Anatomy Of A Business School Rankings Fraud

The beginning of the end occurred at an early morning dean’s meeting on Jan. 9 of 2018. At the tense session, several administrators at Temple University’s Fox School of Business read aloud a Poets&Quants article that cast doubt on the school’s number one ranking for its online MBA program in U.S. News.

Every person gathered for the meeting expressed concern that Fox’s No. 1 ranking had been based on an inaccurate submission of data to U.S. News. Poets&Quants skepticism led everyone in the group to fear that the school’s years-long efforts to game the ranking by routinely submitting false data would soon explode into a crisis.

Everyone, that is, except Dean M. Moshe Porat. Ambitious and strong-willed, Porat seemed undisturbed by his colleagues’ concern. He had been dean of the school for nearly 22 years, ruling over it with iron-clad control as if it were his personal fiefdom. In truth, Porat was as much a presence at the university as anyone, the second-longest-tenured dean in Fox School’s history. Including his days as a doctoral student at Temple in the late 1970s, the insurance professor and dean had been at Temple University for parts of five decades.

A CHAMPAIGN TOAST AND AN EMAIL BLAST TO DONORS TO TRUMPET A FRAUDULENTLY GAINED NO. 1 RANKING

After the meeting, in fact, he was scheduled to give a champagne toast at a reception to announce the No. 1 ranking, the fourth consecutive time Fox’s online MBA had won top honors from U.S. News. But Fox deans and administrators urged him not to mention the ranking since it appeared to be based in part on false and inaccurate data.

Porat abruptly dismissed their worries. He would do his toast, anyway, and also instruct his marketing staff to send out an email to donors trumpeting the news of the school’s No. 1 ranking. Early the next morning, however, he would ask one of the school’s statistics professors to calculate where the school’s rank would have been if the school had not intentionally misled U.S. News about the number of new students enrolled in the online MBA without a standardized test score, a key component of the rankings’ methodology.

Among other things, Fox told U.S. News that 100% of its newest 255 students had handed over a GMAT score for admission when only 42 actually did. Alarmed by the misrepresentation, several Fox staffers urged Porat to contact U.S. News and correct the data. Porat would have none of it. “It’s not like U.S. News is a federal agency,” he told a Fox employee. “I just wish you would all stop being so ridiculous.”

‘WE SHOULD NOT REACH OUT TO U.S. NEWS’

Isaac Gottlieb, the statistics professor contacted by Porat, agreed. In an email to Porat, he wrote that the school would have been ranked sixth, instead of first, if it reported its standardized test data correctly. “In my humble opinion,” Gottlieb advised Porat in an email, “we should not reach out to U.S. News. They have not done anything in the past when they were notified about school collaboration. Furthermore, if they change our rankings they will create the impression that they read the Poets&Quants article.”

Porat conveyed his response in a simple one-word reply. “Agree,” he wrote in an email.

These new details, alleged in a criminal indictment filed today (April 16th) in U.S. District Court in Philadelphia, for the first time disclose the origins of an elaborate fraud meant to increase the school’s U.S. News rankings over many years. The deceit would ultimately cost him his $600,000-a-year job as dean, destroy the careers of a professor and another subordinate, lead to years of investigations, lawsuits, fines and headlines that would tatter the business school’s and the university’s reputation, and cost Temple a minimum of $17 million in “remediation costs.” It may now land Porat and two of his associates in jail.

“This was not a victimless crime,” said Acting U.S. Attorney Jennifer Williams at a news conference announcing the indictment.    “The victims are students and graduates and donors to the Fox school as well as other universities and their students who were cheated out of their legitimate ranking,”

TEMPLE CALLS ITS FORMER BUSINESS SCHOOL DEAN THE ‘MASTERMIND’ OF THE RANKINGS FRAUD

While the former dean, now 74, insists he is not guilty of any wrongdoing, Temple University lawyers maintain that he was the “mastermind” of the fraud. “He conceived it, controlled it and kept it hidden, only to try later to cover it up,” university attorney Carolyn P. Short wrote in a recent court filing. “M. Moshe Porat bears personal responsibility for the Fox School’s intentional submission of false ranking data.”

The indictment, the result of a years-long investigation by the Federal Bureau of Investigation, reinforces the university’s claims that Porat pressured subordinates to report the false data and then engineered a cover up. The indictment points an accusing finger at Porat, ousted over the scandal in 2018 yet still drawing a $316,000 salary from the university as a tenured professor, and two of his direct reports—-Gottlieb, the former Fox professor who has also taught at Columbia Business School, and Marjorie O’Neill, who oversaw the school’s submissions to U.S. News.

