Jones Day Talks®: Operation Varsity Blues and the Need for Internal Controls at Academic Institutions
As the infamous college admissions scandal unraveled, it became clear that aside from the illegal activities of the defendants – who included the principal of an admissions consulting firm, coaches and staff at certain universities, and the parents of college applicants – the case exposed potential problem areas for academic institutions related to their compliance protocols, internal controls, and the overall monitoring of the admissions process.
“Operation Varsity Blues,” was handled by the Office of the U.S. Attorney for the District of Massachusetts, under the leadership of then-U.S. Attorney Andrew Lelling. Now an Investigations & White Collar partner based in Jones Day’s Boston Office, Mr. Lelling shares his perspectives on what made the Operation Varsity Blues investigation so successful and impactful and explains the lessons and insights universities, colleges and other organizations should consider in reacting to this scandal and preparing to avoid the next.
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Read the full transcript below:
Dave Dalton:
The 2019 college admission scandal, which involved elite US universities and criminal allegations against high profile celebrities, generated thousands of hours of news coverage and held the public's attention for months. The case implicated a college admissions consulting firm and its principal, university staff, and parents who are alleged to have used bribery to the tune of about $25 million and fraud to secure admission for their children to 11 universities. The investigation and prosecution, and what came to be labeled Operation Varsity Blues was led by the Office of the US Attorney for the District of Massachusetts under the direction of former US Attorney Andrew Lelling. Andrew Lelling is now an investigations and white collar partner based in Jones Day's Boston office. He's here today to give us the ultimate insider's view of the Operation Varsity Blues investigation. He'll talk about the crimes committed, how the scandal unfolded, and the lessons learned. Pull up a chair. This should be good. I'm Dave Dalton. You're listening to JONES DAY TALKS®.
Dave Dalton:
Andrew Lelling is a former United States Attorney and senior US justice Department official with deep experience in white collar and international enforcement matters. His practice focuses on defending companies and individuals in complex government investigations, conducting internal investigations, and advising on compliance with state, federal, and international laws. Hey, Andy, it's really great to talk with you. Thanks so much for being here today.
Andrew Lelling:
Thanks Dave.
Dave Dalton:
We'll get to Operation Varsity Blues in a couple of minutes, but first welcome again to Jones Day. Talk a little bit about your work prior to joining the firm a couple months ago.
Andrew Lelling:
Well, I spent some time in private practice in the 90s, but the last 20 years I've spent at the US Justice Department doing primarily white collar work, securities enforcement, a lot of international cases. I actually started in the department as a political appointee, a senior DOJ official in the early 2000s doing civil rights work. Then from there, went on to be a line prosecutor first, in Northern Virginia, and then for 15 years in Boston, and then became the US Attorney in Boston. So it's been a pretty good run.
Dave Dalton:
Sure. Where was law school? Are you from that part of the country, Boston?
Andrew Lelling:
I'm actually from New York. I went to law school in Philly and then worked in New York for a few years, and then found my way up here.
Dave Dalton:
Okay. All right. Now talk about what's going to happen at Jones Day. What will be your focus here in terms of client work?
Andrew Lelling:
Well, I'll be in the investigations and white collar practice. So I'll be spending my time helping companies deal with inquiries from the government, from regulatory agencies, or the Justice Department, from the SEC, that kind of thing. The key facet of that is compliance, which is advising companies on compliance and on enforcement trends so that they can avoid those government inquiries in the first place.
Dave Dalton:
Sure, an ounce of prevention, as they say, right? That's a great group. Ted Chung and the whole group are just terrific, so welcome again to Jones Day and to that practice. Okay, let's talk to what everybody's tuning in for, Operation Varsity Blues. You and I were pushing notes back and forth earlier this week preparing for this program. I mentioned to you at one point a Google search for Operation Varsity Blues will yield approximately 3, 560,000 hits. This is not a low profile thing. It generated thousands of hours of news coverage. You had prominent personalities, major elite universities involved, but let's go back to the beginning. When you were US Attorney for the District of Massachusetts, your office filed charges in March of 2019, but talk about how this investigation unfolded prior to that.
