Arrogance Is What Ultimately Caused This B-School Dean's Downfall

Moshe Porat, the former dean of Temple University’s Fox School of Business, became the first university official to be criminally prosecuted for cheating on a college ranking. Earlier this week, he became the only university administrator to be found guilty of cheating to enhance his own reputation as well as the prestige of several of the business school’s programs.

Even without some of the most damaging evidence that has emerged in this rankings fraud, a jury wasted no time in returning a guilty verdict on one count each of conspiracy and wire fraud. The jurors reached that conclusion without the benefit of either an earlier investigation by the law firm of Jones Day that led to Porat’s firing or the testimony of Marjorie O’Neill, who was in charge of preparing Fox’s rankings submissions.

Jones Day investigators clearly laid the blame for the scandal on the school’s leaders. “Fox leadership and other employees bore responsibility for creating or promoting conditions that contributed to the reporting of inaccurate information,” they concluded. “Fox’s reporting of inaccurate information was done knowingly and intentionally for the purpose of improving or maintaining” its rankings.

PORAT LOST THIS CASE DUE TO HIS OWN ARROGANCE

Truth be told, Porat lost this case due to his own arrogance. If he had quietly resigned after getting caught, the mess he created would likely be forgotten by now. But the former dean not only steadfastly accused others of the fraud he masterminded and directed; he even had the audacity to file a $25 million defamation suit in May of 2019 against the university after it fired him. That suit ultimately backfired on him, resulting in several depositions with other Temple officials, including O’Neill, who laid the blame for the fraud squarely on him. No less crucial, his own video deposition which caught him in outright lies, led federal prosecutors to investigate and ultimately hold him criminally responsible for the scandal. And then, after he was indicted by the government for the fraud, he insisted that he was innocent even as evidence piled up to consistently undermine his story that others were to blame for the mess he created.

“The hope is that this case sends a message to other college and university administrators that there are real consequences to making representations that students and applicants rely on,” Assistant U.S. Attorney Mark B. Dubnoff said. “So many people turn to these rankings … to help them make informed decisions of where to go to college, graduate school, and it’s important that people are honest and fully truthful with the representations they make.”

Porat’s high-priced defense attorneys, led by Michael A. Schwartz, himself ranked among the best lawyers in America for white-collar criminal defense for the past 12 years, allowed him to plead innocent. It was a fatal mistake. By holding on to the fiction that Porat was innocent when the evidence clearly showed otherwise, Schwartz distracted from his other more defensible argument that lying to U.S. News for a better ranking is not a federal crime. If he remained focused on the legal precedents to support this line of argument, the jury verdict could have gone differently.

THE RANKINGS FRAUD WAS CLEARLY UNETHICAL AND IMMORAL BUT WAS IT ILLEGAL?

Clearly, the scheme was unethical and immoral. Just as clearly, it deliberately misled applicants, alumni and donors. But is providing fraudulent data to a magazine really a federal crime worthy of up to a 25-year-long prison term?

When the indictment was handed down in April of this year, Orin Kerr, a professor of law at the UC Berkeley School of Law, raised this issue in a series of tweets as well as a law professors’ blog, The Volokh Conspiracy. He noted that the wire fraud statute prohibits interstate schemes to obtain money or property. “Basically,” wrote Kerr, “the crime is misrepresentation to trick someone into giving you money or valuable property. But how is submitting fake U.S. News numbers a scheme to obtain money or property? Who is tricked into giving up their money, and to whom? Was the point of submitting fake numbers to make money for the school? The second set of questions is perhaps more legally interesting. Who was tricked into giving up their money?”

The government convincingly argued that the fraud allowed Porat to dramatically increase enrollment in its Online MBA program from just 18 entering students in 2012 when the program was first ranked by U.S. News and placed 28th to the 255 students who enrolled in 2017 when the program ranked first for the fourth straight year, a 14-fold increase. Applications soared to 572 from just 52 in the same timeframe, a ten-fold rise. Enrollments in the school’s part-time rankings also increased.

‘DEANS WHO SUBMIT FAKE NUMBERS AREN’T TRYING TO HARM APPLICANTS AND DONORS’

Overall, the prosecution said the scheme raked in $40 million in extra tuition alone, based on those enrollment increases, not including donations from alumni and other benefactors who viewed Fox’s rankings as a sign of progress that deserved to be recognized by additional giving. But the university had already agreed in December of 2018 to a nearly $5.5 million settlement of a class action suit brought by students who felt cheated by the rankings fraud.

Porat was more likely driven by his own ego and a desire for greater recognition than any additional tuition revenue or fund raising. Kerr thinks so, too. “I would imagine that Deans who submit fake U.S. News numbers aren’t trying to harm applicants and donors,” he added. “They think their schools are fantastic, and that the U.S. News isn’t realizing how fantastic they truly are. If they can juice the numbers, everyone wins. Deans will think: The school will get the recognition it (in their mind) deserves, the students it deserves, the donations it deserves, etc. Everyone’s happy. Win-win-win, at least in their minds. True, other schools lose out. Other schools get stuck with a lower ranking relative to what they would have had. But from a wire fraud perspective, I’m not sure they matter, as they’re not in the transaction claimed to be fraudulent.”

If Porat came clean, admitting he directed the scheme, and showed remorse for his stupidity, the jury may well have been less focused on whether he did it and more focused on whether it is a federal crime for a university to submit fake numbers to U.S. News for a better ranking. That legal argument was really Porat’s only recourse for an acquittal given the evidence in the case.

ARROGANT, COMBATIVE AND THROUGHLY UNLIKEABLE

Yet, Porat set his own fate in consistently claiming he was innocent. It was an unconvincing, if silly, position to take for someone who over his 20 years as dean of the Fox School had earned a reputation as a rankings-obsessed control freak, a micromanager, a bully of a boss who, as witnesses testified, ran the school by fear and intimidation.

His defense attorneys wisely chose to keep him off the stand because his video-taped depositions in his own defamation case showed him to be arrogant, combative and thoroughly unlikeable. Portions of those videos–shown in the courtroom to the jury–found him to be harsh and pompous, or in the words of the Philadelphia Inquirer, “challenging the questions asked of him, spinning contradictory stories about what he knew and when, and consistently seeking to shift blame to others.”

The belligerent man in those videos was not capable of falling on a sword, even if his lawyers had urged him to do so. As Harvey Mackay, the best-selling author of business books, once put it: “Of all the human failings that can destroy a person or a business, arrogance is the deadliest. It is the most readily acquired, the easiest to justify and the hardest to recognize in ourselves.”

In the end, it will be Porat’s own arrogance that will most likely put him behind bars.