Mole reveals Fuqua running amok, with secret deal to provide all faculty for new B-school in Kazakhstan

Posted at 1:24 AM Wednesday

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✔✔✔✔✔ Fact Checker here. Probative, provocative, pro-Duke. Good day!

A mole has told FC that the Fuqua Business School has signed an agreement with a new university in Kazakhstan to provide all faculty for its B-school, starting July 6, 2012. With this depth of involvement, Fuqua will essentially be running another campus, but unlike proposals for the Duke Kunshan University, the degrees will not carry the Duke name.

The secret agreement represents a new dimension in Fuqua's continuing thrust into every corner of the globe. And it raises very profound if not disturbing questions.

✔ A) FC can find no announcement -- not by Fuqua, not by Duke University -- of the agreement, which was developed as early as April, 2010. The Fuqua website lists international cities where the school either has or is developing programs -- but there is no mention of Kazakhstan.

Elizabeth Hogan, Fuqua's PR officer, and Michael Schoenfeld, principal spokesman for the Brodhead Administration, both refused to discuss this secrecy or the substance of Fuqua's agreement. Fact Checker suggested in past essays that Duke has deliberately dropped the profile of many of its international agreements as the debate over the new Duke Kunshan University heated up, to counter many people who feel Duke is going too many places too fast.

In our post last week on President Brodhead, we listed many instances where Duke has deliberately kept its stakeholders in the dark about Kunshan.

✔ B) A reading of the transcripts of the Academic Council indicates no part of this deal has been considered. On the one hand, there's the argument that unlike Kunshan, which must get approval, there are no Duke degrees. On the other, the unprecedented degree of involvement would seem to establish a need for oversight, a great responsibility to maintain quality and rigor, and a necessity of protecting Duke's reputation. One possible pitfall: MBA sections will have as many as 100 students, far larger than in Durham.

The Council has authority under university by-laws:

"The University Faculty shall be responsible for the conduct of instruction and research in the various colleges and schools in the University. It may also consider and make recommendations to the President regarding any and all phases of education at the University.

"The University Faculty shall approve and recommend to the Board of Trustees the persons it deems fit to receive degrees or other marks of distinction, and the establishment of any new degree or diploma."

While some may argue that the Kazakhstan deal slips through the cracks -- education "at the university" for example, meaning in Durham -- the non-Duke degree programs that have by-passed the council so far were far less encompassing.

✔ C) The information available to FC does not make clear -- indeed it does not even hint -- how this move has strategic value for Duke. As FC has noted, we seem to be opportunistic, with the motto "You show cash, we're there in a flash." Nor is there any indication how this will benefit Duke/Durham.

In fact there is no strategic plan that mentions the explosion of international adventures that we are seeing. The last plan -- developed after extensive and careful consideration among stakeholders at all levels a decade ago -- focused on Central Campus in Durham. But that's been shelved, the money for it swallowed by the financial meltdown in 2008.

President Brodhead did address the faculty in 2007 on "Duke's international aspirations," but certainly there was no hint of campuses in China nor Kazakhstan or anywhere else.

✔ D) The plan is for Fuqua faculty to rotate into and out of Kazakhstan, staying in the country slightly under one month. It is not known how many Duke faculty are interested in this, nor what incentives they are being offered, nor how it would mesh with responsibilities on the mother campus. At a June 1 Fuqua faculty meeting where two degree programs proposed for Kunshan were shot down, few faculty members expressed interest in a similar rotation in China. Former Dean Blair Sheppard had tried to make Kunshan attractive, telling faculty members that in six weeks time, they would be able to meet half of their annual teaching commitment.

✔ E) This deal was inherited by Dean Bill Boulding, now in his 10th day after the sudden curious departure of Dean Blair Sheppard. It will be interesting to see how he handles this early test, a deal replete with many unanswered questions. Sheppard had become known for thrusts in all directions -- and running a financial disaster. In his four years, he ran four deficits. And his money-making pet project, Duke Corporation Education, lost millions.

Corporate Education was key to Sheppard's support -- the general faculty rebuked his leadership on June 1 -- and when the financial tide turned, he had to can employees and force giant salary cuts on others.

✔✔ The new university is in the former capital of Astana, the country's largest city and its cultural center. The aim: to offer world class education to 20,000 students a year, instead of the government's helping the best to go abroad to study.

A careful Loyal Reader will already have discerned a problem for Duke: if Duke provides education in other countries -- and those countries are going to channel their best students to these schools -- Duke in Durham will lose those very students and thus be deprived of an international flavor.

