harreld issued that blather months before his recent contract extension and pay increase by the Iowa Board of Regents, it adds to our list of concerns about that oversight body as well.
Continuing with another example of how tax advantages will form the basis of any shared cost savings in a P3 between UI and a private-sector partner, we have this from the Gazette’s Vanessa Miller, on 05/07/19:
And of course from the UI P3 FAQ we have this, as excerpted in Part 1 of this post:
On its face there is nothing inherently wrong with a public-private partnership regarding utilities or anything else. Even if the entire services agreement is simply a front for a legal tax scheme, both parties could profit, and if genuine synergies are involved that profit could increase. (Although the cost of implementing such a partnership might easily run into the millions of dollars, and require additional millions in oversight and ongoing due diligence as the partnership evolves, it could still be worthwhile from a purely financial perspective. Which is of course why such deals deals are relatively commonplace these days, at all levels of government.)
With regard to public higher education, as previously noted and as obliquely referenced by Harreld in the quote above, any prospective UI partnership owes a direct debt to the P3 that was pioneered at Oklahoma University in 2010. In that deal — in a state known for and reliant on energy production, which would later become a national leader in fracking — the school’s publicly-funded utilities were effectively privatized for fifty years.
Flash forward the better part of a decade, and such agreements in higher-ed are no longer limited to public-private partnerships. In fact, energy companies have even begun initiating such deals themselves, just as any service provider would make their services known to potential customers. For example, on 08/30/19 the Gazette’s Vanessa Miller reported on a partnership between Cornell College — a small, private, 166-year-old liberal arts college in Mt. Vernon, Iowa — and an energy company looking to leverage its expertise:
Setting aside any other aspect of a utility partnership, including tax advantages, there are clearly legitimate reasons to explore the possibility that a private energy company could produce efficiencies in operations, whether at private Cornell College or at the publicly funded University of Iowa. Even in instances in which a partnership is simply a front, however, and all benefits are derived from exploiting the tax code, what we can say with certainty — even if we have no idea what the specifics of a deal entail — is that the entire justification for such a partnership hinges on generating savings in one manner or another, or in combination, from the services agreement between the two parties. Whether in the simplistic examples above, or any examples you can imagine, the cost of energy for the school would decrease, or there would be no point to the partnership.
Having said that, it is also important to note that here we are assuming that the members of the Iowa Board of Regents, and senior administrators at UI, intend to act in accordance with their fiduciary responsibility to the state. Unfortunately, people in positions of governmental authority can also act as agents on behalf of private-sector, for-profit companies, which seek not a mutual benefit but the looting of government coffers. For example, what is promoted as a partnership to build a new, state-of-the art sporting venue often turns out to primarily benefit the private-sector partner, while sticking taxpayers with the bulk of the costs. Whether anyone at the board or the university may be acting on behalf of constituents other than the people of Iowa we do not know, but if we did have any suspicions those would obviously fall on appointees who secured their positions of authority based not on their qualifications, but on crony political or business connections.
Assuming for the sake of argument that better angels in state government will defeat any such corruption, we are still left with considerable uncertainty not only from the secrecy of the deal-making process, and from the blithering incoherence and blatant contradictions of those public officials who have attempted to describe (or obscure) that process, but also because of the manner in which UI expects to be compensated. As the UI P3 FAQ makes clear — and as every UI administrator and regent commentator has emphasized — the most important part of any prospective utility deal is the “lump sum upfront payment” the university expects to receive for signing a long-term services agreement, which the school will then deposit in an endowment. That “payment”‘ will ostensibly be premised on savings derived from the services agreement, but the very fact that a private-sector company may hand a check for hundreds of millions of dollars to a department of state government not only changes the nature of the overall contract, it opens the door to a method of corporate profiteering which would be particularly difficult to expose without intensive analysis of the underlying deal. We will broach those related issues in the next post.
Part 3: The Up-Front Payment
The UI Utility P3 in Context — Part 3: The Up-Front Payment (Part 2)
In 2010, the University of Oklahoma pioneered the concept of a public-private utility partnership in higher education by striking a deal with Corix, an energy company based in Vancouver, Canada. The impetus for that novel, long-term, and purportedly mutually beneficial relationship, however, was not innovation for its own sake, but — as has been said about necessity being the mother of invention — grave concern about two distinct financial threats facing the school. First, Oklahoma was carrying a massive amount of bond debt that required servicing, meaning the university had to make steep annual payments to the individuals and organizations holding those financial IOU’s. Second, at the same time that OU was short on cash, the then-president expected near-term state funding cuts, because the state itself was still on precarious financial footing only two years after the Great Recession commenced in 2008.
In that context, here is how the OU-Corix deal was explained in the Oklahoma University Daily, on 04/25/11:
And here is how Corix reported the same deal, in March of 2012, in a document produced for the Kentucky Public Service Commission:
The University of Oklahoma needed cash, and in return for signing what is called a ‘concession agreement‘, Corix fronted between $118M and $120M to the school. (The difference in those reported amounts seems to be a separate $2M endowment that Corix also established at the university.) Despite all of the financial information contained in the above quotes, however, including multiple deal points and potential destinations for that mountain of cash, nowhere are we told why Corix paid that money to the University of Oklahoma. We know what the overall deal looks like — that Corix paid $120M or so for the privilege of running OU’s power plant and other utilities — but on its face that obviously makes no sense.
While that eye-popping windfall at OU did attract considerable notice in the higher-ed industry, it wasn’t until 2015 that another public university took a serious run at a similar large-scale utility partnership. In late February of 2015, after working internally for over a year, Ohio State University put out a request for qualifications (RFQ) for a private company to lease and run its own utility operations. In publicly framing the goals of that potential partnership, OSU administrators primarily focused on the annual savings that would be derived from the resulting services agreement:
Now, were we given to suspicions about the credibility of the individuals and organizations that advocate for such partnerships, we might be brought up short by the uncanny coincidence that both Corix in 2010 and Ohio State in 2015 referenced the same $600M figure in describing the scale of their future commitments. Admittedly, Corix seems to have been referencing its own “50-year capital investment” in OU energy infrastructure, while OSU “project[ed] spending $600 million on its utilities in the next 50 years”, so we don’t know if OSU’s projection references spending on infrastructure or not. Not only is such numerical consistency unlikely on its face, however, but that’s particularly true given that OU and OSU are considerably different in scale. (While Oklahoma is almost identical in size to the University of Iowa, with approximately 32,000 students currently enrolled on each campus, Ohio State is twice as big, with 66,000 students enrolled.)
Setting aside any paranoia that OSU simply grabbed talking points off the rack from the OU-Corix deal, and ignoring carnival-like rhetoric such as “win[ning] the contract”, Ohio State’s overall messaging about efficiencies was understandably quite similar to the justifications put forward by Oklahoma in 2010, and those being espoused by University of Iowa in 2019. The whole point of a utility P3 is of course to bring in private-sector pros to run a university’s operations, as opposed to the public-sector pros who already know those plants better than anyone, and will probably end up being absorbed by the private-sector partner anyway, meaning the same human beings will still be doing that job under the P3. But I digress….
Despite championing the savings from a public-private partnership, and implying that benefits would accrue to both parties on an annual basis over the life of contract, the Ohio State RFQ [p. 3] also made clear — as the University of Iowa is emphatically making clear today, and OU made clear in 2010 — that a massive up-front cash payment would be central to any prospective deal:
We will consider the implications of this ‘opportunity’ in the context of the UI P3 shortly, but for now simply note that once again we have explicit mention of an up-front payment without any explanation as to what that payment is for. Ohio State wanted to “realize value through a substantial up-front payment”, and the private-sector partner would “receive a return on its investment…through…rate setting mechanisms”, but it was not at all clear why any private-sector company would cut Ohio State a massive check at the commencement of an otherwise synergistic partnership.
Flash forward a little over two years, and in April of 2017 the good people at the Columbus Dispatch tried to explain what they described as “Ohio State’s big, complicated energy deal”. (OSEP is the acronym for Ohio State Energy Partners — a joint venture between two private-sector companies that engaged in the partnership.)
Having already stipulated that it is impossible to know what is going on inside a P3 unless we have the entire contract in our hands — and perhaps not even then — here we have enough information to do a bit of simple math, which will in turn help expose the underlying money flows. (If you would like to read the OSU concession and lease agreement yourself, you can do so by perusing the five documents listed on this page, under the heading of ‘Concession and lease’ — which collectively run 2,665 pages.)
Although OSEP joined the OSU P3 to drive synergistic benefits for itself and Ohio State, they also fronted over a billion dollars for that ‘opportunity’. In return, OSEP would be paid a “fixed fee each year that would start at $45M”, plus an annual “operating fee” starting at $9.2M — the latter of which would be “adjusted each year based on the university’s actual costs”. Meaning that Ohio State would simply calculate what it would have had to spend to continue running its own utilities, then give that same amount to OSEP for doing that job, along with repaying its new energy partner for any upgrades or new buildings, plus a massive annual fixed fee. (If you’re wondering why the “operating fee” is separate from the “fixed fee”, when the whole point of a utility partnership is to pay a private-sector company to run a more efficient operation, and thus pass on any savings, that’s a good question.)
Even if we don’t know what the $1.1B up-front payment was for, and even if we are severely math-challenged, it should be clear that despite the initial windfall, Ohio State will send a massive amount of money to its energy partners over the life of that fifty-year deal. Just calculating the minimum $45M “fixed fee” payments for 50 years gets us to $2.25B, and if we add in 1.5% annual increases to compensate for inflation, and $9M or so for the annual “operating fee”, we jump to roughly $2.75B being passed to OSEP over that time. Which, incidentally, is a whopping $2B more than the $600M Ohio State estimated it would spend over the same half century.
So what’s going on here? Why, in a partnership premised on synergies and annual savings, are massive amounts of money being passed back and forth? What we should expect is that profits would be determined on an annual basis from tax advantages and operating efficiencies, then split per terms in the contract. Instead, we see a billion-dollar check go out at the beginning of the deal, for reasons that are never articulated, then almost $3B will flow back to OSU’s private-sector partners over the life of the P3.
To better understand what happened in the OSU deal — or at least what purportedly took place — let’s return to the last iteration of our super-simple P3 example, from Part 2 of this post. Assuming again that you were originally paying $1M for energy at your university, prior to entering into a public-private partnership, here’s how you and your partner profited:
After P3 with Tax Advantages, Upgrades and Efficiencies:
Power-plant cost to school: $0K
Power-plant cost to private-sector partner: $800K
Energy cost and/or services fee to school: $900K
After one year, because of $50K in tax advantages and $50K in operating efficiencies, you would save $100K on your energy costs, while sending $900K to your private-sector partner for the same amount of energy that used to cost you $1M. At the same time, your private-sector partner would also make a profit of $100K, premised on tax advantages and efficiencies, which is the difference between their cost to produce the energy they sell to you ($800K), and the amount you pay them for that energy ($900K).
If you had not entered into a public-private partnership, over fifty years you would have paid $50M to provide your campus with energy. Because of the tax advantages and efficiencies in your P3, however, you only pay $45M for the same energy over the fifty-year term of that deal. Truly — at least in theory — this P3 is a win-win, and a valid basis for such a partnership.
While saving 10% on your annual costs over half a century would obviously be a good thing, however, let’s add another wrinkle to the context surrounding your decision making. Imagine that just prior to signing your P3 contract you are beset with one or more financial crises, as Oklahoma was in 2010. While tearing apart the university couch cushions looking for loose administrative change, it occurs to you that you could ask your private-sector partner to give you all of your expected P3 savings up-front, in a lump-sum of $5M, instead of waiting for $100K in savings to accrue each year. Unfortunately, however, while that certainly sounds mathematically reasonable, there are two very big problems with your math, and those problems would cause your private-sector partner to reflexively laugh in your face, even if they otherwise thought you were swell.
(Speaking of problems with math…for the sake of simplicity, and because the correct math is beyond me, in what follows we will treat your $5M as payable at the end of fifty years, rather than accruing by $100K each year. That will necessarily mean some of the numbers we come up with are too aggressive, but here we are more interested in the general implications of your request than any specific amounts. Countering that bias, however, we are also going to ignore the fact that inflation should be compounded over time, which will make any calculations significantly more tame than they should be. Finally, in the context of both our theoretical discussion here and the prospective UI P3, note that the average annual inflation rate from 1914, when that metric was first tracked, to today, is about 3.14%, meaning smaller assumptions will also tend to understate results.)
The factor common to both of the problems with your up-front payment idea is that money does funny things when it travels forward and backward in time. Even if you’re not a financial wizard, however, you probably do have some familiarity with what happens to current dollars that travel into the future, and future dollars that travel back to now. For example, you probably know that ‘inflation‘ describes the tendency of goods to increase in cost over time, which has the consequent effect of decreasing the purchasing power of your money. If you have a dollar in your wallet at the beginning of the year, and inflation runs at 2%, then at the end of the year something that originally cost $1 would cost $1.02 — meaning the purchasing power of your dollar would have been reduced to just over $0.98.
While that difference may seem small, over longer time spans the effect can be considerable, and that’s the first problem with your math. If you have a dollar in your wallet, and you lose your wallet for fifty years, when you finally locate your wallet you will still have the same dollar, but assuming a relatively low 2% annual inflation rate the cost of goods would have increased 269%. That means something that originally cost $1 would cost $2.69 fifty years later — or, alternatively, that your dollar would have lost 63% of its purchasing power, and only be worth $0.37 today. (Even if you have never thought about how inflation works, and how it affects the future value of present money, you probably still know that you need to protect any retirement savings by investing in a money-market account or similar safe haven, to protect the purchasing power of those dollars over time.)
As these examples should make clear, the present value of future money is also impacted by inflation, only in reverse. If you expect to have $2.69 fifty years in the future, the present value of that money is $1 — again assuming non-compounded 2% annual inflation. Likewise, if you expect to have $1 in the future, using those same inflation assumptions means your dollar is currently worth $0.37 in today’s money.
The second problem with your seemingly reasonable request for an up-front payment of $5M — which we will only touch on here, but expand on in a subsequent part of this multi-part post — is that the value of money is not only affected by macroeconomic factors over which you have no control, but by voluntary choices that you make about what to do with your money. For example, even if you are relatively risk-averse you can often beat inflation with conservative investments, meaning you won’t merely protect the value of your money, but increase that principal over time. Unfortunately, that also means that if you ask your private-sector partner to give you $5M up-front, one of the things you’re asking them to do is to give up whatever profits they could have made on that $5M over the next fifty years. And no matter how personable you are, they are not going to want to do that.
If we again assume 2% annual inflation, but add a 5% annual return on $5M invested, that net 3% increase, compounded each year, would amount to almost $22M at the end of fifty years. And because your private-sector energy partner will have plenty of financial advisors on the payroll, and more financial advisors on retainer, they would know they would be giving up $22M to give you $5M up-front. So not only would your partner say no to that request, but if that company did have $5M in cash lying around, they would put that money into the market themselves and pocket that $22M — while still saving you $100K per year from their part in the P3.
Apart from any sloppy math, however, and despite concepts that can be genuinely confusing, we can keep the general contours of any up-front payment straight if we just remember — notwithstanding deflation or currency manipulation, and setting aside profits or losses in the marketplace — that a dollar today will always be worth more than a dollar tomorrow. And that in turn means that future dollars will also have to be discounted if we want them today. On that point, however — and momentarily ignoring concerns about lost revenue, and how that might be made up in the following transaction — what your private-sector partner might be willing to do is give you the current value of that future $5M in today’s dollars.
Again assuming annual inflation of 2%, $5M fifty years from now would be worth approximately $1.86M, which is certainly not what you were hoping for, but still a sizeable chunk of money. (On this page you can confirm this crude calculation by starting with $5M and calculating back, or starting with $1.86M and calculating forward. Note also that if inflation equaled the historical average of 3% or so, you would only get $1.14M, so negotiating the anticipated inflation rate in your P3 would also have a considerable effect on how much money you received.)
While you might not be thrilled that your future $5M is only worth $1.86M in today’s dollars (or even less), if you really needed cash — as Oklahoma did in 2010 — you might have no other option but to negotiate for the best possible terms. On the other hand, if you didn’t need that money to meet any fiscal obligations, as Ohio State apparently did not, it might also occur to you that you could put that $1.86M into the market and generate more than 2%. Meaning after fifty years you would not only have preserved that $1.86M, but you would have increased it substantially, perhaps well beyond $5M. (Again, we’re ignoring the fact that your private-sector partner would know that, and would still expect to be compensated for losing that opportunity even if they only gave you $1.86M.)
As you probably know, the traditional way that colleges and universities put money to work to protect against inflation and generate revenue is by establishing an endowment, so this would seem to be the perfect point to transition to a discussion of the endowment that UI intends to fund with a massive up-front payment from its own P3. Before we do that, however, we are going to have a tangential discussion about how easy it would be to abuse the mechanism of an up-front payment to facilitate transactions that are not in the public interest. For example, if you really did need — or perhaps just wanted — more money than you had coming from the services agreement between you and your private-sector partner, how might you use your P3 to achieve that goal? Likewise, even if you planned to invest your up-front payment in an endowment to protect and grow that capital, you might find yourself thinking you could make more money, and thus also spend more money, if you funded an even larger endowment, provided you could get your hands on more cash.