Andrew Lelling:
We were working on this for about 18 months before charges were actually filed. In fact, we had pushed off the date several times. Originally, we want that to take the case down in the fall of 2018, then it was going to be the very beginning of the new year, and then it became March. The reason why we kept pushing it off is because we kept building out the case. It was getting bigger and bigger. The case started, and most people know this now, the case started as a tip in a completely unrelated matter. We were interviewing a witness in a securities fraud case who wanted to help himself out and offered information about the Yale University women's soccer coach taking bribes. It took off from there.
Andrew Lelling:
The key aspect of this that people understand, both on the government side and the defense side, this is important, is it's about seeing the big case in the little case. I used to train white collar prosecutors to do this, right? So you get a tip or you've established that there's a crime, and it's got certain parameters that may be fairly narrow. You have to see if there's more. You have to look ahead to what all the information you have might mean and try and build the case out. If you're on the defense side, you need to know that the government, if it's doing its job right, is going to do that.
Dave Dalton:
Right.
Andrew Lelling:
So this case slowly expanded. Then once we had secured the cooperation of Rick Singer, the mastermind, if you will, then the entire scheme was opened up for us, and then we saw the true scope of it. Then it's just a matter of filling in gaps and anticipating defenses. So we knew at that point pretty much all the parents who were involved, the coaches who were involved. It was a matter of trying to build cases against as many of them as we could, and then bring the case down all at once.
Dave Dalton:
Okay, just to flesh this out a little bit, you had ... I believe it was 11 elite universities and these weren't middling community colleges somewhere. You had high profile celebrities, business people, Hollywood types. I mean, as this is unraveling, did you scratch your head a couple of times? I'm sure you've seen a lot as a US Attorney. You probably heard it all, but did you feel you were in a movie or something|? I'm not talking ... It became a Netflix thing later, but you must've thought, I didn't expect something like this. This isn't what I came to work thinking this is what I'm going to be doing. When did the shock wear off?
Andrew Lelling:
It was pretty remarkable as that developed. Because as we began digging deeper into the case, these names kept popping up. The first few times that happened, where the line prosecutors would point out to me, my gosh, person X, fill in famous wealthy person here, was a client of Rick Singer.
Dave Dalton:
Right.
Andrew Lelling:
The first few times that happened, it was surprising, but then it became clear that this was his client base. It was inherent to the scheme that what Singer was doing was targeting the wealthiest people and occasionally, famous people. So after a while, it didn't shock us anymore because you had so many titans of industry, you had hedge fund managers. Obviously, there were two famous actresses. These were the people Singer targeted as part of the conspiracy, and so after a while, it just made sense. It was just one of the ingredients in the case. So by the time we had put this all together to take the case down, as people now see, we obviously had a pretty lengthy list of famous or exceedingly wealthy people who were going to wind up getting arrested that day.
Dave Dalton:
Talk about Singer for a second. I don't know much about his background. Did he come from academia? Was he an admissions consultant type? I know they did some fraudulent things in terms of fudging athletic backgrounds. Did he come from that part of the world, a sports background? Where'd this guy come from?
Andrew Lelling:
He came ... Singer came from a sports background. The Netflix documentary actually does a decent job of fleshing out his evolution over time. He was a coach. He was a basketball coach for a while. He had started the college consulting businesses in fits and starts, and then at some point he veers into just doing it by fraud. The reason why his scam worked here is because he had an intimate understanding of college athletics recruiting.
Dave Dalton:
I see.
Andrew Lelling:
He understood how first tier and second tier sports in colleges and universities get their students in who play. He understood that coaches in those sports had some of their own prerogatives. There were slots that they were allowed to fill. They could bring candidates for those slots to the admissions committee. There wouldn't be a tremendous amount of scrutiny from the admissions committee. He knew all of this.
Dave Dalton:
I see.
Andrew Lelling:
So he was able to work those aspects of the system because of his athletics background, and make the bribery scheme work.
