The Journal. - Big Donors Clash with Universities Over Antisemitism, Free Speech

Episode Date: December 11, 2023

The president of the University of Pennsylvania, Liz Magill, resigned on Saturday, capping a tumultuous week at the Ivy League school. After statements Magill made about antisemitism at a congressional hearing, influential donors threatened to pull millions in gifts if she didn't leave her post. WSJ's Melissa Korn talks about antisemitism, free speech, and the rising tensions between elite universities and big donors. Further Reading: -Penn President, Board Chair Resign After Furor Over Comments on Campus Antisemitism  -Wharton Board Calls for Leadership Change at Penn Amid Furor Over Campus Antisemitism  -Penn Donor Threatens to Rescind $100 Million Gift Unless President Is Ousted  Learn more about your ad choices. Visit megaphone.fm/adchoices

For weeks, the University of Pennsylvania president, Liz McGill, has been facing calls for her resignation. So the pressure on McGill had been building for months, and we had some very outspoken donors. You know, these are not people who donate anonymously. These are folks with their names on buildings across campus. That's our colleague Melissa Korn, who covers higher education. And they had been really frustrated with how the school was handling a number of issues, including the response to the October 7th Hamas attack, and felt that the school wasn't taking their concerns seriously about anti-Semitism and that there needed to be a leadership change. What was at the heart of this standoff? The controversy at Penn, it's two things.

One is how the school deals with questions regarding free speech and academic freedom and the line between free speech and anti-Semitism. And then the other big issue is what role, what power donors have over how a school runs itself. And on Saturday afternoon, those donors got what they wanted. McGill resigned. And what would that mean to yield to that kind of demand? I think that's where some of the more interesting questions about this all come in, right?

Who's pulling the strings, right? Do you do whatever a big donor tells you to do because they're a big donor or have been in the past? How much power should they have? And these are all questions that I think Penn and many other universities are grappling with right now. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbach. It's Monday, December 11th. Coming up on the show, anti-Semitism, free speech,

and the rising tensions between elite universities and big donors. When it comes to smart water alkaline 9.5 plus pH with antioxidant, there's nothing to overthink. So, while you may be performing mental gymnastics over whether the post-work gym crowd is worth it, if you'll be able to find a spot for your yoga mat, or if that spin instructor will make you late for dinner again, don't overthink how you hydrate. Life's full of choices.

Smart Water Alkaline is a simple one. Liz McGill became president of the University of Pennsylvania in July 2022. of Pennsylvania in July 2022. She's a constitutional law scholar and had been dean of Stanford Law and provost at the University of Virginia. Since early September, McGill has been facing controversy on campus. Initially, it was related to an event, a Palestinian literary festival. There was concern about the guest list and that some of the people there would be espousing anti-Semitic ideas. So the donors who were upset, you know, these are Jewish donors. They often, many of them have ties to other Jewish advocacy organizations. And they said, you know, it seems like you're not taking anti-Semitism seriously, that you're almost inviting it onto your campus.

And this is really troubling. And that they wanted the event to be canceled. How did Penn President Liz McGill respond? McGill put out a statement, you know, saying that the university is not condoning anti-Semitism, but there is value to free speech here. And she put out this statement, but that wasn't the end of things. Not by a long shot. There was a letter that went around from donors.

A number of donors crafted this letter, kind of an open letter, opposing the university's decision to move forward with the event. Were there anti-Semitic incidents happening on campus that these donors were pointing to? There had been, yes. The Hillel, the Jewish Student Center, had been trashed. There was somebody who was yelling anti-Semitic slurs outside the Hillel. There had been a couple of incidents and general reports of Jewish students saying they felt unsafe, they felt uncomfortable. And, you know, many of the donors saw the entire Palestinian Writers Festival as an offense to them and students' safety and security on campus. an offense to them and students' safety and security on campus.

