Unveiling the Ivy League Billion-Dollar Taxpayer Tab

Episode Transcript

John Tomasi: Adam Andrzejewski, welcome to Heterodox Out Loud.

Adam Andrzejewski: Great to be here, John. Thanks for having me.

John Tomasi: It's really a pleasure to meet you finally. I've been following your work at Open the Books for years. I'll be with some mutual friends who are also big fans and supporters of Open the Books. And it's just really nice to have you in our studio to talk about federal funding, state funding for higher education. I wonder if we could just begin by talking about Open the Books itself. So tell our audience what Open the Books is, how it started. You were the founder, I gather?

Adam Andrzejewski: Yes.

John Tomasi: And so how did it start?

Adam Andrzejewski: So it started back in Illinois. And Illinois is the Super Bowl of corruption. If anything happens on public policy and politics, that's good for the people of Illinois. It's entirely by accident. So that's where we started. We started basically in the towns, Palatine, Illinois. We wanted to know how much the city manager made. And it took us 20 Freedom of Information Act requests to quantify 26 different buckets of compensation. And it turned out he was making over $300,000 a year. This was back in 2010. So we figured if it was that hard just to quantify one public servant and how much they made, then we should do the whole state. But we're entrepreneurs. So we built it scalable. And then we built it to do the entire country. So last year, we filed 55,000 Freedom of Information Act requests on nearly every single substantial public body in the entire country. And for the first time in history, not quite, but almost, we've captured every dime taxed and spent at every level of government, federal, state, and local across the country. And that's historic. And we think it's, you know, we think it is the most important public policy innovation in the history of the country.

John Tomasi: Nice.

Adam Andrzejewski: Because we've unsiloed all government spending at every level.

John Tomasi: So you think it's the most important contribution or innovation because of the importance of transparency? Is that what you would say?

Adam Andrzejewski: Well, we believe transparency revolutionizes United States public policy and politics. And so think about this. Since 1789, the burning question has been, what the heck is my government up to? And it's taken this long. But now we've unsiloed all government spending, like I said, federal, state, and local. So if you want to know the salary of the fifth grade teacher teaching your daughter, we have that on our website. You can search it for free at openthebooks.com. If you want to know, if you have questions about White House payroll, like who's the most highly compensated Joe Biden staffer at the White House? It's an easy search at openthebooks.com. Federal checkbook, all the way back to 2001. State checkbooks, all 50 states, 25 million public employee salary and pension records. And you can search it all on our website, like I said, for free. And we've actually pioneered Benjamin the chatbot. So with three easy questions delivered to your email inbox, you can get an answer to your questions on government spending.

John Tomasi: I didn't know about that. So I have the app on my phone.

Adam Andrzejewski: Yes.

John Tomasi: Which I think is really useful and very interesting. I sort of spend time sort of scrolling through, just looking through various things about government spending at all different levels. But tell us about the chatbot. I didn't know about that.

Adam Andrzejewski: The chatbot is our AI innovation. So it runs up against our entire database. So if you answer three simple questions, it'll deliver the production results to your email box. So for example, let's just go through some searches you could run. If you wanted to know how much Amazon takes out of the government complex every year, it'll return that answer. Now, that answer will take a couple of hours. But again, you've been waiting since 1789 for the answer. So when it runs up against our entire database like that, it takes a little longer. But if you want to know the salary of a colleague at a public institution of higher ed, you can find that answer out really quickly.

John Tomasi: I remember being a graduate student at the University of Arizona, and every year the student paper would publish salaries of the professors in the special issue. And at the time, I wasn't quite sure to think about it. I felt like it was interesting and kind of a prurient grad student way to sort of see what these professors were making and to see the gaps between the highest paid and the less well-paid seemed interesting. But I wasn't sure what the public value of that would be. But you could just say a little bit more about that. So it's not a gotcha. It's not a sting. It's because people in a democracy should know where funds are going. And if they're not allowed to know, there's something, would you say, anti-democratic about that?

Adam Andrzejewski: 100%. So transparency levels the playing field. So let's go back again. Transparency levels the playing field. Right. It gives the same information to the people paying the bills, taxpayers, that the people running the government already have. So they already know how they're spending our money in our name. Now, with transparency and the Freedom of Information Act sunshine laws across the country, we now have the same information that they already know. So that levels the playing field. So let's go back to the founding of the country. Transparency is actually baked into the powerful appropriations clause of the United States Constitution. Everybody focuses on the first part of that clause. It's Article 1, Section 9, Clause 7. And that's about how to spend money. But the second half of the clause is about transparency and the people's right to know. It says that a regular statement and account of the receipts and expenditures of all public money shall be published from time to time. Now, look, it's the Internet age. It's the age of big data, the cloud. There's a clear interpretation. Post every dime online in real time. Open the books.

