November 10, 2019; Boston Globe
The ongoing scandal over college admissions shows the lengths some parents will go to ensure their children make it into the right university. As NPQ’s coverage has emphasized, it also demonstrates the corrosive impact wealth can have on a process that’s supposed to be fair and impartial. Just as important to the nonprofit sector, though, is an emergent pattern of turning the respectability and lack of close oversight of nonprofit organizations into conduits for illegal and immoral activities.
For months, the Boston Globe has profiled the story of how Jack Zhao, the father of two fencers, gained his sons’ admission to Harvard University by developing and using a relationship with a respected coach to support this objective. Alexandre Ryjik, who was his children’s private fencing coach, leveraged his connections with Harvard fencing coach Peter Brand to work the admissions system to Zhao’s benefit.
The Globe’s story chronicles “extraordinary financial maneuvers by Brand, Ryjik, and Zhao…starting with Zhao’s purchase of the Harvard coach’s Needham home at an inflated price—at a time when his younger son was seeking admission to Harvard. Then there were the fencing coaches’ charities, fattened with Zhao’s cash.” These charities provided an innocent way for payments to be made that would otherwise seem illegitimate.
In 2008, Ryjik formed the National Fencing Foundation of Washington DC, “dedicated to developing the personal character, academic achievement and athletic excellence through the world of fencing.” It operated with no paid staff and a small budget that depended mostly on participation fees to support its activities. The National Fencing Foundation’s contributory income was minimal except in of 2013 when, as his younger son’s Harvard admission was pending, Zhao contributed $1 million. According to Ryjik’s estranged wife, “The foundation was just a way for rich parents to pay him to get their children into Ivy League schools without raising eyebrows.”
In 2013, Brand formed the Peter Brand Foundation just in time to receive a $100,000 gift from Zhao. The Brand Foundation appears never to have been operational and has not filed a federal tax return since it was formed.
Rick Singer, who lies at the heart of what has become known as Operation Varsity Blues, also depended on a nonprofit organization to manage the flow of funds from parents trying to subvert the admissions process. According to the Los Angeles Times, Singer’s Key Worldwide Foundation “was nothing more than a means to launder money from wealthy parents to bribe college administrators and coaches as part of a massive cheating scandal to get their children admitted into the schools.”
We should also not forget that earlier this month, the Donald Trump Foundation, in settling a suit brought by the New York State attorney general, admitted it had used its charitable status to also mask questionable activities. As reported by the New York Times, the foundation “admitted to using the foundation to settle the legal obligations of [Trump-owned] companies [and] acknowledged that the foundation purchased the $10,000 portrait of Mr. Trump, which was ultimately displayed at one of his Florida hotels.” It also allowed the Trump presidential campaign to use the foundation’s assets for political benefit.
There are many good reasons to launch a nonprofit. On that list, we would not expect to find “personal gain” and “hiding questionable financial transactions.” So, what should we make of the growing number of examples in which organizations that claim to be formed for the public’s benefit are exposed for ignoble purposes? Is it time for stricter oversight?—Martin Levine