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Founder of Indian School of Business Faces Insider-Trading Charges

March 3, 2011, 1:25 pm

The U.S. Securities and Exchange Commission on Tuesday charged Rajat Gupta, a former board member at Goldman Sachs and founder and chairman of the Indian School of Business, with insider trading, raising questions about whether Mr. Gupta would remain on the business school’s executive board, the Indian Express reports. The school, one of the top ranked in the world, issued a statement saying that it had taken note of the charges but was confident that Mr. Gupta would be cleared of any charges.

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  • chuckkle

    Peter Wood continues to display his attempt to spin a story with fancy footwork presentation, ignoring facts and common sense while making his slanted argument.

    1. Wood: “Rather than correct the underlying problem, the state agency plowed ahead with a policy based on spurious research—and the whistleblower got fired.” Where is the evidence for the claim the research was spurious? Yes, the researcher was found to have lied about his degree, but that doesn’t make the actual research spurious. If you go to the Daily Bruin article, you find that Enstrom is the extreme outlier in research on the topic. There is, according to several other authorities mentioned, a consensus based on thousands of other studies that supports the policy matter. Wood doesn’t mention that.

    2. The official UCLA explanation for his termination includes that he failed to meeting his funding threshold. Is that true? Is it in dispute? Does Wood consider that just cause for termination of a non-tenure track research faculty? Is termination for failing to reach funding part of the brutal world of university science funding and something that happens all the time without regard to the politics of someone’s research?

    3. Wood: “Enstrom has also been targeted by the left-wing advocacy group Source Watch, which devotes a page to him.” Why does Wood need to say “left-wing advocacy group,” but provide no such label to Reason.TV which is clearly a right-wing freemarket libertarian advocacy group? And how about the editorial page of the San Diego Union Tribune or the Hot Air blog, which Wood quotes approvingly? Fair and balanced? Neutral and accurate? Hardly. And if you go to the Source Watch site, you find that the page on Enstrom has actually been reviewed by him (apparently for accuracy). That generosity doesn’t extend to Reason.TV or to Wood himself with their opponents.

    4. Wood: “Reason TV strongly suggests that Enstrom was fired in retaliation for his role as a whistleblower.” But, the UCLA official statements say this is not the case, that the cause was his research not aligning with the department mission and didn’t meet funding requirements. Is failing to align with the department mission not just cause? Is it not true? Wood simply ducks the question.

    5. Wood tries to explain away problems an objective observor might have with Enstrom’s research by saying he is an iconoclast. Wood offers this as well: “he was at the time a skeptic on the health dangers of second-hand smoke.” Actually, a much more accurate way of phrasing this would be to say that Enstrom had throughout his career operated in the realm of “wink, wink, nudge, nudge” funding from the tobacco industry and its front groups. His recent research on particulate pollution serves the cause of rolling back restrictions on diesel trucks in California. Indeed, the Reason TV piece is obviously and simply a propaganda piece for the truck industry which uses Enstrom to try to create a “plausible” basis for reversing pollution regulations on diesel trucks.

    6. Wood darkly suggests that the AAUP has “been silent” on the Enstrom matter. Yet this case has been dragging on since last spring. One might say that Wood has “been silent” on it until now. Has Enstrom brought his case to AAUP? Or just to the trucking industry and FIRE?

    Perhaps there is a matter for concern here, but without addressing the basis for non-renewal of Enstrom’s appointment (mission and funding levels) it’s hard to know. Rumors that someone voted against Enstrom as reprisal are, after all, just rumors. Has Enstrom’s case gone through an appeal at UCLA? Wood doesn’t tell us.

    Chuck Kleinhans

  • profmomof1

    I want to know if the guy who faked his Ph.D. has been fired. I also hope that all of the work and results he reported either been thrown out or been completely reassessed by an inpartial panel, because if someone is willing to fake their academic record then I don’t for one minute trust that they actually did any of the research reported. Certainly, he clearly doesn’t have the actual training to properly conduct and evaluate such complex and significant research. And, no one can be naive enough to believe that Enstrom was fired for any other reason than his speaking out on this issue and uncovering embarrasing facts — and if the guy who as a result had to step off of a panel that had a limit of 3-year term, after 26 years sitting on it, got to vote on Enstrom’s termination and did not recuse himself for conflict of interest — I suspect Enstrom may well win something in a court case. He may not be on the politically-correct side to receive the support of university colleagues, but he may well win the support of a jury.

  • peterwwood

    Hien Tran was suspended for two months without pay but was not fired. The blog site Hot Air Reports that “Tran got a 60-day suspension and a demotion, but still works as an air pollution specialist for the state despite his record of fraudulent representation.” http://hotair.com/archives/2011/04/02/ca-legislators-threaten-hearings-if-ucla-fires-carb-whistleblower/.

