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In All Things

Scholars Warn CUA Over Koch Cash

Kevin ClarkeDecember 16, 2013

A group of about 50 Catholic scholars from across the United States has urged Catholic University President John Garvey to get with the Pope Francis spirit and take advantage of “an opportune time to educate students about the importance of business ethics and global solidarity.”

How?

By treading carefully with a fat donation from the Koch Brothers Foundation. (Other groups are urging CUA to return the dough outright.)

CUA hopes to raise $5 million to support research “into the role principled entrepreneurship can and should play in improving society’s well-being.” The Koch Bros, they of ALEC and Tea Party fame, have offered up $1 million toward that goal. Some Catholic academics, however, are wondering about what ideological strings might be attached to that donation, warning, “We must not ignore the stark contrast between the Koch brothers’ public policy agenda and our Church’s traditional social justice teachings.” The scholars say, “We are concerned that by accepting such a donation you send a confusing message to Catholic students and other faithful Catholics that the Koch brothers’ anti-government, Tea Party ideology has the blessing of a university sanctioned by Catholic bishops.”

According to Catholic University, the grant will enable its School of Business and Economics to recruit and hire three visiting scholars one visiting scholar-practitioner from the business world for research and teaching.

With Pope Francis just selected Time magazine’s person of the year and his recent exhortation ringing with denouncements of economic inequality and the inimical affects of global capitalism, the timing of the CUA donation from two of the world’s more notorious capitalists and plutocratic activists could not be worse. On issues from the aforementioned economic inequality to worker rights to climate change and stewardship of the earth, the teaching of Francis and other recent popes could not be further apart from the political agenda and interests of the Koch brothers, the scholars point out in their letter to Garvey and Andrew Abela, the dean of the business school.

The scholars write: “Both Pope Francis and Pope Emeritus Benedict XVI have raised ethical and moral questions about global financial markets, and emphasize the need for preparing business leaders to not simply serve a profit motive but to serve the common good.

“While we understand the challenges of starting a business school during a time of fiscal constraints and restrained philanthropic and government funding, we must raise our serious concerns about a recent $1 million gift the university has accepted from the Charles Koch Foundation. Given the troubling track record the foundation has in making gifts to universities that in some cases include unacceptable meddling in academic content and the hiring process of faculty, we urge you to be more transparent about the details of this grant.”

The statement to Garvey continues: “The Koch brothers are billionaire industrialists who fund organizations that advance public policies that directly contradict Catholic teaching on a range of moral issues from economic justice to environmental stewardship. As you well know, Catholic social teaching articulates a positive role for government, an indispensable role for unions, just tax policies, and the need for prudent regulation of financial markets in service of the common good. …While the Koch brothers lobby for sweeping deregulation of industries and markets, Pope Francis has criticized trickle-down economic theories, and insists on the need for stronger oversight of global financial markets to protect workers from what he calls ‘the dictatorship of an economy which is faceless and lacking any truly humane goal.’”

In a response, a Catholic University spokesperson in a statement dismissed the letter as "an unfortunate effort [by the political lobby Faith in Public Life] to manufacture controversy and score political points at the expense of The Catholic University of America." CUA's Victor Nakas said, "The University controls the search, recruitment, and selection process for all positions funded in the agreement. The University will independently select all faculty and staff related to this grant in accordance with existing University hiring policies. All the activities funded in the grant are related to the core mission of the University to teach and conduct research in service to the church and the nation."

Nakas called the letter "presumptuous on two counts."

"First, its authors cast themselves as arbiters of political correctness regarding Charles Koch Foundation grants. They judge the Foundation’s support of the arts and culture to be 'noble philanthropic work;' its underwriting of grants to universities elicits their 'serious concerns.' Second they seek to instruct The Catholic University of America’s leaders about Catholic social teaching, and do so in a manner that redefines the church’s teaching to suit their own political preferences. We are confident that our faculty and academic leadership are well versed in Catholic social teaching and well equipped to apply it. We created a school of business and economics for the express purpose of promoting respect for the human person in economic life, based on the principles of solidarity, subsidiarity, human dignity, and the common good. The aim of the Charles Koch Foundation grant—to support research into principled entrepreneurship—is fully consonant with Catholic social teaching."

According to Nakas, the Koch brothers foundation has previously supported programs at 270 colleges and universities, including 25 other Catholic institutions, adding that he grant "has not engendered any controversy on our campus." Nakas said, "The facts bear out a long record of involvement in higher education by the Charles Koch Foundation, without any serious claim of interference with recipients of their funds."

He complained, "The negative attention to the grant has all been externally driven by organizations with a political agenda."

