How The University of Oregon's Soul Was Sold
October 19, 2018 6:17 AM   Subscribe

Facing pressure from an anti-tax initiative that pit university funding against K-12 education, UO president Dave Frohnmayer was forced to look to corporate funders to help fund the school's mission, especially local megacorporation Nike. But Nike's owner, Phil Knight, viewed his largesse as an investment, and that, along with family tragedy for Frohnmayer and a misstep on the latter's part leading the former to exact a brutal toll on him, would lead to the University of Oregon surrendering much of its identity and control to Nike. (SLPSMag) posted by NoxAeternum (30 comments total) 21 users marked this as a favorite
 
Well, that was depressing!

Of particular note: The university president's children were born with a rare, terminal disease. He had started a small foundation which was able to award ~$500,000 per year (which is a lot for the humanities but not much at all for medical research). Once Phil Knight was ensconced at Oregon, he was all buddied up with the university president and used to give one to two million a year to the foundation. When the students and the OSU faculty senate voted to hold Nike accountable for sweatshop labor, Phil Knight - friend and humanitarian! - stopped donating to the foundation.

Obviously this is a mere symptom - medical research should universally be publicly funded to avoid exactly this kind of situation.

But it does show you who you're dealing with, and that's worth remembering.
posted by Frowner at 7:08 AM on October 19 [34 favorites]


Knight just donated another $1,000,000 to the republican challenger in Oregon's gubernatorial race.
posted by Dr. Twist at 8:25 AM on October 19


Outstanding article.

As a football fan, I only really ever hear about Oregon with respect to their football team, and it's generally presented as a positive relationship. My alma mater has its own relationship with Nike, and with other corporate donors, and so I'm skeptical of them. But wow, I had no idea just how skeptical I should be.
posted by kevinbelt at 8:26 AM on October 19


Paragraphs like this one describing the "Nike Way" as:
finding ways of coloring outside the lines—Nike had circumvented U.S. minimum-wage laws by using factories based in countries where wages were much lower; it avoided paying international tariffs on some of the foreign-made shoes it then imported back to the U.S. by classifying them as slippers rather than shoes; and it had end-run its own partners through corporate espionage and cutting secret deals on the side.
Followed by Knight's approach at with the University:
Knight circumvented many of the processes public universities are expected to go through with such undertakings. Instead of handing over the money to the school, for instance, Knight often took charge himself. ... Through limited-liability corporations Knight would pay for the design of the building, lease the land it would go on from the university, and then proceed with construction on his own. Once completed, the facility would be handed back to the school as a finished product, having relieved it of responsibilities like a public bidding process with construction firms, negotiations with union laborers, and an open dialogue with the campus community and other Eugene stakeholders.


Makes me really want to read the author's book that this work is pulled from. When I see someone in Nike gear I just assume that they are completely disengaged politically, superficial and an easy mark for advertising.
posted by zenon at 8:38 AM on October 19 [3 favorites]


People got ticked off earlier when I pointed out the problems with this kind of funding becoming so dominant. If you're angered by the story Frowner just related, probably you should generalize that concern a bit.
posted by praemunire at 8:41 AM on October 19 [2 favorites]


Paragraphs like this one describing the "Nike Way" as:

Gives a whole new perspective to "Just Do It".
posted by clawsoon at 8:52 AM on October 19 [1 favorite]


The whole thing about that guy's kids is horrifying.
posted by jenfullmoon at 8:56 AM on October 19


This sounds awful and abhorrent to me even as I type it, but I almost think that if the legislature isn't interested in funding the University maybe the best thing to do is to just shut it down. Let the people who voted for these skinflint bastards see what it's like when things get taken to their natural, logical conclusion. They don't want to pay taxes? This is what you get when you don't pay taxes.
posted by The Underpants Monster at 9:43 AM on October 19 [5 favorites]


Governor John Kitzhaber's budget proposal for 1995 called for a 14.4-percent decline in state support for higher education, making Oregon the only state in America to send its legislature a proposal asking for less money to support its public universities and colleges. Disinvestment in higher education was, in essence, a matter of policy in Oregon.

And it turns out that the options for dealing with this weren’t good. It seems the story is less “University of Nike” than “University of a State Where Education Isn’t Understood to be a Public Good”. I’d be more interested in understanding how things got to that point than understanding the unsurprising result
posted by TheShadowKnows at 9:52 AM on October 19 [1 favorite]


I’d be more interested in understanding how things got to that point than understanding the unsurprising result

That's simple - the people of Oregon passed a law that forced K-12 schooling to be funded by the state, rather than via local property taxes, without a commensurate increase in state taxes. This resulted in K-12 and college education fighting over the same funding.
posted by NoxAeternum at 10:00 AM on October 19 [5 favorites]


To further NoxAeternum's comment, making state the funding source for education comes partly from the desire to adequately fund K-12 education in some counties that have few residents and low property value, like Douglas, Harney, Lake and Malheur counties. Some of those counties have historically been dependent on revenue from timber operations that are long gone and there's no other source of revenue to fund public services.
posted by Dr. Twist at 10:16 AM on October 19 [3 favorites]


That's simple - the people of Oregon passed a law that forced K-12 schooling to be funded by the state, rather than via local property taxes, without a commensurate increase in state taxes.