It is of course a terrible thing to suggest that appointees and state employees at the Iowa Board of Regents and University of Iowa might abuse their powers to facilitate deception, but on the other hand the entire premise of an “up-front payment” is itself an orchestrated rhetorical fraud. Even after reading this post it is probably hard to see that because the regents and UI administrators are doing everything they can to sell the idea of a financial windfall, but when we peel back the messaging — as we will in the next post — it is clear that they intend to deceive the public. (To what ends we don’t yet know, but in service of promoting the UI P3 they are not being straight with the people of Iowa, and they know it.)
In the context of this post, however, whatever else we got right or wrong in all of the above, we finally do know what the so-called “up-front payment” is for in the UI P3. What the University of Iowa is telling prospective energy partners is that UI wants to take out all of the revenue it expects to derive from that plan in a single lump-sump payment when the partnership commences. As just discussed there are a lot of moving parts to such a demand, and there will be critical negotiations about various assumptions, including the expected rate of inflation, but once both parties agree on what the fifty-year benefit will be, however, figuring out the present value of that future flow of money will simply involve plugging in the right information and calculating the results. The implications of structuring a P3 in that way, however, are actually quite profound, and present considerable risks to the state that have not been discussed by any advocate of the UI P3.
Part 4: Intent to Deceive.
Based on your November 24 Ditchwalk, how about this Chronicle of Higher Education report on another Oklahoma fiasco, reported on the same day as your latest column.
https://www.chronicle.com/article/How-a-250-Million/247607
Not only are you right to connect the dots in this multi-part post — concerning the University of Iowa’s prospective public-private utility partnership — to recent events at the University of Oklahoma, but I have a section devoted to the specific debacle detailed in that CHE article.
It is particularly ironic that the school which pioneered the high-dollar P3 in higher-education, and subsequently hired a private-sector crony with no experience in academic administration, is now unleashing chaos on the business sector as a result of blowing up another public-private partnership.
(The rage among normally staid bond investors and bond-market advocates is something to behold.)
The UI Utility P3 in Context — Part 4: Intent to Deceive (Part 3)
Whatever your personal convictions about the integrity of illegitimate University of Iowa president J. Bruce Harreld, or anyone on his executive staff or at the Iowa Board of Regents who has publicly commented on the prospective public-private utility partnership at UI, we would all agree that these are highly educated individuals. As such, we would thus be justified in assuming that those individuals know the importance of choosing the right word or phrase to accurately convey meaning, and that’s particularly true when explaining their intentions to the taxpayers of Iowa, whom they all serve. Likewise, were we able to show that any of Iowa’s governmental stewards were using words to deceive the public, we would also be justified in concluding that they were doing so for reasons which were not in the best interests of the people of the state of Iowa — which would in turn mean they had breached their fiduciary obligations to the state.
In Part 3 of this multi-part post we asked an obvious question, which is why any private-sector company would provide a ‘massive up-front payment’ to a public research university, in apparent exchange for then also running that institution’s utility operations. And of course no for-profit company would pay for the privilege of providing a service for which they themselves expected to be paid. In plumbing the depths of that conundrum, however, we concluded that what Oklahoma did in 2010, and Ohio State did in 2017 — and what Iowa intends to do this year — is take out the expected profits from their public-private partnerships at the beginning of their respective deals.
For reasons articulated in that prior post, taking anticipated profits ‘up-front’ would also necessarily involve discounting the future value of that calculated sum, along with compensating the private-sector partner for their own loss of future revenue from that pile of money. Meaning the universities, and not the private-sector companies, would pay a price premium for early access to those funds. To the extent that we have resolved the financial mystery of what those ‘up-front payments’ represent, however, we are still left with a nagging concern.
Specifically, in what sense can that money be fairly described as a ‘payment’ of any kind? Because although that probably seems like a semantic complaint, that question goes to the heart of the deception that Harreld and his fellow hucksters are intent on perpetrating at UI. They know using the word ‘payment’ makes it seem like the University of Iowa is owed that money, yet that is clearly not the case because such a ‘payment’ will occur at the commencement of the public-private partnership, long before any savings or profits could possibly be realized.
(For the record, not only do I usually take a very dim view of semantic distinctions, but I believe there is a special place in hell for pedants who argue over language while ignoring the real-world implications of any hair they are trying to split. In this case, however, not only do I think use of the word ‘payment’ speaks directly to Harreld’s intent to deceive the public about what the UI P3 entails, but by the end of this post I believe you will agree with me. In fact, not only will you understand why use of the word ‘payment’ is inappropriate and intentionally deceptive, but why any purported ‘up-front payment’ to UI actually represents the assumption of a financial obligation by the school. And that of course means the Iowa Board of Regents will be putting state taxpayers and UI students on the hook in accepting that legally binding obligation.)
From the first press releases about a possible public-private utility partnership at Iowa, which were put out at the beginning of this year, the term ‘up-front payment’ (or ‘upfront payment) has been prominent in messaging by the university. Whatever else Harreld wanted the UI community and greater public to know, preeminent was the assertion that the university would receive a ‘payment’ for entering into a partnership. That university messaging, in turn, also informed reporting on the subject.
* Iowa Now press release, on 02/08/19: “… will provide the UI with an upfront payment…”
* UI P3 FAQ, early February, 2019: “… will provide the UI with an upfront payment…”
* The Gazette, on 03/01/19: “Although UI officials have left open the prospective value of any partner’s upfront payment…”
* UI CFO Terry Johnson, as quoted by the Gazette on 03/06/19: “The key really is the large upfront payment.”
* Iowa Now press release, on 07/11/19: “…will provide the UI with an upfront payment…”
* UI president J. Bruce Harreld, as quoted on 09/19/19, in an article by the Daily Iowan on 09/25/19: “The UI will receive a significant upfront payment.”
* Radio Iowa reporting on comments by CFO Johnson, on 9/27/19: “…Johnson says that up-front payment would be…”
* J. Bruce Harreld, as quoted by the Daily Iowan on 10/10/19: “….[Harreld] said the “massive upfront payment” from this partner…”
Use of the word ‘payment’ by administrators and information resources at the University of Iowa was not only intentional and coordinated, but given Harreld’s private-sector background — which included a stint as the head of global marketing for IBM — the objective is equally obvious. Distract the UI community and the public with the promise of riches, while avoiding any conversation about the cost of that ‘up-front’ money to the state, or the risks attendant in agreeing to such a deal. To be fair to Harrled and his minions, however, while the word ‘payment’ was not bandied about in the original utility P3 at Oklahoma, it was a prominent feature of the Ohio State P3, which likewise included considerable rhetorical emphasis on an ‘up-front payment’ that proved to be ten times greater than the OU deal. (Once, again — despite having been sold to the UI campus as a genius-grade executive from the private sector — we find J. Bruce Harreld borrowing all of his ideas from somewhere else, including not only the premise of the UI P3 itself, but also how to sell that deceptive scheme to the public.)
Indeed, unlike the University of Oklahoma — and very much like the University of Iowa — Ohio State promoted the benefits of an ‘up-front payment’ from the get-go in pushing for approval of their own P3:
* From the OSU RFQ, February of 2015: “Ohio State is seeking to realize value through a substantial up-front payment…”
* From the Dayton Daily News, on 06/05/16 — before the mind-boggling scale of the OSU deal was fully understood: ” …and pockets deep enough to provide the hundreds of thousands of dollars that would be expected as an upfront payment.”
* From the OSU Energy Management website, published on 03/30/17 — and this will sound familiar: “Initially, the proceeds of the upfront payment will be invested into Ohio State’s endowment, dedicated to priorities being finalized in the university’s strategic plan.”
* From the Columbus Dispatch on 04/07/17: “A: Ohio State gets a big upfront payment of $1.1 billion.”
* From the current OSU P3 FAQ: “In addition to its $1.015 billion upfront payment to the university…”
What UI and the Board of Regents are selling now is exactly what Ohio State sold in 2017. Although the word ‘up-front’ is appropriate, the word ‘payment’ implies that Iowa will be due something at the beginning of the contract, and that is demonstrably not true. The whole point of the public-private utility partnerships at OU, OSU and now Iowa involves generating a mutually beneficial profit going forward, which neither party could produce on their own. The clock starts ticking when the contract is signed, at which point the private-sector partner springs into action and profits ensue, through a combination of tax advantages, efficiencies and good old entrepreneurial know-how. Until those profits appear, however, there is literally nothing to be paid out.
To see the effect that this deceptive rhetoric has on public perception, consider the following explanation of the OSU deal from the 06/05/16 Dayton Daily News article referenced above:
At first glance this analogy seems sensible, yet that is not at all what happened in the OSU deal, or the OU deal, or will happen in the Iowa P3. To understand why, note that whether any state assets are sold or leased in such transactions, that is done for tax purposes only — meaning the private-sector energy partner does not actually gain the benefits of ownership that come with buying something outright. If you sell your house the new owner can convert it into a bed-and-breakfast, or tear it down and build a better house, or even flip it if they think they can turn a fast profit — and you could do nothing to stop that because you would have given up your ownership rights in exchange for agreed-upon payment.
Clearly that is not what happened in the Ohio State P3 — or at OU, or will happen at Iowa — and we can see that in this passage from the executive summary of the Ohio State concession agreement [p.1]:
At the state level OSU still owns its utilities, while at the federal level it does not — but only for tax purposes. There is no sense in which OSEP can use Ohio State’s utilities to sell power or water or anything else to other clients, and OSEP certainly can’t sell OSU’s utilities if it thinks it can make a profit. That in turn means OSU’s private-sector partners did not buy OSU’s utilities with a massive $1.1B ‘up-front payment’ — so why was it called a ‘payment’?
Just as OSEP does not own Ohio State’s utilities, and Corix does not own Oklahoma’s utilities, everyone agrees that no one will own Iowa’s utilities when the UI P3 is approved. In each instance the private-sector companies are not owners or even co-owners of the facilities in question, but partners in a venture predicated on those facilities, which is in turn the sole source of potential profits. All of which once again brings us back to what the ‘up-front payments’ represent in all three deals, and it doesn’t have anything to do with selling and or transferring ownership in state assets.
To understand what is really happening in the proposed UI P3, and what happened at OSU and OU, let’s consider a completely different context in which the dynamics are the same. Suppose instead of running a university with its own power plant, that you’re a private citizen, and for several years you’ve been writing blog posts about an issue you care about. You don’t have any immediate objective other than documenting what’s happening, but as time passes you grind out over a million words, some of which others find useful in trying to grapple with the same concern.
While you tend to think of your blog as little more than a time capsule, one day a publisher rings you up and asks if you would be interested in the following deal. In exchange for allowing them to use an in-house ghostwriter to mine the aggregate content of your blog posts, and turn out a quickie book based on your writing, you will be paid a percentage of the profits after the publisher recoups its development costs. (Here we are naively assuming that the publisher is honest, and would not drastically inflate their costs to increase their profits at your expense, which is of course standard industry practice in the shark-infested publishing world.)
While the publisher would put the book together, they would do that as a service and would not own the contents. The words would still be yours, and the only rights you would grant to the publisher would be the exclusive rights to your content for the duration of a three-year deal. You would also have the right to approve edits or proposed changes, and even to back out of the deal if you weren’t happy. In theory you can’t lose, and might win big if ‘your’ book catches on in the public consciousness.
Just when you think the pitch is about to end, however, the publisher tells you not only that they have confidence in their sales projections, but they are so confident they will give you your expected cut of the three-year proceeds in what is called — in apt industry parlance — an ‘advance’. And of course that ‘advance’ is not a ‘payment’ for something they are buying, but an advance against your expected earnings, which is exactly what the deceptive ‘up-front payment’ terminology obscures in the UI P3. Instead of waiting for profits to roll in over time, you will get your future earnings ‘up-front’, which means you can spend that money or put it to work in the markets, while cranking out more blog posts that could eventually become a sequel. Even better, if it turns out that your book makes more money than the publisher expected, you will also get your share of those profits as they accrue on the publisher’s balance sheet.
In this publishing example, the industry lingo accurately reflects what happens in your deal — you get money ‘in advance’. The obvious question regarding the UI P3 is why the highly educated brigands who are pushing that plan insist on using intentionally deceptive terminology, instead of explaining that the ‘up-front payment’ is just a massive advance against future earnings. That money isn’t a deal fee just to get in the door with UI, it isn’t ‘payment’ for something that is being purchased, and it isn’t even a ‘payment’ for a service because — like you and your book deal — the university will be a passive player, with the energy partner doing all of the actual work. Only as a result of the partnership, and only in the future, will profits be generated, so why are Harreld and his crack team of entrepreneurial propagandists determined to obscure that fact?
And of course the equally obvious answer is that Harreld does not want anyone — including, particularly, members of the Board of Regents who are not already committed to this sham — to think about the risks inherent in accepting a huge ‘advance’ from a private-sector energy partner. If you have some familiarity with how advances work in the publishing world, however, not only might you already be entertaining thoughts about how such deals can go wrong, but regarding the UI P3 you may already have leapt to the kind of creeping dread that everyone else reading this post is about to experience. Because the key question with regard to an advance in the book world is not how much money you’re going to get, or even whether you have to pay back any of that money if your books fail to ‘earn out’ — meaning profits do not equal the amount of the advance — but what happens if one or both parties fails to deliver and the project falls through.
In publishing it turns out that the majority of advances do not earn out, but because most book deals are relatively small, and the shortfalls are considerably smaller, a few profitable hits cover the expected aggregated misses. Likewise, because the time frames are relatively short publishers don’t have to discount the present cost of future money over half a century, or deduct a price premium to compensate for profits they would forego by not investing that money themselves. (Or if they do perform those calculations they’re so small on a per-deal basis that they don’t end up blowing those negotiations.)
Much rarer in the literary world are occasions where an advance is given for a work that either does not materialize, or is so woefully short of expectations as to breach the contract. For example, if a celebrity accepts an advance to write a tell-all, but fails to dish ‘the good stuff’, or dishes all sorts of ‘good stuff’ that turns out to be false, or just drops dead, the publisher can and probably will sue to get their money back, particularly if we’re talking about millions of dollars. At that point the parties can then either go to war in the courts, or the party that received the advance can give it back — provided they didn’t spend some or all of it in the interim.
While your book deal and the UI P3 would seem to be safe investments for a publisher and energy company respectively — because in each case those companies will do all of the work — even the best-laid plans can splinter into shards of legal acrimony. If your book deal blows up, however, for whatever reason, the amount involved may be so small as to preclude legal action. Or, alternatively, the threat of being pounded by the publisher’s lawyers for the rest of your life may convince you that refunding your advance is the better part of valor.
With regard to the UI P3, however, what should be blatantly obvious to everyone is that the minute UI accepts any money from their private-sector energy partner, they are on the hook for that money until it earns out — and one way or another that partner is going to make a net profit on that massive advance, whether the partnership survives or not. In fact, even if the services portion of the UI P3 doesn’t ultimately produce the profits both sides expect, which is in turn the mechanism by which the advance will be recouped, there will be language buried in the contract which guarantees the private-sector partner a profit over fifty years. (In a subsequent post we will dig into the implication of all that, but for now all you have to remember is that there is no way any company is giving the University of Iowa hundreds of millions of dollars and not getting that money back and then some. If there was any doubt about that profitability, the company would simply pass on UI’s demands and invest that money themselves.)
By changing the terminology from ‘up-front payment’ to ‘advance against earnings’, we can clearly see that in accepting hundreds of millions of dollars from a private-sector partner, the University of Iowa will owe that money to that partner if anything goes wrong before the partnership is concluded. And that in turn is why you might hesitate to accept an advance from a book publisher even if it sounds like free money. What happens if you spend some or part of that advance, then the deal goes sour and no book is ever produced? If you kept all that money in the bank, drawing interest, you could simply refund the advance — which is what UI seemed to be promising as late as last week, because everyone involved swore up and down that any ‘up-front payment’ would be put into an endowment.
Now, however, we have suddenly learned not only that the Iowa Board of Regents plans to jam the entire deal through in a one-week window, starting with a UI ‘webinar‘ on Tuesday, but in addition to approving the deal the following Tuesday the board will also coincidentally defease $150M in outstanding utility bonds at UI. But if that $150M is coming from an advance on earnings from the P3, then in ten days the University of Iowa will be on the hook to their private-sector energy partner for $150M, as well as any other advanced funds that are spent instead of sheltered in an endowment. (Everything you ever wanted to know about defeasing bonds can be found here. In effect, the regents will be transferring that debt off the books by guaranteeing payment from the P3 advance.)
Even ignoring the fact that the Harreld’s determination to deceive the public implies corrupt intent, and that the board is acknowledging its own complicity by tying the nullification of $150M in bonds to approval of the P3 — let alone at the last possible minute allowable under state code — the university’s receipt of a massive advance against future earnings constitutes not a ‘payment’ but de facto debt. What we don’t yet know is the total amount of that obligation, but it presumably involves hundreds of millions of additional dollars which will be put into an endowment, ostensibly to help fund the made-up costs of the university’s strategic plan. Even in the best-case scenario, however, in which every dollar advanced by a private-sector partner was put into an endowment, and could thus be refunded if the P3 fell apart in the future, the state would still be exposed to substantial risks that the people who are pushing this deal should be trying to avoid.