Dave Dalton:
Well, I noticed they weren't putting slots in a perennial Final Four basketball program or a Big 10 football program. They were finding lower profile sports, it seemed to me. I mean, rowing came up a couple of times, I think maybe women's soccer, things like that. Was that an easier in for him?
Andrew Lelling:
Yeah. There's a key reason for that, which is that what I call the premier sports, the first tier sports, baseball, basketball, football, that kind of thing, it would be much harder to pull this off because there's a lot of independent scrutiny of who the top players actually are. If you are a top prospect, say for football, a top high school prospect for football in the United States, there's a lot of people paying attention to that.
Dave Dalton:
Sure.
Andrew Lelling:
So if some kid is presented to a major football school as a top football prospect, there are going to be other observers who know whether that person really is, or isn't a top prospect. Also, those athletics programs are flush with cash in a lot of schools. They're pretty well-funded and the coaches are decently paid. None of this applies to the second tier sports. If you're the water polo coach, there aren't too many independent agencies looking at the top water polo prospects in the nation. As a water polo coach, you are probably not particularly well paid and the water polo program at your university, probably not that well-funded.
Dave Dalton:
Right.
Andrew Lelling:
So the coaches on that level were more amenable to bribes, and the prospects who they were presenting to the admissions committee, it would be easier to present a fraudulent prospect and not have it get caught.
Dave Dalton:
What's the reaction once this was uncovered? I don't want to name these schools. In fact, we're going to talk about how there was some collateral damage or shrapnel flying round. Some people and institutions who did nothing wrong maybe were unfairly tattooed by this. What's the reaction? The admissions committee, or the dean, or the president of one of these major universities is like, "Wait, my school? We've got the NCA watching us all the time. We've got internal compliance people, or we thought so." Were these people, once they were confronted with the facts, they must've been probably more shocked than you were when you found out about this thing in the first place, right?
Andrew Lelling:
Well, the schools were appalled, and the schools overall were cooperative with the government. They wanted to help us. Keep in mind, you know this, I know this, but in the public discussion of the case it sometimes gets lost. The schools were the victims. The schools were the victims of a fraud. Rick Singer helped these parents successfully defraud the schools with the assistance of these coaches, right? You'd have fake athletic profiles. The application would be sent in. The coach would walk it down the hall to the admissions committee, vouch for the applicant. The admissions committee had no reason to distrust the coach, and would put the student through.
Andrew Lelling:
So the schools were appalled by this behavior. What was fascinating about it is that this flaw in the system that Rick Singer was exploiting was common to many big schools. So it was really a systemic compliance failure, right? As you pointed out, these are not unsophisticated institutions, right? So Georgetown, USC, University of Texas, Yale, Stanford, these are major organizations used to dealing with complex issues, but every one of them had this problem. So what Singer had really done was discover a flaw that was common across college admission systems and had spent all this time exploiting it for profit.
Dave Dalton:
You talk about what's a cliche, a criminal mind for a guy. Again, and you explain it very well. This gentleman, not gentleman, Mr. Singer, had a sports background. He probably understood the different levels and so forth. Because you said if you're a four-star recruit in football, there are 12 rating agencies, whatever, that know that. No one's coming out of the woodwork. But for him to exploit that, how long did he get away with this? How long was this running, do you think?
Andrew Lelling:
We actually were not entirely sure when I was in the government, but several years. It went back several years earlier than the cases we were able to prove. But it's unclear just how far back he was doing this.
Dave Dalton:
Yeah, people retire, people move on, people change. So at some point, maybe the trail gets a little cold even with your resources, but I still can't believe it. You said the other day, this is on the cover of People Magazine twice. I'm like, no. Actually, you said, that's when you know you've seeped into the public consciousness.
Andrew Lelling:
Yeah.
Dave Dalton:
You're on supermarket magazines right there at the cash register, right? This is huge.