So one half of a good idea turned out to be a bad idea?
posted by clawsoon at 10:18 AM on October 19 [3 favorites]


Frohnmayer had never seen such cold, calculated wrath from Knight. The extent of the personal considerations Knight seemed to expect in exchange for his financial gifts to the University of Oregon also surprised Frohnmayer. The disastrous fallout from the signing of the WRC agreement was, in many ways, a wake-up call for the university president, who suddenly realized he'd been laboring for years under some serious delusions about the nature of the bargain he’d made by taking Knight's money.
I mean, really? It's like you never met a donor, bro. He thought he bought you. I think this is remarkably naive for a university president.
posted by Squeak Attack at 10:33 AM on October 19 [6 favorites]


I think this is remarkably naive for a university president.

By then he wasn't "just" president of the UO, he had also been a Congressman, Oregon Attorney General, and Dean of the UO School of Law.

I don't think many people truly grasp just how far Knight went. He crossed ethical lines that vanishingly few do. And he had the gall to do it to someone with the network of a congressman, state attorney general, and freaking Dean of his alma mater's school of law.

It wasn't Frohnmayer being naïve, it was Knight pitting corporate America against practically every value we as Americans hold dear. If you still think Frohnmayer is naïve, take a good look in the mirror and ask the person you see if you truly thought that Trump would become president two years ago. Would you call that person naïve or would you say that the US' structural underpinnings and systemic shift to the far right made it possible for con men to rob the country blind at the highest levels?

Frohnmayer spoke at my high school graduation. This was before his second daughter passed away, but when his family all knew what would happen. He spoke with an eloquence and a hopeful optimism based firmly in reality and lived experience that has stayed with me ever since, twenty-odd years later.

We started noticing Nike's influence when I was at the UO; the Marching Band had always had to fight for funding and had terrible uniforms. You know what was one of the things Nike did? They donated new uniforms and shoes to us. One of the poorest bands in the country suddenly gets to replace their Gore-Tex capes dating from the 1970s with brand-new wool uniforms and white Nikes.

This being the UO of the time, it did not go unchallenged; there were in fact a few high-level teachers (I purposefully use the vague word "teachers") who argued that a public university should not accept such an overt attempt at influence. They were overridden. I graduated a couple of years later. It's changed a lot since then; the football program especially has turned into something so different from what I grew up with that I hardly recognize it. One big Nike advertisement.
posted by fraula at 11:02 AM on October 19 [8 favorites]


It's changed a lot since then; the football program especially has turned into something so different from what I grew up with that I hardly recognize it. One big Nike advertisement.

A friend of mine got really involved in the battle over the rebuilding of the university track stadium, because it's a historic structure. I never understood why the university bulled forward so hard: now I get it.

And wow, Phil Knight is a terrible human being. Seems to me many CEOs are...
posted by suelac at 11:33 AM on October 19


By then he wasn't "just" president of the UO, he had also been a Congressman, Oregon Attorney General, and Dean of the UO School of Law.

What am I missing? That just makes him seem even denser. Donors are the worst. I hate donors. They will give you $10 and think that they own you and can call you up all the time and demand information and get special treatment and ass-kissing and they can yell at you because you didn't give them some fucking tax form that their tax guy is supposed to prepare. And they will get in a snit about the smallest thing and threaten to take their money back and flounce off.

This guy had to have dealt with donors at all levels and somehow he thought that a company he was allowing to completely bail out his university would only expect an occasional heads-up phone call? He was surprised Knight wanted to be consulted about university decision making? After the guy gave millions to the university and to a charity the Frohnmayers were personally and emotionally connected to?

Frohnmayer was compromised by those donations to the Fanconi Anemia Research Fund. They were over the line to even happen and he was unable to see that.
posted by Squeak Attack at 11:35 AM on October 19 [6 favorites]


But what’re you gonna do? Save the school and fund your research or have principles? Keep your dignity or feed your family?

It’s unfortunate when good things catch the eye of a megalomaniac.
posted by amanda at 1:53 PM on October 19


Frohnmayer was compromised by those donations to the Fanconi Anemia Research Fund. They were over the line to even happen and he was unable to see that.
posted by Squeak Attack at 11:35 AM on October 19 [4 favorites +] [!]