In their letter, the scholars remind Garvey and Abela that the Koch brothers gave generously to Gov. Scott Walker of Wisconsin, who stripped public employee unions of their rights to bargain. The church of course endorses the right of workers to collective bargaining and union representation. The statement further notes that the Koch brothers’ primary political arm, Americans for Prosperity, “has aggressively opposed Medicaid expansion in several states and demonized elected officials who support expansion that will improve the lives of the working poor, pregnant women, the disabled, and seniors in nursing homes”: that Koch Industries, the second largest privately held company in the United States, “also has an abysmal environmental record.”

“In addition, Koch Industries funds an array of organizations that deny the reality of climate change, which the Vatican and many Catholic leaders around the world have made a central pro-life concern because of the disproportionate impact climate change has on the poor and most vulnerable.”

The letter's signatories include CUA academics—William A. Barbieri Jr.; Frederick L. Ahearn Jr.; Ken Pennington of the CUA law school; and William V. D’Antonio, a senior fellow at CUA’s Institute for Policy Research and Catholic Studies—Miguel Diaz, former U.S. ambassador to the Vatican; Stephen A. Privett, S.J., president of the University of San Francisco; Fred Kammer, S.J., head of the Jesuit Social Research Institute at Loyola University in New Orleans; and the Drew Christiansen, S.J., former America editor-in-chief.