Andrew Lelling:
Right, it's a case, and we knew this when we charged it. It's a case that checks every box, right? Probably two million families a year have a kid applying to college. So a scandal like this goes right to middle-class anxiety about getting their kid into the best school they can, how to do that. Parents, including me, I have two kids, obsess about what are my child's college prospects? How will they get in? On top of that, you had defendants who were extremely wealthy, or wealthy and famous, and so easy to dislike them.
Andrew Lelling:
You have public skepticism about the college admissions process already, which in some respects is unfair to the schools. The schools are trying to get this right, and they mostly do get it right. But the problem is that the public perception of college admissions is that it's some platonic meritocracy where every single student is assessed only on his or her academic merits and nothing else, and that's all that should matter, but that's not really true. You have legacy admissions.
Dave Dalton:
Sure.
Andrew Lelling:
There's nothing wrong with these things. You have diversity concerns in college recruiting. You have sports recruitment. The schools are to build what they think is the best class, and it's a holistic approach. There's a lot of factors that go into that. I've always thought that the schools should own that a little more, be a little more transparent about it and say, "Look, it's not just about your kid's SATs and grades. It's not only about the cool things they did in public service in high school. There's a lot of things we look at. We want great sports teams. We want a diverse class. Intergenerational loyalty to our school matters. We like legacy admissions, and we use these factors and others to build an incoming class. That's how we do it." Being unapologetic about that, I think, would blunt somewhat this public perception that if anyone gets in on the basis of anything other than their grades and SAT score, it must be a scandal, and it's not a scandal
Dave Dalton:
Singer probably knows his hands were very dirty. The parents that have been charged and that were implicated in this, and some are household names, others aren't, but they're all, as you point out, connected, wealthy, high-profile in whatever circles they run in. When they were confronted, did they think, what do you mean? I didn't do anything wrong here. I'm trying to help my kid get into a great school. Or did they say, "Yeah, maybe we cut a corner here or used some undue influence." What was the reaction from them when they were confronted, arrested, indicted?
Andrew Lelling:
Well, the reactions among the parents was tremendously varied, which is not unusual for a case involving multiple defendants, especially a case like this. You can see a lot of this in the public record. Some of the parents chose to take responsibility right away and got out of the case even before it was formerly indicted. So after they were arrested, but before it was formally indicted. Others waited for a time and pleaded guilty, and others haven't pled guilty. That spectrum is entirely normal. There's a lot of factors that come into play here. First, it's the government's burden to prove that any one of these parents actually committed a crime. So parent defendants who don't think they have committed a crime, they are entitled to force the government to prove it, and those parents will go to trial.
Andrew Lelling:
Others want to feel out the quality of the government's case. That's not uncommon and often a good idea. There's also a really human factor here. It's not like we were arresting drug traffickers. You're arresting a bunch of suburban parents and there's a real human factor in how people react to that kind of event. I mean, often that is the worst thing that's ever going to happen to somebody, is being arrested for a crime. Often, individual defendants need to work through what has happened to them, what the evidence is against them, and come around to making a decision one way or the other, after consultation with counsel, about whether they want to proceed and take the case to trial. Whether they want to take responsibility by pleading guilty, or how they want to play it. You saw all kinds of reactions here among the parents.
Andrew Lelling:
Our hope at that time was that we would charge this large group and some significant portion of them would choose to get out of the case earlier, rather than later. So in the early going, we were pretty explicit with the evidence that we had. We filed an affidavit in support of our criminal complaint. It's very lengthy. It's 200 pages. That's not an accident. We wanted all the defendants to see the evidence that the government had collected by that point. That helps them make decisions earlier, rather than later about whether to get out of the case. That is a policy that government prosecutors should follow more often, and it's frustrating when they don't. Which is with professional defense counsel, if you show counsel the quality of your case earlier rather than later, professional defense counsel is going to help their clients make a decision earlier rather than later. That helps everybody, and I think in part you saw that here.
Dave Dalton:
I suppose with that large of a pool, that's probably expected in some sort. You're going to get different reactions and some pushback.