So it's totally his fault, I guess. Frohnmayer! You heartless, self-serving bastard!
posted by mwhybark at 5:18 PM on October 19 [1 favorite]


It doesn't excuse Knight but it is the job of leading civil servants not to get hustled.
posted by praemunire at 5:22 PM on October 19 [2 favorites]


Nike is currently headquartered in Unincorporated Washington County and has an agreement with the city of Beaverton that they can't be annexed into Washington County for - as of 2005 - 30 years.

The net result is negligible tax breaks for Nike and freedom from obligation to the city of Beaverton: The Washington County assessor's office estimates that annexation could cost Nike an additional $900,000 annually in taxes, an increase of about 17 percent. Last year, the company posted revenue of $12.3 billion and profits of just under $1 billion.

...In the past two legislative sessions, Sheketoff notes, lawmakers gave Nike and other companies with big operations in Oregon a massive break by juggling the formula that determines their state income taxes.

"In order to get tax breaks, whether it's income tax or property tax, employers ought to be able to show the breaks will create new jobs," Sheketoff says. "Unless that happens, there's no accountability and we're just giving revenue away."

Nike's Brim-Edwards says such criticism is misguided. "This is not an issue fundamentally about taxes," she says. "It's about certainty in planning for future growth and the business climate. We do not use City of Beaverton services, thus subsidizing such services does not seem appropriate."

posted by bendy at 6:50 PM on October 19


(Squeak Attack) Frohnmayer was compromised by those donations to the Fanconi Anemia Research Fund. They were over the line to even happen and he was unable to see that.
Accepting Knight's donations to the family's charitable organization was probably ill-advised but somewhat understandable. The bit that completely flabbergasts me is:
(linked article) On top of endowing professorships, Knight began personally contributing $40,000 toward President Dave Frohnmayer's annual salary through a supplemental payment approved by the board of higher education.
How the hell that ever passed ethics review I will never understand.

Seriously, the memo fields on the checks might as well have read "for: Conflict of Interest."
(mwhybark) So it's totally his fault, I guess. Frohnmayer! You heartless, self-serving bastard!
This is just my personal opinion but in exchange for that $40,000 a year I think he forfeited the presumption of good faith. He certainly should have disclosed the arrangement and recused himself from the WRC decision.
posted by Nerd of the North at 11:50 PM on October 19 [6 favorites]


The salary thing is about 100 times more questionable than the building thing tbh. That seems like a fairly normal ruse to fast track public-private partner projects but the salary bump has to be illegal somehow. That and the donations to their charities seem like straight up bribes.
posted by fshgrl at 1:02 AM on October 20 [2 favorites]


“University of a State Where Education Isn’t Understood to be a Public Good” - that's pretty widespread, actually. Here's one of the great studies and arguments.
posted by doctornemo at 7:51 AM on October 20




On the augmentation: It would be customary for it to be part of his bi-weekly pay, not a check. Augmentations are not uncommon, although they're usually more like "you agreed to serve as interim department chair which adds X hours weekly to your workload, while you serve you get an augmentation of Y". I got one for six months when I took on about 50% of an additional job while it was filled. (Although sadly it was not even remotely close to 50% of the pay for the other job.) Augmentations are recorded and taxed like other pay.

When you pull someone's pay records at a university, you generally see all the sources of their pay - so much from this grant, so much from that grant, so much from department O&M, so much from The Fancy Professorship Endowment, etc.

It would be interesting to know how was done. The really crooked way would involve taking in the gift money for the augmentation then setting up a misleading account or transferring the money into a standard account so that it looked like something else when you pulled their pay records. This would mean that almost no one knew about it, but the people who did know would all be aware they were committing fraud. The less crooked but more baffling way would simply be to create an account with a name like "Nike University President Gift Funds", code it like any other gift account and pay from that. That would be baffling because almost anyone who worked with administration payroll would be aware that it was weird money.

Payroll isn't a big secret. For public universities it's actually public knowledge, and certainly many university employees would have legit HR, reporting and auditing reasons to see the president's sources of salary. TBH, you have to wonder how many university presidents have sketchy money like this on their checks.
posted by Frowner at 8:36 AM on October 20 [2 favorites]


On the augmentation: It would be customary for it to be part of his bi-weekly pay, not a check.
Yes, I get that a literal check with "Conflict of Interest" in the memo field is probably not involved. But I still am completely at a loss as to how the "board of higher education" mentioned in the article thought that it could be a workable arrangement.