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Michael Barberi
11 years ago
I cannot validate the claims being made, but this letter urging CUA not to accept the donation from the Koch Foundation seems to represent one end of the spectrum of arguments about the so-called correct interpretation of the social justice-social ethical teachings of the Catholic Church. As long as this donation does not give the Koch Foundation meddling rights that will inappropriately impact CUA's policies or undermine the social teachings of the Church, then these signatories need a more convincing argument. The authors of the letter seem to be saying that CUA is guilty of participating directly or indirectly in some type moral evil. I find that many theologians and clergy on both sides of the theological divide are guilty of exaggerated interpretations of Pope Francis's statements as well as Catholic Social teachings. Each end of the Catholic polity distort the fuller understanding of teachings. Neither side will accept the other's principles or interpretations. Capitalism per se is not condemned by Pope Francis or the RCC. No other political and economic form of government has benefited the poor more than U.S. capitalism. I challenge anyone to name one country's form of government and economic policies that historically have done better. Unfortunately, there it far too much constructive and destructive criticism without sufficient clarity about facts. Clearly, Western capitalism is not perfect and much is needed in terms of reform. What is needed is a fact-based, centrist position that brings both sides together that balances responsible policies for the poor with policies for economic and employment growth and opportunity. Compromise and continued efforts at improving the physical and spiritual condition of the poor and the most vulnerable is the objective. Solidarity is needed not only with respect to a consensus of argument in terms of society's political vision but also in Church politics as well. What we have now is a crisis of truth in the U.S. and in the Church as well.
Vince Killoran
11 years ago
I guess it's good that they're not insisting on veto power over the hiring process etc. because they have done this at other institutions of higher learning. Michael's back with his boiler-plate "capitalism is not condemned per se. . ." The difficulty comes with the "per se" part: capitalism, as it is practiced in the USA IS condemned by scripture, papal encyclical, episcopal letters, etc. You will just have to accept this fact. It would be more accurate to write that capitalism "in theory isn't necessarily condemned. . ." A very tenuous endorsement. As for the "challenge [to] anyone to name one country's form of government and economic policies that historically have done better" I'd have to know what he means by "better." The good old USA isn't doing as well in terms of education, public health, and the environment compared to many other countries.
Michael Barberi
11 years ago
Vince - kindly point to many papal encyclicals, episcopal letters, and scripture that U.S. capitalism is condemned! If you mean that some aspects of U.S. capitalism is condemned, I agree that our democracy and form of capitalism is in need of much improvement. Many aspects of it can be described as harmful to the poor and common citizens such as the recent abuses we have seen on Wall Street. For you information Vince, I used "per se" to connote the theory as well as every aspect of U.S. capitalism. Most of it is good and that does not mean that there are not many dimensions of it that should be reformed. We live in a culture of individualism and materialism and many aspects of it diminish our ability to see how Western consumerism detracts from our obligation to love God and neighbor. Nevertheless, my challenge still stands and you have not answered it with any credible facts or solution. While I don't disagree that you can point to poor score card on U.S. education, public health, et al, many other countries have significantly higher taxation policies, long wait times for healthcare, denials of many medical procedures based on age-related economics or government-imposed standards, etc. U.S. capitalism has its problems. However, it is one thing to fight for the reform of certain U.S. policies, and another to paint U.S. capitalism with a broad negative brush without pointing to another form of capitalism inclusive of political and economic policies that is doing a much better job overall. I venture to say that very few Americans would want to accept another form of capitalism and democracy. For better or worse, most Americans want the benefits without the sacrifices. My argument is this: we like to use words such as: Western capitalism, secularism, individualism, liberalism, consumerism and relativism….as the reasons why Catholics do not recognize, understand and live the truth in accordance with Magisterium teachings. Not everything is personal and social relativism merely because many people disagree for good reasons about certain Church teachings. Excessive forms of capitalism, et al, should be rightly condemned, but let us get real about the problem, solutions and legitimate perspectivism.
Vince Killoran
11 years ago
Start with the U.S. Bishops' 1986 Pastoral and work from there.
Michael Barberi
11 years ago
Vince, Your suggestion that I start with the U.S. Bishops 1986 Pastoral ignores my points and fails to recognize that I am familiar with this issue. Most of the ills of our form of capitalism and democracy are highly complex, far beyond the solution of general moral and social ethical guidelines. Such guidelines are important and we should all strive to keep the message of the Gospels central in our thoughts and actions. However, solutions to our employment/unemployment problems, poverty and income inequality…et al, is as complex as resolving non-reception of many moral and social ethical teachings of the Catholic Church. The answers, fortunately or unfortunately, are not black and white and there are many ways to resolve problems. However, there is no one absolute answer that functions as the panacea. As I emphasized, there are many aspects of capitalism and our economic polices that need to be reformed. The question is how best to accomplish this objective recognizing that most solutions have unintended and realistic consequences. Nevertheless, I would not exchange our form of democracy and capitalism for another but to work hard for as much reform as possible. I hope this provides more clarity and trust we are mostly in agreement.
Charlie Noel
11 years ago
I read this article and exchange with interest. It occurs to me to inquire your opinions of whether the Nordic political and economic model now operative in Norway, Sweden and Denmark for several decades might not be a far better way for a market economy to serve the common good than the prevailing American model. Is the Scandinavian model substantively closer to the principles and outcomes recently outlined by Pope Francis?
Stanley Kopacz
11 years ago
One must bear in mind that the US citizenry, in general, has become very mentally inflexible and narrow. Why do we still use inches and pounds here instead of centimeters and kilograms? There is a not-invented-here streak, as well. Why else would Detroit have waited so long to adopt the process controls that the Japanese learned from the American Deming? We even have to have americanized versions of previously well-done foreign movies and television shows. It is this loss of the ability to learn and adapt and change that I see as preventing the common sense you're talking about. It would also run counter to the reestablishment of aristocracy and hierarchy that we are presently experiencing.
