Anatomy Of A Business School Rankings Fraud

John A. Byrne
·21 min read

Ousted Temple Fox Dean Moshe Porat

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’

A former professor of statistics at Fox, Isaac Gottlieb has been indicted for taking part in the rankings fraud

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

Former Fox Finance Manager Marjorie O’Neill’s LinkedIn page has been stripped of details

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.

Temple University’s Fox School of Business

‘REPORT IT THAT WAY’

“Report it that way,” Porat allegedly told her.

O’Neill also showed Gottlieb a draft of her proposed submission to U.S. News with the notation, “I changed our response to include 100% entrants providing GMAT and GPA so we receive 100% credit for our GMAT and GPA scores.” Gottlieb said he had reviewed the submission twice and it looked “very good.”

The misrepresentation worked like a charm. When U.S. News came out with its new ranking of Online MBA programs four months later in January of 2015, Fox zoomed up to rank first in a tie with Indiana University’s Kelley School of Business and the University of North Carolina’s Kenan-Flagler Business School. The school’s vastly improved ranking, touted by Porat in marketing efforts, brought not only accolades; it attracted more students. The size of the incoming cohort in the year after the No. 1 ranking soared 90% to 133; the following year Fox enrolled 198 students. By 2017, after Fox had its third consecutive No. 1 ranking, the school’s incoming cohort numbered 336 students, a nearly five-fold jump from the days when it did not capture the top online MBA ranking.

Each year, O’Neill continued to submit misleading data to U.S. News and the misrepresentations would go much farther than falsely reporting standardized test data. Among other things, the school knowingly turned over to U.S. News admissions data to make Fox appear more selective, inflate the grade point averages of incoming students, and reduce the average student indebtedness to make the school appear more affordable. The school also falsely reported the amount of work experience of incoming part-time MBA students and the percentage of MBA students who could be classified as part-time by combining the numbers from its Executive MBA program with those of its part-time evening program and its online MBA offering to achieve better rankings. These misrepresentations caused the ranking for Fox’s part-time MBA to rise from 53rd in the nation in 2014 to seventh three years later in 2017, an improvement that saw incoming students to that program rise to more than double to 194 from 88 over the same timeframe.

TOP LIEUTENANTS WERE AWARE THAT THE SCHOOL’S RANKINGS WERE BUILT ON INTENTIONAL MISREPRESENTATIONS

Inside the school, more people knew that something wasn’t quite right but no one wanted to blow a whistle on the fraud. Porat’s chief deputy and Fox’s former vice dean, Rajan Chandran, said that as early as 2014, he, Porat, and other top lieutenants were well aware that their national rankings were built on intentional misrepresentations. “I didn’t do anything,” he said in a deposition. “That’s my mistake. I ought to have reported it.”

Former Fox Admissions Chief Tom Kegelman: ‘If you just burned the school down, I’ll never forgive you’

A year before the scandal became public, some began to question the data the school had given to U.S. News for its ranking. In several emails in 2017, Darin Kapanjie, then head of the online MBA program, raised concerns with Tom Kegelman, the assistant dean in charge of the school’s admissions, according to court records. He noted inconsistencies in the numbers that he assumed at the time were mistakes.

“We need all eyes on these and on them now,” Kapanjie warned.

Will Reith, then director of Fox’s graduate enrollment, drafted a separate email to O’Neill noting that the school had incorrectly stated that all students in the online MBA program had taken the GMAT exam. After the next No. 1 ranking, Reith and others were horrified to discover that the errors they had flagged in the data had not been fixed despite assurances that corrections had been made.

‘IF YOU JUST BURNED THE SCHOOL DOWN, I’LL NEVER FORGIVE YOU’

Kegelman confronted O’Neill. “If you just burned the school down, I’ll never forgive you,” he recalled saying in a recent deposition.

When Fox got its fourth No. 1 ranking in a row, the school’s leadership got together after Poets&Quants noted that the school had “claimed” that 100% of its students had taken the GMAT even though the school had a waiver policy in place and also accepted GRE test scores. The debate became heated and then cut short when Porat departed for his celebration of the No. 1 ranking.

