'Ethics Class’ Made Temple Staffer Push For Correcting Errors In Rankings Fraud Scandal

Moshe Porat’s federal trial is being held at the James A. Byrne U.S. Courthouse in Philadelphia.

The day after the champagne toast for Temple’s Fox Business School’s online MBA fourth-consecutive No 1 ranking – and after it became clear that something was seriously fishy about that ranking – a group of the B-school’s associate deans gathered for their regularly scheduled weekly meeting.

It was January 10, 2018, and U.S. News and World Report had a day earlier published its latest rankings for the online MBA for all the world to see. On the magazine’s website, and in a story published January 9 in Poets&Quants, Fox Business School had claimed 100% GMAT submissions for its incoming class. The associate deans knew that couldn’t be right.

“The five of us were all talking, saying that we have to tell U.S. News” (that the number was wrong), Deborah Campbell testified today (November 16) in the Eastern District of Pennsylvania District Court.

‘WE WERE ALL UPSET’

]“That hadn’t happened yet, and there was no discussion whether that was going to happen. We were all upset,” said Campbell, a senior vice dean who has worked at Temple Fox for more than 27 years. She was testifying as a state’s witness in the federal trial against former Fox Dean Moshe Porat, accused of cheating on several U.S. News & World Report rankings. Porat is charged with one count of conspiracy to commit wire fraud and one count of wire fraud. He faces 25 years in prison and a $500,000 fine if convicted.

Deborah Campbell, a senior vice dean at Temple University’s Fox School of Business

The timing is likely crucial to the government’s argument that as Dean Porat not only orchestrated a scheme to knowingly submit false GMAT numbers to U.S. News’ online MBA rankings, but that he was reluctant to correct the mistakes once they were discovered.

Porat’s defense, on the other hand, contends that Porat immediately ordered staff to correct the O’Neill – the school’s former finance manager who prepared the data set for the rankings – pleaded guilty to conspiracy charges in May and may testify against Porat as part of a deal with prosecutors. In her plea, she admitted to aiding Porat in falsifying the rankings data that helped propel Fox School of Business to the top of the rankings. O’Neill faces up to five years in prison for her part in the scandal.

‘WE DON’T NEED TO DO ANYTHING’

At the end of the associate deans’ meeting – now a full day after the false data became apparent – one of the deans went to go find Porat to see what Fox intended to do about the ranking data.

“Dr. Porat came in and said, ‘What’s the problem?’” Campbell told U.S. assistant attorney Nancy Potts in the prosecution’s direct.

After a short silence, Campbell said, “We have to tell U.S. News.”

“You’re getting upset. There’s no reason to get upset. We don’t need to do anything,” Porat answered, according to Campbell’s testimony.

At that point, other deans in the room weighed in, including Christine Kiely who testified last week. Fox deans knew the ranking was wrong, and the online students who didn’t take the GMAT would know it’s wrong as well. Diana Breslin-Knudsen, senior vice dean at Fox, then told the group that the GMAT numbers weren’t just wrong that year, but they’d been wrong for four years running, Campbell testified.

‘THEY DIDN’T CATCH IT FOR ALL THOSE YEARS, THEY’RE NOT GOING TO CATCH IT NOW’

“And Dr. Porat said, ‘they didn’t catch it for all those years, they’re not going to catch it now,” she said.

After 10 minutes of discussion with Porat, he agreed that it would be corrected, and he instructed Campbell and another dean to contact U.S. News with O’Neill. A little while after that meeting, Campbell ran into Porat at another meeting. Porat told her she was being influenced too much by Christine Kiley.

“I said, ‘I’m being influenced by my undergraduate ethics class,’” testified Campbell, who earned her undergraduate business degree and MBA from Temple. Porat’s irritation didn’t end there. “He continued to be mad at all of us for quite some time,” she recalled.

FOX OFFICIAL FOUND AND REPORTED ERRORS IN ADVANCE OF DATA SUBMISSION TO U.S. NEWS

Will Reith, former senior director of enrollment at Temple Fox

She apparently was among several other Fox officials who had expressed concern over the accuracy of the data being reported to U.S. News. On the morning of January 9, 2018, Will Rieth went to the U.S. News’ website which had just published its online MBA rankings for the previous year. He immediately knew there was a problem.

In September 2017, Dr. Darin Kapanjie, then head of Fox’s online MBA program, sent an email to Rieth, then senior director of Fox’s graduate enrollment, and asked him to review some data on the ranking submission being prepared for U.S. News.