John Tomasi: Fascinating. So I've been following open books for a while, as I mentioned. But your organization came on the radar screen of Heterodox Academy. And all my colleagues, we have a food for thought channel. And we started thinking a lot about open the books. Only recently, in November of 2023, when in a month or so after the Hamas attacks, you published this kind of remarkable piece. I think it was in the Harvard Crimson? Or it was about why Harvard should open the books.

Adam Andrzejewski: Right. I think that was published at Tablet.

John Tomasi: Oh, at Tablet, right. I'm sorry, of course. And that sort of turned HXA's attention to these questions as well. So what are the federal connections to universities? How much authority might legislators like Elise Stefanik have on behalf of the government over these universities? The question of how much money universities get from the federal government seems really important as we try to understand the reform opportunities for universities. Can you just say a little bit about that report that HXA was interested in and drew our attention to you, as I said, about what you found about the Ivy League spending?

Adam Andrzejewski: So in November of 2023, we updated our oversight data on elite colleges. So we took the eight schools of the Ivy League. We added in Stanford and Northwestern. And what we found is that over the previous five years, from 2018 through 2022, the collective endowments of those 10 schools went up by $65 billion, yet they had cost taxpayers $45 billion. And here's how that breaks down.

John Tomasi: You're going to break down the cost.

Adam Andrzejewski: Yes. $33 billion at taxpayer cost flowed from federal contracts and grants into those 10 schools during that five-year period. They also benefited approximately, we estimated, $12 billion worth of investment. investment gains that they didn't have to pay tax on. So you had a $45 billion cost to taxpayers. So who knew that these elite schools were actually taxing you while their endowments soared? And if we take a look at Harvard, Harvard's endowments soared by nearly $12 billion during that five-year period, while they collected $3.3 billion on federal contracts and grants. So here you have what we called a self-enrichment scheme of these universities organized as public educational charities. And that is they stuff their endowments with private sector funds while they offload all of their research on the back of taxpayers. And we think that's patently unfair. And we've called for these elite schools to lighten the load on the American taxpayer.

John Tomasi: Can you say something about the tuition dollars? Because one of the really striking features of that report was talking about how much of the university's revenue on those elite schools comes from tuition dollars and how much comes from federal grants and contracts.

Adam Andrzejewski: So these elite schools, the Ivy League included, they are a more federal contractor than they are educator. What we mean by that is they get more payments on federal contracts and grants than they collect on undergraduate student tuition. It's a pretty shocking statistic.

John Tomasi: When we all read that piece, that was the one line that jumped out at us. We were surprised to find that tuition was a lower revenue piece than the federal government. And by the way, in federal government, by the way, you say you're combining grants and contracts.

Adam Andrzejewski: Right.

John Tomasi: With the contracts, who controls the intellectual property rights values?

Adam Andrzejewski: Yeah. And this is very important. And obviously, it varies by contract. But the most common occurrence is that the IP, the inventions, especially on grants, accrue to the university itself. So think about that. They're stuffing their endowments with private sector donations. They are offloading their research on the back of taxpayers, where 90% of their federal money comes in on grants. And at the end of the day, the universities own the IP to further enrich the university, but taxpayers paid for it.

John Tomasi: I want to just, when we come back to this, I want to put a marker here, because there is a question, I think, about how rich universities should be. That's sort of separate from the question of what the universities owe the public who's doing the paying for it. There are people who would say that America has the greatest university system in the world. We built that over the last century, especially. Right. I think that's a true statement. But in part because of government policies that made endowments, that made endowments, give special tax advantages for endowments, tax exemptions from property taxes, and so on. So, we'll come back to this as we go, the evaluation of what to make of the facts that you've come up with. But there is this point out there that some people, some of our listeners, I'm sure, will think that it's good to have universities have a lot of money in America because you want to have the best universities in the world. Do you have a thought about that?

Adam Andrzejewski: I do, yeah. And I think that's something, it's a point that you do have to take seriously. But here's where the argument's going. So, today, the eight schools of the Ivy League have a collective endowment north of $200 billion. We forecast at the current gift and giving rates that by 2048, their $200 billion endowment will actually grow to a trillion dollars. So, that's a relevant fact when you talk about public policy and where do we go from here, that these elite schools, they literally have all the money in the world. They have all the connections in the world. And so, why at the end of the day, with, for instance, Harvard's endowment at $51 billion, why are they collecting $3.3 billion from taxpayers? So, I think they need to lighten the load on the American taxpayer.