As was once famously said by Warren Buffet — who is a very successful and very rich man — never invest in a business you can’t understand. As a corollary, I would submit that the state should not partner in a venture that is being intentionally obscured by the state employees and appointees who are pushing that plan. What we should expect is that Harreld, his execs and the board would not only be forthcoming and scrupulously honest about this proposal, but that they would answer questions and provide information to the press upon request — including interviews with people who can explain the complexities, if that sort of thing is beyond Harreld and his crack team of highly educated administrators. What we have gotten instead is omission and obfuscation leading to a bum’s rush to approve the deal before anyone can object, which means the people who are pushing this plan — which will sit on the balance sheet of UI and the state for half a century — do not want it understood.
Part 5: A P3 Betrayal
The UI Utility P3 in Context — Part 5: A P3 Betrayal (Part 4)
If you do not closely follow the corrupt bureaucratic machinations at the University of Iowa and Iowa Board of Regents, most of what you read in the press will seem plausibly coherent. That is, in fact, not because what UI and the board are saying is true, but because it is a carefully woven tapestry of oft-repeated lies. In pushing for a utility partnership at the University of Iowa, for example, illegitimate UI president J. Bruce Harreld has relentlessly stressed that the revenue which will be generated from an endowment funded from that public-private partnership (P3) is critical to ‘fully funding’ the current UI Strategic Plan.
Now here is what Harreld leaves out:
* The current UI Strategic Plan covers 2016-2021, and a new five-year plan has yet to be drawn up. If UI was really short on funds it could simply cut back on the purported costs of any current or future plan, obviating the need for a risky half-century P3. Instead, Harreld is using a five-year plan that has almost expired as the primary justification and imperative for making an uncertain fifty-year commitment of UI assets and resources.
* The current UI Strategic Plan has no dollars or costs attached to its aspirational objectives, meaning the amount that Harreld variously cites — currently $15M per year to ‘fully implement’ the UI Strategic Plan — is a Harreld invention. That number does not exist anywhere except in propaganda disseminated by Harreld and the university.
* One of the earliest references to ‘fully funding’ the UI Strategic Plan comes not from Harreld but from former regents president Bruce Rastetter, who authorized the fake, state-funded presidential search that he and others then used to jam Harreld into office in 2015. In the context of a subsequent failed attempt by Harreld to steal $4.2M from students and families by reneging on scholarships that UI was legally obligated to pay — of which Rastetter also approved — Rastetter said this in early March of 2017:
* As noted, in 2017 the objective of extolling the sacred virtues of the UI Strategic Plan was not a public-private utility partnership, however, or the revenue that would flow from such a venture, but finding any and every excuse to continue increasing tuition. To that end, Harreld parroted Rastetter’s rationale extensively ahead of the board’s Tuition Task Force that summer. That summit — which the governor bailed on, and prevented her administrators from attending — was convened to justify enacting additional annual tuition hikes over the next five years, in addition to multiple hikes that had already been implemented following Harreld’s hire.
* In the presentation that Harreld gave to the Tuition Task Force in mid-August of 2017, 7 of the 28 slides [21-26] — fully 25% of his entire plea — tied the need for more tuition revenue directly to the UI Strategic Plan. If the university did not get more money from UI students and families, it would not be able to ‘fully fund’ the fake costs associated with that plan, thus it was imperative that the regents approve minimum annual tuition hikes for the next five years. (You can see and hear Harreld making that hard sell here.)
* Slide 26 of Harreld’s presentation is particularly informative because it clearly shows the three pieces of the financial puzzle that were needed to fund the UI Strategic Plan in 2017. Along with state resources and cost savings, the critical missing piece was additional tuition, which was precisely what Harreld was arguing for — and indeed received, when the board approved a five-year schedule of hikes. Notably, however, Harreld’s plaintive premise in 2017 was also a lie, because the tuition hikes that were already on the books more than made up for the strategic plan funding shortfall that Harreld claimed at that time. Indeed, as discussed in multiple prior posts, the actual costs of the exact same UI Strategic Plan that Harreld is flogging today — which were detailed on Slide 20 — were not only covered by prior tuition hikes, but had nothing to do with the actual plan. (Instead, those costs were aimed at assuaging concerns from the AAU about UI’s falling metrics. In effect, the University of Iowa and the Iowa Board of Regents were raising tuition on students and families to pay membership dues to the AAU.)
* Flash forward to today, and let’s compare Slide 5 from the UI P3 Informational Webinar last Tuesday, to Slide 26 from the UI Tuition Task Force two and a half years ago. To begin, Slide 20 from the Tuition Task Force presentation gives us a maximum made-up cost of $165M to fund the UI Strategic Plan, or $33M per year over five years. Slide 26 then shows $11.7M of that $33M coming from cost recoveries, leaving $22M to come from the other two funding components: state appropriations, and of course tuition. (Curiously, there are no dollar amounts for either, but the aggregate goal is still $22M.)
Now compare that to Slide 5 from last week’s UI P3 webinar. We find the same total listed — $33M — and we find roughly the same $11M in cost recoveries mentioned (down $700K for some reason), but here the total contribution from state funding and tuition hikes is estimated to be only $7M, leaving a whopping $15M to be made up from income from the P3 endowment. And yet, as a factual matter, we know that over the past four years of Harreld’s tenure at UI — which includes five tuition hikes to-date, and four more to come — the university has generated far in excess of $22M per year in new tuition revenue. Meaning the entire made-up cost of funding the UI Strategic Plan is already covered before we even consider generating revenue from the UI P3.
We can see that increase in tuition revenue clearly in the two pie charts in this post from the beginning of this year. In FY2016 the university generated $432.6M in tuition and fees. In FY2019 the school generated $482.8M in tuition and fees, or $50M more in that year alone. Even taking into account $12M in cuts in annual state funding, that means UI was $35M ahead in that year, and yet where is all of that new tuition revenue on Slide 5? And the answer is that it’s omitted.
* What Harreld, the university and regents are doing, nakedly, is using the exact same made-up justification for increasing tuition revenue each of the next five years, to now justify the imperative of deriving additional revenue from a public-private utility partnership. And incredibly, to make that actually work in the UI slideshow, they have simply omitted any mention of the massive revenue increases that were derived from those tuition hikes, which already covers the made-up costs of the UI Strategic Plan.
As you can quite literally see, it’s not that there is one false fact in all of this, it’s that all of it is false. The entire premise of funding the UI Strategic Plan is a lie. That lie was used in 2017 to justify enacting five years of additional tuition hikes, after four hikes had been implemented in three years. In terms of raw dollars, the tuition hikes that have so-far been enacted have generated well over $150M in new tuition revenue, meaning the UI Strategic Plan has already been paid for, and there are another four years of minimum annual tuition hikes still in the pipeline. Incredibly, however, even though we can prove all that, Harrled is now claiming that the university needs $15M in additional revenue from a P3 endowment to fund the UI Strategic plan, which is already paid for.
Imagine that a weepy J. Bruce Harreld knocked on your door two and a half years ago and told you he desperately needed $10K for a life-saving operation, so you gave him the money. Now, two and a half years later, the same weepy J. Bruce Harreld is not only back at your door, begging for another $10K, but he wants that money for the same operation. At the very least, wouldn’t you want to know what happened to the $10K you already gave him?
As if it isn’t enough that Harreld is now using the same fake justification to drive approval of the UI P3 — and the Iowa Board of Regents knows he is doing this — we now also know that the regents are, this very weekend, pretending to review four ‘finalist bids’ for the P3, even though the University of Iowa is already working with the winning bidder. Were there any state agency charged with rooting out government corruption, they would start tearing the Board of Regents apart on Monday, demanding documents and communications about the UI P3. Unfortunately, we live in a world where the president of a public AAU university is actively encouraged to be, and rewarded for being, a recidivist grifter for the state.
Golly Gallogly
When I first started working on this extended post, roughly a month ago or so, I naively assumed the UI P3 would be on the agenda for the next regularly scheduled regent meetings in mid-January. Indeed, I actually polished and posted the first three parts of this post before the board suddenly announced, less than two weeks ago, that it would jam the entire disclosure and approval process into a one-week window, between two pop-up meetings. And yet, even at that breakneck pace, in the first of those two meetings the university and board failed to answer key questions about the prospective public-private utility partnership, and are now faking a review of the bidding process for reasons no one has explained. (In last week’s webinar, Harreld stated as a fact that the university was already working with the winning bidder.)
A full discussion of the UI P3 informational webinar will take a while to write up — in part because we still don’t have answers to those key questions — but there was one moment at the end that deserves particular notice in the larger context of the P3 conversation. You can see that moment at the 1:20:35 mark, when Harreld is clearly on a selling high about getting through the entire staged webinar with little more than pom poms and MBA blather:
…said the shyster former business executive from the private-sector, who was advocating for the privatization of the University of Iowa’s utility systems, predicated not on need but on a premeditated and recycled lie.
As ever with Harreld, the subtext of his rant is that what the University of Iowa is doing on his watch is somehow revolutionary, when it is in fact derivative of a similar plan that was enacted at Ohio State in 2017, which was in turn pioneered at the University of Oklahoma in 2010. So not only is there nothing new in what UI is doing, but over the past decade there has been plenty of opportunity for other schools to get on the P3 bandwagon, yet most have chosen not to do so. In fact — and I suspect Harreld knows this — if there ever was a P3 craze, it almost certainly ended a few months ago, at the very place it all began.
When the University of Oklahoma initiated the first large-scale, higher-ed utility P3 in 2010, the president was David Boren, a local legend who had previously served as both the governor of Oklahoma (1975 to 1979) and as one of Oklahoma’s U.S. Senators (1979 to 1994). As noted in an earlier part of this post, that deal generated an upfront payment to about $120M to OU, at a time when that state university was desperately in need of ready funds.
Boren served as president of the University of Oklahoma for 24 years, from 1994 to 2018, and announced his impending retirement in September of 2017, with his last day scheduled for June 30th, 2018. True to the creed of corrupt governmental oversight at public universities, the OU board stacked the search committee with cronies, hired a private search firm, then proceeded to conduct a secret search which returned a single recommended candidate for the job. Not only was the sole candidate to replace Boren a life-long businessman, and a big-money donor to, and alumnus of, Oklahoma — very much like Jerre Stead at the University of Iowa — but that candidate also had zero experience in academic administration or the public sector, just like the private-sector toad that Stead hand-picked to run UI in 2015, Bro Bruce Harreld.
Not surprisingly, when that sole OU candidate — James Gallogly, former CEO of LyondellBasell, senior exec at various energy firms, and mega-donor to his alma mater — was appointed in late March of 2018, his non-traditional hire was extolled for many of the same reasons that Harreld’s hire was hailed as a bold move, using many of the same buzzwords:
Apparently eager to start off with a bang, Gallogly fired six administrators on his first day in office. His stated justification for doing so was that the university was heavily in debt, but there were also veiled insinuations that David Boren had not managed the school well over the previous twenty five years. Whether that factored into the hire of the hard-charging Gallogly or not, the die was cast, and Gallogly clearly had a mandate for change from the OU governing board.
Less than six months later, however, Gallogly’s new, high-flying regime was bogged down in trench warfare with a lingering Boren, and his advocates and adherents. And then things got ugly:
In late March of 2019, allegations of decades-old sexual misconduct were leveled against David Boren. Less than a month and a half later, and less than a year after taking office, James Gallogly announced in mid-May that he was retiring as the president of Oklahoma, having apparently accomplished everything he set out to do.
Continuing the administrative purge, a month later the University of Oklahoma also severed its remaining ties with Boren, amid allegations that any prior improper conduct had been covered up instead of investigated. Even as all of that bureaucratic idiocy was unfolding, however, a consequential series of decisions was taking place in the background, which may very well have a profound effect on higher-ed public private partnerships across the United States.
Before announcing his impending retirement in 2017, Boren was on a building binge on the OU campus, and that included various student-housing projects. Among them was a public-private partnership with Balfour Beatty and another developer, which was formed to build new, high-end housing for upperclassmen in a development called Cross Neighborhood, which was scheduled to open in the fall of 2018:
When James Gallogly took office in early July of 2018, he not only noticed the mountain of construction debt that Boren was leaving behind, but how Boren’s P3 commitment to the Cross Neighborhood project would cost the university millions going forward. Worse, that new housing development — like many new student housing developments across the country — was having trouble finding tenants, meaning many of those luxury apartments were sitting empty.
By mid-August of 2018, Gallogly had a fix on just how bad things were:
Faced with projects that belonged to his predecessor, and with a gaping hole in the budget that now belonged to him, Gallogly did what any CEO would do in that situation. He looked at the university’s legal obligations, realized he could legally cancel the lease that underpinned the Cross Neighborhood P3, and on July 31st, 2019, James Gallogly did just that.
While that cancellation would save OU $7M a year, the loss of that income — and the fact that the apartments were not renting — put OU”s private-sector partners in immediate peril. In responding to that abrupt change, those partners provided some insight into why a private-sector company might provide an upfront payment to a public-sector partner in a P3:
With the sudden loss of guaranteed revenue from the University of Oklahoma, the bondholders for the Crossing Neighborhood P3 are now at risk because revenue is not “sufficient to pay operating expenses and debt service on the bonds”. As a result, the bondholders have been aggressively fighting back, the university is countering that the bondholders may have defamed the university, and as of two months ago the dispute is not only likely headed to court, but has drawn renewed scrutiny to higher-ed P3’s.
Specifically, the private sector is no longer willing to trust that a publicly funded university will keep its noble word or do what’s right, especially given that such institutions are now being run by the same conscienceless mercenaries who only used to prey on suckers in the private sector:
Needless to say, the bond industry is not happy (see here and definitely here) Whatever good faith there may have been in the P3 industry prior to Gallogly voiding those OU lease agreements, that’s gone and it’s never coming back, which means the deal UI is about to push through will not have any outs for the university if that partnership falters. Gallogly’s specific claim that OU could not continue to make the lease payments in question, however — because that would be “subsidizing a private entity, which the university cannot do with student tuition and fees” — also raises obvious concerns about the UI P3.
As reported by the AP’s Ryan Foley this past Tuesday, on 12/03/19:
As long as the P3 endowment generates that subsidy, UI can skim the rest. But what happens if the endowment fails to produce the expected revenue? In that case would the university be allowed to increase tuition in order to subsidize a private entity, or would that be prevented by state code?
Because if the university does not have that option, that means the state would be on the hook for any money owed, and that flatly contradicts what Harreld asserted in the UI webinar. (If Harreld was lying about the state’s potential exposure to the UI P3, that’s not just another routine Harreld lie, that’s a real whopper. Then again, this is the same guy whose presidential bio touts his central role in the explosive growth of Boston Chicken/Market, even though that company subsequently collapsed into Chapter 11 bankruptcy after Harreld slipped out the back door as president of that debt-laden venture.)
In the webinar Harreld also acknowledged that the university could be compelled to blow up the P3 because of egregious non-performance under the services contract, but that doesn’t mean UI would keep the so-called ‘up-front payment’ — at least $153M of which will become instant debt the moment the deal is consummated. Unfortunately, not only does that mean the private sector partner could sabotage the deal by doing a lackluster job, but UI might still decide it had to suffer poor performance if it couldn’t find the money to repay what was effectively a massive loan. (Yet another reason why, contrary to Harreld’s hucksterism, that this “[type] of mechanism” is not about to take the higher-ed world by storm.)
The cutting-edge in higher-ed P3 deals is not what UI is doing now, because that was pioneered by Oklahoma in 2010. Instead, the cutting-edge in higher-ed P3 deals is — ironically — taking place at Oklahoma, where a previously celebrated P3 has disintegrated into saber rattling and lawsuits. Does that sound like anything a sane university president would want to be involved with, or maybe more like what a private-sector hustler would be attracted to — particularly if he was risking other people’s money?
Whatever your personal feelings about public-private partnerships in higher-education, Harreld is not only electively embroiling the University of Iowa in a risky venture for minimal annual gain — $15M or so, against an annual budget of $4B — but the pretext for the UI P3 is a double-decker lie. There are not and never were any costs associated with the UI Strategic Plan when it was developed, and even if there were, five tuition hikes over the past four years have covered those made-up costs. On the other hand, maybe the UI P3 isn’t about the endowment profits at all, but instead about that $153M in bonds that will be defeased right off the top — which was part of the reason David Boren pioneered the utility P3 at Oklahoma in 2010.
On that point, we would be remiss if we did not note that until the UI webinar was announced two weeks ago — as part of an absurdly contrived fast-track approval process, which has now devolved into naked administrative fraud on the part of the Board of Regents — there was not a single comment or mention about any bonds being defeased in the UI P3. This despite claims from lying Josh Lehman and others that the UI P3 had been “discussed publicly for months“. Yes, it was discussed, but in ways which intentionally obscured and omitted critical information, including the revelation that $153M will be siphoned away from the much-anticipated and relentlessly emphasized endowment, in order to pay off an equivalent mountain of debt with new, costlier, and riskier debt.
