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Pressure from Gaming Industry Leads UNLV to Disregard Academic Freedom

By November 14, 2014

What happens in Vegas doesn’t necessarily stay in Vegas. This is especially true of the University of Nevada, Las Vegas’s (UNLV’s) disregard for academic freedom, recently exposed by The Ralston Report and covered by Inside Higher Ed.

The controversy arose in August after the Center for Business and Economic Research (CBER), an independent think tank operated out of UNLV, released a study (pages 15–40 of the PDF) analyzing a proposed “margin” tax on high-earning businesses to help fund K–12 education throughout the Silver State. The study concluded that the tax would provide some economic benefit to the state, in that it would have a net positive job impact.

The tax proposal, which was defeated on last Tuesday’s ballot, was vehemently opposed by Nevada’s gaming industry, and the study’s conclusions were unpopular with casino executives. Documents obtained by The Ralston Report reveal that some of these executives went directly to UNLV Interim President Donald Snyder (himself a former gaming executive who previously served as CEO of the Boyd Gaming Corporation), telling him that UNLV’s funding would suffer if he didn’t do something about the report. One such email to Snyder (page 57 of the PDF) came on August 20 from Caesars Entertainment Corporation CEO Gary Loveman:

Don:

When you came to see me recently, I suggested to you that the first, second, third….. [sic] priorities at UNLV are to improve the faculty to a tolerable, and then a distinguished, level. Never could I have guessed that your so-called Center for Economic and Business Research could validate my point so strongly and quickly.

My colleagues will speak for themselves, but I am rather sure they are unconvinced by the economic rationale of the proposed margins tax and disagree fundamentally with the purported growth consequences of a local tax increase on an already overburdened industry.

Before burning what little political capital the university has left on a football stadium, let’s search for an economics professor that understands that growth and taxes are inversely related. But if for some reason you succeed with the stadium, perhaps the economics group could suggest that the field tilt upward on each UNLV possession to facilitate the offense.

Regards,

GL

Another threat to UNLV’s funding (page 59 of PDF) came from current Boyd Gaming Corporation CEO Keith Smith:

Don,

I absolutely agree with both Jim and Gary’s comments. I cannot wait to see the study and try and understand the basis for their conclusions. Given how this tax will impact our business, I guess I can put off trying to find ways to support the various “asks” from the University, including support/funding for a new Hotel College building, a proposed Medical College, T&M renovations and that Stadium project.

Keith.

There’s no doubt that this is very heavy pressure on UNLV to withdraw or discredit the conclusions of the study, given the power and wealth of the gaming industry in Nevada. However, universities are regularly faced with donor pressure when unpopular things happen on campus, and while it might make raising funds more difficult, we have the right to expect universities not to compromise their principles simply to ease fundraising. Unfortunately, that’s not what happened here.

Rather than stand up for academic freedom or for the quality of UNLV’s faculty, Snyder replied: “Gary, I absolutely share you [sic] concern over this work; and I have already requested a review and explanation. Please stay tuned.” That same night, UNLV Chancellor Daniel Klaich also weighed in, emailing Snyder (page 78 of PDF):

It always amazes me that there are units of the university that feel they can do things like this with no notice to anyone.

I fully understand academic freedom but I also like a little common sense.

This attitude is, sadly, all too common among campus administrators. They profess to be presiding over a forum in which various ideas (such as changing tax rates) can be debated and discussed freely so that the best ideas can triumph on their merits. Yet when it would make their political lives more difficult, they quickly retreat towards whatever the most powerful forces on campus (or off campus) want to hear. FIRE Chairman Harvey Silverglate wrote in The Wall Street Journal last Sunday about how this happened at Smith College, in a controversy involving FIRE Board of Advisors member Wendy Kaminer. Kaminer refused to censor herself at a panel about free speech, and Smith’s president apologized to the “offended” parties. UNLV seems to be following the same troublesome path.

On August 21, UNLV issued a press release formally distancing itself from the study, highlighting the various professors and alternate studies of the margin tax at odds with CBER’s conclusions, and declaring that the study would be subjected to additional peer review. The press release, titled “UNLV REQUESTS FURTHER ANALYSIS OF CBER MARGIN TAX REPORT,” stated in part:

Executive Vice President and Provost John Valery White, who serves as the university’s Chief Academic Officer, noted that other economic experts have expressed skepticism about the methods and conclusion of the research.

[…]

White said that Mary Riddel, professor and chair of the Economics Department at UNLV and former interim Director for CBER, immediately raised concerns about the report and the modeling strategy used. UNLV economics professor Alan M. Schlottmann also questioned aspects of the study.

Based on the feedback from Provost White and the two UNLV economic professors, President Snyder has requested The Brookings Institution, based in Washington, D.C., review the report and provide an analysis on its merit and quality.”

To put it mildly, it is highly unusual for a university to publicly question the findings of a study produced by members of its faculty and to subject a study to mandatory peer review outside the normal everyday practice of the university. There is nothing wrong with a university publicly noting that academics speak for themselves and not for the university, and it’s normal for the conclusions of academic studies to be rigorously tested. But academics should never be called to the carpet to explain their work to administrators apparently beholden to outside financial interests. Such tactics are arguably inconsistent with the principles of academic freedom—they discourage academics from taking positions that are contrary to the administration’s wishes or that might bring unwanted attention to the university, for fear that their work, too, will be subjected to a coordinated effort by the university to discredit it. It’s very difficult to believe that UNLV would have issued this statement, or taken the extraordinary step of seeking a second opinion, if the report’s conclusion didn’t run contrary to the interests of a powerful industry.

CBER ultimately revised its report and issued a new updated report, significantly adjusting (downward) its estimate of the jobs the margin tax would create. If that revision was the product of external academic criticism and not political pressure, that would be one thing, but the political meddling here is too obvious to ignore. With all the pressure it faced, how can we be sure that CBER’s revision is a genuine effort to get the research right? The answer is that we can’t, which makes the research far less valuable and demonstrates the problem with allowing politics or fundraising to drive research results.

It appears that one would be wise to avoid betting on academic freedom at UNLV, especially on topics that involve the interests of the gaming industry.

Schools: University of Nevada, Las Vegas