“Good Citizens” and the University: Wealth, Health and Tax Evasion

By Umair Muhammad
Thanks to files from Justin Panos

photo credit: CBC.ca

The British-Canadian billionaire Victor Dadaleh received an honorary doctorate from York University earlier this year. The decision to award the doctorate was met with a fair amount of controversy. It seems that Dadaleh, who told students to be “good citizens” in his acceptance speech, does not have a record of being all that great a citizen himself.

The Panama Papers, a cache of leaked documents from the firm Mossack Fonseca, revealed that Dadaleh was at the centre of a long-running bribery scheme. The scheme, involving mining company Alcoa of Australia and high-ranking members of the Bahraini government, was a decades-long affair in which Dadaleh made off with tens of millions of dollars.

Details of Dadaleh’s role in the affair were widely reported shortly prior to him receiving his honorary doctorate from York University. Despite this, the university went ahead with its decision to award Dadaleh the doctorate. Prior to awarding the doctorate, York had decided to name a building after him and inaugurated the Dadaleh Institute for Global Health in his honour. What did Dadaleh do to deserve such recognition? He donated $20 million to York. In other words, Dadaleh bought recognition.

It is something of an irony that Dadaleh, having had his devious activity uncovered thanks to a leak of documents from a company specializing in offshoring services, will have an institute of global health named after him. Offshore tax havens, it just so happens, are terrible for global health.

Consider, for instance, the phenomenon of debt-fueled capital flight in sub-Saharan Africa. In Africa’s Odious Debts Leonce Ndikamana and James Boyce describe how money borrowed by African states often ends up leaving those countries and going into private bank accounts owned by government officials and other well-connected individuals.

Ndikumana and Boyce estimate that for every dollar that is borrowed by African countries, 60 cents exits as capital flight in the same year. Often enough, the same financial institutions that lend the money to African governments assist individuals in making off with it. Resources needed to fund such things as public health are lost. All the while, common people are forced to pay back loans they obtained no benefit from. During the years 2005-07 Nigeria, Mauritania, and Cote D’Ivoire spent twice as much on debt servicing than they did on public health; Cameroon, Democratic Republic of Congo, and Gabon spent three times as much on debt servicing compared with public health; for Guinea it was seven times as much!

In Treasure Islands, Nicholas Shaxson higlights “the terrible human cost of poverty and inequality in Africa, Latin America, and other parts of the world connected with the apparently impersonal world of accounting and financial regulations and tax law.” Will the terrible costs of tax havens be highlighted for students at the the Dadaleh Institute for Global Health? Likely not. As corporate money is increasingly relied on to fund universities, the quality of the education students receive is no doubt increasingly impoverished.

York University has avoided responding to inquiries about Dadaleh’s sordid history. York president Mamdouh Shoukri was asked by reporters if Dadaleh was a good role model for the university’s students. While walking away, Shoukri replied, “Yes, yes he is.”

It seems that Shoukri has a rather low regard for York students. Otherwise, he would not commend to them the likes of Dadaleh as a role model.

As shameful as President Shoukri’s regard for students is, it is not surprising. The fact that York has little concern for its students, not to mention its employees, is made clear by looking at the kind of people that are at the top of the university’s administration. Consider the examples of Greg Sorbara, York’s Chancellor, and John Hunkin, a member of the Board of Governors.

Sorbara was Ontario’s minister of finance from 2003 to 2009. When a Private Member’s Bill was introduced to raise the minimum wage to $10/hour, Sorbara actively opposed it. During his reign, the minimum wage in the province remained at $6.85/hour, the same amount that had been in place during Mike Harris’ government. Moreover, Sorbara continued the Harris-era tax cut regime by completely eliminating capital gains taxes.

Long before becoming finance minister, Sorbara held the position of Minister of Universities and Colleges from 1985-87. He initiated the series of policy studies that led to the deregulation of tuition in Ontario. Tuition in the province has risen by more than 200 percent since that time. As a result, students in Ontario graduate with an average debt of $27,000, the highest in the country.

John Hunkin is a former CEO of CIBC. During his tenure, the bank paid $80 million to settle claims that had to do with it having helped Enron conceal the extent of its debt. CIBC was caught by the US Securities and Exchange Commission for having assisted hedge funds in making improper, market-timed mutual-fund trades in 2003. Despite having had an inglorious reign, Hunkin took home $50 million when he retired from CIBC in 2005. That same year, the bank paid out-of-court settlements that amounted to $2.83 billion.

President Shoukri no doubt thinks that, along with Dadaleh, Sorbara and Hunkin are good role models for York students. Having been given role models like these, it should come as no surprise that students continually face the prospect of higher tuition while York’s employees find themselves facing off against cutbacks and worsening working conditions.

Universities are not cooperative enterprises, where the top-level administrators have the interests of lowly employees and students in mind. On the contrary, constant vigilance and collective struggle on the part of students and workers is required to ensure that a humanized environment exists in our universities.

Umair Muhammad is a member of CUPE 3903, which organizes Contract Faculty, Teaching Assistants, Graduate Assistants, and Part-time Librarians and Archivists at York University in Toronto. Umair is the author of Confronting Injustice: Social Activism in the Age of Individualism.