Part 6: J. Bruce Harreld’s Long Con
The UI Utility P3 in Context — Part 6: J. Bruce Harreld’s Long Con (Part 5)
On more than one occasion I have pointed out that the illegitimate president of the University of Iowa, J. Bruce Harreld, is lying trash. I don’t know if that propensity is congenital on his part, or merely an expedient tactic — or perhaps an adaptive admixture of the two — but one inevitable result of that tendency is that it is much harder to figure out what is actually happening at the University of Iowa. (The benefits of that obscurity may also factor into Harreld’s behavior as well, whether consciously or subconsciously.) In employing deceit and prevarication as president of UI, including particularly over long time frames, Harreld makes it that much harder to detect and comprehend what he is doing, and thus harder for concerned citizens to counter or even comment on his decision making.
Even compared to Harreld’s corrupt appointment in 2015, which was engineered by three co-conspirators and abetted by Harreld himself, there is no better example of Harreld’s intent to deceive than the development and rollout of the university’s public-private utility partnership (P3), which the Iowa Board of Regents recently approved on 12/10/19. Although the P3 is now a done-deal on a 9-0 regent vote, there is still a lot we don’t know, and may never know, about that deal, to say nothing of how the deal itself will ultimately turn out. What we do know, however, indisputably, is that the ten-plus publicly visible months at the end of the full eighteen-month development and approval process were actually used to forestall questions and concerns until the last possible minute, at which point the deal could then be approved in an impervious bureaucratic blitz.
Specifically, from previous posts on the P3 we can identify five protracted lies that the university purveyed to the public over the course of 2019, precisely to obscure the intent and structure of that deal. Those lies were all told by Harreld himself, but in many cases were also echoed by his executive team and by individuals at the Iowa Board of Regents. While none of those lies were particularly sophisticated — indeed, it was possible to detect them almost immediately — the fact that there were five of them, and they were implemented over the same time frame for the same deceptive purpose, tells us a great deal about J. Bruce Harreld’s incapacity to lead on the merits.
Adding insult to injury, as soon as the P3 was passed in a rush on 12/10/19, Harreld and the board turned around and pointed to a series of trivial if not staged informational meetings which were held for the public and various shared governance groups on campus, as evidence that the entire process had been inclusive and transparent. In reality, however, Harreld and other high-ranking UI administrators routinely worked to delay and deflect questions and concerns until the final days of the P3 development process, at which point the university and board then denied any opportunity for public comment. (While the university and board do seem to have cleared the very low bar of not actually violating state law, it is critical to understand that there are no state laws which compelled the university or board to act in the manner that they did. Instead, the board took advantage of legal latitude afforded to it and allowed Harreld and UI to systematically defeat the intent of Iowa’s ‘sunshine’ laws.)
In brute administrative terms the five orchestrated lies detailed below were obviously successful because the UI P3 was approved, but that does not mean those lies cannot be readily perceived. Quite the contrary, while none of the people involved would ever admit the truth short of being placed under oath — and for some, perhaps not even then — this single post will disabuse anyone of the notion that the university or regents were interested in a fully informed discussion about the benefits and risks of taking out what is, effectively, a $1.17B loan. And yet…in reading several haughty comments from Harreld and others following approval of the UI P3, it is also hard not to conclude that they themselves believe they got away with all of these lies simply because they had the administrative power to approve the public-private partnership.
Fortunately, whether or not you yourself inhabit the diseased echo chamber that is public higher education in the state of Iowa, all you have to do is read this post and draw your own conclusions. Did J. Bruce Harreld go above and beyond to make sure everyone was fully informed about the UI P3, and had an opportunity to comment when all the pertinent facts were known, or is that claim just part of a long con that he ran during 2019? Was the UI P3 approved following an exhaustive deliberative process premised on reasoned argument, or simply because a cabal of higher-ed bureaucrats wield unchecked power?
The Payment Lie
We dealt with this lie extensively in Part 4 of this multi-part post, and it was the most widely-disseminated lie over the course of 2019. In early March, the University of Iowa will be handed what the school has consistently characterized as an ‘up-front payment’ of $1.17B — at the so-called ‘financial close’ of the agreement, which takes place ninety days after regental approval — but that money is not a payment for anything. At best it represents an advance against projected aggregate returns from the partnership, assuming there will be a consistent financial benefit derived from the underlying services agreement, yet even J. Bruce Harreld and UI CFO and Treasurer Terry Johnson have distanced themselves from that assumption. More likely, the so-called ‘up-front payment’ represents a straight assumption of $1.17B in debt, which has been obscured by a pretextual concession agreement.
Making matters significantly worse, the success or failure of the UI P3 hinges not on energy savings or technological advances or even the exploitation of state or federal tax advantages, but on leverage — meaning the borrowing of money for investment purposes. With regard to the UI P3, a majority of the so-called $1.17B ‘up-front payment’ will be invested in an endowment, and it is the returns on that endowment over the next half century which will determine whether the partnership is a success or not. In fact, here is J. Bruce Harreld himself obliquely acknowledging that reality during the UI ‘informational webinar’ on 12/03/19, one week before the approval meeting at the board:
If the University of Iowa was being paid $1.17B in cash for any reason, then the school could not possibly get in trouble going forward because it would not have to pay that money back to anyone. The university could blow that money on frivolous causes or failed entrepreneurial ventures, or it could make poor investment decisions which failed to keep pace with inflation or even lost money outright, but there would be no scenario in which the university would end up owing more money to a purported partner than was being generated from that $1.17B. With the UI P3, however, that is a very real possibility, which is precisely why everyone involved at the approval meeting took momentary pains to make clear that the P3 does involve risk.
To be clear, however, that serial acknowledgment was not done out of any concern that the risks inherent in the P3 were inappropriate, but simply as bureaucratic ass-covering for putting the state on the hook for $1.17B in new debt. If the deal falls apart or falls short, and the state has to cover any losses, everyone involved can say they were honest about the risks, even as they limited that burst of honesty to fleeting sentiments during a seven-day window between the ‘informational webinar on 12/03/19 and final approval on 12/10/19. (And of course after acknowledging the presence of some vague risk, everyone involved went right back to touting the benefits and implying that the University of Iowa will almost inevitably profit from the deal.)
Given his long history of prevarication, the very fact that J. Bruce Harreld felt obligated to acknowledge an eight-year span of uncertainty means the risk that the UI P3 may not earn out is probably considerably greater, but that isn’t the only financial risk the university now faces as a result of this deal. Precisely because Harreld was so successful in promulgating the lie that the University of Iowa is being paid $1.17B for…something…the school now faces a long-term risk to its overall budget that it would not be facing if Harreld had not pushed that deal through to fruition. Indeed, there have been a few passing comments about this new risk in the press, particularly from state legislators who represent districts which include UI, Iowa City and Johnson County, and that conversation will almost certainly heat up in the coming months, if not explode. (At which point we will get to watch J. Bruce Harreld try to undo his ‘payment’ lie, without admitting it was a lie all along.)
We will come back to this new risk in the post after next, but in the meantime see if you can figure out how Harreld boxed himself in by convincing everyone that the university is being paid$ 1.17B. Relative to the P3 approval process that ‘payment’ lie was successful, but that doesn’t mean everyone will now forget that lie going forward. Instead, and quite ironically, that lie will actually be internalized by the vast majority of Iowans as a fiscal truth — and particularly so given enthusiastic press coverage like this — and that in turn will almost inevitably bite the university in the ass.
The Endowment Lie
For the great majority of the publicly-visible P3 development process, which began with an initial press release in early February of 2019, and continued into late November, the constant refrain from the University of Iowa and Board of Regents was that any ‘up-front payment’ would be put into an endowment, which would then be used to generate any revenue that would be spent — meaning the principal would be preserved. Only at the very end of November, with two weeks left to go in the entire eighteen-month development process, was it finally disclosed that about $150M would instead be used to defease (retire) outstanding utility bonds. As reported by the Daily Iowan’s Marissa Payne, on 11/26/19:
As to why that particular disclosure was made on that particular day, November 26th was exactly seven days before the UI ‘informational webinar’ on 12/03/19, and under state law the board is obligated to post notice of pending matters at least one week in advance. The university and regents certainly knew long before 11/26/19 that they planned to retire those bonds with money skimmed from any ‘up-front payment’, but rather than disclose that possibility earlier, in the spirit of transparency, they withheld that information until the last possible moment allowable by law. And of course beyond the issue of withholding that information, the fact that UI planned to spend any of the ‘up-front payment’, instead of placing all of it into an endowment, as had been relentlessly stressed for ten months, also increased the risks inherent in the UI P3.
As we now know, $166M of the $1.17B ‘up-front payment’ will immediately be spent on defeasing those outstanding bonds ($153M) and paying off the consultants who helped broker the deal ($13M). Not only does that mean 14% of the overall cash advance will be gone before the endowment is even established, but that smaller endowment will still have to generate sufficient returns to repay that $166M, plus interest, over fifty years. And of course if anything happens to void the P3 over the next half-century — as happened recently at the University of Oklahoma, where a P3 disintegrated into acrimony and legal threats — UI will be on the hook for that $166M, on top of repaying the other $999M, which will ostensibly be sitting in an endowment.
Except…the same administrative perpetrators who used lies of omission and commission to secure approval of the P3, and withheld disclosure of $166M in expenditures until the last possible moment, have so far failed to provide even a pledge that all of the remaining $999M will be placed in an endowment. It’s assumed that it will because that’s what Harreld and others said throughout 2019, but as of November 26th we learned that was no longer true. As to what might convince UI to spend more of that $1.17B in cold hard cash, not only are there endless financial needs on any college or university campus, but at UI specifically J. Bruce Harreld is engineering a largely opaque effort to turn the university into a business incubator, and that requires startup capital.
Were the university to stick another $50M in P3 cash in a startup slush fund, not only would Harreld literally be in business, but we would probably never know that any additional money had been diverted. The very fact that Harreld and UI have that option, however, is yet another clue about how compromised Harreld is by the success of his ‘payment’ lie. Wherever that $1.17B came from, and wherever it’s going, it is undeniable that in early March the University of Iowa will be sitting on a veritable mountain of unrestricted cash, which Harreld is not legally obligated to put into an endowment. (In a prior post it was noted that while Ohio State promised to put most of the $1B that it was given in its 2017 P3 into an endowment, only $700M seems to have been committed.)
The Exploration Lie
During the vast majority of the publicly visible P3 development process, the University of Iowa, in its official communications, insisted that the school was only in the ‘exploration phase’ of a possible utility partnership. That rhetorical positioning commenced with the initial press release in February and continued into early October, even as other voices at UI began contradicting those official statements. This naked dissonance and deception came to a head when the Daily Iowan’s Eleanor Hildebrandt published a scoop about the progress of the UI P3, on 10/08/19:
The zeal with which UI administrators tried to plug this unanticipated leak regarding the progress of the P3 development process underscores the degree to which the university was determined to obscure that process. Instead of acknowledging that the reported timeline was largely correct, an official spokesperson not only downplayed the significance of the story, but lied in order to do so. In fact, even at the time it was clear the university was lying because of prior comments by J. Bruce Harreld himself, as reported by DI staff on 09/29/19 — over a week earlier:
If you are talking to people who are bidding on a project — let alone flying around the world to meet with those bidders — then by definition you are no longer in the “exploration phase” of that project, you are in the ‘bidding phase’ of that project. And indeed, only two days after the university released a patently false official statement about still being in the ‘exploration phase’, Harreld again made clear that the P3 development process was, as Hildebrandt had accurately reported, rapidly nearing its conclusion. From the Gazette’s Vanessa Miller, on 10/10/19:
Not only had the bidding phase begun during the summer of 2019 — meaning the exploration phase had been over for months, even as university spokespersons insisted that the school was still wrestling with whether to proceed or not — but in documents released during the final approval meeting on 12/10/19 we gained additional visibility into that timeline. In a document titled RFP Final Process Letter, dated 10/23/19, we find a recap of the drafting of the concession agreement [p. 7], which includes this [p. 8]:
Even as the university was insisting, as late as October, that the P3 was still in the exploration phase, three months earlier Harreld and his team of covert P3 approval specialists had not only identified bidders, but those bidders were providing feedback on the concession agreement. From that point on, any official statements which portrayed the P3 as still only in the exploration phase were lies, and those lies were specifically intended to allow Harreld and his administration to avoid answering questions about the development process. And of course that in turn means, as a publicly funded institution, that Iowa’s taxpayers were paying employees at UI to lie to Iowa’s taxpayers.
The Lease Lie
Throughout 2019, in multiple public comments, J. Bruce Harreld insisted that the UI P3 would not, under any circumstance, involve the lease or sale of state assets. Of all the lies Harreld and the university told about the P3, even at the time that one seemed particularly odd given that the UI P3 was almost certainly premised on the 2017 Ohio State P3, which included a lease of state assets for state tax purposes, and the sale of state assets for federal tax purposes. From a Daily Iowan interview with Harreld on 03/11/19, roughly one month after the university first acknowledged that it was looking into a possible public-private utility partnership, even as the ‘exploration’ process had been underway for nine months or more:
Three months later, however, on 06/24/19, the Des Moines Register published a letter to the editor from former Iowa regent David Fisher, in which he clearly described the prospective P3 deal as a lease arrangement:
Had something changed between March and June? Was the UI plan, like the OSU P3, now premised on a lease? Well, as far as Harreld was concerned, definitely not — and as the president of the University of Iowa you would think he would know. From the DI’s Charles Peckman, on 10/10/19 — meaning as the P3 was hurtling toward its conclusion in early December:
Two weeks later, however, this time a serving regent was quoted in the press, disputing Harreld’s characterization of the deal. From the Gazette’s Vanessa Miller, on 10/24/19:
Without ever explaining or addressing this recurrent, blatant contradiction, on 12/03/19 the university presented its ‘informational webinar‘ to the board, which purported to inform the apparently oblivious regents about the complex plan that UI would seek approval for only one week later. In the presentation graphics for that webinar, however, in the upper corners of slides 8 and 9, the word ‘lease’ was clearly visible, indicating that Harreld had misled the public about the nature of the deal for the better part of a year. And indeed, one week later, when documents related to the P3 were finally disclosed, this was the title of the 1,800-page concession agreement:
From those documents we also know that on the same day in October when Harreld publicly asserted that there would be no lease or sale of state assets, the university was initiating its third round of revisions to the concession agreement with qualified bidders. Was the adoption of a lease arrangement a late development, meaning Harreld had not lied to the public about the terms of the prospective deal? We find the answer to that question in the first sentence of the first paragraph of another document that was released on 12/10/19, titled RFQ Final Process Letter, which is itself dated 04/18/19:
Not surprisingly, when the P3 was finally approved in December, multiple press headlines noted that the deal involved a 50-year lease of state assets. At the same time, however, no one in the press, and no one at the university or the board, explained why J, Bruce Harreld spent the better part of a year telling a consistent lie which he had to know would inevitably be revealed. In fact, even as I type this I cannot give you a single coherent reason why Harreld would have initiated or stuck to that lie, other than having some sort of compulsion to tell falsehoods even when they are demonstrably unnecessary, if not antithetical to his aims.
As it turns out, however, not only did the UI P3 mimic the OSU P3 by including a lease, but the UI deal also included the sale of state assets for tax purposes. From p. 49 of the 1,800-page concession agreement (p. 56 pdf):
Again, while I have no idea why Harreld lied about leasing (or selling) state assets in the UI P3, that’s precisely why those lies — of all the lies Harreld told while pushing the P3 through to fruition — are most concerning. No one who had their wits about them would repeatedly swear that the UI P3 would not include a “lease of state assets”, when he clearly knew the deal was premised on a “lease of state assets”. Yet that’s exactly what J. Bruce Harreld did.
The Strategic Plan Lie
Throughout 2019, Harreld insisted that generating new revenue from an endowment which will be funded from the $1.17B loan he is taking out is in turn critical to fully funding the UI Strategic Plan. As regular readers have known for over two and a half years, however, any claim that the UI Strategic Plan comes with a price tag is false. In reality, Iowa’s Strategic Plan — like similar plans at colleges and universities across the country — is an aspirational and organizational document focused on priorities and objectives, as opposed to capital projects or other expenditures with a specific price tag. To that end, the UI Strategic Plan does come with metrics by which administrative progress can be assessed, but any purported dollar costs were assigned later by Harreld and his team, precisely to exploit the UI Strategic Plan as a justification for multiple revenue-generation schemes.
For example, from p. 9 of the current five-year UI Strategic Plan, which spans 2016 to 2021:
Not only does the UI Strategic Plan ascribe no costs to achieving that goal, but even after Harreld lumped that objective in which several others, and assigned them a collective $127M price tag over five years, it was never made clear why the university would have to pay money to generate “federally funded research support”. (If the federal government is funding research, that’s money coming in, not going out.) In a moment we will come back to that $127M cost, but here it is important to recognize that the UI P3 was not the first long con that Harreld ran which involved the UI Strategic Plan.
