Universities — especially public universities — are never, ever supposed to cede their academic independence to their donors, who might otherwise use their departments as glorified think-tanks, laundering their ideology and giving it the veneer of objective, scholarly credibility.
George Mason University has long defended its willingness to take $50,000,000 from the Charles Koch Foundation by insisting that the money didn't come with strings attached — and insisting that the fact that their economics department says a lot of things that makes Koch very happy is just a mysterious coincidence.
But now the university president, Angel Cabrera, says that he has discovered that since at least 2003, the university's development department (the people who hit up donors for money) have been entering into secret agreements with big-money donors to let them appoint members of the university's hiring committee for the economics department.
At least 10 agreements like this are now known to exist, all tied to the Mercatus Center for Free Market Research, a Koch darling. The agreements say that if the donor isn't happy with the hiring choices that emerge from the hiring committees, they can take all their money back.
The ordinary protection against conflict of interest, and against donors using the university's reputation as an ideological/financial cutout or flag of convenience is to build institutional firewalls, which allow donors to provide large money with broad conditions attached (such as: this money should be used to hire an endowed professor carrying out research and teaching on Topic X) but without specific controls on who that professor is. This is at best imperfect – but it at least somewhat curbs the voracity of development officers and individual academic "entrepreneurs."
It would appear that any such firewalls were comprehensively breached at George Mason University (which is a public university, with consequent public obligations). The ferocity of the university administration's efforts to keep the arrangements secret suggest the reputational damage that the university now faces. It's also notable that a lot of GMU faculty have suspected something like this for a long time, but weren't able to get straight answers from the administration until its hand was forced by this lawsuit.
Finally, it's notable that the person representing the interests of an as-yet unnamed big donor to the law school is Leonard Leo, who is the Federalist Society officer largely responsible for the ideological vetting of judges for the Trump administration. That doesn't say great things either.
The public choice of public choice [Henry Farrel/Crooked Timber]