John Tomasi: It's an interesting point. I've heard people saying for years in my profession that endowment, subsidies for endowments and special tax status helped universities grow to become powerful players and great educators and real public service entities. This is a common view within the academy, at least. But I know for years, people have been saying things like, well, at what point is a tip and it no longer is clearly the right thing for the government to be paying for and taxpayers to be paying for to make them ever richer and ever, ever more prominent. So, I'm not sure how we measure that, how we know that. But part of what's so striking to us about your work at Open the Books is that you're bringing this data to us so that we now can start having that conversation, a conversation that really wasn't available before you started making these disclosures, systematic disclosures about the money that's flowing the way it is.

Adam Andrzejewski: And it's a nonpartisan issue. So, you have folks like, I believe it was The Atlantic that wrote the piece, you know, Should Princeton Exist?, which basically calls into question the whole concept of an elite university in an egalitarian system.

John Tomasi: You have- Princeton is the wealthiest university in the world per capita because it's smaller than Harvard.

Adam Andrzejewski: Right. And then, for instance, right now you have the state legislature in Massachusetts and there's been legislation introduced to slap a 2.5% excise tax on the Harvard endowment, which would pay for every single undergraduate student on tuition in the state of Massachusetts in public universities. So, you have all these different types of public policy prescriptions right now on this issue.

John Tomasi: I want to talk a bit more about what the October 7th attacks and then the congressional testimony, how you heard all that from the perspective of Open the Books. So, here you are, mired in the data, studying all these cash flows from taxpayers to these universities, and then you see the spectacle that we all saw. I'm just curious from an Open the Books perspective, when you saw Elise Stefanik asking the college president these questions, what was your perspective? So, when Stefanik asks the question, does calling for the genocide of Jews violate your policy on harassment and bullying, and there was a complete lack of moral clarity from the three college presidents, the whole country was witness to that. The first thought that came to my head was bigotry, discrimination, anti-Semitism. No institution should receive public funds if they incubate those type of things on campus. And so, when, and Congress has a real, as we've discussed, Congress has a real role to play here because federal tax dollars exceed the dollars that are coming from the parents of students on campus. And so, these are, these are real public policy questions that need to be on the table. And we were happy to add to that debate. And a lot of those funds are flowing into research projects, presumably science and STEM. So, there's probably going to be public benefit to some of these research projects through time.

Adam Andrzejewski: Well, there's a lot of waste too, John. So, I mean, you got Cornell University, you know, a million dollars on a study where it hurts the most to be stung by a bee

John Tomasi: I wanted to ask you about that study. So, I didn't.

Adam Andrzejewski: Turns out it's the nostril.

John Tomasi: Oh, is that right?

Adam Andrzejewski: Yeah, I read it.

John Tomasi: So, let me just, on that, on that study, I was struck by that example of yours. I'm not sure, I haven't read the study. I would like to read it. I'm very curious to see whether it's as frivolous as it sounds. It might be a title that they're trying to figure out about some fact about human sensitivity that might be important for us medically. And I'll give an analogy that may weaken the position of my own position, but I'll give it anyway. And I work in philosophy. And there's a very famous, famous article written by a philosopher named Tom Nagel with a title, and it's embarrassing to say, but I will, what is it like to be a bat? And look at it from the outside. You think, what university would fund some ridiculous, who cares what it's like to be a bat? And a lot of people can say, I agree, but what Nagel is doing, he's asking an old philosophical question about, how do we perceive the world, and how do we understand what's out there? We have our five senses, we humans, and we attract the world that way. And Nagel is saying, well, what if you had a bat like sonar? How would that affect the way we process information? So, sometimes there are studies that have maybe two cutesy titles, like, what's it like to be a bat, or where does it hurt to be stung most by a bee? That is doing work that's taken seriously by scholars and academics, even if it's not immediately recognizable as such from the outside. I just wanted to mention that as a...

Adam Andrzejewski: I don't know the public policy benefit of the study, but look, I did read it, and the researcher, he took, you know...

John Tomasi: You read that report. You read that report.

Adam Andrzejewski: I did.

John Tomasi: Oh my God, that's awesome.

Adam Andrzejewski: He stung himself in every area.

John Tomasi: No, he didn't.

Adam Andrzejewski: Yes.