Andrew Lelling:
Yeah, you're talking about, I think we had ... I may be slightly off. I think it's 52 defendants, and so it's a lot of parents. So you're going to have different reactions to getting caught up in this kind of thing.
Dave Dalton:
Sure. Well, let's drill down a little bit into the actual charges brought and what they were. People know generally what this is about, but in terms of the literal crimes that were committed and alleged, what were they charged with typically? Maybe they weren't all charged with the same things, but what are we mostly looking at, I guess?
Andrew Lelling:
There were a lot of charging documents here, but the core charges the government brought was RICO, meaning racketeering charges.
Dave Dalton:
Oh yeah.
Andrew Lelling:
Part of the rationale behind that was you had this classic scenario where you had a particular enterprise, a particular organization, which was Rick Singer's group, Key Foundation, his counseling group, all of that. You had a particular distinct enterprise engaged in a long-term pattern of racketeering activity, meaning a long-term pattern of certain key crimes, fraud, money laundering. Something we call honest services fraud, where what happens is an employee of a larger organization defrauds the organization he works for. So I'm thinking of the coaches here.
Dave Dalton:
Okay.
Andrew Lelling:
So when Singer sets up his bribery scheme with these coaches, Singer gives them bribes and they let his students through and then recommend them for admissions. What he's doing is he's inducing the coaches to defraud their own employers, the schools. Those coaches are now depriving the schools of their honest services. That's what we call it, and so that can be a kind of fraud. These are the core charges we were dealing with here. There were other on the fringes, but mainly RICO, wire fraud, honest services fraud, these were the core charges that most defendants found themselves facing.
Dave Dalton:
Now Andy, we talked about this a little bit already, but I want to explore some of these issues. Forget that you're a lawyer for a second. As a parent, a college graduate, concerned citizen, talk about what this means in terms of the college admissions process, what our priorities are, our culture in general. Should we be concerned about things like this going on?
Andrew Lelling:
Well, one of the things I find ironic about ... Well, a few things. One of them was that I found ironic about this case was first, at the time we were putting this case together, my daughter was going through the college admissions process. So it's this weird dissonance where I'd come home and I would talk to her about the schools that she was applying to, and then I'd go back to work and deal with the college admissions cases-
Dave Dalton:
That's the movie.
Andrew Lelling:
... we were building, so that was a little weird.
Dave Dalton:
Yeah.
Andrew Lelling:
But the other thing that I found ironic is that there is perception versus reality going on here a bit. So when you say, should we be concerned, yeah, we should be concerned, but we shouldn't be concerned about the schools. We should be concerned about the parents. So when you look at the situation from 10,000 feet, parents have become so intensely anxious about their children's college prospects, that the schools are caught in a catch 22. It doesn't matter what the schools do. They will be subject to criticism for how they administer the admissions process and the results, meaning who gets in, who doesn't get in. They will withstand criticism for every change they make and every decision they make in how admissions is administered.
Andrew Lelling:
So our concern should be focused on the intense anxiety of middle-class, upper middle-class, and the wealthy when it comes to where their kids go to school.
Dave Dalton:
Sure.
Andrew Lelling:
I'm not quite sure how you tamp down that anxiety. I mean, that's a whole different discussion. That's a different podcast. But that is an issue, and while I think some skepticism of how college admissions works is healthy, college admissions is a high stakes process for a lot of families. It seems to me, the focus should be more on parents losing their sense of perspective about their children's college prospects and what it means to go to school A instead of school B.
Dave Dalton:
Well, we all know a lot of hyper successful people did not necessarily attend an Ivy League school or an elite school. It's fine if you did, or if someone did, but it works that way too, right?
Andrew Lelling:
Yeah, of course. The name on the door of the school has become too important as opposed to longer term thinking about your kid's prospects.
Dave Dalton:
As the then US Attorney leading the matter, are you satisfied with how Operation Varsity Blues appears to be winding up?