And then after the October 7th Hamas attacks on Israel and Israel's subsequent strikes on Gaza, what happened at Penn? So McGill issued a statement three days after, so on October 10th, it lamented the loss of life by Hamas's attack. It didn't just shrug its shoulders at the barbarity of what happened, but it was a pretty kind of focused on some of the practicalities, like here are some support services you can seek out on campus if you feel you need them, and let's remember to be kind to each other right now. And there was almost immediate backlash to that statement. How so? There was concern that it wasn't strong enough. It didn't call Ham the loss of life in Gaza, right? The civilian deaths happening there were not called out the same way the civilian deaths in Israel were. So she was getting it from both sides. One of them, a man named Mark Rowan, the CEO of private equity firm Apollo Global Management,

wrote an op-ed calling for the resignation of McGill and the president of the board, Scott Bach. And then, Rowan took his message onto CNBC. Over the past two weeks, more than 4,000 of our alumni, many of our leaders, many of our trustees, many of our board members have kind of finally said we've had enough and signed an open letter basically telling President McGill that she was heading in the wrong direction. And what was happening with students on campus around this time? There were protests on campus, right? There are always protests of some sort on many college campuses. But these were, you know, there were groups of hundreds of students. It was generally students, pro-Palestinian student groups that were organizing these.

And the sense, the kind of mood on campus shifted further with Jewish students saying they felt really uncomfortable, really unsafe. There were reports of a few more anti-Semitic incidents, vandalism, things like that, that there was kind of this steady drip of statements from university leaders saying, you know, we are looking into it. Once again, we do not condone anti-Semitism on our campus. saying, you know, we are looking into it. Once again, we do not condone anti-Semitism on our campus. These anti-Semitic incidents on campuses began to draw the attention of lawmakers. There was a big push in Washington,

and state governors put out statements, mayors put out statements, all of that, saying we're very concerned about this. And then you have enough of a push in Washington of people saying, these schools are doing something very wrong. So the House Committee on Education and the Workforce arranged a hearing, and they invited the presidents of Harvard, MIT, and Penn to testify. Why those universities in particular? Well, they're all very prestigious schools.

They are all schools where there have been particular incidents or allegations of anti-Semitism. They're high-profile schools, so when things happen there, everyone notices. So the House Committee on Education and the Workforce arranged a hearing. the workforce arranged a hearing and the House committee, which is run by Republicans, made very clear that they were very disappointed in this leadership. Coming up, how that hearing would tip the balance against McGill. or is doing nothing because you look the same in whatever the heck red light therapy is. It's definitely not that. Don't overthink how you hydrate.

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facing the crowd of committee members. Virginia Fox opened the session, and then the questioning began. Today, each of you will have a chance to answer to and atone for the many specific instances of vitriolic, hate-filled anti-Semitism on your respective campuses. How did things go? These hearings are, they're political events. They're political spectacles often.

No matter who's running the hearing, this is an opportunity for politicians to get a few sound bites, to show that they're being tough on a particular issue. The goal for the presidents is to, like, get through the hearing. Yes, the goal is to get through the hearing relatively unscathed, if possible. And, you know, they had all worked with lawyers and prepared. This was not a group of people who went in cold. And some argue maybe they were overprepared because their answers tended to be extremely legalistic. When did you notice things start to go awry? So the first half of the hearing, I'd say, was not that spectacular. Elise Stefanik, a Republican from New York, was asking some pretty pointed questions.

And then they went on recess because House members had to go vote on a couple of things. And some people thought the hearing was over, right? And then after, I want to say it was an hour, they come back. And that's really when things started to get heated. And that's the part of the hearing that everyone is now focused on. Here's Elise Stefanik grilling McGill. Ms. McGill, at Penn, does calling for the genocide of Jews violate Penn's rules or code of conduct? Yes or no? If the speech turns into conduct, it can be harassment. Yes. This is when Elise Stefanik started asking the genocide question.

And none of the presidents gave an unequivocal yes. They all said something along the lines of, it depends on the context. I am asking, specifically calling for the genocide of Jews, does that constitute bullying or harassment? If it is directed and severe or pervasive it is harassment so the answer is yes it is a context dependent decision congresswoman it's a context dependent decision that's your testimony today calling for the genocide of Jews is depending upon the context that is not bullying or harassment. This is the easiest question to answer.

