One Bad Deed

The biggest news story last week undoubtedly involved the story of the Hollywood stars and business elite who have been charged with fraud related to college admissions for their children.

Credit: The New York Times

Prosecutors allege that parents of students conspired with a high-priced college entrance counselor to manipulate standardized test scores and bribe athletic coaches at elite schools to have their children placed on the preference list that each coach gets with the school's admission office. The problem is that most of the children did not even play the sport they were supposed to be stand-outs in.

It is no secret that having some type of "edge" is required to gain admittance to most of America's elite colleges and universities. If you read my previous blog post on the formula for success, you should know that as in other fields of human endeavor, the supply of those who are qualified to do the work at an elite college vastly exceeds the spaces available in each class.

For example, in a recent year at Princeton, 50% of those who applied with perfect SAT scores were rejected as were 82% of the high school valedictorians.

When we moved from Ohio to New Jersey in the early 1990's we learned quickly one of the reasons lacrosse was the biggest sport at the local high school. Good lacrosse players had an edge with the best schools. Good lacrosse skills might be worth  200 points on the SAT.

Credit: Forbes.com, February 23, 2013
https://www.forbes.com/sites/troyonink/2013/02/23/grit-grades-and-lacrosse-how-to-cradle-your-way-into-elite-colleges/#6a305ac5301d

It is no different with students who have other unique skills or abilities in the arts, music or public service that complement their academic achievements. Elite schools wants a mix of students with a variety of talents and experiences.

Of course, the connections and money that parents have has always been a factor in college admissions. For example, a student with a parent who is an alum and has made large donations over the years has always had an advantage in admissions.

High profile parents have also always had an advantage in getting their children into high profile schools. Would George W. Bush have gotten into Yale without that advantage? Would Al Gore have gained admission to Harvard? What about Chelsea Clinton at Stanford and Malia Obama at Harvard? Perhaps some or all would have. All I know is that they had a significant "edge" over others who might have had similar academic profiles.

What is so odious about the allegations in this case is that the children of the parents already had significant advantages due to the wealth and position of their families in society to begin with.

It apparently wasn't enough. They decided they had to stack the scales even more in their favor by cheating the system.

As a result. the parents are alleged to have spent millions of dollars in payments to the college prep advisor, William Rick Singer, and in bribes to SAT test proctors and college coaches.

For example, Georgetown University's former tennis coach is alleged to have received $2.7 million in what he called "consulting fees" that were actually bribes so that the coach would put the students on his list of recruited players. 12 students were admitted under this scam despite the fact that some did not even play tennis, let alone competitive tennis.

The going price for a recommendation from the Yale women's soccer coach to the admissions office----$450,000!.

Similar scams were uncovered at Stanford, Yale, UCLA, USC, Texas and Wake Forest with different sports.

The two highest profile names on the list of accused parents were actresses Felicity Huffman and Lori Loughlin. Their daughters got into USC by through crew. However, I could not help but shake my head in when I learned that Silicon Valley investor William McGlashan was caught up in the probe. His son was a supposed placekicker to the football team.

Credit: Chicago Sun-Times

Believe it or not, McGlashan positioned himself professionally as an "ethical" investor and had established an investment fund with "conscious leaders" like Bono and Laurene Powell Jobs (widow of Steve Jobs) which purports to have “a deep personal and professional commitment to driving social and environmental change,” ­according to a story in The New York Post .

I have to think there is much more that will develop regarding this story as it unfolds.

For example, if a scheme like this could be perpetrated with Division 1 coaches with athletic teams that have scholarships and have only limited flexibility with admissions for "walk-on" spots, what was going on with Division 3 coaches at elite schools like MIT, Bowdoin, Haverford, Chicago, CalTech and Emory? These coaches make far less money and there are no athletic scholarships. These coaches presumably have much more flexibility with getting students added to preferred admission lists.

You also can be sure that there will be some major lawsuits filed against these universities by students who were denied admission so that these rich kids could get in. In fact, one class action suit has already been filed. I am wondering how a school like Georgetown can claim that they are blameless when they were admitting "tennis players" on the recommendation of the coach but never checked to see if this "recruited' athletes ended up on the team roster or even tried out once they were on campus?

Credit: CNN.com

Prosecutors also apparently made a judgment call in not charging the students in this case. They stated that many of the students were not aware of what their parents were up to. That may be true in come cases but I cannot believe it is true in most instances. The prosecutors undoubtedly decided it would not look good to go after the students when there were bigger fish to fry. The students may face expulsion anyway and they will clearly all pay a heavy price reputationally.

That reputational fallout has already engulfed many of the parents. McGlashan has resigned his CEO position. Loughlin has been fired by the Hallmark Channel. All of the parents also face potential jail time. The co-chairman of New York law firm Willke, Farr & Gallagher has been placed on a "leave of absence and will have no further Firm management responsibilities."

The potential reputational cost in all this has already touched others who may be tangentially involved and innocent. For example, pro golfer Phil Mickelson and former pro football great Joe Montana have already disclosed that they used Singer as a college admissions consultant to assist their children but everything was above board with their children. Both stated they were shocked to hear of the scheme.

What should be the lesson?

Benjamin Franklin said it well many years ago.

It takes many good deeds to build a good reputation, and only one bad one to lose it.