A little over four months after he took office in late 2015, J. Bruce Harreld authorized the push for a new fast-track strategic plan. From the Press-Citizen’s Jeff Charis-Carlson, on 04/25/16:
As for all of those “public forums”, however, they were not only announced very late in the spring term, but were scheduled for the busiest time of the 2015-2016 academic cycle:
In reality, and despite touting “more than twice as many public forums than in the past”, Harrled and his bureaucratic minions jammed the entire feedback process for the UI Strategic Plan into a ten-day window at the busy conclusion of the academic year. From the Gazette’s Vanessa Miller, on 04/21/16:
Assuming for the sake of argument that the university was not simply lying about the number of “open forums” that had been held in the past, the number of forums scheduled for the 2016-2021 Strategic Plan was indeed greater. Because those seven meetings were scheduled in a very tight window, however, and announced with short notice — let alone at the busy conclusion of the academic year — attendance and participation would have been diminished by those administrative choices. (Underscoring the malevolent utility of this administrative subterfuge, note also that because multiple meetings were provided, Harreld could then claim there was simply little interest expressed by the UI community, while ignoring the fact that the meetings were scheduled in such a way as to actively diminish participation.)
Fortuitously, however, there were plenty of administrators at UI who were eager to look the other way and follow Harreld’s lead:
While a draft of the new UI Strategic Plan was indeed published by early July, pushback concerning the accelerated timeline and last-minute feedback sessions compelled Harreld to add additional forums in the fall. By the end of 2016, however, the new fast-tracked Strategic Plan had been approved, and six months later, in the summer of 2017, Harreld ruthlessly put that document to work in pursuit of generating new revenue.
Specifically, Harreld used the new UI Strategic Plan to press for five years of compulsory tuition hikes, over and above a number of aggressive hikes he had already pushed through in his first year and a half. In arguing for those annual hikes, Harreld referenced not only a desperate need for additional revenue to fully fund the UI Strategic Plan, but he showed a slide [p. 20] which ascribed specific costs to the UI Strategic Plan when there are no such costs in that document. (The slide on that page references the $127M mentioned above, and includes a number of other metrics which relate not to the UI Strategic Plan, but to UI’s membership in the American Association of Universities. In effect, Harreld was using the UI Strategic Plan as a plausible justification for raising tuition on students and families, even as he fully intended to use that money to satisfy the membership criteria of an academic organization which confers no actual benefits on its members.)
Harreld’s deceptive pleas about funding the UI Strategic Plan took place during a much-publicized Tuition Task Force, which was convened by the Iowa Board of Regents in August of 2017. That task force, in turn, allowed the regent and university bureaucracies to claim they had behaved transparently and engaged in community outreach before approving five years of compulsory tuition hikes at each of the three regent universities. Flash forward to the beginning of 2019, however, and when J. Bruce Harreld broached the possibility of a UI P3, he once again justified the pursuit of new revenue from that deal by claiming that he desperately needed about $15M each year to fully fund the UI Strategic Plan. Meaning the same strategic plan that only a year and a half earlier he said he could fully fund from five years of tuition hikes.
From the very first UI press release announcing the intention to ‘explore’ the possibility of a P3, on 02/08/19, even as active planning had already been underway for eight months:
As to whether Harreld demonstrated any sophisticated administrative sleight of hand while using the same strategic-plan scam to justify both compulsory tuition hikes in 2017 and the UI P3 in 2019, the answer is that he did not. We can even see that by comparing p. 26 from Harreld’s Tuition Task Force presentation and p. 5 from the UI P3 ‘informational webinar‘. In the tuition scam Harreld claimed UI needed $33M each year for five years (extrapolated from p. 20) to fully fund the UI Strategic Plan, of which $12M would come from “campus-based resources” such as cost-cutting and efficiencies. That left $22M that would have to be covered by some combination of new tuition revenue and increases (or decreases) in state funding, in order to fully fund the made-up costs of the UI Strategic Plan.
If you look at p. 5 of the P3 presentation however, you will find the same $33M in total annual costs for fully funding the UI Strategic Plan, and the same $12M or so in cost recoveries, but the remaining $22M in purported annual need is now largely derived from the P3 endowment, with only a peripheral mention of tuition revenue. To underscore the monstrousness of this serial deception by Harreld, note also that even before the board approved five years of annual tuition hikes, the hikes that Harreld had already pushed through also fully funded the made-up $33M annual cost which he ascribed to the UI Strategic Plan — and that’s true even after cuts in appropriations that were triggered by a two-year collapse of the state budget. Meaning the UI P3 will now fully fund the made-up costs of the UI Strategic Plan for the third time.
As this post should make clear, the only reason J. Bruce Harreld has been successful in putting forward all of these lies is because the Board of Regents is complicit. Were they concerned about integrity or credibility Harreld would have been fired long ago, but they really only care about generating revenue — and they don’t care who they have to abuse (students and families) or what the downside financial risks are (with the P3). As regular readers know, it is objectively true that from the tuition hikes that were enacted prior to approval of the five-year tuition plan, the University of Iowa is already generating about $35M more each year compared to when Harreld was hired. In the purportedly open, honest and transparent UI P3 development process, however, all of that revenue was intentionally omitted from the conversation, and because the regents are equally corrupt, they abetted Harreld in doing so.
As to where all of the new tuition revenue will go once the next four compulsory hikes are implemented, and where all of the UI P3 revenue will go once the endowment starts generating returns, it just so happens that J. Bruce Harreld has begun the process of shaping the next UI Strategic Plan, and no one should be surprised if the made-up price tag for that new version goes way up. For that reason, if you are involved in drafting the next UI Strategic Plan, you may want to ask what happens to any money in excess of the various schemes that have already been implemented to purportedly pay for the prior plan. (The very fact that no one has talked about how any annual P3 revenue in excess of $16M will be spent tells us that Harreld and the board don’t want to answer such questions.)
J. Bruce Harreld’s Long Con
Over the course of 2019, from early February until late November and even beyond, J. Bruce Harreld told the five lies detailed above in order to forestall question about, and secure the approval of, the University of Iowa’s public-private utility partnership. In telling those premeditated, orchestrated and aggregated lies, Harreld, his executive team, and the officers and members of the Iowa Board of Regents were united in their intent to deceive the people of Iowa, but they weren’t alone in pursuing that objective. Instead, after four years with J. Bruce Harreld in the president’s office — as a result of another long con perpetrated during the fraudulent presidential search in 2015 — the entire leadership structure at UI was a full-on partner in Harreld’s P3 lies.
Indeed, with what must be the bitterest irony for those who still have some semblance of integrity at the University of Iowa, the foundational premise of higher-education administration that was betrayed by Harreld and his co-conspirators in 2015 — the concept of shared governance — has now been brought fully to heel by Harreld. Instead of functioning as a counter to executive excess and recklessness, shared governance at UI is now a partner in pushing Harreld’s entrepreneurial agenda. Where lying to the press, the public and the UI community were the means by which Harreld’s co-conspirators appointed him to the presidency in 2015, in flagrant defiance of shared governance, lying is now the means by which the various shared governance groups hope to profit during Harreld’s illegitimate rule.
To be fair, it is of course understandable that academics and professionals would act out of self-interest, even if doing so means betraying the very premise of higher education. It’s one thing to have principles, but when the only thing that really matters is money, principle are a luxury that shared governance leaders at UI can no longer afford. (Never underestimate the amount of damage that a remorseless crony with a penchant for deception and treachery can do to a public research university.)
Part 7: Shared Governance Sells Out
The UI Utility P3 in Context — Part 7: Shared Governance Sells Out (Part 6)
In the previous post we looked at five specific lies that J. Bruce Harreld, his executive team, and the Iowa Board of Regents perpetrated while claiming that the development of the UI public-private utility partnership was an open and transparent process. In this post we will consider several additional and interrelated administrative lies spanning the entire leadership structure of the university community, which belatedly voiced enthusiastic support for the P3 just before and immediately after the agreement was rammed through the approval process by the Board of Regents. In order to understand this burst of campus-wide enthusiasm in context, however, we must first look back at another pivotal moment in UI history, only four short years ago….
In early September of 2015, when the corrupt Iowa Board of Regents appointed the complicity corrupt J. Bruce Harreld as president of the University of Iowa, that willful bureaucratic imposition was done not only in defiance of a higher-ed concept called ‘shared governance’, but in open betrayal of that longstanding commitment. If you have never heard of shared governance before — as I had not at the time — you can read a summary here on the website of the American Association of University Professors (AAUP), an organization which plays an important role in enforcing shared governance in the United States. The practical importance of shared governance as a concept, however, is not hard to understand.
The legal right to control a public college or university is usually granted, by statute, to the governing board of that institution, which then passes considerable executive authority to the president of the school. In a strictly legal sense, the board and/or its proxy president can pretty much do whatever they want, provided they do not run afoul of actual law. (And by ‘run afoul’ I mean not only ‘transgress’, but ‘get caught’ and ‘be indicted’.)
As with any large organization, however — to say nothing of one teeming with eggheads and know-it-alls — it is one thing to exercise legally sanctioned authority, and quite another to genuinely lead and empower people throughout such an institution. And of course that’s particularly true when college and university presidents are often outsiders, or, as is currently the case at the University of Iowa, a carpetbagging dilettante. If the president of a college or university simply imposes their will they may be within their legal rights to do so, but they will also inevitably weaken their institution because the best people will simply leave, taking their knowledge, grants and teaching prowess with them. In what is usually seen as a worst-case scenario, the faculty body may eventually give a heavy-handed president a vote of no confidence, which may or may not mean the end of that president’s tenure depending on the degree to which the governing board is or is not behind the president’s hostile agenda.
The time-honored administrative mechanism by which these potentially disruptive tensions are eased is shared governance, which is a voluntary commitment on the part of governing boards and executive administrators to make sure academics and staffers have a meaningful say in the future of the institution at which they work. Shared governance conveys no legally enforceable rights to faculty and staff — and of course the student body is largely an afterthought — but it does provide rolling, real-time proof of the credibility of those who do ultimately wield power. If a governing board of executive suite simply imposes its will on a college or university, that information gets out, and prospective faculty and staff know to look elsewhere for work, where their voices will not simply be heard but respected. In short, in higher education a betrayal of shared governance is a de facto abuse of power.
As regular readers know, the appointment of J. Bruce Harreld as president of UI in September of 2015 was such an abuse of power, and that was true before we learned that the search process was also corrupt. Although the Iowa Board of Regents had the statutory right to appoint anyone to lead the school, even without conducting a search, its flagrant betrayal of shared governance was stunning. Fortunately, while the regents scheduled Harreld’s campus forum dead last among the four finalists, and allowed less than forty-eight hours between his startling reveal as a candidate and his shocking, done-deal appointment, the local chapter of the AAUP — in observance of its shared governance responsibilities — conducted a survey of the campus, and the results were clear. J. Bruce Harreld was completely unacceptable:
In response to this flagrant betrayal of shared governance the national AAUP launched an investigation, the results of which you can read here. After subsequently finding that Harreld’s appointment was indeed a betrayal of shared governance, the AAUP put the University of Iowa on its list of sanctioned institutions, which was unprecedented for a university of Iowa’s caliber. Even as the investigation was ongoing, however, one of the co-conspirators in that abuse of power — then-president pro tem of the regents, Katie Mulholland, who served alongside president and co-conspirator Bruce Rastetter — decided to pour gasoline on the fire.
From the Press Citizen’s Jeff Charis-Carlson, on 09/25/15:
Arguing that shared governance does not involve shared decision-making is disingenuous, and we can see that clearly if we simply ask how an individual would govern in any meaningful sense if they were precluded from shared decision-making. Again, everyone understands that governing boards and executive administrators hold most of the legal cards in higher education, and that the promise of shared governance is not legally binding. That does not mean, however, that the promise of shared governance cannot be broken, or that breaking that promise — as Mulholland and others did during the 2015 presidential search at UI — holds no consequence.
Whatever satisfaction Mulholland got by making her dismissive statement in late September of 2015, the University of Iowa ended up on the AAUP’s list of sanctioned institutions for two years. That sanction in turn warned prospective faculty and staff to steer clear, because the board could not be trusted to take the concerns of the UI campus into account. If the board was willing to hire a crony tool as the president of UI, over the objections of the vast majority of people who responded to the local AAUP survey, then it was clear the board was only interested in sharing governance on issues that the board itself did not care about.
Because academics are also an ego-driven lot, however, it wasn’t long before the more transactional types on the UI campus — including particularly the leadership of the UI Faculty Senate — were champing at the bit to remove UI from the AAUP sanctions list. Flash forward two and a half years from the date of the original AAUP sanction, and the faculty leadership on the UI campus finally succeeded in removing the university from the list of schools that could not be trusted to honor shared governance.
From the Daily Iowan’s Emily Wangen on 06/17/18:
As to what actually changed on the UI campus, however, the answer was nothing. We know that as a factual matter because four months later J. Bruce Harreld dropped his presidential drawers and defecated on the faculty leaders who had worked so hard to scrub away the stain of his corrupt hire. From an interview with the Daily Iowan on 10/15/18, here’s Harreld doing his very best Katie Mulholland impression:
In one of the defining examples of Harreld’s pugnacity, as soon as the AAUP sanction was lifted he pointedly and publicly made clear that he had played and exploited the faculty leadership while giving up nothing in return. In Harreld’s mind shared governance merely afforded various constituencies an opportunity to speak, but denied them any right to have an effect. As to how the faculty leadership responded to Harreld’s naked affront, all we have to do is flash forward to last summer, when said leadership published an AAUP post purporting to detail the history of the AAUP sanction — including particularly the heroic efforts by UI faculty to overcome that black mark — which includes no mention of Harreld’s subsequent denial of shared governance.
Instead, we get this:
Bruce Harreld is the living embodiment of the administrative belief that shared governance means nothing. In exchange for the appearance of administrative consensus, he and other UI executives and regents are willing to sit through tedious meetings which bind them to no course of action, and in grateful thanks the self-interested shared governance groups pretend those meetings have an effect. All of which brings us now to the UI P3, which is a case study in how to fake shared governance on all fronts.
Shared Governance and the UI P3
From the outset, exploiting the shared governance process as a means of purportedly validating the UI P3 was emphasized by the University of Iowa media shop, which is controlled by J. Bruce Harreld. From the initial press release about the faintest possibility of a future public-private utility partnership, on 02/08/19:
Note specifically that ‘shared governance’ is described as an active administrative mechanism — “…through shared governance…” — even as we already know from Harreld’s post-sanction bowel movement that “shared governance does not mean shared decision-making”. The obvious conclusion is that Harreld was happy to use the concept of shared governance to advantage, by implying that independent groups on campus approved of the UI P3, while at the same time denying those groups any actual right to approve or disapprove of the plan. And that in turn effectively co-opted those groups, because how many people involved in shared governance at UI would ever admit they have no actual power?
As to what information about the P3 was communicated to the shared-governance groups on the UI campus, we had very little visibility about that until late in the development process, when the Daily Iowan’s Eleanor Hildebrandt published her previously mentioned scoop (see Part 6) on 10/08/19. In Hildebrandt’s report, a member of the Iowa Graduate and Professional Student Government (UI GPSG) said the UI P3 was a “fast-moving process”, and that the final bidder would be selected in a little over a month. That in turn prompted immediate pushback from a UI spokesperson — who also takes orders from Harreld — who characterized the UI P3 as still being in the “exploration phase”. (And of course Harreld himself then obliterated that statement two days later, on 10/10/19, by saying that the UI P3 was in the “final stages” of the negotiating process.)
As to the question of transparency, the fact that a member of UI GPSG was listening in on “weekly conference calls” sounds encouraging, but again neither the GPSG nor any other shared governance group had veto power over the P3 process. They could be let in on discussions, and feel special as a result of that access, but they had no vote. More importantly, as Hildebrant’s reporting made clear there were multiple levels of access, and what the public was being told — including by a UI spokesperson who insisted that the P3 was still in the “exploration phase” — was clearly at odds not only with what shared governance leaders were being told, but with reality.
Still, at the tail end of the P3 development process the shared-governance leaders at UI began giving a big public boost to the P3, as reported by the Press-Citizen’s Aimee Breaux on 12/06/19 — — meaning three days after the UI ‘informational webinar’, and four days before the P3 approval meeting:
Continuing a particularly deceptive administrative tactic — which we also referenced in Part 6, regarding Harreld’s hyper-accelerated schedule for developing the current UI Strategic Plan — Daack-Hirsh focused on the number of meetings, as opposed to any qualitative assessment of the information conveyed. We will take a closer look at Daack-Hirsch’s enthusiastic claims about transparency shortly, but the question here is not whether UI administrators held a lot of meetings, but whether those meetings were something more than theater. (As regular readers know, almost everything that takes place in public view at the University of Iowa, and at the Iowa Board of Regents, is staged for effect, and has little or nothing to do with any active decision making process.)
As to the specific individuals mentioned by Daack-Hirsch, when I first read Breaux’s report the day it was published I did not remember ‘Yockey’ at all, but ‘Rietz’ did sound vaguely familiar. When I did an internet search for ‘Rietz’ and ‘public-private partnership’ that same day, however, I got surprisingly few hits from Google, including no links to news sites other than the Press-Citizen article in question. (It may be that the Google algorithm terminated early for some reason, but I also think the subsequent wave of reporting on the UI P3 boosted the number of hits returned.)