Andrew Lelling:
Absolutely. I told my line prosecutors on the case when I was US Attorney a year ago to relax, because this was a win. Public response to the case was overwhelmingly positive. If you are on the prosecution side, it's a complete privilege to do this kind of case. How many cases do you get over the course of your career that spark a national conversation about a particular industry or a particular aspect of modern life that most people are familiar with? That's what happened here. So this case was a win for the public interest. It was good to uncover this kind of misconduct.
Andrew Lelling:
Other parents who might have been tempted to engage in this kind of misconduct, or other guys like Rick Singer, I think that they have been somewhat deterred from doing so, because of the intense scrutiny of this case and the fact that people have been convicted and they're going to jail. The white hot focus on this case has wound up being a little unfair to the schools because again, the schools are the victims.
Dave Dalton:
Right.
Andrew Lelling:
But people are reluctant to view major universities as victims, and so there is that issue. But overall, I think this case was a win. Again, it was a privilege to be able to work on it.
Dave Dalton:
Sure. That said, this case, and we mentioned the universities several times, they were the victims in this. They were caught up in this unwittingly and defrauded in many cases. What could some of these parties that were involved have done differently? I mean, how do they prevent something like this from happening again? Because when we opened this program, we were talking about your background and what you're going to do for clients looking ahead. You said a lot of is internal stuff, preparing investigations, staying out of trouble, compliance. What can be done to make sure this sort of thing doesn't go on?
Andrew Lelling:
It's a compliance question, right? So what they could have done ahead of time, I think not a lot. A lot of this is 2020 hindsight. Ahead of head of time, it would have been difficult to predict this problem on this scale. There have been individual cases in the past where parents have bribed coaches to try and get their kids into a school through an athletics program. That has happened. But it's been infrequent and they've been one-off cases involving one parent and one coach. So I think it would be a lot to ask of universities to go revamp aspects of their admissions process because one case happened. But now that the Varsity Blues case had occurred, this is an obvious compliance question for schools.
Andrew Lelling:
Any complex organization, universities included, have to have a culture of compliance and have to have robust compliance systems. That is not a tremendous insight. Everyone knows that. The implementation though matters, and there's less focus on how effective the implementation is. So you need clarity and simplicity. You need rules based on an accurate understanding of the current law. You got to make those rules simple. You have to make them easy to follow. You have to make sure everyone knows the rules, and you have to catalog your efforts as a school administration to make sure everyone knows the rules. Everyone should certify that they know the rules. Compliance should be checked on from time to time, either randomly or some kind of audit.
Andrew Lelling:
Again, certification is a powerful tool. This may seem like a weird analogy, but I remember in the early 2000s, they passed the Sarbanes-Oxley statute, which was a securities regulation reform package that was passed by Congress following the Enron scandal.
Dave Dalton:
Right.
Andrew Lelling:
Part of what Sarbanes-Oxley did was require CEOs and CFOs of companies to personally certify, with a signature, the accuracy of the company's financial statements.
Dave Dalton:
Right.
Andrew Lelling:
Now it's simple and cheap. Just a piece of paper that says to the best of my knowledge, these financials are a fair and accurate reflection of the company's financial situation, signed Joe CEO. But it's a very powerful deterrent to fraud. So if you have coaches presenting prospects to the admissions committee as recruits in the athletics program, have those coaches certified in writing that's the best of their knowledge, the information on these applications is true and accurate. You won't stop every case, but you'll stop a lot of them.
Andrew Lelling:
Because there's real power to having someone sign their name asserting that something is true. Anyway, these are standard compliance measures. I think by this point, a lot of the schools ... Because the Varsity Blues case was taken out about two years ago, a lot of the schools have looked into this now and fixed it. The key is maintaining compliance, keeping it simple, and then trying to look on to what the next thing might be.
Dave Dalton:
I think the internal, the compliance, the self-policing, the paying attention, the transparency, everything is important. Nobody likes more oversight or more big brother stuff going, but what about external agencies? What about the NCAA? What about some of the regional college accreditation bodies, institutions, whatever they are? Have they taken a look at this or are they leaving it to the individual school saying, "You know what, be careful, clean up your act," or are there other governing authorities they're looking at this also?