John Tomasi: Oh my gosh. So, you think the areas that would hurt the most, well, I guess the nostril hurts even more. Oh, that's really good. That's really good. So, when... And your piece in 2023 about the Ivy League schools plus Northwestern and Stanford, I think were your set. You know, there was a sense then, I think, around the country, what's going on at universities? How have they been allowed to do these things that they're doing? What's their accountability to the rest of the country and their fellow citizens? And your report showed that, at least opened up some light on the question by showing some alarming and striking facts about the percentage of revenue universities get from tuition versus revenue from tax breaks. There's a history there, as we know. There was, you know, in 2017, there was the excessive endowments tax. Can you say a little bit about that tax and what that tax... How do you see that tax from an open-the-books perspective?

Adam Andrzejewski: So, the Boston Globe cited our work in the spring of 2017. We did a report over a six-year period from 2010 through 2015 on the eight schools of the Ivy League and their receipt of federal funds, special tax breaks, and other subsidies at the state and local level. And during that six-year period, we quantified roughly $42 billion flowed to those eight schools of the Ivy League. So, the Boston Globe did cite our work in that study, which had great national impact at the time when the Republican Congress and the Republican president slapped a first-ever tax at 1.4% on the excessive endowments, on their gains. Now, many people thought that that was a pretty low tax to put on the excessive endowments. For example, if you're a wealthy individual in America, your top-line capital gains tax rate is 23.5%. So, fast forward to today, after our reporting in November of 2023, for instance, there's Senate legislation out of Ohio with J.D. Vance, the senator. He wants to take the 1.4% tax and make it a 35% tax. And this is not across, these proposals are not across all endowments. They're endowments that reach a certain kind of level that they call excessive. And I think that, you know, the Vance tax in legislation would be any endowment that exceeds $10 billion.

John Tomasi: Interesting. Now, I, you know, I think... Regardless of the school size, that's a number that's... In the 20... It's sort of a flat tax concept.

Adam Andrzejewski: Correct.

John Tomasi: He's not doing a ratio of how many students there are or what the value of the endowment per student is. That's what the current tax law has.

Adam Andrzejewski: Exactly. And I think that's, I think that's a million dollars a student or there's some, there's some line of demarcation.

John Tomasi: I think it's $500,000.

Adam Andrzejewski: $500,000. Yes.

John Tomasi: Right.

Adam Andrzejewski: And, and in the 2017 legislation, you actually have to take federal funds. So, for example, Hillsdale College is exempt from that excessive endowments tax because they don't take government money.

John Tomasi: Right. Interesting. And that idea about the endowment tax, you were telling me this before we came on studio, you were telling me there's some history there, going back to Milton Friedman and some other earlier thinkers. Can you say something about that?

Adam Andrzejewski: When the Republican Congress came up with this tax, I was a little uncomfortable with it because I don't believe, you know, look, I believe there's a lot of waste, fraud, corruption, and abuse. We should cut those areas and not tax entities further, just as a general rubric of thought into openthebooks.com. I've turned around on it when I read Richard Vedder's piece in the Wall Street Journal with Milton Friedman quoted. So, I guess a couple of years, Milton Friedman was 91 years old by 2003, and Vedder had an email conversation with Friedman because in 1960, Friedman thought the positive externalities of higher education merited subsidies and not taxes. But by 2003, Friedman, Milton Friedman had turned around. He thought tax the schools rather than subsidize them because now they have negative externalities for society.

John Tomasi: I haven't read that piece. I know a lot of Milton Friedman. I haven't read that piece, but I need to find that and read it.

Adam Andrzejewski: It'll be fascinating.

John Tomasi: Were the negative externalities, and maybe I'm not sure how fresh it is in your mind, but I'll just throw it out here anyway. Were the negative externalities ones that had to do with, I think it's 1960, 1960 something? What year did you say?

Adam Andrzejewski: So, in 1960, and he wrote a book, and he advocated for subsidizing the higher education rather than taxing it.

John Tomasi: And when did he flip?

Adam Andrzejewski: By 2003.

John Tomasi: Oh, by 2003. Okay, way later. I'm just really curious to see what those negative externalities were. Were they that people were not choosing the right majors that allowed them to be economically productive? Or are they more negative externalities such as people not liking America or being brought into a worldview of seeing America in a very negative light and wanting to change the social structure or something? What were the negative externalities he talked about? Do you happen to know?

