America’s Universities Need Serious Regulation


If you want real change in large organizations, focus on governance and personal accountability.

By Arthur Levitt

The Wall Street Journal

November 12, 2023


Americans who are rightfully appalled by the pusillanimous response to anti-Semitism on college campuses have been pulling their donations and calling for restrictions on anti-Israel student groups. Maybe those tactics will work. But in my experience, if you want real change in large and unwieldy organizations, you need to focus on fixing governance and assigning personal accountability. You need to regulate.


After the accounting scandals of the dot-com and Enron era, Congress passed laws requiring auditors to tighten their operations, establish clear boundaries between their consulting and audit businesses, and assume far more accountability than they had before.


Directors, too, were informed that they bore a personal interest in preventing fraud. One rule made it clear that if a company passed fraudulent numbers off to investors, the person who signed the filing—usually the chairman—would be personally liable.


Lawmakers have also tightened anti-money-laundering statutes, requiring banks to review their customers closely and to ensure they aren’t unwittingly providing services to organized crime, terror entities, tax evaders or other bad actors. The rules are difficult to enforce and require a lot of work. But they come with real penalties for failure: Bank officers can go to prison if they fail to prevent money laundering, and several have.


Think of the difference this makes. When Russia invaded Ukraine, America’s banks and other multinational corporations quickly had to implement sanctions—including anti-money-laundering rules—on Russia’s government, politicians, financial institutions, oligarchs and others who make up the country’s elite. This happened effectively because people had real skin in the game: their own.


Which brings us back to campus. Clearly, America’s universities are in need of similar encouragement.


Universities have lately seen a raft of scandals related to their fundamental mission of scholarship and teaching. Students are graduating unprepared for basic work and deeply in debt. Prominent scholars are found to be fudging their own research. Admissions officers and other officials are found to be engaging in pay-for-admission schemes. Athletic programs are regularly found breaking rules and laws. Universities have taken charitable gifts from questionable sources such as Jeffrey Epstein and Chinese military and Communist Party fronts.


Add the explosion of anti-Semitism. America’s campuses are the source of some of the vilest Jew-hatred America has seen since 1939, when the German American Bund held a pro-Nazi rally at Madison Square Garden. Not only do some faculty and students call for Israel’s destruction; they celebrated Hamas’s brutal massacre as an act of “resistance.”


If public companies featured such systematic failures, they would be visited by regulators and called before Congress. Universities, by comparison, are lightly regulated. There are accrediting agencies, and the Education Department focuses on enforcement of civil-rights laws. In the case of professional education, some membership organizations set curricular standards.


But these don’t constitute regulation in a comprehensive sense. Universities can pretty much set their own rules, and they answer to no one. They face no meaningful external pressure to tell the truth or honor their promises to students and others. They don’t need to report or punish fraud or corruption. They don’t set consistent standards for contributions or spending.


None of this is acceptable. Not to students and parents. Not to alumni and donors. And not to taxpayers, who subsidize universities to the tune of $1 trillion a year. The public has a clear interest in how these institutions operate and deserve to know how they became hotbeds of anti-Semitism.


Imagine what a difference it would make if universities were subject to the same kind of regulatory oversight the Securities and Exchange Commission provides to public companies. Administrators would have to meet basic standards of truthfulness and governance or face stiff financial penalties and sanctions, including permanent bans from working in higher education. If criminal acts were discovered, the Justice Department would step in.


When I led the SEC, I often spoke about my duty to the investing public. I said every public corporation needs to be trusted, and all should treat their investors with respect. Someone who breaks that trust should pay the price—including with time in prison.


Given what we are seeing on college campuses, it is time to impose the same standard on universities, their managers and their directors and trustees. It may be the only way to save them.




America’s Universities Need Serious Regulation - WSJ



15 May, 2024
Annie Hirshman '24 May 15, 2024 Last year, I took a Political Science course with a certain professor. This was not uncommon for me, as I am a Political Science major. However, for students of different majors, this particular course was required in order to obtain a liberal arts degree from Davidson College. Therefore, this class serves as a lot of students' sole exposure to the political science department. I was in the classroom with a variety of individuals, ranging from the Phi Delt jocks to the studio art majors. This classroom had everything and everyone. Since this was the first time a lot of them had taken a political science course, the dialogue and discourse was somewhat quieter. Therefore, I felt encouraged to speak up in class. I participated often, sharing my opinion on daily issues and historical events that had shaped American politics. I hoped that my voice would encourage others to participate. Sharing my opinion took a turn for the worse on a certain Wednesday morning. As the semester progressed, I noticed that the teacher was only sharing liberal skewed media sources. When they would discuss conservative matters, it had a negative connotation. They often referred to Republican politicians as a whole using derogatory terms, almost asserting that one bad apple was synonymous with the bunch. I discussed what occurred within the classroom numerous times outside, especially with my classmates that were rather conservative. They spoke of how they felt alienated in class, frightened at the outcome if they were to share their opinion. As a natural-born extrovert and rather excited by the idea of questioning the professor, I spoke up. I asked them why they chose to share only liberal-based news sources and strayed from conservative outlets in their journalistic sources. Their answer was short and sweet: because they were the only accurate sources to garner information from. I was shocked and severely taken aback by their statement. Later that day, the professor followed up with an email ‘defending’ their position. Without their intent, they confirmed that they do not “explicitly seek to include conservative outlets”. They spoke of how there was an ongoing movement to tar outlets that were not relatively conservative. They continued that accurate news sources were under attack for liberal alignment when in reality (their opinion), they were honest and true. The professor asserted that Republican politicians were guilty of executive aggrandizement for these efforts. In addition, they asserted that sources such as the New York Times and the Washington Post have been shown to have a very limited liberal bias, if any. As someone who seeks to challenge my own and other’s beliefs, I did some research to see if these statements were accurate or not. I checked multiple sources to see which sources were actually ideologically skewed. The Allsides Media Bias Chart, which collects its information based upon multi-partisan scientific analysis, including expert panels and surveys of thousands of everyday Americans, provided convincing material. It asserted that the New York Times, CNN, and Washington Post all skew left to the same extent that The Wall Street Journal skewed right. In addition, I analyzed the Ad Fontes Chart. In order to analyze their data and rate their sources, their methodology consists of multi-analyst ratings of news sources along seven categories of bias and eight of reliability. Each source is rated by an equal number of politically left-leaning, right-leaning, and centrist analysts. All analysts must hold a bachelor’s degree, while most hold a graduate degree and about one-third have obtained a doctoral degree. It argues that the Wall Street Journal is on the “skews right” section while the Washington Post, New York Times, and CNN are on the “skews left” section. The fact that Davidson supports a professor that only teaches one side is sad but not shocking. This is an ongoing issue at this college. I know for a fact that I am not the sole student who feels this way. Teachers are supposed to teach us how to think, not what to think. Through supporting professors that promote a one-sided discourse, that statement is contradicted daily. Considering that the college routinely refers to the “Davidson Experience” in a positive way, I can’t believe that this is what they have in mind. At the end of the day, solely teaching one side is indoctrination. Davidson, coming from a student who admires and cherishes you, please do better so future generations of students feel both free and encouraged to speak their mind, even if it is different than the majority. Annie Hirshman is a 2024 Graduate of Davidson College with a degree in Political Science.
07 May, 2024
Students demanded that we side against Israel, violating the core principle of institutional neutrality.
03 May, 2024
Higher education isn’t daycare. Here are the rules we follow on free speech and public protests.
Show More
Share by: