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Anand Giridharadas: College Bribery Scandal Highlights How America Is Rigged for Wealthy & Powerful

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As the fallout continues over the elite college admissions scandal that investigators nicknamed “Operation Varsity Blues,” we speak with journalist Anand Giridharadas, author of “Winners Take All: The Elite Charade of Changing the World.” His book examines how the so-called elite class of America have worked the system to maintain and consolidate power and wealth, even while claiming to help people and “change the world” through charity. On Wednesday, Giridharadas tweeted: “The college bribery scam is not a college bribery scam. It is a master class in how America—governed by a cheater, ruled by rule breakers, managed by a class that confuses its privilege for merit—functions.”

Transcript
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now! I’m Amy Goodman. The fallout continues over the elite college admissions scheme known as “Operation Varsity Blues,” three days after charges were announced against 50 people, including 13 college coaches and powerful CEOs, for taking part in a scheme where wealthy parents paid exorbitant bribes to secure spots for their unqualified children in schools including Yale, Stanford, Georgetown, UCLA and USC—University of Southern California—as well as Wake Forest. Parents reportedly paid up to $6.5 million to gain access to the schools. This is U.S. Attorney Andrew Lelling announcing the charges Tuesday.

ANDREW LELLING: This case is about the widening corruption of elite college admissions through the steady application of wealth combined with fraud. There can be no separate college admissions system for the wealthy. And I’ll add that there will not be a separate criminal justice system, either.

AMY GOODMAN: At the center of the story is Newport Beach, California, man Rick Singer, who promised parents he could get their children into the schools in exchange for a hefty fee. As part of the scheme, he bribed school coaches to give his clients admissions slots reserved for student athletes, in some cases either staging or doctoring photos to make the teenagers seem like accomplished athletes. Earlier this week, Singer pleaded guilty to charges including racketeering, money laundering and obstruction of justice. Singer’s clients included Hollywood stars Felicity Huffman and Lori Loughlin, and Bill McGlashan, a founder of TPG Capital, one of the largest private equity investment firms in the world—all of whom were charged on Tuesday.

Well, our next guest has been studying how the so-called elite class of America have worked the system to maintain and consolidate power and wealth, even while doing so under the pretext of helping people and, quote, “changing the world.” On Wednesday, he tweeted, “The college bribery scam is not a college bribery scam. It is a master class in how America—governed by a cheater, ruled by rule breakers, managed by a class that confuses its privilege for merit—functions.” Anand Giridharadas is editor-at-large at Time magazine and a former correspondent and columnist for The New York Times. His new book is called Winners Take All: The Elite Charade of Changing the World.

Anand, welcome to Democracy Now!

ANAND GIRIDHARADAS: It’s a pleasure to be with you.

AMY GOODMAN: Talk about what you feel is most important to understand about this scandal.

ANAND GIRIDHARADAS: You know, I think when a scandal like this breaks, it’s really important for us to understand that we’ve gone from seeing 0 percent of a system to 0.003 percent of a system, right? There’s so much more here. This is a little biopsy of a world that we happen to get.

And what we learned is, as you cover on this show, America is, in many ways, rigged for the wealthy and powerful. And we know that. We have a tax code that is rigged for the wealthy and powerful. We have anti-trust enforcement that’s rigged for the wealthy and powerful. We fund public education according to property taxes, so the nicer mommy or daddy’s house, the better the school you get. America is already rigged for rich people.

The problem is, for some rich people, all that rigging that I just described is shared equally among rich people. Right? You have the same first-class seat on the commercial jet that everybody—all the other rich people have. And what we found in this case was, some rich people are not satisfied with the generalized rigging that they have to share with everybody else. They want special, private, bespoke, bottle-service rigging over and above the standard rigging that rich people receive.

And I read the indictment. This Singer guy is a great character, and he really understood the psychology of these rich people. People like him in that kind role, who are service providers, often do. And he says, “You know, the people I work for, they don’t want to do a million-dollar check and then hope their kid gets a second look. The people I work for, the wealthiest families in America, they want a guarantee. They want this thing done,” he said.

And so, I think this is a phenomenal glimpse, because what—as someone who’s been writing about this plutocracy for a few years, what these folks say when they hear critics like me is, “Don’t be negative. Don’t be zero-sum. We can empower the least among us. We can fight for the poor. And we can benefit and get rich. Right? It’s not zero-sum.” And you know what really is actually zero-sum? When there is one college seat, and a hard-working kid from a poor neighborhood, whose family has never sent anybody to college, but now they have a shot at that seat—they’ve worked hard, their parents took many buses to many jobs, they might be eligible for that seat—and they don’t get that seat, because someone like Bill McGlashan, private equity baron, impact investing impresario, who had a $2 billion impact fund with Bono, has locked up that seat for his son.

AMY GOODMAN: What do you mean, “with Bono”?

ANAND GIRIDHARADAS: So, as you know and have covered on this show, in the last several years, there’s been a rising chorus of criticism of capitalism. Right? That’s come from Elizabeth Warren and Bernie Sanders in the political sphere, people like them, AOC. It’s also come from the Occupy movement and various other forms of outside pressure.

Within the citadels of capitalism—the banks, the business schools, the big corporations—there have been a couple responses. Some responses are like, you know, “Buzz off.” But there have been a kind of—there’s been a kind of woke capitalism movement within these citadels, saying, “You know what? You critics have something of a point. Right? Something of a point. And what we’re going to do is, we’re going to respond by evolving a kind of new capitalism within. We’re going to do social enterprises. We’re going to do impact investing. We’re going to double bottom line.”