Adam Andrzejewski: I don't know what he was looking at, and I don't think it really gave a lot of detail in the piece at the Wall Street Journal. I think it was about a 400-word piece there by Vedder. But I'll give you a negative externality, obviously. Look, in front of Congress, in front of the House Subcommittee on Education and the Workforce, when you had the three college presidents up there and they can't answer on the genocide of Jews question if it violates their rules on bullying and harassment, that is obviously negative externality. Just on a micro basis, you've got the University of Virginia. So the University of Virginia is founded by Thomas Jefferson, the author of the Declaration of Independence. All men are created equal. And in America, you have equal opportunity. You can make something of yourself. I'm the beneficiary of that. I started out in a small town. In 15 years, I was able to make it to one of the most wealthy zip codes because my brother and I started a company. I had an exit and I dedicated my life to public service. I'm the beneficiary of the Jeffersonian principles. So was the University of Virginia embracing Jeffersonian principles or have they gone in a different direction? So here's a microcosm example of a negative externality. So Students for Justice in Palestine, after the 10-7 attacks, they hold a rally on campus. Now, this is an organization that's so radical that Columbia University and Ivy League school had suspended them, suspended their local chapter at Columbia. And they're serious about it. Like they've been sued on it and they're battling the lawsuits. University of Virginia, there's a professor and she offers extra credit to her students to attend the rally. That is a prima facie example of a negative externality.

John Tomasi: Interesting, because she's encouraging people into a worldview which is anti-Semitic. Is that what you would say?

Adam Andrzejewski: Yes.

John Tomasi: I mean, I think what's kind of floating in the air, there's sort of two things here. I see Open the Books as providing information that can be taken in different directions for reformers who see the world in different ways. You can take that data and embed it in different political worldviews, different ideological worldviews and reach different conclusions. I'm hearing you say that Open the Books takes the position that this data we're seeing really says something about how universities need to be reformed.

Adam Andrzejewski: Yes.

John Tomasi: That the common reaction to those hearings is one you share. And what you add to it is now this information about how much flow of money, of public monies are going there. That leads to the conclusion, I think, that I think you hold, but I'll just let you tell me in your own words, that there should be more government and public oversight of the goings-on within universities. Is that what you think?

Adam Andrzejewski: Well, here's the position that I think that universities should mimic, especially the universities at the Ivy League that are organized as 501c3 public charities. And they should mimic, on the receipt of public funds, the policy that we have internally at OpenTheBooks.com. We don't accept government money. That would compromise our mission as government watchdogs. So, for instance, at the height of the pandemic, we could have taken $700,000 worth of COVID aid, but we swore it off. We made it through COVID on our own. And let me tell you, it was tough. For the first time in five years, I had to dip in my own bank account, and I had to put $30,000 in to make payroll. Our chairman had to do the same thing. But we had the personal wherewithal and the network of donors who support our mission to weather the storm. For instance, those wealthy colleges at the Ivy League that are organized as 501c3 public educational charities, they have all the money in the world. They've got all the relationships in the world. They've got all the access to capital in the capital markets. They don't need government money, and they should lighten the load on the American taxpayers. So, that's where we would come down. Like, institutions should do it on their own. They should start to lighten the load on taxpayers.

John Tomasi: So, there's two ways we could go here, I think. One would be to say, which you're just saying now, that ideally, universities should not take federal money, or let's say federal money. They go Hillsdale, as it were. That would be your recommendation. The other way we could go is to say that if universities take federal money, if they continue to take federal money, then they have some special degree of accountability to their fellow citizens to disclose and describe what they're doing. And on that second road, which is probably the road we're more likely to be on for some time, I don't see Harvard and all, not anytime soon. I don't even think these universities are going to get a haircut, even now. I'm very curious to hear what you think is coming. I'm going to save that toward the end, because I think that's a big question I'm just fascinated to talk with you about. But if they're not going to go Hillsdale, that is not to take federal money at all. If they went Hillsdale and took no federal funds, then I suppose they can do what they want to do. They're not genuinely private institutions now. They can make choices about what they teach, how they teach it, all kinds of the marketplace will decide who's providing value and who's not, perhaps. But if they do take federal money, let's talk about that world now. And I think a lot of people are feeling this after hearing the congressional testimonies, the Stefanik and all, that there should be some kind of appropriately oversight. There should be more oversight of what goes on on university campus in a specific way. The kind of programs that are taught there, the kind of ideas that are taught there. Do you think that's true? Do you agree with that idea? We can't do the ideal of going Hillsdale, but we go the other way. Do you think it's right to say that if they're taking federal funds, there should be more accountability? And what accountability should that take?

