When Your Money Is So Tainted Museums Don’t Want It

Nonprofits should not allow themselves to be used by the wealthy to scrub their consciences.

When it comes to blood money for the arts, how bloody is too bloody?

On Wednesday, the Metropolitan Museum of Art decided that money made from selling the opioids that have killed several hundred thousand people is too bloody. It announced it would no longer take donations from members of the Sackler family linked to OxyContin. “On occasion, we feel it’s necessary to step away from gifts that are not in the public interest,” Daniel H. Weiss, the Met’s president, said.

Gifts that are not in the public interest.” It is a pregnant, important phrase. Coming on the heels of similar decisions by the Tate Modern in London and the Solomon R. Guggenheim Museum in New York, the spurning of Oxy-cash seems to reflect a growing awareness that gifts to the arts and other good causes are not only a way for ultra-wealthy people to scrub their consciences and reputations. Philanthropy can also be central to purchasing the immunity needed to profiteer at the expense of the common welfare.

Perhaps accepting tainted money in such cases isn’t just giving people a pass. Perhaps it is enabling misconduct against the public.

This was the startling assertion made by New York State in its civil complaint, filed in March, against members of the Sackler family and others involved in the opioid crisis. It accused defendants of seeking to “profiteer from the plague they knew would be unleashed.” And the lawsuit explicitly linked Sackler do-gooding with Sackler harm-doing: “Ultimately, the Sacklers used their ill-gotten wealth to cover up their misconduct with a philanthropic campaign intending to whitewash their decades-long success in profiting at New Yorkers’ expense.”

It was strong stuff: The State of New York was officially claiming that in taking Sackler money, arts institutions had allowed themselves to be used as lubricant in a death machine. “It’s a remarkable statement,” Benjamin Soskis, a historian of philanthropy at the Urban Institute in Washington, told me this week, “the sort of thing we heard from critics of philanthropy on the periphery of power but rarely, in recent decades, from those at the center.”

Are museums, opera houses, food pantries and other nonprofits to be held responsible for how their donors have made their money? It is a question being asked more and more as a century-old taboo shatters.

“No amount of charity in spending such fortunes can compensate in any way for the misconduct in acquiring them,” Theodore Roosevelt said after John D. Rockefeller proposed starting a foundation in 1909. It was not a lonely thought at the time.

But in the decades since, not least because of the amount of philanthropic coin that has been spent (can it still be called bribing when millions are the recipients?), touching all corners of our cultural life, attitudes have changed. And, as I found in spending the last few years reporting on nonprofits and foundations, a deeply complicit silence took hold: It was understood that you don’t challenge people on how they make their money, how they pay their taxes (or don’t), what continuing deeds they may be engaged inso long as they “give back.”

When I speak privately with people working in nonprofits, as I often do, especially younger people, I hear this complaint again and again: They agonize about having to stay quiet not only about their donors’ membership in a class that has benefited from an age of inequality but also about specific conduct by many donors that often worsens the problems the donors and nonprofits are working to solve.

And so the decision by the Met and the other museums may be a small sign that this compact is cracking — and perhaps that nonprofits are taking a broader view of their role in public life: not only as doers of good in a particular area of work but also, if they’re not careful, as enablers of broader, if more generalized, societal harm.

“Turning down money runs against the grain of the thinking that’s long governed charitable boards — that they are stewards of the interests of particular institutions, with considerations of broader public interest being peripheral,” Mr. Soskis, the historian, said when I asked him about the Met. “What we are seeing more and more of, through the spread of social media, and an increased willingness to critically engage major philanthropic gifts, is the assertion of the public’s interest in the philanthropic exchange.”

It remains to be seen whether other arts institutions will follow the lead of the Met, Tate and Guggenheim — and more broadly, whether the nonprofit sector will begin asking itself some deeply uncomfortable questions.

Should anyone working to make cities better and more equitable take money from JPMorgan Chase, which paid a huge sum for its role in helping to bring about the 2008 mortgage disaster and financial crisis? Should anyone working to help families affected by President Trump’s immigration policies take money from Mark Zuckerberg, whose soft-pedaling of Russian interference in the 2016 election allowed anti-immigrant hate to spread and potentially helped Mr. Trump gain votes?

It remains to be seen whether other arts institutions will follow the lead of the Met, Tate and Guggenheim — and more broadly, whether the nonprofit sector will begin asking itself some deeply uncomfortable questions.