Most notably, he was asked to review the percentage of incoming students that had taken the GMAT. The excel spreadsheet prepared by O’Neill reported that all of the 255 incoming students had submitted GMAT scores. The actual number was 42, and Rieth replied to O’Neill, who was included on the original email, telling her so, Rieth testified. Rieth also cc’d his own supervisor, Tom Kegelman, former Fox admissions chief.

Rieth also noted that the number of students admitted to Fox but who did not end up coming to the school were being calculated in a way that would give Fox a higher yield percentage than it actually deserved (which could look better on ranking criteria.)

PORAT: ‘KEEP A LID ON IT…KEEP IT TO OURSELVES’

He pointed out these errors a second time when O’Neill sent a revised version of the spreadsheet – which did not reflect Rieth’s corrections.

But on the public-facing data published on U.S. News’ website, those corrections had still not been made.

“I was pretty upset, pretty saddened,” he testified. “I felt that action had to be taken that morning to alert senior leadership at Fox.”

He took a screenshot of the data and sent it to his supervisor. A few hours later, sometime around the champagne toast, he ran into Porat in the men’s restroom on the seventh floor of Alter Hall.

“He said something to the effect of, ‘I understand that there have been some data issues that were brought to light this morning. I just don’t want people getting worried about this. If we can kind of keep a lid on it, if we can kind of keep it to ourselves for now, that would be great,’” Rieth recalled Porat saying.

That was the day before the associate deans meeting in which Porat finally agreed to reach out to U.S. News.

DEFENSE’S CROSS

Under cross-examination, defense co-counsel Michael A. Schwartz noted that Rieth never brought up his September 2017 concerns directly with Porat, continuing a pattern of questioning of state’s witnesses as to whether Porat was notified of any irregularities in the rankings data before it was submitted.

Questions also honed in on Rieth’s subsequent interactions with O’Neill, notably an email exchange on January 10, 2018, in which Rieth testified he felt might be trying to deflect blame for the erroneous GMAT data on him.

“You were being blunt that Ms. O’Neill had numerous errors in her draft (from September 2017), Is that correct,” Schwartz asked.

“Yes. There were a number of questions that I raised in that email,” Rieth answered.

“And, in fact, you believed you were really questioning Ms. O’Neill’s competence,” Schwartz asked.

“I don’t think that I’m questioning her competence necessarily,” Rieth answered. “But certainly questioning the results of the (first submission) draft.”

Through Schwartz’s questions, Porat’s attorney attempted to reinforce the argument made at the start of the trial that it was O’Neill alone who submitted the false rankings data, and she was not acting on Porat’s behest.

CHEATING SCHEME RESULTED IN A $40 MILLION TUITION WINDFALL FOR FOX

The third day of witness testimony began with prosecutors lugging out an old school easel and flip pad to do a little old school arithmetic. Assistant U.S. attorney Mark Dubnoff led FBI Special Agent Brian Coughlin through a series of calculations to demonstrate why rankings are so important to a school like Fox and, perhaps, why someone at the school might be motivated to cheat. Coughlin, who investigated the case as a member of the bureau’s Public Corruption Squad, gave the bulk of his testimony the day before.

In the fall of 2010, 22 incoming students enrolled in Fox’s online MBA. After the first year of the U.S News online MBA ranking (when Fox was ranked 28th), there were 67 new incoming students. Each year after, as the U.S. ranking climbed to 9th and then three years at No. 1, enrollments climbed to 133, to 198, to 253 and to 336. In 2018, after U.S. News “unranked” the business school, enrollment fell to 144 and then to 106 the year after.

A similar trend occurred in the part-time MBA program. After the part-time MBA program was ranked 20th by U.S. News and then 7th a year later, actual enrollments climbed from 88 to 194. (However, the numbers Fox reported to the magazine were much higher, prosecutors pointed out. Instead of 88 actual incoming students in fall 2014, Fox reported 299. Instead of 194 incoming students in Fall 2017, Fox reported 486.) After the scandal became public, enrollments dropped to 145 in fall 2018 to 89 in fall 2020.

The rise in rankings and in subsequent enrollments was a windfall for Fox. Dubnoff asked Coughlin to multiply Fox’s OMBA tuition, just shy of $60,000, by the 388 extra students the higher online rankings likely attracted. Result: About $23.3 million in extra tuition raised in the years the program was ranked. The 278 extra students likely attracted to the part time MBA translated to about $16.7 million in extra tuition. That’s a grand total of about $40 million.

During the same time period, Porat’s dean salary added up to about $2.3 million, the prosecution noted.