Why Mideast Universities Should Be Investigated

“Hela, hela, hela, ho – Where’s the money, oh Fadlo?” angry students at the American University of Beirut (AUB), where I was on the faculty for 11 years, have long wanted to know from its controversial president Fadlo Khuri.

In April, AUB’s administration announced that it will require a substantial portion of tuition payments in U.S. dollars, with full dollarization to follow.

Since Lebanon’s economic crisis began in October 2019, its currency has tanked by as much as 95% against the dollar, immiserating some 80% of the Lebanese population and making life difficult for many of the rest.

Khuri, a physician who was sued for medical malpractice prior to embarking on his career in academic administration, has not been modest about his institution’s needs.

In July 2020, even as the COVID-19 pandemic raged, he fired 850 employees at AUB’s once prestigious medical center, calling in the Lebanese army and militarized security police to enforce the dismissals.

In December 2020, AUB changed the exchange rate for tuition payments, resulting in a de facto 160% cost increase. Student protestors who objected were beaten and tear-gassed by Lebanon’s security forces massed at the campus’s gates.

In March 2021, AUB appropriated $100 million-$150 million of its relatively small endowment just to guarantee payroll for a three-year period.

A month later, it was reduced to taking out a full-page ad in the print edition of the Sunday New York Times to beg the former paper of record’s readers for immediate financial assistance.

For about 18 months, most AUB faculty members remained paid in the nearly worthless local currency, with some reporting incomes as low in real terms as a few hundred dollars per month before limited dollar-based relief was provided.

A faculty email thread shared with me earlier this year revealed that some faced severe limitations on how much of these penurious amounts could be withdrawn from their local bank accounts.

Some suspected that AUB lacked the cash on hand to cover even their diminished salaries, though AUB naturally denied this.

Unsurprisingly, hundreds of professors have left AUB, in some cases without alternate employment.

Few current or former faculty members are willing to talk. Most cite fear of retaliation, both at AUB and in other places if they have moved on to.

Those among my former colleagues who do talk report unprecedented low morale, “Gestapo” and “witch hunt” tactics by Khuri’s administration, and other complaints severe enough to drive out almost anyone who is able to leave.

According to AUB’s tax records, Khuri’s annual remuneration for his stellar leadership skills is about $1 million, paid in so-called “fresh” dollars not subject to Lebanon’s currency depreciation.

Repeated complaints have been consistently ignored by AUB’s Board of Trustees, some of whose members have been implicated in and, in some cases, arrested and prosecuted for a range of serious alleged crimes.

Students are fed up, especially after hearing recently that AUB somehow found $29 million to spend on a new campus facility in nearby Cyprus, with longer range plans to open another branch campus in Dubai.

“There is an atmosphere of fear,” says Rand Chmaitilly, an AUB student activist who is president of AUB’s Secular Club, which promotes liberal values consistent with the university’s ostensible mission and opposes Lebanon’s religious sectarianism, “There is no transparency … the administration has zero concern about students.”

In April, in a disturbing mockery of AUB’s supposed commitment to free speech and open dialogue, the university’s interim dean of student affairs threatened to suspend Chmaitilly’s entire organization for “the posting of unauthorized published materials” critical of the dollarized tuition policy.

Facing sacrifice and intimidation with no end in sight, AUB students have begun to wonder where their interests truly lie and how, if at all, AUB serves them when other universities in Lebanon have not altered their exchange rates or currency policies.

They might better ask whom AUB does serve. In addition to Khuri’s lavish seven-figure salary, tax records show that despite the economic crisis and AUB’s desperate cries of poverty at least 16 other AUB employees are paid more than $200,000 per year in a country where the minimum wage is now about $24 per month.

That’s not a typo, but in May Khuri told Executive magazine, without a trace of irony, “We can’t keep burning cash.”

Worse, just five years ago, AUB admitted guilt, accepted responsibility, and paid a $700,000 fine to settle a civil fraud claim brought against it by the U.S. Justice Department for having illegally used U.S. federal funds to train associates of Hezbollah, a Lebanese political party that has been designated a terrorist organization by the U.S. and many other countries.

Hezbollah is widely believed to be responsible for numerous deadly attacks, including the February 2005 assassination bombing of Lebanese Prime Minister Rafik Hariri, and for the August 2020 ammonium nitrate explosion that devastated central Beirut and, perhaps ironically, caused millions of dollars in damage to AUB’s campus.

Are things better at other “American” universities abroad? Signs point to no.

At the American University in Cairo (AUC), where I taught for three years, former president David D. Arnold left after the construction of what AUC called its “state of the art” new campus, which opened in 2008 while still unfinished and heavily overbudget.

His successor Lisa Anderson departed shortly after a campus public opinion survey registered a 97% disapproval rating of her leadership, which included controversial financial decisions and major protests related to tuition and labor policies.

Anderson’s successor Francis J. Ricciardone Jr., a former U.S. ambassador, left after one term, during which AUC’s rankings plummeted amid acerbic disputes over tuition, contracts, alleged discrimination, and other grievances. In February 2019, he lost a faculty no-confidence vote that AUC’s board of trustees voted to reject.

AUC’s current president Ahmad Dallal formerly served as AUB’s provost but, along with Khuri’s immediate predecessor as AUB’s president, resigned following a major scandal in which multiple AUB administrators resigned or were fired amid allegations of malfeasance, embezzlement and other possible crimes.

According to AUC’s tax forms, at least 10 of its employees are paid over $200,000 per year, while Egypt’s minimum wage is about $172 per month.

In addition to rapidly rising tuition bills imposed on vulnerable and already highly discontented developing world populations, every year AUB and AUC receive millions of dollars in U.S. taxpayer funds and millions more in tax-deductible charitable gifts and other forms of U.S.-based institutional support.

Both institutions claim to represent and impart American values in a highly unstable yet strategically vital region where recent developments show American prestige has fallen to a disgraceful nadir.

In light of their shenanigans, full, high-level investigations of how they operate and spend our money are long overdue.