Should anyone working to make cities better and more equitable take money from JPMorgan Chase, which paid a huge sum for its role in helping to bring about the 2008 mortgage disaster and financial crisis? Should anyone working to help families affected by President Trump’s immigration policies take money from Mark Zuckerberg, whose soft-pedaling of Russian interference in the 2016 election allowed anti-immigrant hate to spread and potentially helped Mr. Trump gain votes? Should any health institution take money tied to Pepsi or Coca-Cola?

Make no mistake: To ask these questions opens a can of worms. The Sacklers are an easy case. Once the complicity turns more diffuse, it is hard to say whether a nonprofit is participating in an injustice by taking money — or doing the best it can in a flawed reality. What’s next after this? Is there a statute of limitations on looking for blood money? What kind of moral purity test are these institutions supposed to use? Once you begin to raise these dilemmas, how do you actually draw those lines around what’s acceptable?

The Met has already drawn some lines. It won’t remove the Sackler name from its galleries; it won’t return money already donated. What it should do is go beyond a single act of rebuffing to model a new process for evaluating money.

Past and future donations could be judged on various criteria:

  1. Was the money legally and fairly made?
  2. Is the money owed to tax evasion or extreme legal tax avoidance?
  3. Is the museum effectively selling a modern papal indulgence for a sin that shouldn’t be so easily pardoned?
  4. Does the donor have a duty of reparation to people they have exploited or harmed that gives those parties more of a right to the money?

And the public should be brought into the process. Public-facing institutions enjoy the privilege of being untaxed, so citizens should be able to comment on and scrutinize prospective donations.

These questions will long be with us. These museums have forced an essential conversation. For far too long, generosity has been allowed to serve as a wingman of injustice; giving back disguises merciless taking; making a difference becomes inseparable from making a killing — sometimes literally. It is high time to reject these alibis for treachery.

The Student-Debt Crisis Hits Hardest at Historically Black Colleges

Long a path to financial security, traditionally African-American schools are now producing graduates who struggle with disproportionately high debt

Historically black colleges and universities helped lift generations of African-Americans to economic security. Now, attendance has become a financial drag on many of their young graduates, members of a new generation hit particularly hard by the student-debt crisis.

Students of these institutions, known as HBCUs, are leaving with disproportionately high loans compared with their peers at other schools, a Wall Street Journal analysis of Education Department data found, and are less likely to repay those loans than they were a decade ago.

Among key findings of the Journal’s examination of 2017 data, the latest available:

  • HBCU alumni have a median federal-debt load of about $29,000 at graduation—32% above graduates of other public and nonprofit four-year schools.
  • The majority of HBCU grads haven’t paid down even $1 of their original loan balance in the first few years out of school.
  • America’s 82 four-year HBCUs make up 5% of four-year institutions, but more than 50% of the 100 schools with the lowest three-year student-loan repayment rates.

Though HBCUs typically cost less than other public and nonprofit four-year schools, these colleges have long trailed those peers on measures of debt and repayment. Now they are trailing by far greater margins.

Many HBCUs see a mandate in giving opportunity to disadvantaged youth, who often start out with fewer financial resources and a diminished ability to pay.

At Stillman College in Tuscaloosa, Ala., the board until recently included alumni from rural Alabama working as lawyers, doctors and ministers, said its president, Cynthia Warrick. “They’ve told me that no one else would take them but Stillman. I think we have a responsibility to still be that place.”

Graduates of four-year for-profit colleges, which weren’t part of the Journal’s comparisons, have similar overall repayment rates and median debt loads to HBCU alumni, an analysis of federal data shows.

The HBCU debt gap has widened partly because of simple math. Tuition increases have outstripped inflation across America.

  • Black families have the least wealth of the largest U.S. racial groups, Federal Reserve data show.
  • Parents of black college students have lower incomes and are less likely to own homes than those from other racial groups, Education Department data show.

So in coping with tuition increases, black students have fewer resources to draw on than many Americans. Borrowing proportionally more has been the solution for many black students and families.

.. Blacks typically earn less than whites after college, so they have fewer resources to repay. Black college graduates between ages 21 and 24 earned nearly 17% less per hour, on average, than white graduates of the same age range in 2018, according to an analysis of census data by the Economic Policy Institute, a left-leaning think tank.

.. Many HBCUs opened after the Civil War and in the first half of the 20th century when public and private universities often denied admission to African-American students. The schools often started out severely behind their peers financially. Many never caught up, despite government efforts that the schools say have been insufficient.

Jared and the Saudi Crown Prince Go Nuclear?

There are too many unanswered questions about the White House’s role in advancing Saudi ambitions.

Jared Kushner slipped quietly into Saudi Arabia this week for a meeting with Crown Prince Mohammed bin Salman, so the question I’m trying to get the White House to answer is this: Did they discuss American help for a Saudi nuclear program?