Indeed, the Kazakhstan government has already announced a goal of making this an "international and world class university," bringing an end to its unique and progressive “Bolashak” (Future) program, which paid for undergraduate educations abroad in return for a commitment to work for five years in Kazakhstan.

The Bolashak director for the US and Canada has been brought home. FC could not learn if any Bolashak students have attended Duke. The program was started in 1993 and has involved 6,000 students.

✔✔ The school is named Nazarbayev University, modestly carrying the family name of the Kazakhstan president. It also goes under the title "New University." Classes will be taught only in English, with all of its professors from abroad. Most people in the nation speak the Kazakh language or Russian, owing to that country's long sufferance as part of the Soviet Union.

As part of its discussion of Kunshan, where classes will also be in English, the Fuqua faculty learned that Chinese candidates for advanced degrees may not be proficient enough in English to grasp complicated concepts. Or they may need them explained slowly, step by step. We can only wonder if this factor plays out in Kazakhstan.

✔ Already, Nazarbayev University is embroiled in a language controversy.

Luckily, this by-passes Duke, which will apparently not play any role in admissions (adding to the quality problem, we might add). Similarly, undergraduate students, with classes scheduled to begin this fall, will not be selected by University College of London, which is providing faculty on the baccalaureate level in a deal similar to Duke's.

Controversy already: With a small number of undergraduates about to begin class, the list of accepted students posted on the school's website consists almost exclusively of ethnic Kazakhs. Non-Kazakhs make up just over a third of the population -- and while they do not speak the Kazakh language, it should make no difference since courses will be in English. A spokesman for Nazarbayev University just shrugged when asked about this by a journalist.

✔✔✔ On the graduate level, one division, the B-School, will be staffed by Duke. From information provided by a Loyal Reader, Fact Checker has learned the names of some senior Fuqua faculty who have made hush-hush visits to Kazakhstan:

✔ -- Richard Staelin, the Edward and Rose Donnell Professor of Business Administration. In addition to his degree-oriented teaching, he has been very active in packaging corporate education programs (at a very fancy price) for corporations around the world. Examples: Norway, Israel, Australia. His biography states that he was "deeply involved in setting up the Duke Goethe and Duke Seoul University alliances," whoops, both of which collapsed. FC expects that in a short time, the thriving petroleum and gas industries will be prime targets.

✔-- Thomas Keller, the R. J. Reynolds Professor Emeritus and a former Dean of Fuqua. He has been involved in discussions of whether a full-time MBA or part-time Executive MBA program is better. There seems to be sentiment in favor of the full-time MBA, because managers in Kazakhstan feel they are worked to the bone, with little free time to allocate to education.

✔-- Daniel Nagy, an associate dean who has been Regional Director for Fuqua in Russia, CIS, and Europe. Our source says when he called the timetable "aggressive." Staelin chimed in: the timetable may be "fast," but the academic courses will still be "high quality."

✔✔✔ Competition: Kazakhstan already has an MBA program taught in English by professors many of whom are foreign. It’s the Bang School of Business at Kazakh Institute of Management, Economics, and Strategic Research. The MBA program there advertises itself as one that “trains leaders who can manage effectively and transform successfully organizations in Kazakhstan and internationally.”

President Nazarbayev told the opening ceremony, the university "will become a national brand of Kazakhstan that will combine the advantages of the national education system and the best of international research and education practice."

Academic freedom? Democracy. No mention.

The new university has its critics: “It's educational segregation: the level of education in Kazakhstan has fallen catastrophically over the last 20 years,” said Dosym Satpaev, a political analyst in Almaty. “But we have this ambitious project to build one very good university in Astana. Some lucky people will get access to a very good education, but what about everyone else? They will get a bad education and won't be able to find jobs.”

As in Kunshan, construction is underway. The centerpiece -- a massive atrium that connects all the buildings -- is done. Soaring roof. Fountains and pools. Palm trees. Thanks to luck of nature, a booming oil and gas-fueled economy is set to launch a school that hopefully will upgrade and insure its future.

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Appendix to Fact Checker, from the Duke Graduate School Guide. Kazakhstan is the ninth largest nation in the world and the second most populated country in Central Asia. It is a bilingual country with Kazakh being the state language and Russian
the official language used routinely in business.

During the years of Soviet power, Kazakhstan acquired an education system that had a vertical structure and was fully financed by the government. The duration of each phase of schooling is fixed, and when each is completed, a certificate or degree is awarded. Students are paid a stipend depending on their success, and teachers’ earnings are related to their duties, experience and qualifications. Kazakhstan lags behind the developed countries in the level of investment in education. The republic spends 12 times less per student than the