Michael Schwalbe on How Higher Education Abets Corporate Crime

Many universities in the United States have close ties to corporate criminals and apparently have no qualms about it.

North Carolina State boasts about its close ties.

Last semester, Michael Schwalbe taught a course at NC State called Corporate Power in America.

“I hoped to arouse student interest by adding material about the university’s corporate partnerships,” Schwalbe wrote in a recent article titled How Higher Education Abets Corporate Crime. 

“I searched North Carolina State University’s website – discovering my university’s partnership portal – and learned that the university claims seventy-five industry partners, boasts of being at the forefront of research commercialization, and touts its fourth-place rank among US universities for share of research supported by industry.” 

“In fact,” says the university, “we have an entire department dedicated to supporting corporate partnerships.”

“A record of criminal behavior was no obstacle to establishing and maintaining a relationship with NC State,” Schwalbe writes. “But now the scope of the problem became clear. It was not a matter of ties to a few bad apples. The problem is much larger. It would be more accurate to say that most universities, not just NC State, draw their corporate partners from a rotten barrel.”   

“Universities do not merely partner with law-breaking corporations; they abet that lawbreaking by normalizing it. If respected institutions dedicated to science, education, and scrupulous truth-seeking are not put off by corporate crimes, then surely such crimes are no big deal. That’s how normalization works. If no one objects to untoward behavior, that behavior is implicitly redefined as acceptable.”    

“It’s precisely this sort of legitimacy – the impression of being good corporate citizens capable of self-regulation – that the tobacco industry long sought through its associations with universities. Many corporations want the same positive aura that comes from associating with higher education and academic science. In business-speak this is called ‘investing in corporate citizenship goals.’ This kind of public-relations payoff can be had apart from new product development or employee recruitment. Normalization of corporate crime, in other words, is not just a fringe benefit that no one intends; it’s a reliable part of the payoff package.”

“The charge that partnering with criminal corporations is a problem is likely to be met with a defense built on circular logic. Yes, corporations (or, rather, the people in them) break the law occasionally, admits the defense. But for the most part this is routine business behavior; it’s nothing to get wound up about – it’s normal. How do we know it’s normal? Because people who are trusted stewards of the public interest – university administrators, professors – aren’t bothered by it.”

“The complaint is thus dismissed. The normalization of corporate crime is not a problem, because upstanding folks see corporate crime as normal.”

Schwalbe says “it didn’t take long to find enough information on NC State’s website to make a larger point about how public universities – no less than other public entities we might expect to remain independent and dedicated to the common good rather than to private gain – can succumb to the lure of corporate partnerships. I had planned to stop there. But a few more clicks took me to a page on which NC State featured, as shining examples of success, its affiliations with GlaxoSmithKline and Eastman Chemical. Recalling the scandals involving GlaxoSmithKline, I searched the internet again. The headlines filled pages: Glaxo Agrees to Pay $3 Billion in Fraud Settlement, GlaxoSmithKline Fined $3bn after Bribing Doctors to Increase Drug Sales, GSK Chinese Bribery Scandal Ends in $489 Million Fine, Executive Sentenced,  GlaxoSmithKline Most Heavily Fined Drug Company. On Violation Tracker, a database on corporate misconduct, I found that, since 2000, GlaxoSmithKline has paid nearly $8 billion in fines for various forms of illegal activity.”

Schwalbe offered his article to the Chronicle of Higher Education. But it was turned down without explanation. The Chronicle appears to be in on the game. The Chronicle even sells an issue brief on the subject – The Outsourced University: How Public-Private Partnerships Can Benefit Your Campus.

Schwalbe’s article instead was published this month by the American Association of University Professors in its magazine Academe.

Did you have difficulty finding out about the corporate partners of NC State?

“No, the university was boasting about them,” Schwalbe told Corporate Crime Reporter in an interview last week. “That is what made it so interesting. When I did my initial presentation in class, it probably took me half an hour to an hour to track down half a dozen key corporations. They are all over the university’s website. It’s not hard to find at all. That’s why I thought – I had better go back and look at this more systematically. That’s what I did. It was not hard to find the information at all.”

Did you ask the university whether it had any standards on when it would take money from criminals and when it wouldn’t?

“I didn’t do that. But it’s a good question because in the article I argue that the university ought to have some standards. And my guess is they probably do somewhere in some fine print. But if you look at what the university actually does, you would be hard pressed to infer that there are any standards. Some of these corporations that the university partners with have hundreds of violations and billions of dollars in fines over the last twenty years. And it’s clearly no obstacle to having partnerships with the university and clearly no obstacle to having those partnerships touted as success stories.”

(Corporate Crime Reporter did ask the university about its ties to corporate criminals and whether it will take money from any criminal. We did not get a response.)

“If you just infer from what the university does, you would have to conclude that if there are any standards, they don’t seem to have much effect in terms of excluding corporate criminals from these partnerships,” Schwalbe said.

You would think that if a mobster wanted to partner with the university, the university wouldn’t allow it.

“You can find statements that the university will disallow donations that have criminal origins or criminal intent behind them. But these are perfectly legal corporations, they are some of the largest corporations in America and they are certainly not seen as criminal organizations.” 

What do you mean by perfectly legal corporations?

“They operate officially above board. That doesn’t mean of course that they are not involved in various kinds of criminal activity, as demonstrated by the fines and convictions they accrue. But nonetheless they are seen generally speaking as legitimate business organizations operating within the realm of the law. But that’s part of my argument. Their violations are normalized so that we don’t see them in the same light as we would see mobsters or gangsters who are clearly operating outside the law.”

What impact does corporate criminal money have on the university?

“There are different kinds of impacts. It normalizes corporate crime. Universities are respected institutions that are dedicated to science and the pursuit of truth. They are getting in bed with criminal corporations. And the university says – no big deal, they are legitimate institutions. There is a normalization effect. That’s one of the big problems.”

“But there are other kinds of problems as well. The university’s priorities will shift to serve these business interests. And that can be anything from developing curricula that serve those corporate interests or orienting research to developing commercially exploitable products.”

“Also, other parts of the university that are not oriented to that kind of economic activity get slighted in various kinds of ways. Departments that participate are seen as more valuable. More traditional academic departments not involved in that kind of activity are then seen as more marginal to university activities. That’s a real danger – that we lose the heart of the university because everything gets drawn into this vortex created by massive amounts of money that capital brings to the university.”

Most major corporations engage in one level of criminal activity or another. Are you more concerned about corporate criminal money or just straight corporate money?

“Both concern me. Straight corporate money can skew the university’s priorities. I’m concerned about the criminal activity because then the behavior is normalized. You might expect the university, in service to the public good, to investigate it and speak out about it. But faculty who do that are generally not going to be rewarded.” 

“The university is dependent on millions and millions of dollars coming from these corporate sources. If the corporation is engaged in criminal activity and a faculty member stands up and says – hey, that’s not right and we should be investigating that and not abetting it. Well, there is a chilling effect if the university is taking money from the corporate criminal.”

[For the complete Interview with Michael Schwalbe, see 36 Corporate Crime Reporter (20)12, May 16, 2022, print edition only.]

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