Andrew Lelling:
They're leaving it mostly to the schools.
Dave Dalton:
Okay.
Andrew Lelling:
This was, at the end of the day, an internal admissions process issue for the schools. I don't think the NCAA feels any particular responsibility for this. I can tell you that another aspect of the fraud was Singer helping students cheat on the SAT and the ACT, and those testing organizations are taking the case very seriously and have tried to somewhat revamp their measures, or have taken a hard look at security for test taking. But I think beyond that, it's really just the schools themselves that have been forced to take a hard look at how they run admissions and how they make sure that the information on these applications is accurate.
Dave Dalton:
Sure, and frankly, if they don't get it now, they're never going to get it.
Andrew Lelling:
Sure.
Dave Dalton:
I think they probably got it, right?
Andrew Lelling:
But that's a really good point. Part of the significance of how big the college admissions case was is that moving ahead from the college admissions case, the schools now have to be on top of their admissions process, and the propriety of their admissions process, and compliance in the admissions process. Because the college admissions case is like this flare being fired up into the sky, right? It's a warning to the schools that there could be issues in admissions, fraud issues that they need to be aware of. They should be taking a hard look at their admissions processes from top to bottom. So that later, if another problem comes up, they can say, look, we were responsive to the college admissions scandal. It caused us to take a proactive look at our admissions process. Here are the compliance changes that we made.
Dave Dalton:
Sure, and if, and I said if, if there's a silver lining to all this, maybe that's it. Maybe some of these processes are cleaned up, reexamined, made more transparent, everything we've talked about. Okay, Andy, great conversation. Obviously Operation Varsity Blues grabbed a lot of attention, but I'm imagining there are other issues and potential trouble areas confronting institutions of higher learning, schools, etc. What are you seeing coming down the board? What should people be aware of or maybe looking out for?
Andrew Lelling:
Yeah, that's a great question. As the schools know better than anyone, there's always a host of compliance issues that they're dealing with. At this point two years in, most of them have grappled with the issues raised by Varsity Blues. They're dealing with that, but there's always something else on the horizon. COVID created liability issues for schools, cost and refund litigation for schools surrounding issues of students not actually being on campus yet paying full freight, that kind of thing. There's always various student affairs issues. There's Title IX issues. There's cybersecurity issues.
Andrew Lelling:
I can tell you that one I've been thinking of lately that I think not enough schools are focused on is the issue of foreign influence. So what most people have noticed is that take China for instance. The government rhetoric about China has only gotten more aggressive with the change in administrations, not less aggressive. What I've noticed over the last few years is that that has directly impacted schools, because it has led to government investigations of academics on college campuses who are working with Chinese counterparts.
Dave Dalton:
Right.
Andrew Lelling:
It has led the Department of Education to insist that schools comply with section 117 of the Higher Education Act, a relatively old statute that requires schools to report all total funding amounting to over $250,000 a year from a foreign source. That's not going to go away. Those kinds of inquiries from the government are going to continue. The Department of Education opened 19 investigations of foreign influence on college campuses over the last year or two. That will be a focus going forward. I think that's our next podcast. We can talk for an hour about that.
Dave Dalton:
I was going to say you're making my job a little too easy. Because usually I say, "Hey, we should come back and revisit that," and you've stolen my line. So we'll plan on doing that soon, and we'll circle up and talk. That sounds like a great program and probably actually a lot of material, or that may be a series of podcasts, but we'll talk about that soon.
Andrew Lelling:
Thanks Dave.
Dave Dalton:
For contact information and a complete biography of Andrew Lelling, please visit jonesday.com, and while you're there, visit our insights page. You'll find more pertinent content, podcasts, videos, white papers, commentaries, alerts, blogs, and newsletters. Subscribe to JONES DAY TALKS® at Apple Podcasts and wherever else podcasts are found. As always, we thank you for listening. I'm Dave Dalton. We'll talk to you next time.
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