Of all the harebrained and unscrupulous dealings of the Trump administration in the last two years, one of the most shocking is a Trump plan to sell nuclear reactors to Saudi Arabia that could be used to make nuclear weapons.

Even as President Trump is trying to denuclearize North Korea and Iran, he may be helping to nuclearize Saudi Arabia. This is abominable policy tainted by a gargantuan conflict of interest involving Kushner.

Kushner’s family real estate business had been teetering because of a disastrously overpriced acquisition he made of a particular Manhattan property called 666 Fifth Avenue, but last August a company called Brookfield Asset Management rescued the Kushners by taking a 99-year lease of the troubled property — and paying the whole sum of about $1.1 billion up front.

Alarm bells should go off: Brookfield also owns Westinghouse Electric, the nuclear services business trying to sell reactors to Saudi Arabia.

Saudi swamp, meet American swamp.

It may be conflicts like these, along with even murkier ones, that led American intelligence officials to refuse a top-secret security clearance for Kushner. The Times reported Thursday that Trump overruled them to grant Kushner the clearance.

This nuclear reactor mess began around the time of Trump’s election, when a group of retired U.S. national security officials put together a plan to enrich themselves by selling nuclear power plants to Saudi Arabia. The officials included Michael Flynn, Trump’s national security adviser, and they initially developed a “plan for 40 nuclear power plants” in Saudi Arabia, according to a report from the House Oversight and Reform Committee. The plan is now to start with just a couple of plants.

As recently as Feb. 12, Trump met in the White House with backers of the project and was supportive, Reuters reported.

No one knows whether Prince Muhammed will manage to succeed his father and become the next king, for there is opposition and the Saudi economic transformation he boasts of is running into difficulties.

Trump and Kushner seem to be irresponsibly trying to boost the prince’s prospects, increasing the risk that an unstable hothead will mismanage the kingdom for the next 50 years. Perhaps with nuclear weapons.

Former Trump Adviser Pushed Saudi Nuclear-Plant Plan, Report Says

Mike Flynn and others within the White House ignored repeated legal and ethical warnings, according to House report

Former national-security adviser Mike Flynn and others within the White House ignored repeated legal and ethical warnings as they pushed early in President Trump’s tenure a plan to build dozens of nuclear-power reactors in Saudi Arabia, according to a report released Tuesday by the House Committee on Oversight and Government Reform.

The report describes how Mr. Flynn and Derek Harvey, whom Mr. Flynn brought to the National Security Council staff to oversee Middle East affairs, worked closely on the plan with a group of retired U.S. generals and admirals who had formed a private company to promote it.

Despite the warnings from career White House staff—and an order by the NSC’s top lawyer to stand down—the White House officials and their private-sector allies worked to place the idea on Mr. Trump’s agenda during a phone call with Saudi Arabia’s King Salman, and to be discussed during the U.S. president’s May 2017 trip to Riyadh, his first overseas trip as president, the report says.

The Wall Street Journal first reported many of the details of the Saudi plan and Mr. Flynn’s efforts to advance it inside the White House in a series of articles in 2017.

The plan for U.S. companies to build nuclear power plants in Saudi Arabia, part of an ambitious “Middle East Marshall Plan,” was billed by advocates as a way to revive the moribund U.S. nuclear industry, create jobs and reassert American influence in the region.

But one unnamed senior official quoted in the report derided the idea as “a scheme for these generals to make some money.

.. Another key player in the Saudi nuclear effort was Tom Barrack, a Trump ally who chaired his Inaugural Committee. according to the committee’s report.

“Tom Barrack has been thoroughly briefed on this strategy and wants to run it for you. He’s perfect for the job,” Robert “Bud” McFarlane, a one-time adviser to President Reagan who was an adviser to IP3 International, a private firm pitching the nuclear plan, wrote to Mr. Flynn on Jan. 28, 2017.

.. Mr. Flynn’s involvement in the project was controversial because he had worked as a paid adviser to an IP3 subsidiary, Iron Bridge Group Inc., from June to December 2016, while a senior adviser to Mr. Trump’s presidential campaign.

.. On Jan. 30, 2017, the National Security Council’s top lawyer, John Eisenberg, instructed the NSC staff “to cease all work on the plan” because of potential conflicts of interest and other legal concerns, the report says.

Despite that order, and Mr. Flynn’s firing, “officials inside the White House continued to move forward on the IP3 nuclear plan,” the report says. It says that more than five individuals recall Mr. Harvey saying during a meeting on March 2, 2017, that “I speak with Michael Flynn every night.” That was more than two weeks after Mr. Flynn was fired.