The champagne was uncorked and Porat approved a marketing email boasting of Fox’s fourth consecutive No. 1 ranking. But the very next morning on Jan. 10th, he sent an email to Gottlieb at 6:26 a.m. asking him to calculate the school’s rank if it had accurately reported that only 42 of its 255 students in the latest cohort had reported a GMAT and another 11 submitted GRE scores. The answer: Sixth place, not first.

‘IF THEY HAVEN’T CAUGHT IT, WHAT MAKES YOU THINK THEY WILL CATCH IT NOW?’

In front of other team members, Porat resisted the calls to report anything to U.S. News. “Dean Porat said, ‘Well, if they haven’t caught it … what makes you think they will catch it now?’” recalled Christine Kiely, an assistant dean at Fox, in a deposition. “He seemed annoyed that we were talking about it — in essence, turning ourselves in.”

But the dean finally relented and directed O’Neill to tell U.S. News that a “clerical error” had been made. On Jan. 11th, she informed U.S. News that there had been what she called a “slight discrepancy” in the reported GMAT numbers. Two days later, Porat told Temple University’s president and provost that a “clerical error” had been made but that the school had reported it and he expected that Fox would still be ranked No. 1 or potentially No. 2.

Instead, U.S. News yanked the school from its online MBA ranking altogether on Jan. 24th, setting off a full-blown crisis. Porat again reported to Temple’s president and provost, repeating the lie that a recalculation of the rankings still “would have resulted in us either remaining #1 or perhaps slipping to #2”–even after Gottlieb had earlier informed him that Fox would likely slip to sixth place.

THE DEAN URGED JONES DAY INVESTIGATORS TO HURRY UP THEIR PROBE

The following day, in a meeting with Temple President Richard M. Englert, Porat was told the university wanted to bring in an outside counsel to investigate. Over Porat’s protestations, the university hired the law firm of Jones Day to conduct a probe of what had happened at Fox. The news would only get worse. Over the next few days, Fox administrators discovered other inaccuracies in the data submitted to U.S. News over the years and told him that the school should withdraw from U.S. News rankings.

When Jones Day investigators began their probe in early February, they immediately ran into roadblocks from Porat and Gottlieb. The dean urged the law firm to hurry up and complete its investigation because of the impact it was having on Fox’s marketability. During one interview, Porat claimed that he instructed O’Neill to contact U.S. News and ask for clarification if there were any questions about filling out the organization’s survey. In fact, the indictment charges, Porat often told O’Neill to interpret questions in a way that would lead to the best rankings for Fox. Porat also urged his personal assistant to download WhatsApp so they could communicate with each other without anyone being able to trace their conversations.

Gottleib, meantime, claimed to the investigators that he was never involved in either reviewing or helping O’Neill prepare answers to the U.S. News ranking survey. When the professor was finally interviewed by FBI agents during the summer of 2019, he claimed that he was unaware that Fox had been reporting inaccurate information to U.S. News until after it was discovered in January of 2018.

O’NEILL ADMITTED TO KNOWINGLY FALSIFYING DATA AT PORAT’S DIRECTION

Former Fox Dean Moshe Porat insists he has done nothing wrong

O’Neill was more forthcoming with the investigators from the law firm. She admitted to knowingly falsifying data for years at Porat’s direction, according to court records. She has since invoked her Fifth Amendment rights and declined to be deposed in a defamation case filed by the former dean against the university. Her spare LinkedIn page, which lacks a photo of her, lists O’Neill as being “retired” and living in the Orlando, Fla., area.

The Jones Day report would be highly damaging. The investigators found numerous examples of misreported data, if not outright fraud, along with evidence of a cover-up. On July 9th of 2018, Temple asked Porat to resign his deanship. When he refused to step down, he was fired from the job he had held since 1996.

“It is my duty to report that the Fox School, under the leadership of Dean Moshe Porat, knowingly provided false information to at least one rankings organization about the Online MBA,” wrote Temple President Englert. “In addition to the misreporting of the number of students who took the GMAT from 2015 to 2018, the average undergraduate GPA was overstated, and there were inaccuracies in the number of offers of admission as well as in the degree of student indebtedness.”

