Iowa State Announces $1.7 Million Charles Koch Foundation Gift

Iowa State University economics professor Peter Orazem.

Iowa State University’s economics department will receive $1,685,000 over five years from the Charles Koch Foundation for its program studying underperforming Midwest markets and entrepreneurship opportunities, the university has announced. ISU had been seeking up to $3.7 million for the program from the foundation of the libertarian-minded GOP billionaire and another source. According to ISU, the foundation’s pledge, received through the ISU Foundation’s Forever True, For Iowa State campaign, may eventually total $2.5 million. (Read the full text of the university’s agreement with the Koch Foundation at the end of this post.)

The funding proposal was penned by economics professor and Ames City Council member Peter Orazem, who was a Koch visiting professor of business economics at the University of Kansas in 2004 and 2005. (Read his proposal here.) Orazem heads the program, which is based in the college of agriculture and part of ISU’s Agricultural Entrepreneurship Initiative established in 2005 with a $1.6 million gift from Roger Underwood, founder of the Ames-based seed company Becker Underwood, and his wife Connie. Former Board of Regents president and GOP agribusiness tycoon Bruce Rastetter, who along with Underwood is a partner at the Rural American Fund, later gave $2.25 million to the program to establish the Rastetter Endowed Chair in Agricultural Entrepreneurship, which is based in the economics department and occupied by Kevin Kimle, a colleague of Orazem’s who is also involved in the Midwest markets program.

The entrepreneurial initiative was touted by Wendy Wintersteen, the dean of ISU’s ag college and a finalist to be the university’s next president, at an open forum last week where she called it “another great example of investment in our students.” The Koch Foundation deal was apparently referenced earlier this week in a letter published in the Iowa State Daily from Pulitzer Prize-winning journalist Art Cullen, who warned against Wintersteen becoming ISU’s next president. “The Koch Brothers and Monsanto and Dow DuPont own Iowa State, the governor’s office and the Board of Regents,” he wrote. “They will do anything to make certain that they can do business in whatever way they like, no matter the cost.”

Orazem previously told the Informer that his proposal was written with concerns about academic freedom in mind and that he didn’t believe the foundation’s money would unduly influence the market research program’s work.

Gavin Aronsen is an editor and reporter for and founding member of the Iowa Informer. He previously worked as a city reporter for the Ames Tribune, research assistant to investigative journalist Wayne Barrett at the Village Voice, and in various roles at Mother Jones, where his work contributed to a National Magazine Award nomination for the magazine's digital media coverage of the Occupy Wall Street movement. Email: garonsen [at] iowainformer [dot] com.
  • Connor Gibson

    Here are what the contracts have looked like at other schools:

    Koch retains right to cancel future payments if the university fails to please Koch in annual progress evaluations.

    Restricted money for tenured professorships is also problematic, especially since Koch contracts define a “mission” that their professors must adhere to. In the long run (presumably), Koch grants go away and the school must keep paying for these tenured professors whose mission has been narrowly defined by a donor.

    Essentially, ISU is now part of the State Policy Network. Keep your eyes peeled for any lobbying they do with the SPN think tanks.