The president of a public flagship research university like the University of Oregon holds a job with huge responsibilities over an institution that employs thousands, educates many thousands more, has a budget on the order of a billion dollars, and wields immense power in the community where the university is located. Why would you ever vote that it was OK for that person to accept substantial additional compensation that was awarded at the discretion of a private individual? (The article claims Knight personally provided this money; I read that as meaning it didn't come through Nike but directly from Knight.)
TBH, you have to wonder how many university presidents have sketchy money like this on their checks.
If in fact there are others with similar arrangements it should be a public scandal, tainting not just the individuals who are receiving such compensation but also any body that approved such "augmentation."
posted by Nerd of the North at 12:54 PM on October 20 [2 favorites]


On the augmentation: It would be customary for it to be part of his bi-weekly pay, not a check. Augmentations are not uncommon,

Can administrators get them though? I thought they'd be in the civil service pat scale which doesn't allow that sort of thing. We just do extra jobs for free!
posted by fshgrl at 3:04 PM on October 24


Support staff were able to get them in my old job - I actually had one twice (we were not always super fast about hiring!) The thing is, this was literally doing someone else's job, as in going to their desk on another floor for part of the day, and in one case it was a job that was out of my pay grade. Also, we had a very fair-minded department chair. It is customary to have complaints about chairs, but he was always extremely decent to staff, grad students and other people without tons of clout. I know for a fact that he went out of his way to get money for various people's support or pay.

Why would you ever vote that it was OK for that person to accept substantial additional compensation that was awarded at the discretion of a private individual?

Would they have voted on it? Here is my bet, after thinking about it: It didn't get voted on. The funds were accepted by the university through the foundation or wherever they housed the money and there was some rationale that passed muster with HR about the augmentation and no vote was taken. My bet is that it was just discussed and set up. It may be that augmentations are routine enough there (they were pretty common in my old unit, just due to delays in hiring and various kinds of churn) that this one didn't stand out to HR/payroll and/or they didn't want to rock the boat. It might just have been that the CFO signed off on it, and even the CFO - though absolutely responsible for this kind of thing - might not have really understood what was going on.
posted by Frowner at 3:40 PM on October 24


Would they have voted on it? Here is my bet, after thinking about it: It didn't get voted on. The funds were accepted by the university through the foundation or wherever they housed the money and there was some rationale that passed muster with HR about the augmentation and no vote was taken.
I obviously don't know the details of how that arrangement came to be, but I am basing my opinion on the article text, which says "Knight began personally contributing $40,000 toward President Dave Frohnmayer's annual salary through a supplemental payment approved by the board of higher education." I read "approved by the board of higher education" as indicating that at some point a body in charge of reviewing such things voted on it but it is possible that that did not take place as I imagine.
posted by Nerd of the North at 4:26 PM on October 24


Frohnmayer's wife Lynn has written a response in our local newspaper, The Register-Guard: ‘University of Nike’ exploits my family’s tragedy to support a false narrative. Some excerpts:
The book purports to be a deep-dive “investigation” into how corporate dollars have “bought American higher education,” but the truth is that it exploits my family’s tragedies in support of a sensational and patently false narrative.

I might ignore a writer’s careless disregard for the facts, but this book distresses me so deeply that I cannot overlook its glaring inaccuracies and shoddy reporting, at least as they pertain to my family and Phil Knight.
[...]
Hunt has twisted Knight’s generosity into a work of fiction. It is well-documented that in April 2000, when UO joined the Workers’ Rights Consortium — an organization that criticized working conditions at Nike’s overseas factories — Knight halted planned gifts to UO. Hunt falsely asserts that Knight also withdrew his support of FARF during that time. Hunt insinuates that Knight was willing to jeopardize our 10-year-old daughter Amy’s survival in order to bend the UO president to his will. UO Professor Nathan Tublitz, quoted in the book, describes Knight’s alleged cruelty as “a loaded gun” pointed at Amy’s head. Hunt even suggests that in early 2001, I was “on the verge of a nervous breakdown” because Knight had ended his support of FARF.

This narrative could not be farther from the truth.

On Dec. 22, 2000, just eight months after UO joined the WRC, Knight wrote a check to FARF for one million dollars. On Dec. 18, 2001, he wrote a second million-dollar check to FARF. The Knights’ support of Fanconi anemia research was never affected by the WRC controversy.

Hunt erroneously suggests that the Knights’ support of FA research was our only hope of saving Amy, as if one generous donor could ensure a cure for one specific child. Furthermore, the suggestion that our Fund relied solely on the Knights is insulting to the more than 45,000 people and businesses that have supported our research since 1989.

While Hunt’s reporting about Knight’s support of FARF is the most egregious inaccuracy from my perspective, the book contains dozens of other distortions and untruths about my family.
[...]
When challenged, Hunt claims that the end notes at the back of the book verify his facts. I disagree.

Hunt called me late one night in July to “verify” two assertions in his book. I told him both were wrong and he needed to check his facts. I urged him to contact FARF about the Knights’ giving history. He never did. Hunt never interviewed me about my family or my children’s medical history.
Again, the Frohnmayer family is pretty well-known and connected in our area; I have every reason to believe Lynn Frohnmayer's account. The book now sounds dubious in that light.
posted by fraula at 12:08 PM on November 5 [1 favorite]


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