‘FOX HAD IN PLACE A CONCERTED, RANKINGS-FOCUSED STRATEGY’

The Jones Day investigative team interviewed 17 Fox employees and reviewed more than 32,000 documents. It concluded that, over the past several years, “Fox provided U.S. News with inaccurate information across multiple data metrics that are part of the publication’s OMBA rankings methodology. And while Jones Day focused on information that Fox provided to U.S. News relating to the school’s OMBA program, the investigation revealed that Fox provided U.S. News with erroneous information relating to other programs as well. On certain occasions, Fox’s reporting of inaccurate information to U.S. News was done knowingly and intentionally for the purpose of improving or maintaining Fox’s standing in the relevant U.S. News rankings.”

The firm’s investigators discovered that Dean Porat and other Fox personnel made clear that improving or maintaining Fox’s position in rankings was a key priority. “Fox had in place a concerted, rankings-focused strategy including detailed analyses of U.S. News’s rankings methodology and strategies tied to specific U.S. News data metrics, which strategy was promoted internally by the Dean and other Fox personnel,” the investigation found. “The environment fostered by the school’s emphasis on rankings contributed to the reporting of inaccurate information to U.S. News. Moreover, the Dean’s focus on rankings, coupled with his personal management style, caused Fox personnel who interacted with the Dean on ranking-related matters to feel pressure to perform in this regard.”

Incensed, Porat would ultimately file a $25 million defamation suit in May of 2019 against his former school and President Englert, an action that would unwittingly result in a series of depositions and disclosures of records that would would help the FBI and the U.S. Attorney General bring their case before a grand jury.

‘TEMPLE TOOK AWAY THE JOB I LOVED, DAMAGED MY HEALTH, AND DESTROYED MY REPUTATION’

“The administration at Temple took away the job I loved, damaged my health, and destroyed my reputation and the legacy of my life’s work I spent decades building,” Porat said in a lengthy statement when he filed his lawsuit. “They did this with a false narrative invented for its expediency in public relations — and to deflect attention from the University’s own role in all of this. I have been made a scapegoat.”

It took a team from the FBI, the US Department of Education Office of Inspector General, and the Postal Inspection Service several years to unravel the fraud. The indictment charges Porat with one count of conspiracy to commit wire fraud and one count of wire fraud. Gottlieb and O’Neill have each been charged with one count of conspiracy to commit wire fraud. If convicted, Porat faces a maximum possible sentence of 25 years in prison, followed by three years of supervised release, and a $500,000 fine. Gottlieb and O’Neill each face a maximum possible sentence of five years in prison, followed by three years supervised release; and a $500,000 fine.

“Moshe Porat knew that burnishing the MBA programs’ rankings would make Fox more competitive, bringing in more students and more dollars,” said Lilian S. Perez, assistant special agent in charge of the FBI’s Philadelphia Division in a statement. “Fudging the school’s data was a means to that end. But countless applicants, students, and donors made big decisions, financial decisions, based on the lies at the heart of this alleged conspiracy. This was an extended and extensive fraud, for which those involved must be held accountable.”

THE FORMER DEAN ‘LOOKS FORWARD TO DEFENDING HIMSELF’

Despite the mounting evidence against him, Porat seems determined to fight the charges until the end. His lawyer issued a statement Friday. “We are disappointed that, after cooperating with the government in its investigation, the United States Attorney’s Office decided to bring these charges, which Dr. Porat vigorously denies,” wrote Porat’s attorney Michael A. Schwartz.

“Dr. Porat dedicated forty years of his life to serving Temple University, first as a faculty member, and ultimately as Dean of the Fox Business School, and he did so with distinction. He looks forward to defending himself against these charges and to clearing his name.”

DON’T MISS: FORMER B-SCHOOL DEAN INDICTED ON FRAUD CHARGES or MBA RANKINGS: WHY ARE SCHOOLS WILLING TO CHEAT

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