Grifters, con artists, and sleight-of-hand entrepreneurs come in all ages, classes, genders, and colors. My subject today is the grifters born into ideal circumstances for learning the type of charm that makes people feel that your smile grants them access to excellence. I’m talking about the young, white, privileged, headline-making variety, whose exploits definitely call the question that is my new book’s subtitle: what does it mean to be educated?
I am talking about three extremely ambitious young white people who leveraged their credentials, desire, and the presumption of altruism given to people of their ilk into ill-gotten fortunes that ultimately fell apart. I’m not saying the elite schools these three transgressors attended and mined for prestigious contacts and collaborators were responsible for their wrongdoing. But I am saying that the glow cast by such institutions on the trustworthiness of such fraudsters was evidently bright enough to make the sort of commonsense verification you or I might demand of someone who wanted our money seem unnecessary:
Charlie Javice, who pretended to streamline access to student financial aid, bilking JPMorgan into financing her to the tune of $175 million. From the New York Times’ story, we learn that she was an undergraduate at the University of Pennsylvania’s Wharton School. She later claimed to have needed and had difficulty obtaining financial aid at Wharton, but there is no proof she ever applied or qualified, especially in light of the fact that her father was a Wall Street executive for more than three decades, including time at Goldman Sachs and Merrill Lynch. At school, she was awarded a place on “Fast Company’s 2011 list of the 100 most creative people in business.” That’s not the only such list that included her; accolades piled up for the entirety of her con game. Read the full story. In the competition for chief liar, she rivals George Santos.
One of the most interesting things in Javice’s story is how a massive corporation such as JPMorgan simply liked the look of her and apparently didn’t bother to investigate before investing. “But did the bank’s due diligence team include anyone who had been on financial aid, to see if the whole thing passed the sniff test?” Ron Lieber asks in the Times. “Had anyone ever filled out a FAFSA for his or her family? The bank would not comment on this or other aspects of the due diligence, other than to point to the efforts it described in its complaint.”
Sam Bankman-Fried, the disgraced and indicted chief executive of the cryptocurrency exchange FTX, represented himself as an avatar of “effective altruism,” the idea that you should make as much money as possible to support philanthropy delivering the greatest good for the greatest number. Adherents outdo each other in ostentatious non-consumption. Bankman-Fried was famous for showing up to the World Economic Forum in a T-shirt and shorts. His luxury home in the Bahamas only came to light after FTX crashed and burned. Bankman-Fried was born on the Stanford campus; both his parents teach law there. He graduated from MIT.
One of the most interesting things in Bankman-Fried’s story is his masterful self-promotion, straight out of Opposite World: He donated large amounts of money to Democratic candidates (he was the second largest donor to the Biden campaign in 2020, exceeded only by Mike Bloomberg). He lobbied Congress for cryptocurrency to be regulated (which if he had succeeded would probably have put him out of business much sooner). He painstakingly cultivated a public image as the ethical avatar of cryptocurrency. It look a long time to expose him as essentially the proprietor of a very costly Ponzi scheme. The Wikipedia article about him is rich with interesting links.
Elizabeth Holmes is headed for prison now, sentenced to 11 years for the epic fraud she perpetrated by convincing tons of top-tier investors that she’d invented an affordable streamlined system to test for many medical conditions with just a drop of blood. She descended from wealth (and its downside; her father had been an executive at Enron). She dropped out of Stanford to pursue her entrepreneurial ambitions, convincing the dean of the School of Engineering to join the board of her project, Theranos, thereby attracting venture capitalists and other supporters, including former Secretary of State George Schultz. She was ranked 110 on the Forbes 400 list in 2014, lauded as the youngest self-made female billionaire. Theranos was then valued at $9 billion (having raised over $400 million from investors) without having released a single useful product.
Holmes too cultivated a careful public image, this one modeled on Apple’s Steve Jobs (for instance, she always wore a black turtleneck), deepening her voice to command respect. I recommend her Wikipedia page too.
In The Camp of Angels of Freedom: What Does It Mean to Be Educated? was published last week. (You can find a video of the launch here.) I wrote the book for many reasons, including how alarmed I am at the way social goods (including higher education) are being converted to profit centers. Everyone wants to go to Harvard or Yale or Stanford, but elite schools keep inflating their endowments and exclusivity by charging massive tuition and turning away something like 97 percent of applicants, triggering a feeding frenzy of competition. This excerpt from part two of my book describes my aims:
I have an agenda in writing this book. I want us to prevent and heal the damage that credentialism—the certainty that academic qualifications are the best measure of ability—does to many people who lack college degrees. I speak for openness, awareness, and respect. I don’t want to see human potential wasted, skill and knowledge squandered, people who have a great deal to contribute overlooked and devalued because they haven’t been certified by an institution. I want to see the institutions that benefit from treating knowledge as their sole province held to account and reformed, especially those heaping up vast fortunes by making access ever scarcer and more expensive. I want all people to be granted the same freedom to pursue their chosen paths to knowledge and to be respected for their skill and wisdom whether or not they were acquired in an educational institution.
I describe how college degrees are widely seen as tickets to fortune, and how that isn’t true for everyone. I write about the college admissions scandal of 2019, demonstrating what wealthy parents will do to buy their children blue chip diplomas. I write about who gets in and who drops out and why so many elite institutions cultivate complacent self-regard, as when students believe that they earned their places strictly on the merits, despite benefiting from preferences such as legacies, close connections with admissions deans, and the generous donation to Harvard that eased mediocre student Jared Kushner’s path to admission. When students nowadays are asked what college means to them, all those interviewed by The New York Times “believed that college is primarily for gaining a credential to get a job or admission to graduate school rather than mostly for learning about oneself and how to be an adult.”
It all adds up to a class-culling system that amplifies privilege and devalues those who lack it. It is fueled by cozy assumptions about wealth and entitlement that make people like these three remarkably successful at exploiting the automatic presumption of virtue that attaches to associating with other privileged people and merely claiming to make the world a better place. Shame on these A-list fraudsters and shame on everyone enabling them.
A lot of things need correcting about this society, but I argue that one of the chief changes needed is to stop issuing free passes to grifters whose proximity to the right schools, associates, and images has granted them one. There’s much more to In The Camp of Angels of Freedom, including paintings and memoir. I’ll be blogging about it going forward, and I also hope you’ll want to read it for yourself and find out.
Carol Bebelle, “2020 Blues.”
Order my new book here: In The Camp of Angels of Freedom: What Does It Mean to Be Educated?