Impact investing is one of these many modalities, and it basically says, instead of investing in ways that destroy communities—which, by the way, why is that legal to begin with?—we’re going to invest in ways that make us money but also benefit communities. Right? So this is a widespread movement. There’s a lot of capital moving in this impact way, but it’s generally a fringy thing.

Bill McGlashan was the leader of perhaps the biggest impact investing fund in the world—$2 billion fund. Real money. And if you want to legitimate this kind of plutocratic do-gooding, you’ve got to get Bono involved. Right? So he and Bono signed on together, like, you know, bros, to do this fund.

AMY GOODMAN: And when you’re talking about Bono, you’re talking about the U2 singer.

ANAND GIRIDHARADAS: The U2 singer. And what was so—and that makes this story so much more powerful, because you have a guy who’s had a $2 billion fund, called The Rise Fund, that was about empowering people around the world, from Appalachia to Africa, who hadn’t had opportunity. And what we now know is this guy was working to rig the system, when we weren’t looking, to make sure that those people he was supposedly empowering with his fund would never actually be able to compete with his son.

AMY GOODMAN: And what’s also astounding in this is that Singer had this, quote, “nonprofit.” And so, the parents, who are paying, what, half a million, up to $6.5 million—

ANAND GIRIDHARADAS: Yes.

AMY GOODMAN: —to get their kids fraudulently put into a school, gave their money to him, and it’s a tax-deductible contribution.

ANAND GIRIDHARADAS: Yes.

AMY GOODMAN: And they said it was to elevate poor students.

ANAND GIRIDHARADAS: Yes. So, there are two things here your viewers really need to understand, because this is why this matters to all of us. First of all, at a more general level, this case is not a one-off, in the fact that the mechanism by which rich people were exerting wealth, influence and rigging things was charity. If you look at the Koch brothers, many others, the mechanism by which a lot of this stuff is done, and the kind of conquest of power is done, is through charity and philanthropy. So it’s very notable, but also very telling, rather than exceptional, that the mechanism here was charity.

But to your tax deduction point, which is so important, there’s several layers of the tax deduction. First of all, the rich people donated to this fake charity—

AMY GOODMAN: Key Worldwide Foundation.

ANAND GIRIDHARADAS: —to feed the bribe. That would eventually be reinvented as a bribe. So, that’s tax reduction number one.

Now you’ve donated to this fake charity. You can—let’s say you donated a million dollars to it. You can now take a million dollars off your income—right?—and save $400,000, $500,000. Amy, who do you think pays for that? Everybody watching this. You have to understand, you paid higher taxes last year to make up for the shortfall of giving that rich person a half-million dollars in tax deduction. Great.

Next step. The charity receives that money. Because it’s registered as a charity, it’s a nonprofit. It doesn’t pay taxes, the way other organizations that receive money, income, would pay taxes. Again, you are paying money, because the system requires a certain amount of money, and if they’re not paying it, you’re paying it. OK? And then, some of those donations went to the Stanford Boating Association, other nonprofit, including nonprofit universities, right? And so, they don’t pay taxes on that, either. And again, you are paying taxes for that money a third time passed on.

And these universities, in many cases, are now sending 50 percent of their graduates into consulting, finance, Silicon Valley. So it really raises the question of why, frankly, you need to subsidize them with your hard-earned tax money, for them to not pay taxes.

AMY GOODMAN: And just to be clear, if people weren’t following this, you had, for example, the actress Lori Loughlin—her husband isn’t talked about as much, but he was indicted, too, and I don’t know if that goes to some level of sexism—the fashion designer Mossimo Giannulli, their two daughters, to get them into USC, paid half a million dollars, working—they made them look like crew athletes.

ANAND GIRIDHARADAS: Right.

AMY GOODMAN: They had an indoor machine brought in to take photographs of them, but they didn’t row crew.

ANAND GIRIDHARADAS: Right. What was so amazing here is—

AMY GOODMAN: They sometimes, in different cases, photoshopped the faces of their children on athletes, to send in to a university, and Singer facilitated all of this. And they worked with coaches, who have now been indicted?

ANAND GIRIDHARADAS: Imagine how little faith you have in your own children, if you think white privilege, millions of dollars in wealth and the various other tailwinds that all those kids enjoyed are not enough. Right? Imagine the stunning lack of confidence in one’s children—basically, the conclusion that your children like really have no chance in the world—that it takes to say, “Over and above the advantages these kids already have, I need to get these kids a guarantee.”

And I will tell you, Amy, as someone who’s reported in this world, “merit” is the byword of these people. The way they push back against me is, “Why don’t you believe in merit? Why don’t believe in free markets? Don’t you—these companies are big because they had a better product than people. I’m rich because I was smarter. I worked hard.” And you know what’s now been revealed? They actually don’t believe in merit. They don’t believe in merit at all. If they believed in merit, they would have sent in an application like everybody else watching this show does. But, no, they actually wanted a guarantee, because they were so confident in what they didn’t deserve.

AMY GOODMAN: Well, we’re going to do Part 2 of this discussion, and we’re going to post it online and play it on the show. The book is Winners Take All: The Elite Charade of Changing the World. Anand Giridharadas is the editor-at-large of Time magazine, former correspondent and columnist at The New York Times. He is the author of this book. Stay tuned for Part 2.

This is Democracy Now! When we come back, how will helping a young 29-year-old South Asian-American journalist help millions of people in this country and around the world—or at least thousands? Stay with us.

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