Curiously, one link that did stand out among those sparse initial hits was a link to this site, which, on closer inspection, seemed doubly odd because it pointed to a post from August of 2016 — meaning long before the UI P3 was a topic of conversation. When I looked up that post I was even more surprised to find a deep dive into a white paper that had been written by a Faculty Senate working group (FSWG), which had in turn been formed in response to a prompt from then-regent-president Bruce Rastetter. Specifically, after learning that former UI President Sally Mason was retiring, Rastetter’s big idea was that the University of Iowa could elevate itself to a “top ten” public research university, and he charged the UI Faculty Senate with achieving that goal.
While the Faculty Senate working group did quickly conclude that there was no chance to elevate UI to the stature Rastetter sought, even at that the resulting white paper was so completely devoid of academic merit that it was scrubbed from the UI Faculty Senate website after I wrote about it on this blog. Fortunately, I archived a copy and linked to it in the original post, and in that archived copy you can see that although Rietz is not quoted or even mentioned, he is one of the signatories. And yet you would not know that were it left to the UI Faculty Senate to determine which historical documents to retain and which to purge.
As an R1/AAU public research institution, I am confident that an official UI spokesperson would say that the university steadfastly believes in the foundational importance of history. At least until a written record makes the university look like an insane asylum or a den of thieves, at which point UI is all-in on scrubbing information. Speaking of which, from — ironically — the 10/18/17 meeting minutes for the UI Staff Council Executive Committee, which, along with the Faculty Senate, is one of the official shared-governance groups at UI, we also have this fine example:
And from the minutes of the 11/08/17 full Staff Council meeting, when the rest of that body was informed that Harreld and Curry would be able to speak off the record going forward, and have their prior conversations scrubbed — but only in the interests of expediency, avoiding confusion, and promoting “open conversation”:
This is shared governance in action at UI: eliminating accountability and scrubbing J. Bruce Harreld from the history books. (I did not find any subsequent discussion about changing the bylaws, and there are no meeting minutes showing discussions with Harreld or Curry. So Bro Bruce has had secret “open conversations” with the Staff Council for going on two years.)
With regard to the UI P3, while I had indeed run across Rietz’s name in another context, the fact that the current Faculty Senate president was touting his involvement convinced me that I had also run across his name more recently. That in turn led to more digging, and one site I focused on was the meeting minutes of the UI Faculty Senate — which, to be fair, are some of the best meeting minutes you will read anywhere. Except when Harreld drops by…at which point the Faculty Senate always goes into closed session, leaving nothing but a few recorded motions to that effect.
Sure enough, when I dug into the archive of Faculty Senate and Faculty Council meeting minutes which had so far been posted for 2019 (currently through October as of this writing), I found Tom Rietz mentioned in the same February meeting that Daack-Hirsch specifically referred to in the Press-Citizen quote above. It was at that point that I recalled reading those minutes when they were posted, but what was startling in retrospect was both how little Rietz had to say about the P3 at the time, yet how completely he laid out the potential pitfalls and true nature of the deal — in stark contrast to page after page of tap dancing and hard sell from UI CFO and Treasurer Terry Johnson during the same Faculty Senate appearance.
Indeed, on the topic of the UI P3, the single-spaced meeting minutes from 02/12/19 fill just over four pages, yet this is the bulk of Rietz’s recorded contribution:
In response to that blunt assessment a member of the Faculty Senate asked a question, but that question was answered not by Rietz but by CFO Johnson. Over the entire presentation — which Johnson dominated — Rietz also added the following spare comments:
Here Rietz acknowledges that the fifty-year loan for the UI P3 will be leveraged, meaning profits from the invested debt will be required to pay back the loan itself. (Without those profits UI would lose money, with students and/or taxpayers having to cover the losses.)
Here we have early confirmation — which also occurs in the larger passage on Rietz’s commentary — that there will be little or no savings derived from leasing UI’s utilities to a private-sector operator. UI will still pay for the fuel, and for the personnel costs even though the workers will become private-sector employees, meaning the ‘privatization’ aspect of the deal exists primarily to obscure and legally facilitate the borrowing of $1.17B.
As for Joe Yockey, who was at the time serving as secretary of the Faculty Senate, by happenstance he turns up in the same February meeting minutes, but not in the context of the UI P3. Instead, Yockey is referenced in a separate section regarding a committee review of the UI Office of Finance and Operations [p. 8], which he chaired. And of course the current VP for Finance and Operations is Rod Lehnertz, who gave an extensive interview to the Daily Iowan in October, before taking a star turn in the university’s ‘informational webinar’ here [seated on right].
As to next steps for the Faculty Senate, in the February meeting minutes we find this note at the top of p.6:
In the UI Faculty Council meeting minutes for 12/19/19, we do indeed find the council discussing the UI P3 with Lehnertz and Laird Harreld hisself, but we don’t know what anyone said because the council moved into ‘executive session’. Likewise, one week later, in the UI Faculty Senate meeting on 02/26/19, we find the full senate discussing the UI P3 with Lehnertz, Harreld and interim-provost Sue Curry, but we don’t know what anyone said because the senate also moved into ‘executive session’.
Other than a short note that the university would soon release a request for qualifications (RFQ), the next mention of the UI P3 in any of the meeting minutes for the Council or Senate comes from the 04/23/19 Faculty Senate meeting:
As a reminder, we now know that the UI P3 involves borrowing over a billion dollars from private-sector investors, skimming $166M off the top to retire other debt ($153M) and pay off consultants ($13M), then ostensibly investing the remaining $999M in the sphincter-puckering hope that the resulting returns will be sufficient to pay back that loan with interest. As for Joe Yockey, as a result of the leadership conveyor belt at the Faculty Senate he is now the Vice President, which means he will soon be president, then past-president of that august body. So you just know he’s going to be really tough on J. Bruce Harreld, and totally hold him to account in his role as head of UI’s most important shared governance body, even though Harreld has stated that shared governance is not shared decision making.
That April meeting was the last Faculty Senate or Council meeting of the 2018-2019 academic year. Following the long summer break, the only substantive discussion of the UI P3 in the minutes posted so far for the 2019-2020 academic year occurred during the 10/15/19 Faculty Council meeting, in a conversation with Harreld’s senior advisers (Peter Matthes and Laura McLeran), but we don’t know what anyone said because the Council moved into ‘executive session’. At no point after Tom Rietz spoke to the Faculty Senate in February of last year, however, was Rietz’s name ever mentioned again in any of the meeting minutes, which seems more than a little odd given the importance that current UI Faculty Senate president Sandra Daack-Hirsch assigned to him on 12/06/19:
While Daack-Hirsch was perfectly happy with the premise and outcome of the UI P3 — despite clear warning from Tom Rietz back in February, and despite all of the deception and lies detailed in the six sections of this post that you may or may not have read so far — she did have one concern about divvying up all of that borrowed loot, as reported by Breaux:
You can see the proposal in question here, on p. 22 of the UI ‘informational webinar’ slides, which Harreld, Lehnertz and Johnson presented to the Iowa Board of Regents on 12/03/19, just one week before the perfunctory approval meeting. What is particularly interesting about Daack-Hirsch’s comments, however, is not only that she has no leverage — because Harreld is already on the record stating that “shared governance is not shared decision making” — but that she had no input into the proposal prior to the presentation. If J. Bruce Harreld “passionately believe[s]” in shared governance at the University of Iowa, how did that proposal find its way into Harreld’s presentation without first being “vetted, challenged and revised” by “stakeholders” like Daack-Hirsch?
Despite having clearly been marginalized in the P3 development process, however, not only was Daack-Hirsh an enthusiastic supporter four days before the approval meeting, but on 12/11/19 — meaning one day after the regents approved the UI P3 — the Daily Iowan’s Rin Swann and Eleanor Hildebrandt reported that all four of the official shared governance groups were fully in support:
If UI administrators were “transparent about the transaction”, does that mean the shared governance groups knew the university was taking bids even as the university was officially claiming that the P3 was still in the development process? Did all of the shared governance bodies know about the size of the loan in advance, or about $166M being diverted to pay off other debts and consultants? Did the shared governance bodies also know that roughly $250M of the money that UI would be borrowing would actually come from unnamed investors in Iowa, which the university refuses to disclose? And again, how about that allocation process, which the Faculty Senate president herself was lobbying to change only five days earlier, after clearly being blindsided by Harreld’s “proposal” three days before that?
As for Weaver’s claim that shared governance at UI will “continue to hold the university accountable in the future”, there is no evidence — none — that shared governance held Harreld or the regents accountable for anything during the P3 development process. In fact, not only is Weaver’s assertion simultaneously hilarious and pathetic, but it counts as a lie because there is no mechanism by which shared governance could possibly hold J. Bruce Harreld for anything. (And that’s assuming anyone in a leadership position in shared governance had the guts to publicly confront Harreld on a given issue, which they clearly do not. Even going back to the naked corruption surrounding Harreld’s hire, which Harreld himself abetted by lying to the UI community on multiple occasions, no one in a leadership position in shared governance ever dared publicly speak truth to power, so there is no chance that will happen now.)
It is not surprising that people who know they are otherwise powerless might resort to cheap rhetorical bravado to maintain relevance. Of real concern, however, would be evidence that shared governance at UI is actually in league with UI administration in deceiving the public about the UI P3 or anything else, and that brings us back to the following two quotes.
From 12/06/19 — meaning three days after the UI ‘informational webinar’, and four days before the P3 approval meeting at the Board of Regents:
From 12/11/19 — meaning one day after the P3 approval meeting:
So Daack-Hirsch touted the number of meetings, and Weaver touted the administration’s transparency, and that all sounds great until we put a simple timeline together. In the initial UI press release in early February of 2019, which announced that the university was “exploring a potential public-private partnership (P3) with its utility system” — which, by that time, had already been under active development for eight months — we find the schedule of meetings that were held with what the DI reporters subsequently called, on 12/11/19, the “four pillars” of shared governance:
As you can see, all four of those shared governance meetings, and the first two public information sessions, were concluded within about three weeks of the initial announcement. So what actual information could have possibly been shared at those meetings? Indeed, the UI RFQ would not be released until a month or more after all of those meetings, and even then the university refused to make the RFQ public. (Did the shared governance leaders at UI get a look at the RFQ, or were they also frozen out?)
Continuing from the Swann/Hildebrandt report in the DI on 12/11/19, we find even more hilarity about the importance of shared governance:
Again, if you’re involved in shared governance on the UI campus, which involves advocating without any meaningful ability to act, you’re probably not going to point out that you have no actual power. By the same token, if you know there is money on the table, and you’re trying to get your cut in a committee full of shared governance competitors and administrative thugs, you’re probably going to go out of your way to assure Harreld that what he is doing is wonderful, because otherwise you’re going to be left out in the fiscal cold. And that’s all true before we get to questions about actual coordination between shared governance leadership and UI administration in deceiving the UI community and general public about what actually transpired.
On 12/09/19 — just one day before the P3 was approved — J. Bruce Harreld gave one of his regular sit-down interviews to the Daily Iowan. Although that interview was not published until 12/15/19 it is important to get the sequencing right because Harreld previewed his disingenuous defense of the secretive UI P3 development process, which hinged on stalling and deceived the public until it was too late for the public to ask informed questions. From the top of that interview:
Again, here we have Harreld leaning heavily on the volume of meetings, and on subsequent press coverage about those meetings, most of which not only disclosed nothing worth reporting, but actively obscured the considerable progress Harreld and his team had already made. What the University of Iowa officially characterized in February of 2019 as the beginning of the P3 “exploration phase” was, by Harreld’s own admission in the DI interview, a process that had been underway for eight months. And of course this is the same man who spent the entirety of 2019 telling everyone that the UI P3 would not involve the “lease of state assets”, when the entire deal was premised on a lease of state assets. (I still have no idea why he did that, but he did that, and you should never forget it.)
A bit later in the DI interview — which again took place the day before the UI P3 was approved, and three days after Faculty Senate President Daack-Hirsch singled out Tom Rietz and Joe Yockey for their contributions — Harreld said this:
On the day before the P3 approval meeting, in an interview that Harreld knows will not be published until after the P3 is approved, he not only acknowledges the risks involved, but like UI Faculty Senate President Daack-Hirsch he identifies Tom Rietz as having somehow minimized the risks by running countless theoretical models. And yet from reporting by the DI”s Katie Ann McCarvery way back on 02/12/19, about the Faculty Senate meeting where Rietz and CFO Johnson brought that group up to speed, it is clear that Tom Rietz was not giving the P3 his seal of approval:
Despite Rietz’s concerns in early February, to say nothing of his description of the UI P3 as a de facto loan, in mid-December Rietz was suddenly being lauded for his role in shepherding the UI P3 to fruition. Despite no other appearances that I can find following his minimal comments to the UI Faculty Senate in February, by the time the UI P3 was on the verge of final approval both Daack-Hirsch and Harreld singled him out — if not fingered him — as one of the main reasons that the university decided it was worth risking the future of the school on a $1.17B bet. (That particular DI article is one of the links that my initial Google search failed to return, but it is also one of the only mentions of Rietz prior to the sudden convergence of notice by Daack-Hirsch and Harreld in early December.)
Now, I don’t have any idea why Rietz was a party to the embarrassing white paper about gaming Iowa’s national rankings, and I don’t know what he did or didn’t do with regard to the UI P3, but it is worth noting that even now we don’t actually have Rietz on the record about the P3 other than his comments ten months ago. Daack-Hirsch is thrilled with Rietz, and Harreld is thrilled with Rietz, but the one guy those two leaders agree was pivotal in the decision making process has not been quoted in the press for close to a year, and the obvious question is why not? If his modeling proved so persuasive, why hasn’t Tom Rietz presented his data to the UI community — particularly given that it represents state-funded research derived from his work as a member of the faculty, as differentiated from any trade secrets involving the private-sector energy partners that the university finally got in bed with.
As for Dan Collins, until Harreld’s DI interview I had never heard of him in any context, and when I did a search for his name and ‘public-private partnership’ I got zero hits other than a link to that interview. Because I was still concerned that Google wasn’t accurately reporting results I then went back through all of the 2019 meetings minutes for the Faculty Senate and Faculty Council, but his name wasn’t mentioned once. Yet to hear J. Bruce Harreld tell it on the eve of approval for the UI P3, the otherwise invisible Dan Collins was critical to the university’s transparent and extensive deliberative process. Really?
Whatever role Collins, Rietz and Yockey did or did not play in convincing the University of Iowa to borrow $1.17B from a European energy consortium, it is also worth nothing that while Daack-Hirsch and Harreld were heaping praise on those men — and indeed crediting them with having assured the shared governance groups that the UI P3 was a great idea — there has been little public mention of the consultants that UI paid to vet the deal that was actually consummated. Even in his extensive DI interview on 12/09/19, Harreld mentioned them only in passing:
The University of Iowa is paying those advisors $13M, yet in the span of a few days before the UI P3 was approved what Daack-Hirsch and Harreld wanted to talk about were not the major corporations that did the heavy lifting, and vetted the contract that was actually signed, but three academics who were, by every available public measure, only peripherally involved. Even if Tom Rietz ran ten thousand iterations of a hundred different models each, however, it was the financials that Welles Fargo produced which would have defined the parameters of the UI P3 concession agreement, because that’s what investment bankers do. And whatever sanction Collins and Yockey gave to the premise of the UI P3, it can be said with a reasonable degree of certainty that none of their input, and none of Rietz’s models, would have dissuaded Harreld from plunging ahead if Jones Day and Wells Fargo said they could make it happen. And we know that in part because unlike such deals in the private sector, not a damn person at University of Iowa had any skin in the game. If the whole deal implodes for any reason, or the economy tanks and the endowment falters, UI can simply raise the cost of tuition or beg the legislature for more funds, which actually incentivized the risk-taking we see in the UI P3.
All of which now brings us back to shared governance at the University of Iowa, and claims by both Daack-Hirsch and Harreld that the UI P3 development process was transparent. It is not only abundantly clear that more information was shared internally at UI than was shared with the general public, but that does not mean Harreld kept shared governance leaders fully apprised — and why would he? Just as Harreld and his executive team controlled the flow of information to the greater public, we can assume that they controlled the flow of information to shared governance leaders, and we have Harreld himself attesting to the right to do so.
Again, from a Daily Iowan interview on 10/15/18, here is what J. Bruce Harreld really thinks about shared governance at the University of Iowa:
There is zero chance that J. Bruce Harreld would have rejected the UI P3 if shared governance leaders had expressed strong reservations, and nothing about the shared governance process had any effect on the outcome of the UI P3 development process. Harreld may have kept shared governance leaders apprised of various aspects of the plan, but that doesn’t mean he kept them fully informed, and it is self-evident that he did not give them a vote about whether to push ahead or not. So whatever Rietz, Collins or Yockey did or did not do, that was either a mutually beneficial smokescreen or ass covering depending on whether the gamble pays off.
If the P3 endowment makes money, then everyone can claim to have been critical to that success, and add that to their extensive C.V. If the P3 endowment loses money, then Harreld and the regents can claim shared governance was fully in support, and that esteemed academics on the UI campus gave it the green light. [Had Rietz’s models forecast financial ruin, it’s a safe bet that Welles Fargo — which systematically defrauded its own customers — would have produced reports which gave Harreld and regent president Mike Richards (who, no joke, is part owner of a casino) odds they could stomach, and UI would have pushed ahead anyway.]
