Last week, several American CEOs and celebrities were embroiled in a bribing scheme that allowed them to get into some prestigious and some not-so-prestigious universities and colleges around the country.
It all took place last Tuesday, when federal prosecutors in Boston charged 33 parents and 13 collegiate coaches with engaging in a long-running scheme to get children into colleges by lying to and cheating the admissions process.
Some of the most famous names caught up in the case include actresses Lori Loughlin and Felicity Huffman, as well as partner at the private equity firm TPG, William E. McGlashan Jr., co-chairman of the law firm Wilikie Farr & Gallagher, Gordon Caplan, and retired CEO of Pimco Doug Hodge.
While it’s obviously morally questionable for the rich and famous to pay exorbitant amounts of money to get their offspring into the school of their choice, buy why exactly is It a federal crime?
To put it simply, the charges that were filed in the cases include mail and wire fraud statutes which means that these ill-advised parents could potentially be facing charges that come with 20-year sentences in prison.
Interestingly, it’s possible that these parents could have avoided any criminal punishment if they were more well-versed in the 2010 Supreme Court appeal of former Enron chief executive Jeffrey Skilling, which limited the honest-services fraud law. But unfortunately for them they were not, meaning they did not know that bribes and kickbacks are still very much illegal. If they haven’t already, they’ll all want to lawyer up real soon.
Perhaps the one silver lining for the families who are named in the case is that while the university coaches or employees who were taking payment in exchange for improperly admitting students could be convicted as federal criminals, the parents charged in the case, the ones who paid the money, have only be listed as guilty for ascent as accomplices in the scheme.
That’s probably good news for them, but less good news for other Americans who will likely once again see the upper class get off the hook for breaking the law.
But did the parents even care that they were breaking the law? According to some of the quotes that were obtained through wiretap, it seems unlikely.
One parent charged in the case named Jane Buckingham was quoted telling an informant the she knew “this is craziness; I know it is. And then I need you to get him into U.S.C., and then I need you to cure cancer and [make peace] in the Middle East.” Buckingham was discovered to have paid $50,000 to have someone else take the standardized test known as the ACT in place of her son.
Mr. Caplan, the aforementioned CEO of Pimco was quoted telling an informant in the case, “I’m not worried about the moral issue here. I’m worried about the- if she’s caught doing that, you know, she’s finished.”
So why commit these crimes when the reason for it seems so trivial? Why pay thousands, hundreds of thousands, or even millions of dollars to get your child into a specific university when it’s a crime, especially when the kid could simply get into a less prestigious university yon their own?
A parent’s love is an obvious and fairly forgiving answer. A more pragmatic answer is that most white-collar crime similar to this one do not have a clear victim. Because there is no clear victim, it seems likely that those involved can easily convince themselves that they are doing nothing wrong.
While this crime cannot really be considered a white-collar crime, paying money to get a child into a prestigious university is not so different. In both cases there is no easily identifiable individual victim. Even though deserving children were obviously robbed of their admission to a given university in place of a child who had won the genetic lottery in terms of being born to wealthy parents, it’s nothing like looking at a victim of abuse, or robbery, or similar crime.
But it has already happened. The parents involved have been named and many of them have been publicly chastised, or even removed (though maybe temporarily) from their positions. It goes without saying that the coaches and university staff involved have also been removed.
In the case of Loughlin and Huffman, one former Oakland School Teacher named Jennifer Kay Toy has filed a $500 billion class action lawsuit claiming that “legitimate applicants to colleges were denied access due to illegal activities.” In the lawsuit, Toy sad her son Joshua was not admitted to several universities where the cheating scandal took place, despite having a 4.2 GPA.
The one interesting question is what happens to the children who benefited from the bribes. In some cases the students were likely very aware of the deal. In others, it appeared as though the students were just as ignorant to the reason behind their admission as their fellow classmates.
While a number of implicated universities have already claimed that any incoming students who benefited from system will be denied, it is harder to remove students from their already established student body.
The truth is that this situation is likely far from over. While the coaches and university staff implicated will very likely face some potentially seriously jail time, it also seems quite likely that the very same system that got their children into university will keep this rich and famous parents out of jail.
Whatever happens, it will be fascinating to see how the American judicial system chooses to go forward. Whether they will choose to make these parents and former university staff an example, or if they simply give them a slap on the wrist as is customary for many white-collar criminals, will likely have a role in dictating how similar situations are dealt with in the future.