Friday, May 30, 2014

Transparency--The Last Refuge of a Scoundrel: New York University's Abu Dhabi Construction Scandal

Patriotism, Samuel Johnson remarked, is the last refuge of a scoundrel. But times have changed. Today,self-proclaimed "transparency" is the last refuge of the scoundrel--or at least of scoundrel universities.

Earlier this month, the New York Times broke the story of labor abuses during the construction of New York University's Abu Dhabi campus.  According to the Times, construction workers were required to pay hiring bonuses to get jobs, forced to work long overtime hours in order to obtain the wages they were promised, and crammed into substandard housing--sometimes 15 workers to a room.  Immigrant workers' passports were confiscated, and striking workers were arrested and beaten.

Transparency--the queen of virtues
New York University apologized immediately after the scandal broke, probably pulling a template apology from its public relations department files.  But it never took responsibility for what occurred.  In fact, NYU President John Sexton tried to distance the university from the scandal by claiming that the construction company, not NYU, was responsible for working conditions during the Abu Dhabi construction.

A few days later, NYU held its first graduation ceremony on its Abu Dhabi campus, and Bill Clinton showed up to give the commencement address.  Did he reproach NYU for the labor scandal? No he did not.

This is what Clinton said:
When this story came out, instead of going into immediate denial, the university did something which reflects the values you have been taught here . . . The university, and the government, promised to look into the charges, to do it quickly, to do it honestly and, most importantly, among all the world's skeptics, to do it transparently and if the charges were well founded, to take appropriate, remedial action promptly.
Ah, transparency!  The new queen of virtues.

But then, only a couple of days later, the New York Times reported that the construction company that built NYU's Abu Dhabi campus and apparently abused its construction workers, is run by Khaldoon Khalifa Al Mubarark, a member of NYU's boad of trustees!

So NYU President John Sexton was not being transparent when he suggested that NYU was not directly involved in the Abu Dhabi construction project.  In fact, the construction company's chief executive was sitting on NYU's board.

This is not the first time NYU has been caught being less than transparent. Remember when Senator Charles Grassley tried to get NYU documents pertaining to the low-interest loans it was giving favored administrators? NYU employees finally let Senator Grassley's staffers look at some pertinent documents but they would not permit any documents to be copied or allow Grassley's people to keep any documents for further review.

Some transparency!  Let's face it--New York University, which pays President John Sexton an obscene salary and has a board of trustees packed with Wall Street insiders, is about as transparent as a Louisiana crawfish pond.

Which is fine.  Let NYU run itself any way it chooses.  If it wants to pay its president $1.5 million a year, dispense exit bonuses to guys like Jacob Lew, and give low-interest loans to help insiders buy second homes--I say go right ahead.  But let's kick this renegade institution out of the Federal Student Loan program.


Clinton Lauds N.Y.U. Graduates, and Inquiry, in Speech. New York Times, May 25, 2014.

Ariel Kaminer.  N.Y.U. Impeding Compensation Inquiry, Senator Says. New York Times, July 10,2013.  Accessible at:

Andrew Ross Sorkin. N.Y.U. Crisis in Abu Dhabi Stretches to Wall Street. New York Times, May 26, 2014.

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