How the school came to be embroiled in the biggest rankings scandal ever is an untold story, a narrative with a headstrong protagonist who became obsessed with rankings and the public recognition that came with them. After leading the Fox School for more than a dozen years, Porat made little to no progress on the annual lists published by U.S. News. Those rankings conveyed status and prestige, more often than not on elitist institutions, with big endowments and nearly unlimited resources, including Temple’s crosstown rival, the University of Pennsylvania’s Wharton School.

The Polish-born Porat, who earned his undergraduate and MBA degrees from Tel Aviv University in Israel, took pride in both the broad and deep diversity of the school’s student population and the fact that the school largely educated first-generation students whose families never had the advantage of higher education. And he held a generous opinion of himself. Porat had written a personal account of how he had recast an undistinguished commuter school into a nationally ranked, research-intense institution of higher learning. The forthcoming 200-page book, with the title Transforming A Business School: Entrepreneurial Leadership In An Era Of Disruption, would be largely ignored when it was eventually published in November of 2018.

UNDER ITS AGREEMENT WITH THE UNIVERSITY, FOX GOT TO KEEP 87% OF ITS TUITION REVENUE

Resentful of his school’s lackluster rankings and envious of the attention paid rivals, Porat believed Fox deserved better. Besides the obvious bragging rights higher rankings would confer, there was a monetary reason for boosting the visibility of the school’s programs. Higher rankings would lead to more students and Fox kept 87% of the revenue generated by its online MBA program with the remainder going to the university. Fox could not gain ground in the more competitive full-time MBA rankings but the school could swing the odds in favor of Fox’s online MBA, part-time MBA and undergraduate business programs.

In the early 2000s, Porat quietly began to convene a ranking committee to help the school take steps that would lead to higher rankings. Concerned that it did not sound good to have a panel of administrators, including Professor Gottlieb, who regularly met to improve rankings, he would later rename it the “strategic communication group.”

In 2013, after Fox’s online MBA ranking still failed to crack the Top 25, ranking 30th, a disappointed Porat dispatched O’Neill and two other employees to travel to Washington, D.C., to meet with U.S. News to express their concerns that the program was ranked too low. O’Neill, who had the title of manager of finance at the school, had joined Fox three years earlier in 2010 and had been put in charge of completing the ranking surveys for Fox.

A TRIP TO U.S. NEWS YIELDED A CRITICAL INSIGHT: THE ORGANIZATION DIDN’T HAVE STAFF TO AUDIT SCHOOL DATA

O’Neill, according to the indictment, returned from her trip to inform the dean that one reason Fox’s Online MBA didn’t do better was because fewer than 75% of the incoming students had submitted a standardized test score for admission. In the 2012-2013 academic year, only 12 of 48 incoming online MBA students had submitted a GMAT score. But she also returned to Philadelphia with what would prove a crucial insight to someone who wanted to cheat in a ranking. She informed the dean that U.S. News did not audit the data supplied for the rankings because it lacked the staff to do so. As a result, the publication had no choice but to rely on the schools to report accurate data.

Soon after O’Neill’s trip, Porat disbanded his internal rankings group to keep closer control of the data, appointing O’Neill as the sole provider of the information to U.S. News with assistance from Professor Gottlieb. The dean obviously felt he could trust both of them. He had personally hired O’Neill in late 2010, and he had written the forward for Gottleib’s book on Excel, noting that he had personally known Dr. Gottlieb for several years and can attest to his deep knowledge in this field.” Gottlieb, moreover, was generously paid at Fox, earning $176,000 a year as a professor at the school. The professor began attending meetings of the ranking committee after joining the school’s faculty in 2009. Gottlieb had studied the U.S. News methodology, using his expertise to do regression analysis on the ranking.

Fox would do better the following year, in early 2014, when its Online MBA program rose to a rank of ninth place. When the time came to submit the school’s newest data during the summer of 2014, O’Neill had bad news for the dean. The percentage of new students with GMAT scores had fallen further to just eight of 70 entrants, now 11.4% of the new cohort, below the year-earlier number of 25% and still well under U.S. News‘ 75% threshold. She told the dean, according to the indictment, that if Fox reported those numbers, U.S. News would not fully credit the school for the average GMAT score. But if Fox told U.S. News that all 70 students had been admitted with a test, Fox would get 100% credit for its class average and would climb in the rankings.