    There is more news on this case from FIRE (http://thefire.org/article/13019.html) which reports, “Twelve members of the California State Legislature have written UCLA Chancellor Gene D. Block and Provost Scott Waugh a letter decrying UCLA’s treatment of longtime Department of Environmental Health Sciences faculty member James E. Enstrom.” Engstrom is due to meet with Chencellor Beck today (Monday, April 4) to present his appeal.

    Peter Wood

  • http://pulse.yahoo.com/_7MHPIFOJRACNS3RBRTZOKTBUMU DavidT

    There’s a great deal that is missing in these accounts, so speculation about it may end up sounding pretty ridiculous.

    It appears from UCLA’s own statement that Enstrom’s position is a “qualified” one, that is, an adjunct position, an issue I raised above. Despite his longevity there, such positions in science programs normally are soft-money jobs that are supported by external funding, and at least one of the articles about this case suggested – again, the details are sketchy – that Enstrom failed to get funding for his work, and consequently there was no funded position to which to reappoint him. This is such a common occurrence in soft-money positions that the only notable feature of this case is the length of time that Enstrom was affiliated with UCLA. If, in addition, his program decided that his research was not in line with the work of the program, whether it was funded or not, he lacks the academic freedom that might protect a “regular” faculty member. Here again I know of many such cases – they’re common on large research campuses, differing from Enstrom’s only in that the nature of research in question is usually not so controversial.

    Dr. Wood has raised good questions in other contexts about what academic freedom protects, and he makes persuasive arguments that academic freedom should not protect work – research or scholarship – that is outside of a faculty member’s area of expertise. I would not expect a biology faculty member to ask for a raise based on her analysis of Shakespeare, however much the English faculty applauds it. Similarly, faculty cannot expect that their political speech is protected by academic freedom.

    I invite Dr. Wood to consider the related question of who gets academic freedom. In my university, untenured faculty do not have academic freedom, nor do adjuncts. In the case of junior faculty, departments and administrators want to be able to evaluate all aspects of a junior colleague’s work when making decisions about promotion and tenure: granting junior untenured faculty academic freedom opens a Pandora’s Box of possible complaints, suits, grievances. Tenure, as I believe that is traditionally understood, is the earned guarantee of academic freedom. And when I was granted tenure the common observation was that I could start publishing the controversial stuff; I believe this is a long-standing part of the wisdom of academic careers. With adjunct faculty such as Enstrom that issues seem even clearer. A “research professor” appointment is a courtesy granted by a university, and does include tenure or academic freedom, and it is hard to imagine how it could.

    As for Hien Tran, it may be worth emphasizing that he was on the California Air Resources Board, and it is that body that has suspended him. There is no indication that I have seen that he has a university appointment anywhere. I agree that a mere suspension is strangely mild in his case, but there doesn’t seem to be any reason for anyone here to suggest or imply that any UC campus is to blame for this simple slap on the wrist.

  • peterwwood

    Dear DavidT, your observation that your university reserves “academic freedom” to tenured members of the faculty surprises me, Would you be willing to divulge what university that is? The concept of academic freedom has been around for many centuries, although in the United States it is most commonly seen through the lens of successive AAUP statements, beginning with the 1915 Statement of Principles. None of these statements presented academic freedom as something limited to tenured faculty members. Moreover, most universities in my experience have adopted formal statements that explicitly recognize that academic freedom extends to all faculty members. It would be odd to have a policy that reserves the right to teach, pursue research, and speak publicly to the tenured faculty, who are the class of faculty members least in need of such protection. Odd–but clearly not impossible.

    I am not familiar with UCLA’s declared position on this. Perhaps a reader can direct us to the relevant policy statement. In any case, the general principles of academic freedom would certainly extend to Dr. Engstrom’s case.

    Your raising the issue that academic freedom does not protect work outside the faculty member’s area of expertise is not relevant here. Dr. Engstrom was operating squarely within his area of expertise. He had published research on the exact question at issue before CARB, and he initially critiqued Mr. Tran’s report on its merits. The scientific flaws in that report were sufficiently serious that Dr. Engstrom became suspicious about Mr. Tran’s scientific background, and only at that point did he bring to light the Mr. Tran’s fraudulent credentials.

    I agree that there is much more to be learned about this case that I have mentioned or that the sources at hand provide. I am struck, however, by the tone of defensiveness in several of these comments. Yes, Dr. Engstrom was “soft money” funded. We do not know at this point whether his external funding had dried up and, if it had, for how long. When someone in a research position is in this situation universities typically extend a period of bridge funding at least until applications for new external support have had a chance to run their course. Did UCLA proceed in that fashion or did it seize a lull in his funding as a pretext to get rid of a researcher who had netted two of his senior colleagues by catching them in acts of seriously unprofessional behavior?