Yes, Ms. McGill. So is your testimony that you will not answer yes? If the speech becomes conduct, it can be harassment. Yes. What did you think as you heard that? I knew what they were trying to say, which is we give people a wide berth in what they're allowed to say on campuses,

both inside and outside the classroom, because that sparks discussion and debate and intellectual growth. So yes, it can depend on the context. That's why it was so hard for them to answer the question. Exactly. You know, they couldn't answer that question with a hard yes, because it's, well, you know, hate speech is subject to disciplinary action when it has the threat of imminent violence or it's directed at an individual. But they were so caught up in the rules part of it

and the policy and the precedent and all that, they weren't thinking, wait a sec, I just said maybe we wouldn't punish someone for calling for genocide. And how did that go down at Penn, which already had these, like, tensions between donors and the school, and McGill in particular? I had a trustee refer to the testimony last Tuesday as a hand grenade that went off on campus. Like, this just blew things up. Even if this tension had been simmering, the situation became untenable afterwards. Like, there was no coming back from this. The next night, on Wednesday, McGill sought to walk back her remarks in a video. She said she regretted how she answered the question at the hearing

and promised to make changes to Penn's policies. I was focused on our university's longstanding policies aligned with the U.S. Constitution, which say that speech alone is not punishable. I was not focused on, but I should have been, the irrefutable fact that a call for genocide of Jewish people is a call for some of the most terrible violence human beings can perpetrate.

But her statement fell short, notably to some donors to Penn's business school, Wharton. The donors were horrified. And you also had one major donor, Ross Stevens, say that he was going to rescind a $100 million gift that he had given back in 2017 because essentially his affiliation with Penn now was doing reputational damage to his own company and he couldn't have that. Who is Ross Stevens and can you rescind a donation? So Ross Stevens is another finance guy. He is a very wealthy man who is very generous to the institutions that he likes. So he had given money for this new center at Wharton a couple years back.

The center opened, and now he says, you know, that the gift was in the form of stock in his company, and he said he's going to cancel the shares because of all of this. Is there precedent for that, to withdraw a donation so large? I haven't seen something like this ever before. Certainly not at this dollar amount. On Saturday, McGill and Board Chair Scott Bach both resigned. McGill will stay on until an interim president is named,

and she'll remain on faculty after the transition. How has the student body reacted to McGill's resignation? It's a mix. So there was a big camp saying the school can't back down. The school shouldn't back down. McGill shouldn't step down because that sends a terrible message about prioritizing donors over academia. Right. And then there was another camp saying they have to back down because the school is, you know, this could be the first of many rescinded donations. And at what point can you no longer just give back all of your money that you've gotten over the years? And has her resignation satisfied her critics? Not sure yet. I think, you know, some of them spent the weekend doing a bit of a victory lap.

But they also know that this doesn't solve underlying currents of anti-Semitism that may be on campus and not just Penn's campus. And there's a question of how much power they'll get in deciding who the next president is, right? They might see this as an opportunity to really take a stand and weigh in on who the successor is. And they may feel that they have the authority and the power to do it because this worked. With McGill resigning now, what's the big question you have? I think I have a few questions still. One is, who's going to want to take that job? Knowing that there's some dysfunction within the board and some frayed relationships with

major donors, and also likely some distrust from faculty, many of whom they weren't thrilled with how McGill handled things, but they're worried about what the move means for them, right? Are they going to self-censor now? Are they going to be nervous about what they're allowed to say? And they'll be on the chopping block next. So I'm not sure who wants to take that job. So I'm not sure who wants to take that job. And then I still have questions about what this solves, right? This doesn't make anti-Semitic incidents on campus disappear. This doesn't stop objectionable chants on campus. These things will continue to happen.

It's just with someone else sitting in the presidency. That's all for today, Monday, December 11th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Douglas Belkin, Joseph D'Avila, Rachel Louise Ensign, Laura Cusisto, and Peter Loftus. Thanks for listening. See you tomorrow.