Marie Rehbein
11 years ago
If you split a yard into thirds, you get 12 inches (a foot), which you can also split evenly into thirds or fourths. If you split a meter into thirds, you get 3.333... centimeters. Try splitting that into thirds or fourths.
Stanley Kopacz
11 years ago
If you divide a meter by 3, you get 33.3333333...... Centimeters. See. Another rocket just crashed.
Marie Rehbein
11 years ago
Sorry, 33.3333 cm. You see how easy that is to mess up in metric?
Vince Killoran
11 years ago
"Excessive forms of capitalism, et al, should be rightly condemned, but let us get real about the problem, solutions and legitimate perspectivism." I agree--and the Bishops in '86 found US capitalism to be "excessive" (& I have yet to locate a contemporary form of free market capitalism that they find acceptable).
Michael Barberi
11 years ago
The choice of words "let us get real about the problem…" was meant to isolate those aspect of US capitalism that are excessive and should be reformed. Your comment that the Bishops in '86 found US capitalism to be "excessive" is an exaggeration because it paints the entire US capitalistic system with a negative and irresponsible characterization. What is more important is the fact that the Bishops in '86 have not put forth a form of capitalism or specific reforms that are intelligible and balance the many tangential consequences. I applaud the Bishops and encourage their counsel, but guiding principles and a few overarching suggestions are not a realistic solution in a complex society. Unfortunately, when that happens individuals use their informed conscience and do their best to make the right moral and social decisions. This is not the perfect answer, but neither are the Bishops' suggestions.
Stanley Kopacz
11 years ago
Business ethics and principled entrepreneurship. CUA should take the money under the condition that the Koch Bros. take the course.
Neil Vigliotta
11 years ago
I grew up in a Catholic Household. My father is a Deacon. I attended LeMoyne College where I earned a BS in Business and then attended Babson College where I earned an MBA. Just background to show that I know something about Catholic teachings, as well as Business. If CUA wants to start a Business School, its rather clear that one of the first things the leadership of CUA's new business school will need to do is to take a long look at its own business ethics (today, that's kind of a Oxymoron, unfortunately). Today's businesses, especially large corporate businesses, focus on one thing and one thing only as the sole driving ethic... the Profit motive. They are driven by Fiduciary Duty to act on behalf of shareholders. And often, the boards of directors seem to act in the best interests of themselves, despite the principle Fiduciary Duty. Too often, everything else falls to the wayside. True ethics rarely come into the discussion. The society which in the end is the customer, and the labor, and the trustee of these corporations is ignored in favor of the profit motive. In a way, that's what CUA is doing in this instance, placing current endowment, and the prize of a Business School program, above the principles upon which it was founded as a place of HIGHER learning in a CATHOLIC setting. And as a Pontifical University, I would think that CUA would very much want to follow the teachings of our Pope Francis and of Jesus Christ. And there is opportunity here for CUA. If CUA wants to set itself up as a true leader in Business, it should consider Business Ethics as a great place to earn a reputation in Business Leadership. Its the perfect institution, in the perfect location, to place itself on the hilltop as a beacon of light. Its abundantly clear that ethics in US Business schools truly is one of the most ignored parts of a Business Education. All one has to do is look at Washington, DC and our government, and watch the lobbyists in action to see that there is a lack of ethical behavior involved. And the best way to do this is to not accept money from Charles Koch. I realize the his foundation does not necessarily reflect the attitudes of the man. All donors are sinners. Charles Koch and his foundation are two separate entities. But, his reputation is so soiled with the stain of his business interests and the actions of his various trusts, special interest groups, and companies, that to separate the two is next to impossible. I know that CUA could really use this money to start this school and develop its program. But at what cost? What does this do for future endowment at CUA from others who want to help CUA become a leader in business? What does this say to the Students of CUA? What does this say to American Catholics when the University of the Catholic Church in America is accepting money from an individual who has done so much to hurt the common man in order to enhance his own net worth and the fortune of his investors? These are the very questions that ethics demand to be asked, and CUA's response is extremely disappointing to say the least.
Joshua DeCuir
11 years ago
"They are driven by Fiduciary Duty to act on behalf of shareholders. And often, the boards of directors seem to act in the best interests of themselves, despite the principle Fiduciary Duty." If this were true, then they would be held accountable by the shareholders for breaches of their fiduciary duties. Of course, the plaintiff's bar, in a ever-determined search to find breaches of fiduciary duties, routinely files multiple lawsuits against boards of directors for almost every action they take. As an example, within minutes of announcements of major corporate actions such as mergers, recapitalizations, etc., a plaintiff's firm files multiple suits (usually one in the company's state of incorporation, and another in the state of the company's headquarters) alleging a breach of fiduciary duty. Finding it easier to pay off the plaintiffs than to litigate, despite the merits of their case (the lion's share of which settlement goes, of course, to the plaintiff's lawyer who probably has never met the nominal shareholder in whose name the suit is filed), the net result of this has been a situation where most boards of directors are more concerned about being sued than about doing what it is in the best interests of the shareholders, and only further squander funds that ought go to to shareholders rather than lawyers. So the picture you portray is, to say the least, simplistic. Furthermore, having been an observer at the considerations of various boards of directors of corporations, it is simply false to claim that "profit" is their only consideration. For example, when a recent publicly-traded corporation in our city was acquired, the board of that company negotiated a contractual commitment from the acquiror to retain a certain number of jobs in our city. Not only was that threshold met, but the acquiror has subsequently increased the number of employees here. But what I found odd about this is that the very argument being advanced to reject the donation (the money, albeit made by a non-political 501(c)(3), is hopelessly tainted by its association with the Kochs) eerily similar to the arguments advanced by those on the far right against allowing politicians to receive graduation honors who do not fully measure up to their interpretation of Catholic teaching. I am glad to see you mention CUA's response; I thought it was spot on, & found it curious that Mr. Clarke did not update his story to reflect it.
Kevin Clarke
11 years ago