    The appearances right now don’t at all favor the University in this case, and I’ll venture the prediction that, when the dust settles, Dr. Engstrom will prevail.

  • chuckkle

    Wood: “Did UCLA proceed in that fashion or did it seize a lull in his funding as a pretext to get rid of a researcher who had netted two of his senior colleagues by catching them in acts of seriously unprofessional behavior? ” Indeed, just the issue I raised in my post above. This is yet another example of Peter Wood’s Chicken Little response to events and his rush to judgements that are congruent with his political positions. Why didn’t Wood just phone or email Enstrom and ask before publishing his premature conclusions? Or if not Enstrom the people at FIRE who are working with Enstrom?

    Chuck Kleinhans

  • _perplexed_

    The University of California Academic Personnel Manual statement on academic freedom may be found at http://www.ucop.edu/acadadv/acadpers/apm/apm-010.pdf . How the protections apply to nonfaculty academic appointments is more than a little unclear…

  • peterwwood

    Dear Dr. Kleinhans, UCLA is of course refusing comment and I have in fact been in touch with FIRE. You worry that I am in too much haste to report an event. I worry that an apparent serious violation of academic freedom has gone unreported in the Chronicle of Higher Education and Inside Higher Ed, the two major sources of information to the general academic community, for nearly a year. The AAUP which is currently touting its report on the need to protect the faculty members in “politically controversial academic personnel decisions,” has once again remained on the sidelines in a case where the faculty member’s “politics” do not appear to match up with those the AAUP usually favors. It may be that the AAUP will come late to the story. All we can do about that is wait and see.

  • http://pulse.yahoo.com/_7MHPIFOJRACNS3RBRTZOKTBUMU DavidT

    Dr. Wood: Your comment that “Your raising the issue that academic freedom does not protect work outside the faculty member’s area of expertise is not relevant here. Dr. Engstrom was operating squarely within his area of expertise” urges me to ask you to read my note again. I did not suggest that there was any such issue in Enstrom’s case: this was simply an illustration of one of the good points you have made about academic freedom in the past.

    I was trying to draw the parallel between two issues in academic freedom: what it protects, and whom it protects. You have written before that academic freedom should protect everyone, in some form, from students to administrators. You have not weighed in on adjunct faculty, as far as I know.

    I am surprised that you are surprised that academic freedom is not extended to junior, untenured faculty in my own university – and in many other universities with which I am familiar. The cases that test these issues are rare, but I will remind you again that tenure has for many years been regarded in the popular wisdom of academia as an opportunity to do the controversial research or publish the out-in-left-field paper. In other words, once one is protected by the academic freedom that tenure grants, a little pushing of the boundaries is possible. I am familiar with only a couple of cases in recent years in which junior faculty who did not get tenure have raised academic freedom issues, and as far as I know, in both cases this was thrown out as a factor that they could appeal to. As I also noted, I am not even sure what it would mean for an adjunct faculty member to have academic freedom, given the very precarious nature of that status. What rational university would tie its hands with such a strange policy?

    As you once wrote, Academic Freedom is a broad, bold concept. We encourage pushing the boundaries, testing new ideas, going out on a limb to push science and scholarship further. But there is also academic freedom, a narrower, legal issue that many universities formalize in written policies. In my limited experience, when they begin to think seriously about what it is and to whom it is extended on a day to day basis, adjunct faculty certainly don’t get it. I suspect that there are universities in which it is extended to junior, tenure-track faculty. I’ll go further: I assume there are. I also assume that the first time an assistant prof. who is denied tenure raises the academic freedom issue, his/her university quickly re-thinks the matter.

  • chuckkle

    Wood misreads and/or misrepresents what I said. I didn’t say he was too hasty to report this case. It’s always an appropriate time to present information on a possible violation of academic freedom. What I said was that Wood is rushing to judgment on the case without providing adequate information to make a reasonable determination. I take it from what he’s said here, and avoided addressing, that he has not contacted Enstrom, but Enstrom could answer some of the important questions. Such as, has he contacted AAUP? And why hasn’t Wood, with his already existing CHE connections, suggested to the CHE editors that they report on the situation instead of flapping his wings in indignation?

    UCLA is refusing comment: this is standard operating procedure for legal and privacy reasons in personnel cases. Usually it is only at the end of appeal investigation that details are disclosed. But on a key matter here, Enstrom is free to disclose his actual funding and what the department threshold was for the past, say, 10 years. This would help clarify the question of appropriate cause for the termination.