Having said all that, as noted earlier there is a practical aspect to all of this as well, and in that regard Harreld also checkmated shared governance leaders into submission. If you haven’t already, take a look at the Path Forward Steering Committee that Harreld intends to use to dispense money from the P3 endowment, which Harreld himself sits on, along with representatives from the four shared governance bodies. If you intend to get your cut of the P3 pie, will it help or hurt your chances if you were on the record pointing out that the P3 is reckless? And of course the answer is obvious. Anyone who was disloyal to Harreld would inevitably be punished, and the other shared governance leaders would not come to that individual’s aid because that would mean more money for them and their constituents. (This is in fact a microcosm of the divide-and-conquer approach that Harreld employed in rolling out a new budget model, which also pits colleges and departments against each other, fighting over funds that Harreld doesn’t care about.)
In the context of the UI P3, then, here is the reality of the shared governance process on the University of Iowa campus. From the get-go Harreld made it clear that the university was going to borrow an insane amount of money (albeit cloaked as a ‘payment’), the bulk of which he would then invest in the markets in the hopes of generating a profit. From that prospective profit Harreld would then make a capped amount — roughly $15M or $16M — available to the greater campus, through a grant process which Harreld imposed without asking for permission from any of the shared governance groups. Because there will now be more money to play with, however, and the process by which those funds will be distributed is ‘competitive’, everyone in shared governance is incentivized to validate any lie that Harreld has told or will tell about the UI P3, even if doing so puts the university or the state at risk.
In sum, across the spectrum of executive, academic, staff and student leadership at the University of Iowa, truth has been devalued to the point of irrelevance. The only thing that matters is telling the most compelling lie, for the most money, irrespective of any risks to the institution. That isn’t shared governance so much as shared deceit, but hey — they’re all pulling in the same direction, even if that collaborative effort is antithetical to the premise of higher education. Unfortunately, instead of searching for truth, everyone at UI is now a game show contestant looking to score a cash prize.
And that would all be fine if the University of Iowa was a private institution, but it isn’t. Instead, it’s a state-funded public research university, yet no one in a position of leadership at UI — or at the Board of Regents for that matter — feels that the university has any obligation to be fully transparent to Iowa’s taxpayers. With regard to the P3 specifically, the question isn’t whether all of the self-interested grifters and bureaucratic hostages at UI agree that the process was transparent and allowed time for informed comment, the question is whether it was transparent and objectively it was not. (While this is admittedly not a new phenomenon at Iowa, the degree to which Harreld and shared governance leaders equate internal collaboration with fulfilling their duties as state employees makes clear that they have effectively privatized the university in their own minds, if not also turned it into a lucrative country club.)
As we will see in the next part of this multi-part post, however, one Iowan did pointedly object to this entrenched institutional arrogance, particularly as displayed by the Board of Regents. The fact that J. Bruce Harreld took pains to publicly deride that individual also underscores the degree to which his pugnacious attitude drives his reckless decision making. Unfortunately, I have every confidence that the shared governance leaders at UI will remain mute in that regard, even if Harreld’s petty, bratty and vindictive attitude costs the university dearly. What was a hostile takeover in 2015, when Harreld was appointed, is now complete, and the capitulation and collaboration of shared governance during the UI P3 approval process makes that clear.
Update 01/25/20 — The Daily Iowan published a letter to the editor on 01/23/20 (which I have been told was submitted in December, just prior to the campus going on winter break), which pushes back against the idea that the university’s shared governance bodies were wholly in support of the UI P3. Even if Harreld’s recklessness cannot be mitigated, it is important that individuals with first-hand knowledge help make the historical record, as opposed to leaving that to Harreld and his collaborators on the UI campus.
Part 8: J. Bruce Harreld and the Iowa Legislature
The UI Utility P3 in Context — Part 8: J. Bruce Harreld and the Iowa Legislature (Part 7)
I don’t know how other states go about legislating, but in Iowa the legislature is a part-time affair with sessions usually running from mid-January to late April. As to the make-up of that branch of state government, there are 50 senators (currently 32 Republican, 18 Democrat) and 100 representatives (53 Republican, 47 Democrat), and over that three-and-a-half-month span they all congregate in the capital city of Des Moines to enact new legislation and hammer out the budget for the next fiscal year.
In the context of the University of Iowa’s public-private utility partnership (P3), which was approved by the Iowa Board of Regents on December 10th, this background information is important because of the one truly unexpected moment that occurred during that otherwise ruthlessly scripted meeting. (While there were important disclosures that took place, and we will dig into one of those disclosures in the next post in this series, the dissemination of all of that previously secreted information was still under the control of the university and the board.)
You can see — or more accurately hear — that unscripted moment for yourself at the 48:37 mark in the video of the approval meeting, which was gaveled to a close shortly thereafter. In its own right the moment is hilarious precisely because it reveals the literal scripting of the proceedings. The president of the board, casino owner Michael Richards, reads a few lines from a text in front of him, then says, “Any discussion?” Because he already knows none of the regents will speak Richards turns the page in his script without looking up, only to be startled to a head-snapping degree when someone does start speaking off camera.
In textbook administrative fashion Richards quickly recovers, listening blankly until the 49:26 mark, then picks up right where he left off in his script, as if the interruption never took place. Moments later, the UI P3 is approved and the meeting adjourned. While the speaker is never revealed on camera, and what they said was unintelligible during the live-stream (at least to me), from journalists who were in the room we did quickly learn who spoke out and the gist of what they had to say.
As reported almost immediately in tweets, then expanded on in press accounts of the meeting, the off-camera speaker turned out to be Iowa State Senator Claire Celsi (D), who represents Senate District 21. (That district includes a chunk of West Des Moines, and is located just south of the suburb of Urbandale, which is where the regent offices are located.) Not only had Senator Celsi taken time to attend that meeting, but after witnessing the breakneck pace of the proceedings and the total disregard for public input and comment, she spoke out in defense of the disenfranchised citizens she represents.
While I have yet to find any comment about Senator Celsi’s impromptu remarks from members of the Board of Regents, when the press asked illegitimate University of Iowa president J. Bruce Harreld for his thoughts after the meeting, he seized the opportunity to shoot off his mouth. (That is notable in itself because for the most part — save his obligation to regularly meet with the staff of the student-run Daily Iowan — Harreld has made a point of avoiding the local and national press during his tenure.) Although Harreld could have easily taken the high road, or said nothing at all, because he is a petty, bratty and vindictive man he went on the attack, almost certainly because Senator Celsi accurately exposed the false narrative that the UI P3 development process was broadly inclusive and transparent.
From Iowa Public Radio’s Katarina Sostaric, on 12/11/19:
On the merits Senator Celsi had Harreld and the regents dead to rights, so Harreld did what he often does. Like a third-rate debater — or trapped rat — he ignored Senator Celsi’s damning charge and simply changed the subject, while also salting in various insults. As a factual matter, however, Senator Celsi’s description of what had just taken place was entirely accurate. After sharing limited P3 information internally at UI, and holding a spate of largely meaningless public meetings as detailed in prior parts of this post, Harreld and the regents only disclosed the critical components of the deal during the same meeting at which the P3 was then immediately approved.
Indeed, when members of the press asked in advance why there would be no public comment at the final approval meeting, not only did the board spokesperson laughably assert that the regents were powerless to provide any opportunity for public comment because of the type of meeting taking place, but both he and a spokesperson for the university once again emphasized the number of prior meetings — as if those meetings absolved the board of any subsequent obligations to the citizens of Iowa. From the Gazette’s Vanessa Miller on 12/09/19 — one day before the slapdash approval of the UI P3:
As a factual matter nothing prevented the board from allowing public comment at the approval meeting, or the university from releasing critical details prior to that meeting. Indeed, in the ‘informational webinar’ that UI conducted the week before, Harreld and his transparency-positive team could have easily divulged key details that they held secret until the approval meeting, thus giving the public time to digest that info. Instead, because they did not want to answer questions or hear any pushback, they used their own policies and governing latitude as an excuse to ram the approval through. (As to why the board and university were afraid of public reaction, a lawsuit that was filed against Ohio State during its own secretive P3 development process was almost certainly the driving force behind UI’s deceptive practices, including falsely asserting that the UI P3 was still in the “exploration phase” when the university was already soliciting and winnowing bids.)
Fortunately, and to her everlasting credit, Senator Celsi called Harreld and Richards on their bureaucratic duplicity in the moment. Like the giggly cool kids they believe themselves to be (watch President Pro Tem Patty Cownie immediately to Richards’ right — camera left — in the video clip above), they know no one can make them do the right thing, so they do whatever they want. In this instance, however, we do have a pointed and pertinent accusation on the record, which reveals the P3 approval process to have been an administrative boondoggle in itself.
Were we in a generous mood we might excuse both the board and university spokespersons for ‘following orders’ from their superiors, but what about Harreld’s disingenuous rant at Senator Celsi? There is in fact a lot to say about Harreld’s bitter retort, but to understand where that particular blast of bile came from we have to pull back and look at the larger context. Specifically, we need to take into account both the preceding forty-eight hours and the remainder of the day on December 10th. In doing so we will not only reveal J. Bruce Harreld’s rhetorical deception to have been premeditated, but expose the degree to which Harreld believes all of Iowa’s legislators are deserving of his personal contempt.
As just noted, after lying about the development of its public-private utility partnership for the better part of 2019, the University of Iowa conducted an “information session” for the Board of Regents on 10/03/19 — as if the board was, at that late date, still oblivious to any prior planning, even as the university and board spokespersons now insist that the entire project was fully disclosed throughout the entirety of 2019. (If everyone in Iowa knew exactly what was happening, why did the regents need an informational webinar one week before the approval meeting?) Three days after that perfunctory clown show, or four days before the final approval meeting on 12/10/19, Iowa state senator Joe Bolkcom — who represents Senate District 43, which includes the great majority of Iowa City and thus the great majority of the UI campus — published an op-ed on the risks inherent in the proposed P3. (That opinion piece, which appeared in multiple publications in early-to-mid-December, seems to have appeared first in the Iowa City Press-Citizen, and was accompanied that same day by a separate write-up from the PC’s Aimee Breaux.)
From Bolkcom’s op-ed:
When I read that op-ed at the time I was brought up short by what turned out to be Bolkcom’s prescient guess about the staggering valuation of the P3, but for the purposes of this post we will focus on Bolkcom’s invocation of the phrase “breakneck speed”, and on his concerns about disclosure. Continuing, from later in the op-ed:
Clearly this is the same concern that Senator Celsi expressed four days later, during the breakneck approval meeting, which in turn prompted spittle from Harreld’s perturbed lips. If a state agency intends to assume a massive debt, and the state itself is ultimately on the hook for that debt — despite Harreld’s scandalous on-camera denial to the contrary — then the public deserves an opportunity to comment before that debt is assumed. Unfortunately, any fiduciary stewardship that was originally intended when the Board of Regents was created has been obviated by the modern-day entrepreneurial ethos, which exults in risking taxpayer funds for the benefit of private corporations. (As a reminder, and as we will see in the next post, $250M of the total $1.17B in upfront cash that will be given to UI was contributed by a secret group of Iowa investors that the regents and university refuse to identify.)
Although Bolkcom’s op-ed did not appear in the university paper, two days later, on 12/08/19 — meaning two days before the P3 approval meeting — the Daily Iowan reported on a forum it had just hosted for local legislators. Among those in attendance were Bolkcom, Representative Vicki Lensing (House District 85, encompassing northern Iowa City), Representative Dave Jacoby (House District 74, covering western IC, Coralville and a rural strip to the north), Representative Mary Mascher (House District 86, which includes southern Iowa City and a strip to the south), and Senator Zack Wahls (Senate District 37, covering far-west Iowa City, Coralville, and a sizeable chunk or rural Johnson County).
From the write-up about that forum, by the Daily Iowan’s Marissa Payne:
As luck would have it, the very next day, on 12/09/19 — meaning the day before the P3 approval meeting — J. Bruce Harreld sat for one of his regular interviews with the Daily Iowan. Although that interview was not published until 12/15/19, or five days after the P3 was approved, the reporters did ask Harreld for his thoughts on the legislative forum:
Setting aside his instant pissiness, and the fact that Harreld just happened to have a bunch of oddly specific data points in his head — as if he stayed up all night cramming for a transparency test, which, in retrospect, he clearly had — this response was simply a verbose preview of his reaction to Senator Celsi the next day. Instead of actually speaking to valid concerns about the P3 approval meeting, at which substantive information would finally be disclosed only moments before the deal was approved — and no public comment would be allowed — Harreld changed the subject and went on the attack. And of course the very next day he did the exact same thing.
As it turns out, however, not only did Harreld use the same disingenuous argument with the DI and at the P3 approval meeting, but he also used it when speaking to the UI Faculty Senate on the afternoon of the 10th — meaning after the P3 was already approved. (Of course by that time it didn’t really matter what the hell he said because the issue was moot, and everyone knew it.) From the meeting minutes for the UI Faculty Senate meeting on 12/10/19, which took place almost immediately after approval of the UI P3 by the Board of Regents:
Clearly, Harreld’s game plan over that forty-eight hour span was to deny that there were any issues about transparency, while also citing all of the meaningless meetings that were conducted during 2019 as proof that the P3 was fully disclosed. At the same time, however, Harreld’s appearance in front of the UI Faculty Senate mere hours after the P3 was approved — to personally inform them about a series of last-minute disclosures that the Faculty Senate and other shared governance bodies knew nothing about — — puts the lie to Harreld’s repeated assertions. (In fact, the meeting minutes for Harreld’s presentation run over three single-spaced pages and comprise two thousand words, and the obvious question is why that presentation was necessary if Harreld kept the Faculty Senate fully informed all along.)
Looking at the big picture, what seemed like a petulant blast directed at Senator Celsi on 12/10/19 was part of larger messaging campaign designed to confuse Iowans about whether the P3 development process was transparent. After Senator Bolkcom’s op-ed dropped on December 6th, Harreld had four days to get his talking points down, and three days later he began hammering his false message at every opportunity — first to the DI on the 9th, then after the approval meeting on the morning of the 10th, and again during the Faculty Senate meeting on the afternoon of the 10th. And of course in all three cases he avoided addressing the legitimate complaint that Iowans had no chance to comment once the most important facts were divulged, because formal board approval followed immediately thereafter.
Even with all of that context, however, and seeing Harreld’s messaging for the orchestrated lie that it was, that doesn’t explain his bile when asked about Senator Celsi’s comments following the approval meeting. And to see what I mean, here again is Harreld’s response as quoted in the press:
Because Harreld knows the press is obligated to pass along whatever he says, whether it is true or not, it may be that a certain percentage of distracted Iowans were swayed by his false insistence that the P3 development process was open and transparent. In reality, however, not only is that not the audience Harreld should have been concerned about when responding to Senator Celsi, but from his “stop it” comment it’s clear that his inner brat was once again in control of his mouth. And that is potentially a big problem for Bro Bruce and UI, because as noted above the legislature is currently in session, and part of the legislature’s job is determining how much state money each regent university will receive for the coming fiscal year.
In that context, and whether you believe J. Bruce Harreld is a super-colossal business genius or a crony toad, let’s consider a simple question. Was Harreld’s response to Senator Celsi smart, or not so smart? Because from where I sit up in the nosebleed section, barking “stop it” at a state legislator during funding season is not just a punk move, it’s a dumb punk move. (There are only 150 Iowans who will vote on how much money you get from the state, and you decide to publicly belittle one of those people?)
If Harreld had a bit more self control he could have said a hundred different things ranging from the banal to the diplomatic, but he clearly cannot moderate his condescension. To underscore how his pugnacity could cost the university, let’s also note that of the legislators mentioned so far in this post — Celsi, Bolkcom, Lensing, Mascher, Jacoby and Wahl — all are Democrats, but Celsi has a unique distinction. Where the others represent districts in which the University of Iowa and/or its students, faculty and staff reside, not only does Celsi’s Des Moines district have nothing to do with UI, it has nothing to do with any of the state universities. Meaning when Senator Celsi is thinking about what’s best for her constituents, she isn’t thinking about spending money on Iowa, Iowa State or Northern Iowa, but about other priorities.
Whether Harreld was high from having rammed the P3 through to completion, or indignant because his pristine power play was sullied, treating legislators like children when you want them to give you money is cosmic-grade idiocy. Making that idiocy all the more inexplicable is that while the University of Iowa is once again pleading poverty, it is also about to take custody of a $1.17B check. Not surprisingly, the implications of that windfall on the school’s appropriations have prompted concerns by everyone from local state legislators to members of the UI campus community, and even Harreld himself seems to be aware of the risks.