The story was updated with CUA's repsonse within about one minute of its e-delivery.

JR Cosgrove
11 years ago
I have a few comments: 1. We tend to use Catholic Social Teaching like it was sacrosanct. No one seems to question that what some call CST may actually hurt the poor and favor certain economic groups over others. So the letters CST or the words, Catholic Social Teaching, get thrown around like they are articles of faith and what is in them is infallible. For example, there is the knee jerk defense of unions as if unions are good for the worker or the poor. But unions always favor one group over another and sometimes the group which is favored is small and much more prosperous than the general public. Unions are often defended because it is thought that they are fighting the rich capitalist, whoever that is, and defending the little guy. But while there might have been some truth to that 75-100 years ago that is not true in our society today. For example, the author pointed to Scott Walker and the unions in Wisconsin. These union members were hardly oppressed and now that they are free of coercion to belong to a union, many are choosing to opt out. If the Koch brothers supported Scott Walker, three cheers for the Koch brothers. 2. There has never been a more efficient and more just system of distributing good than free market capitalism. There are several types of capitalism and when one uses the term, capitalism, they must point to just what form they criticize. Most of the criticism of capitalism are not of the free market entrepreneurial version that has been responsible for most of the advances in wealth and well being in the United States and a lot of the world. There was an article in America several months ago by Stacie Beck which illustrated some of the bad types of capitalism. It is called "rent seeking" or "crony capitalism" where the controllers of the resources use their influence to get favorable treatment from the government for their organization as the expense of others. Free market capitalism would prevent such behavior and is one where every transaction takes place between two willing participants without any favorable treatment for either party. Each party is assuming that they are better off with the transaction and as a consequence wealth and well being is created. Crony capitalism restricts possible transactions and reduces over all wealth as it favor the few versus the many. 3. There has never been any better system than what has driven the prosperity of the US. It is far from perfect as noted above with the tendency of larger organizations to lobby for rent seeking. Most of the wealth has been generated beneath the major corporations by entrepreneurs and as long as we leave these people alone we will see even greater rewards in the future. Some become large organizations that then try to impose their will in a rent seeking way and we as a country and CST in particular should try to prevent this. To point to something like the Scandinavian countries as a model is ludicrous. These are small homogeneous countries and have little of the expenses we have in the US. When a country has a population of 300 million that is far from homogeneous and requirements for social welfare that exceeds what these small homogeneous countries could ever hope to fund, it does not make sense to hold them up as a model. 4. Jobs are created by those who want to create wealth, namely a small number of ambitious people. Employees are an expense for any organization and to employ anyone the employer searches for people who must contribute to the success of the business. If the expense of employing someone is too high, the employer may do two things, look for automation to replace workers or move the jobs to another country that has lower wage demands. Jobs are not created by fiat but by a few who create opportunities for others to enjoy the fruits of their endeavors. Sounds kind of crass but it is true and has been true since the beginning of organized society. Until Catholic Social Teaching realizes that, it will proffer counter productive ideas that will actually hurt the poor and opportunities for growth. So I recommend that so called CST be rethought and that reflexive anti-capitalist rhetoric be trashed and instead be replaced by ideas that will encourage people to innovate and make the lives of the poor better. That is what CUA should do in its new business program. To do anything else is to harm the poor.
Marie Rehbein
11 years ago
It's not true that the US was at some point a free market. There has always been some form of cronyism in operation. However, there have been periods of adjustment, where concern for the conditions of the poorest and the lack of reward for effort were addressed by government intervention. The biggest reason for the size and growth of the United States economy is the richness of resources within the boundaries of the nation. The biggest reason for the size and growth of the previously great British economy was Britain's exploitation of the resources of other areas of the planet that were not well defended. It is a fantasy to think that current political conditions can actually allow for such a thing as a truly free market in which some people, perhaps a large number, are not exploited and harmed, such that it can be argued that this is the ideal that brings the most benefit to the most people. Government's most important role is, in fact, to prevent exploitation of some for the benefit of others -- paying a large number of dollars, representing a small percentage of one's net worth, is not a form of exploitation, by the way.
11 years ago
The United States has had a freer market system than most other countries which allowed us to exploit our natural resources more efficiently and creatively than other nations. Individuals pursuing their self-interest with limited government interference have done more to alleviate poverty than all the aid and anti-poverty programs that have flourished. There are many countries rich in resources that purport to protect the interest of the poor, but in fact are impoverished because of their corruption and incompetence, including, Venezuela, Syria, and Zimbabwe. Smaller city-states like Hong Kong and Singapore and Japan have flourished with limited natural resources because of free markets. However, you are correct that many times a large number of people are exploited and harmed and we must do more to protect them from such exploitation.
Marie Rehbein
11 years ago
Before you call them "our" resources, remember that they were often taken by force. Without going into too much detail, you need only recall the relocation of the Cherokee nation as an example of this. I think you imply that individual self-interest when allowed to manifest itself in one's elected officials results in what appears to be both corruption and incompetence. This does not argue in favor of allowing people to serve their self-interest without government interference, however. Japan, particularly, has flourished because of special status given to its exports by the United States. It does not qualify as an example of free market economics.

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