Adam Andrzejewski: I think the accountability is going to be delivered in each individual state. So we're going to have a marketplace of ideas that come from the 50 states. So let's kind of break that down. We've already talked about what Massachusetts is doing, you know, with the Harvard endowment, the 2.5% excise tax to, you know, proposal to pay for all public education for undergraduates in the state. You have Florida, Governor DeSantis, the state legislature. There's no public money used for diversity, equity, inclusion programming. And you had the University of Florida terminate 28 staffers about two weeks ago and save taxpayers and students $5 million, the $5 million actually gets put into a elite professor recruitment fund to bring the best and the brightest into the classroom on behalf of the students at the University of Florida. You have Texas, which pretty much followed the Florida model. Their law became effective on January 1st, but there really hasn't been any headlines as to any institution making any reforms there yet. We're now in the middle of March. You have Wyoming and there's legislation that passed, I think, the Wyoming House. It goes to the Senate. There's been a compromise where there will be no public funds for diversity, equity, inclusion, DEI officers, offices, programming, but they leave the classes alone. So the Wyoming legislation in the red state actually gives great latitude to academic freedom in the classroom. So I think on all the, you know, if you do a survey out there now, there's all kinds of ideas on how the states are trying to reform their systems. And this is good. This is the way federalism works.

John Tomasi: It's really, it's so interesting, right? We see us entering this period of experimentation and there are also big experiments going on, going on abroad. We're following the, in the UK, the Higher Education Reform Act, which imposed a bunch of government regulations at universities, including having a requirement that every university, that receives money, has to have an ombudsperson, as they call them, to monitor open inquiry and free speech. So they're doing, there's a model going on in the UK too, which is also where we're watching with great interest for this kind of reform efforts from the outside of universities. There's an idea that I just want to, you mentioned academic freedom, and I want to say a little bit more about that with you and get your reaction to something. So in 1915, there was a very famous statement produced by the American, the AAUP, the American Association of University Professors. It was written by John Dewey and some others. And in this statement, America sort of went through a period in the late 1800s of exploding the number of colleges around the US. In a typical American way, people are starting new colleges everywhere you looked. And one year, I think in 1880, for example, there were four universities in the UK, four ancient, wonderful universities. There were 44 in the state of Ohio alone. Such an American approach that gives, let's start a new one, let's start a new one, all that kind of very American world. So there was an explosion of university building and college building across America after the Civil War. But they weren't quite sure yet what was this thing they're creating and what's the relationship, here's the relevant part, what's the relationship of these entities, these universities, to the donors or to the public or to anyone else on the outside. And the 1915 report gives this classic statement of strong academic self-governance. And what they say then is that universities have a very special public role to play in the society. It's a role for the long term. It's a role that only the experts in these various fields of philosophy, like my bat sonar person, friend, or the bee stinging person at Cornell, or hopefully other philosophers and scientists who are doing work that's relevant and important to society in the long run, only they as experts can really judge the quality of that kind of work.

Adam Andrzejewski: Right.

John Tomasi: So they argued for, kind of remarkably in 1915, for a special sphere of insulation around university decision-making. And the key line is that they said that academic freedom is best protected by academic self-governance. That only by allowing universities to govern themselves without outside influence can we have academic freedom protected. Because only they know what's good work, what's not good work, what's important work, what's not important work. Around here at HXA, you know, many of us like that idea. Kind of, for me, grew up as a professor in that idea. But then we also watched things happening that seemed like it wasn't so clear. It's not so clear to us now that academic freedom, open inquiry, asking questions, freedom of speech, truly is best protected by academic self-governance. Maybe, in fact, there's some need for some outside agents to come in and to play some role in reforming them. Do you have any, you mentioned academic freedom. Do you have any thoughts about that? I mean, I'm just sort of, again, looking at this government role. You agree that the government either should be out of it entirely, no funding and no control, roughly, or they should be involved. And so the experimental approach is what you're most interested in, the state-based approach.

Adam Andrzejewski: Right.

John Tomasi: Is there a federal rule? I mean, are there blanket federal policies?

Adam Andrzejewski: So, I mean, you raise a great frame. And into that frame, I'd like to put the situation at the University of Virginia that we've uncovered last week. It's national news. And I'll just mention, we're extremist. The whole Virginia University system, we're interested in deeply. So let me...

John Tomasi: Interesting. I'd love to hear what you're doing.