From the Daily Iowan’s report about its legislative forum on 12/08/19 — two days before the P3 was approved:
From the UI Faculty Senate meeting minutes for 12/10/19, mere hours after the P3 was approved:
In the DI’s 12/10/19 write-up of that same Faculty Senate meeting, J. Bruce Harreld was not only clearly aware that the legislature could reduce Iowa’s appropriations as a result of the P3 windfall, but he had a novel solution to that potential problem:
Given that Harreld got the job he now holds because he is the little buddy of a rich UI alum, and has never stood for public office in his life, and would have been flushed down the higher-ed toilet if the 2015 UI presidential search had been an election instead of a corrupt crony hire, it is more than a little ironic that Harreld is now agitating for Iowa’s state legislators to be thrown out of office if they won’t give him more money. In fact, the record shows that while Harreld has relentlessly advocated for tuition hikes since he was hired, over the past four years he has done almost nothing to encourage Iowa’s legislators to increase funding. Then again, Harreld also knows there is no mechanism by which the UI community can vote him out of office, so he has no incentive to advocate for more funding unless the regents tell him to do so, which they never do.
Again however, what we should really be asking — as we did moments ago regarding Senator Celsi specifically — is whether it is strategically smart for the president of the University of Iowa to actively campaign for sitting legislators to lose their jobs, while he is in fact waiting to find out how much money they intend to give him. And of course the answer is no, that is not smart, but it is in keeping with the petty, bratty, vindictive way that Bro Bruce conducts himself. Precisely because he is protected by the crony Board of Regents, Harreld knows he can shoot his mouth off and go on the attack against Senator Celsi or any of the other 149 members of the Iowa legislature, and it won’t cost him his $50K monthly state checks.
So how does the funding picture look for the regent universities for the coming fiscal year (FY2021), which begins on July 1st? At a remove the appropriations conversation seems to be little different than it has been the past four or five years. In mid-January, when the legislature gaveled into session, new Republican House Speaker Pat Grassley laid out his budget priorities, and as reported by the Daily Iowan’s Julia Shanahan on 01/13/20, the regents didn’t even merit a mention. The next day, however, when the governor detailed her own FY2021 budget, she had quite a bit to say about the regents, as reported by the DI’s Marissa Payne, on 01/14/20:
At first blush this substantive support from the governor would seem to be good news, but as regular readers know this is merely part and parcel of regent theater. In the fall of each year the regents ask for a given amount of funding — usually around $20M — which the governor and legislature then intentionally fall short of in the final budget. That shortfall, no matter how trivial, is then used as justification by the board — which is appointed by the governor — for again raising tuition on students and families, completely out of scale to that funding shortfall. (Overall, even when there are actual cuts in state funding, the regents increase tuition about $2.7 for every $1 cut. And of course when the state does increase appropriations, tuition hikes in those years are pure profit.) It is, in every sense, a racket, and again this year the governor is proposing $15M of the board’s initial $18M request, thus fulfilling her headlining role in this year’s theatrical budget production.
As to how much money the regent universities will actually get, however, and specifically the University of Iowa, it is not surprising that local state legislators and the university faculty, and even Harreld himself, are concerned that UI might see a reduction in support following approval of the UI P3. If the university really is about to receive a ‘payment’ of $1.17B in cash, of which $999M is liquid, why wouldn’t the state cut funding to the school now that is demonstrating increased self-sufficiency? Particularly given that the other state schools — Iowa State and Northern Iowa — will not be receiving checks for $1.17B, what possible justification could there be for giving UI another $6.7M on top of the massive windfall from the UI P3?
The great irony, of course, is that the University of Iowa proved so adept at obscuring the fact that the $1.17B P3 ‘payment’ is a loan that will have to be paid back with interest, that the regents must now fight against a pervasive belief they themselves created. Even after skimming $166M to pay for incidentals it is undeniable that the University of Iowa will end up sitting on a $999M endowment, which may be the single biggest liquid asset in the state. Whether that money is a ticking time bomb of debt, or — as the university and regents implied for all of 2019 — straight-up profit, the result is that the University of Iowa is about to find itself flush with $1B in unrestricted funds. Which may explain why the regents are now slithering around behind the scenes, trying to convince Iowa’s legislators that UI should still not have its funding cut, despite all that moo-lah. (Cow joke!)
From Kelsey Harrell and Marissa Payne at the Daily Iowan, on 12/10/19 reporting on Harreld’s extensive post-approval briefing to the UI Faculty Senate:
Setting aside the possibility that J. Bruce Harreld let the cat out of the bag, and there is a secret “funding deal” that the regents and legislative powerbrokers agreed to behind the scenes, let’s consider the implications of this sentence. As with the 12/10/19 Faculty Senate meeting itself — which should have been unnecessary because Harreld and his crack team of administrative brigands were so transparent about the details of the P3 — here we inexplicably have the regents “educat[ing] the current members of the state Legislature”, even after UI spent the better part of a year doing just that. Given all of the P3 meetings that were held, and all of he press reports that Harreld himself seems to be able to tick off from memory, what exactly is there to educate Iowa’s state legislators about?
To that point, two weeks ago, on 02/05/20, J. Bruce Harreld appeared before the Iowa House Appropriations Committee and answered questions about the UI P3. Unfortunately, the most important observation we can make about the questions from members of the House, at least as reported by the DI, is that no one asked the most important questions, which include whether the $1.17B in cash that UI is about to receive constitutes a payment or a loan. Equally frustrating, however, is that after four-plus years of paying close attention to the University of Iowa and Board of Regents, I still can’t tell if Iowa’s legislators are genuinely oblivious of the cons that Harreld keeps running, or whether some of them are also bit players in regent theater.
For example, and as detailed endlessly in prior posts on this site, the first sentence in this quote is a flat lie by Harreld, which he nonetheless told with characteristic ease to Iowa’s elected officials:
For any legislators reading this post who may be out of the loop, here is a snapshot of the University of Iowa’s overall funding picture since J. Bruce Harreld was hired in 2015:
* At the end of the 2015-2016 academic year (concurrent with FY2016), the Iowa Board of Regents — on the pretext of a $1.7M funding shortfall from their revised $8M ask — unleashed a massive set of tuition hikes at all three state schools. From that single year of hikes alone the University of Iowa instantly generated an additional $27M in revenue from tuition and fees:
FY2016: Appropriations $230.9M; Tuition and fees $432.6M
FY2017: Appropriations $232.2 (+$1.3M); Tuition and Fees $459.8M (+$27.2M)
* When the state budget collapsed in the middle of FY2017, the governor and legislature took the opportunity de-appropriate UI by about $15M on a permanent basis. In response, the Iowa Board of Regents again increased tuition, this time by more than enough to permanently compensate for those state cuts going forward. To see this clearly, here are the budgeted revenues for FY2018, which show a $15M decrease in appropriations relative to FY2017, but a compensating $17M increase in revenue from new hikes:
FY2018: Appropriations $216.8M (-$15.4M); Tuition and fees $477.4M (+$17.6M)
The net result of these cuts and hikes was that the $27M increase in annual revenue that was generated by tuition hikes the year before was not only preserved, but slightly increased, meaning UI was again net-ahead $30M or so in FY2018, even after all of the funding cuts and de-appropriations.
* In late summer of 2017 (beginning FY2018), J. Bruce Harreld repeatedly referenced de-appropriations in his presentation before the Board of Regents’ Tuition Task Force, while saying nothing about the $30M in additional tuition revenue that the university would generate that year, and every year going forward, because of hikes he had already pushed through. In fact, in that presentation Harreld requested five years of additional tuition hikes specifically to pay for the five-year costs of the UI Strategic Plan — meaning the exact same strategic plan Harreld just used as justification for entering into the recently approved public-private utility partnership.
As put forward by Harreld in the summer of 2017, we can extrapolate the estimated annual cost of the UI Strategic Plan from two slides in Harreld’s presentation. (Note that the specific costs attributed to the UI Strategic Plan, then and now, do not actually exist in the plan itself, but were ascribed by Harreld after its creation.) From the slide on p. 20 we get a total five-year cost of between $155M and $165M, or $33M per year at the high end. From the slide on p. 26 we can deduct roughly $12M in incremental/campus savings from that $33M, leaving a professed annual need of about $21M, or $105M total over five years.
Even as Harreld was using that purported annual $21M cost as justification for five years of additional tuition hikes, he made no mention of the fact that prior hikes already provided sufficient revenue to pay for the UI Strategic Plan — and of course the board was fully aware of that surplus as well. Not only did the regents eventually approve Harreld’s demands, albeit at a lower percentage than initially requested, and following a one-year delay, but the board also granted itself two important caveats. Along with raising tuition 3% each year for the next five years, the board would do so even if state appropriations increased dramatically. Conversely, if state appropriations failed to keep pace with inflation as gauged by the Higher Ed Price Index, the board would simply add any shortfall to the annual 3% increase, again guaranteeing itself a profit regardless of state funding.
* Although the new compulsory tuition hikes were stalled for a year, in FY2019 the board once again increased tuition while also seeing another small decrease in appropriations:
FY2019: Appropriations $214.7M (-$2.1M); Tuition and fees $482.8M (+$5.4M)
Once again, the result was that the University of Iowa was net-ahead another $33M or so for that fiscal year, as compared to FY2016.
* Only in FY2020 (the current fiscal year), has the University of Iowa experienced a decline in revenue from tuition and fees, and yet increased appropriations largely compensated for that drop:
FY2020: Appropriations $218.7M (+$4M); Tuition and fees $477.7M (-$5.1M)
The end result is that over the past four fiscal years, even after taking into account all of the funding cuts and de-appropriations that Harreld and the regents have been wailing about over that time, the University of Iowa is net-ahead approximately $120M in total, or about $30M per year. Not only is that roughly one and a half times the annual $21M amount that Harreld said he needed to pay for the UI Strategic Plan in the summer of 2017, but it is twice the $15M or $16M Harreld now says he needs from the UI P3 to pay for the exact same strategic plan in FY2020.
All of which now brings us back J. Bruce Harreld’s testimony before the Iowa House Appropriations Committee two weeks ago:
As just detailed using the University of Iowa’s own data, not only is there no “funding gap left after state appropriations and tuition” with regard to the UI Strategic Plan, but UI has been able to cover the professed costs of that plan since FY2017, following the massive hikes that were pushed through at the end of FY2016. All of Harreld’s claims in FY2018 about needing additional tuition revenue to pay for the strategic plan, or now needing revenue from the UI P3 to pay for the same strategic plan, have been premeditated lies. In fact, for FY2021 and every year going forward, the University of Iowa will bank another $30M or so in tuition revenue as compared to FY2016, and that would still be true even if the next four years of compulsory hikes were abandoned and the UI P3 produced not profits. On the other hand, once those new tuition hikes are implemented and the UI P3 endowment begins to generate returns, the University of Iowa will be net-ahead an additional $20M to $30M each year, or $50M to $60M from all new sources or revenue as compared to when Harreld took office.
Even assuming that the majority of Iowa’s legislators do not know these facts, at what point do legislators get tired of being played for suckers? In his recent testimony before the House Appropriations Committee Harreld not only lied to their faces about needing additional funds for the UI Strategic Plan — which he is already generating from prior tuition hikes — but immediately after doing so Harreld went right back to calling for those same legislators to be voted out of office if they don’t give him more money:
Again, what is the benefit of antagonizing the very people who will determine how much funding you get for the coming fiscal year? How is that smart, particularly when the regents are skulking around in the shadows, trying to ‘educate’ legislators about why they should keep shoveling money at UI? Whether the P3 is a loan or a payment, the University of Iowa is about to receive $1B in cash, all of which will be unrestricted as to its use — yet Harreld is talking trash in Des Moines?
Consider what the UI P3 must look like to legislators from either party who hail from, say, western Iowa — where there are no regent universities benefiting each year from hundreds of millions in state appropriations. Whether they have been paying minimal attention or have been educated about the UI P3 by the Board of Regents, they know the University of Iowa is about to find itself sitting on $1B in cash, which it can use for any purpose under the sun. Not only have those legislators never seen that much money themselves, but they have to fight tooth and nail, every year, just to get a few thousand dollars here or there for law enforcement or social services in their districts. And yet, at the same time that UI is about to become cash-rich, they know that the president of the University of Iowa is demanding even more money from the state.
Wasn’t the whole point of hiring a non-traditional university president from the private sector to generate additional revenue? And isn’t that non-traditional president now fulfilling that mandate, by generating a truly stupefying windfall for the school, and thus also the state? So on what basis is that same university president not only calling for more state aid, but threatening to vote legislators out of office if they don’t meet his demands?
Were I such a legislator, not only would I be dubious about anything the board told me — particularly after that university president not only lied to my face, but showed me his ass on the way out the door — but I would be thinking very hard about why I would want to give more money to the one regent university that was about to receive a billion in cash, while the other two state schools were fighting for relative funding scraps. In fact, I think I would also take a very hard look at the premise that the University of Iowa should be allowed to protect that $1B ‘payment’, and only spend the proceeds of an endowment, when the university could actually do both to the benefit of the state, while still honoring its contractual obligations.
Specifically, as a state legislator looking for money for my own constituents, I would agree that the University of Iowa should generate as much revenue as possible from the initial $999M endowment, but at the end of the first year not only would the university be obligated to spend that revenue in full, it would be required to draw the endowment down by $20M. ($999M divided by the fifty-year term of the P3 is roughly $20M per year.) In the second year that $979 endowment would again generate a profit, at which point both those returns and another $20M could be used to fund whatever programs or expenditures the campus deemed appropriate.
At the same time, however, because of all of that new, unrestricted cash and revenue at UI, I would argue — perhaps from the well of my chamber — that appropriations to the University of Iowa should be reduced by $35M, precisely because the non-traditional president of the school proved so successful at generating what the president of the Board of Regents called a “new revenue stream“. (I would stress that this was not a cut, but a reallocation of state resources made possible by J. Bruce Harreld’s heroic success.) While the university and regents would probably prefer to keep the $999M endowment intact, and only spend the proceeds, it would obviously be selfish for a regent university to sit on a billion in cash when there were so many other pressing needs. In fact, the current proposed funding increase that UI clearly does not need could be split between Iowa State and Northern Iowa, both of which struggled this year with enrollment declines, which significantly reduced tuition revenue. (An extra $5M would be an incredible boon to UNI, while that same amount is a a drop in the bucket at the University of Iowa, which has an annual budget of $4B.)
Whether or not any legislator proposes something along those lines during the current session, ask yourself how likely it is that other legislators from either party would sign on. The Democrats who represent Iowa City and Johnson County would certainly be opposed, but what about legislators from districts which do not materially benefit from the hundreds of millions of dollars the state sends to the three regent universities each year? For example, how do you think Senator Celsi would vote if someone proposed a cut to UI’s funding commensurate with profits from the P3? Do you think Senator Celsi, a Democrat, would be favorable disposed to the petty, bratty, vindictive university president who told her to “stop it”, or might she be more inclined to vote in favor of shifting revenue to her own constituents?
As for any financial concerns about strategically reducing the P3 endowment by $20M per year, note that during the university’s ‘informational webinar’ on 12/03/19, Harreld and his administrative team took great pains to point out that even if the endowment was reduced to zero at the end of fifty years, UI could simply turn around and do the same deal all over again:
If the University of Iowa was a private institution there would be nothing wrong — indeed everything right — with sitting on a massive endowment and only spending the annual returns. That is in fact how many private colleges and universities survive, precisely because they do not receive taxpayer support in the form of state appropriations. For a public university to assert, however, that it should be allowed to preserve a mountain of money that was generated from state assets, and can be generated again when the UI P3 contract expires, would simply be bureaucratic greed. (Given that UI is about to receive an unprecedented windfall, not only should Harreld and his team be thankful that the state facilitated their success, but as a steward of state resources Harreld himself should insist on a commensurate reduction in state support, so critical funds could be directed to agencies and citizens who will not benefit from the UI P3.)
As to the Board of Regents trying to head off funding cuts at UI by educating legislators about the UI P3, the board is almost certainly doomed to fail not because of external opposition, but from internal dissent. To see why, take a moment and consider which state legislators would be at the front of the line in advocating for less funding for the University of Iowa. And of course the answer is those legislators who represent districts which include Iowa State and Northern Iowa, which are the other two universities operating under the auspices of the Board of Regents. If only to make clear that they were fighting for every penny for their constituents, the senators and representatives who represent ISU and UNI would almost certainly come out in favor of reducing UI’s appropriations, lest they leave themselves vulnerable to a challenger in their party’s primary or in the general election. (Even if the regents made it menacingly clear to the presidents at ISU and UNI — who work for the Board of Regents — that they were expected to publicly support increased appropriations for UI, those presidents comprise only two voters, whereas the justifiably irked students, staff, faculty, and administrators at those schools number in the tens of thousands.)
I honestly don’t know whether Senator Celsi or anyone else in the state legislature knows that J. Bruce Harreld is, objectively, lying trash, but the thing to remember is that Harreld certainly knows, and on that basis alone you might think he would avoid denigrating elected politicians. Indeed, once we start considering who would support cuts in funding to Billionaire Bruce, and who would oppose such cuts, the only people in the 150-member legislature who would have any reason to vote against such cuts would be the Democrats who represent districts that include UI, which are already among the wealthiest districts in the state. In fact, if you live outside the Iowa City/Johnson County area, you might ask your local legislators how they feel about the University of Iowa hoarding a billion dollars in cash, while the president of the school runs around telling anyone who will listen that they should be thrown out of office if they don’t give him even more money.
Or, alternatively, you could send them a link to this post.