    Another way of reading the same story, so far, is that Enstrom had a long ride as a researcher who was a dependable producer of scientific research favorable to Big Tobacco (e.g. finding second hand smoke harmless). And those funders had deep pockets to pay for work that they could then use in lobbying and court cases. But, times have changed, and tobacco companies have moved on to making most of their money abroad, the overwhelming research consensus on second hand smoke is that it’s bad, governments have prohibited it, smokers are now habituated to nicotine gum or smoking outdoors, and there’s no more interest in funding research saying its harmless. It seems that Enstrom has moved on to trying to cozy up to the trucking industry about diesel pollution. But that industry is nowhere as big as tobacco, has no history of funding such research, is limited in scope (California in this case), and has other lobbying concerns such as keeping Mexican trucks off the roads. Enstrom seems to have failed to tack rapidly to the new wind. Too bad for him, but that’s not some dark political conspiracy.

    Chuck Kleinhans

  • rick1952

    While I agree with your sentiment (my last name requires an accent mark in order to be spelled and pronounced correctly), at this moment I am pleased to note that anyone outside of the Hispanic/Latino community is actually paying attention to us and our place in higher education. It’s been a long time coming for me, and maybe I am wrong in saying it this way (I don’t mean to sound flippant), but “there is no such thing as bad advertising.” I will, however, join you in calling for better spelling and pronunciation in the future.

  • sherbygirl

    Congratulations. This is something I have been blogging about, saying, and doing for the past two years (I know, not very long, but what can I say, it took me a while). I hope others will see this and understand that it isn’t impossible to speak out, speak up, and be a TT professor. Keep it up!

  • http://twitter.com/AleksieAleksie Aleksie

    Congrats! I think the key to what you said is be constructive. Many people are not aware or skillful at giving constructive criticism or critique.

  • terrisue

    Congratulations – you give me inspiration!

  • jovanevery

    I agree. It is also true that in a competitive market, there is often more than one qualified candidate. You need someone to say “I really want to work with that guy/gal.” Bland is not going to distinguish you. And anything that would make you stand out positively, is going to be a big negative for someone. Without the risk there may not be a reward.

  • singfasola

    Congratulations!! Juliewhite said it best, and through your writing you had gained a following before you arrived on campus.  They’d had time to consider your views, and you weren’t a surprise to them.

  • http://tomkephart.com TomKephart

    Congratulations! It’s not easy to be brave, but in order to gain recognition for the value we provide, we can no longer afford to remain quiet. Best wishes on your new position.

  • http://twitter.com/RobynBradley RobynBradley

    Congrats, Isaac, on the new position and for speaking up! :)

  • smilintoday

    It appears the key word here is “constructively”.   I’ve heard both:  the whiner, and the person with constructive comments.   Hired the latter; the former is still looking for a job.

  • henry_adams

    Great news.  Congratulations on the job, Isaac. 

    Keep telling the truth about higher ed, even though higher ed doesn’t like it.

    Henry Adams

  • 12080243

    “I believe that pointing out inadequacies can lead to changes for the better…Speak out constructively.”

    Here, here! 

    “Speaking out constructively” will allow you to test your freedoms. Make it relevant. That is, take instances when there’s “skin in the game”–yours, your colleagues, and administrators. Don’t start with a difficult issue, like sports corruption. Instead, assume you identify reliable, preferably documented, evidence that, say, your school made several material misrepresentations in its accreditation reports. Honesty is important to you. Now, “constructively speak out” to your colleagues and administrators.

    Pick any instance of misconduct or corruption where you and your school has “skin in the game.” You shouldn’t have long to wait. For details, see “University and AACSB Diversity” and “A General Theory To Test Social Reality.” (http://ssrn.com/author=397169)

    Chauncey M. DePree, Jr., DBA
    Professor
    School of Accountancy
    College of Business
    University of Southern Mississippi
    http://www.usmnews.net

  • southerntransplant

    I’m curious as to what kind of message he is sending. The best way to get a TT job is to rail against the status quo in a CHE blog? Or does the quality of the writing have anything to do with this?

    If the former, does it apply to people with access to general blogging sites, or will only the CHE imprimatur hold sway over search committees?

    As a STEM person who gets annoyed at fallacious correlations, I kind of think he’s dispensing some potentially problematic advice.

  • edwoof

    Congratulations, Professor Sweeney!

    I’m glad this ended well and a few months at Richard Bland will hopefully take the away the sting of James Madison.

    Yes, we all should always speak out and we are very grateful that you did.

  • http://twitter.com/IsaacSweeney IsaacSweeney

    Thanks for everyone’s well-wishes!