Adam Andrzejewski: So after Florida terminated, University of Florida terminated the 28 staffers for $5 million of total cost, we took a look at the University of Virginia to see what the DEI, Diversity, Equity, and Inclusion complex, looked like at the state school. They had represented a year ago to the New York Times that they had 40 staffers employed under the DEI banner. A couple of months later to their board of visitors, they had represented in a formal presentation 55 staffers dedicated to DEI under the banner. We had filed a Sunshine Request for the university payroll. We received that. We went through it. And we actually quantified 235 staffers, including 82 students. And some of them were making a lot of money. Obviously, diversity, equity, inclusion rejects merit. The equity component is the opposite of equal opportunity. It's equal outcomes. So it's a rejection of Jeffersonian principles. The very school founded by Jefferson was moving in the opposite direction. These concepts have their foundations and roots in socialism, in neo-Marxism. So you have the 235 staffers. Woke doesn't mean broke. Like, the top ones are making a tremendous amount of money. The person in charge of DEI for the entire university-wide programming, his base salary, cash compensation, exceeds the salary of the President of the United States. He makes $401,000. Over at the Darden School, their chief global diversity officer, made $452,000 on cash compensation. When you add in the cost of benefits at 30%, that's $530,000 a year. At student, at taxpayer expense. Money that could be being spent on financial aid for students, for new professors doing research, all those other kinds of things instead. So the 235 staffers at total payroll costs, including benefits, we estimated $20 million. Okay, so I took the undergraduate student tuition for an in-state Virginia student at the university, and it's nearly 1,000 students' full tuition payment to pay for the 235 staffers. Now, there's only 17,500 undergraduates at UVA, and 1,000 of them are paying the cost for those staffers under the DEI banner. It's remarkable.

John Tomasi: I have a friend named Todd Zywicki, and Todd was a professor, but he was a trustee at Dartmouth, where he was an alum. And Todd told me that he had this standard that he would bring to the trustee meetings. When he was an undergrad, when Todd was an undergrad at Dartmouth, he had mopped the floors. That was his student aid job. So he would mop the floors and then do his homework, and he was a student at Dartmouth, and he was very happy to have the opportunity. And he said when he became a trustee, he used to raise this test in the room. When someone proposes an expenditure, he would say, well, is it worth having students mop floors so you can do that?

Adam Andrzejewski: Right.

John Tomasi: Which is an example of what you're saying. So having the DEI positions, all the staffing, they're making that choice for emphasis, and that means a lot of students are effectively mopping floors rather than making them.

Adam Andrzejewski: Rather than having time to work. This UVA example goes right to your frame that you posited. Are these public institutions accountable? Here's what the chief spokesperson of UVA in the national media said immediately in response to our report. I think they underestimated our reputation. They didn't review our methodology, which was disclosed. We disclosed our database of the 235 staffers by name, position, title. That they're employed in within the university and the amount that they made on cash compensation last year. Okay. So we disclosed all of that transparently. And he comes out in the press, Brian Coy, and he says, the numbers are wildly inflated. We only have 55 staffers. And it's just patently not true. None of the 235 employees have written to us to say that they are not part of the DEI staff. Brian Coy comes out of a highly political background. He was the chief spokesperson for the Virginia Democratic Party. He was the chief communications officer for the last two Virginia governors. We're a nonpartisan organization. We take on Republicans. We take on Democrats, hard facts, no spin. You know, no press secretaries. You can look at the data. We disclosed it. So here's the deal, John. We actually asked Brian Coy to disclose his 55 staffers on two emails. And then his deputy communications director, we asked him as well. Two emails, no response. We filed a sunshine request for the database. And here's what the university responded. The records do not exist. So, I mean, at the end of the day, it goes right to your frame. Are these institutions, these public institutions funded by taxpayers, funded by students, are they accountable? And that's a public policy question because, you know, do they need standards boards to review their activity? And I think they're going to get it because the governor is going to get five picks on the board of visitors in July. And he'll have a majority. And maybe that new majority can bring reforms.

John Tomasi: Can you say more about this board of visitors?

Adam Andrzejewski: So maybe the reform standards board is the board of visitors of the college. You know, if you're appointed on the board of visitors, you have to maximize your power versus the administration. You have to make sure when the administration represents to you on a question, how many diversity, equity, inclusion staffers do we employ? And they say 55. They need to start asking the next question. Says who with what proof? There is a member of the board of visitors that asked, who prepared this report for me? Nobody at the university will claim responsibility for preparing that report in June of 2023. But obviously, he was in the minority on that board. But he'll be in the majority conceivably come July.

John Tomasi: I'm wondering, sort of moving into the political realm a bit, how nonpartisan are these reform efforts? It seems to me that there was widespread shock and dismay about the response from the hearings with the college presidents on Capitol Hill, not being able to show moral clarity beyond the legal technicalities that they sort of ducked within. But I wonder, do you see reforms of universities along these lines being more likely with Republicans in charge than with Democrats? In Virginia, for example, Governor Youngkin is a Republican, presumably his appointees will be Republicans as well, or at least people he chooses, whatever their political affiliation is. Do you see these reforms that you're describing as being nonpartisan as well? Or is this really going to come from the Republican Party if it's going to come at all?

Adam Andrzejewski: That's a political question. Yeah, I think the tension is between a competitive system. I think where any system gets in trouble is where monopoly control exists. And so I think the tension between Republicans and between Democrats tend to, you know, does the best to work out good public policy responses.

John Tomasi: So we've been talking primarily in the study that I mentioned from last fall about the elite Ivy League schools, private universities that, to the surprise of many, you all showed us up on the books, receive enormous floods of federal funds at a higher rate than most of us, I think, realized, which was a pretty remarkable and really significant finding and something for us all to become aware of. Can you say something more about state universities and how you see their funding and what the relationship is between the state funding of state universities and the kind of political controls and responsibilities that we've been talking about?

Adam Andrzejewski: Yeah, the state university has a tremendous role to play in American society. I'm a personal beneficiary of that role. So I was the oldest of seven kids. And I started out in a town of 1,200 people in the middle of Illinois, surrounded in the middle of 26 miles with a cornfields, beanfields, alfalfa fields, sunflower fields. So my family was at or near the federal poverty markers for my entire upbringing. I went to Northern Illinois University, the state school. Eventually, I got a half tuition waiver on debate team. But I was the beneficiary of the federal and state Pell Grant money. I was the beneficiary of grant money. I was the beneficiary of the soft social safety net that helps. You know, and I got federal loans as well. So I was able to graduate from there. And then, you know, it's a great story because eventually my brother and I, we became entrepreneurs. We founded a company. We paid tens of millions of dollars worth of taxes. And that's the way the system's supposed to work. You go to the state school. You're helped by taxpayers to get a leg up. And then you go to work and you pay your debt back to society. And then after I had my exit from our business, I dedicated my life to public service. So there's a gainful role for the public university being funded, you know, having some of these programs to fund the soft social safety net. And we're a rich enough country to do it.

John Tomasi: Yeah, so that's interesting. So that's not quite the Hillsdale model now. You're saying that, in fact, there's a role at the state university level.

Adam Andrzejewski: It's a state university, right.

John Tomasi: We've got community colleges too, for example, opportunities for people. And there is something, I think, about those wealthy universities providing extremely high-level intellectual experiences for people who really want that in the world. There should be some places in the world, it seems to me, where someone can go and seriously study what it's like to be a bat. So they can study, you know, the philosophical problems behind it. That's something that a wealthy society can afford. But whether they should be being paid for by tax dollars is a broader question. It's like, should there be tax dollars funding the arts? It's a question. It's a political debate that you and I might have. But, you know, there's some question. There should be something like that out there in the world, I think, most people think, like, great art. And there should be great, great, great bastions of learning. This conversation has been so interesting. We're going to be going forward as a society with an election coming up in the light of these hearings. The questions about universities and how to reform them is supercharged right now. Are there any final thoughts you want to share with us about what you see coming over the next couple of years in this space? Anything at all from Open the Books perspective?

Adam Andrzejewski: So at the federal level, we'll see if we get any reform, especially on the appropriation of dollars into elite universities from congressional appropriations. And here's why I say that. We're not getting individual bills. We're not getting an education bill. We're not getting separate bills. We're getting omnibus spending bills, massive bills dropped on Sunday that have to be passed by Friday and signed by the president. So we're not getting the national debate. We're not getting the white-hot spotlight, the continuation of the white-hot spotlight on these issues at the university level in Congress. And that begs the question if we'll get any reform when it comes to congressional dollar, taxpayer dollar appropriations into these institutions.

John Tomasi: Thank you so much, Adam. It's been a real pleasure having you on Heterodox Out Loud. We appreciate your sharing these challenges to our audience. And thanks for the work you do. It's really wonderful.

Adam Andrzejewski: Thank you, John.

S2 Episode 13: Unveiling the Ivy League Billion-Dollar Taxpayer Tab with Adam Andrzejewski

Discover how Ivy League schools might be shortchanging taxpayers to the tune of billions.

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