We stumbled across a very interesting article in the Des Moines Register that discusses the methods public universities’ alumni associations (in this case, the University of Iowa and ISU) use to obtain and sell student data.
From the Des Moines Register:
Last year, representatives of Bank of America sat down to negotiate a deal that would guarantee the company access to the home addresses, phone numbers and e-mail addresses of University of Iowa students and parents.
But they didn’t deal directly with school officials. Instead, they talked to representatives of the school’s privately run alumni organization.
The two eventually signed a confidential credit card marketing agreement in which the bank agreed to pay the alumni association an undisclosed amount of money.
The alumni association then signed a related contract with the university guaranteeing the association – and, by extension, Bank of America – access to publicly owned databases of information on students, parents and fans who attend football and basketball games.
It was a roundabout way of doing things, but it’s an approach Bank of America and other credit card companies have used at many U.S. schools. It enables some of the world’s largest financial institutions to keep secret the amount of money they pay to use the assets – and even the student athletes – of public universities.
The alumni associations say that because they are private, nonprofit corporations, they’re not subjected to public-disclosure laws that would otherwise force them to reveal their contracts with Bank of America. With the associations acting as a conduit between public schools and Bank of America, the money that changes hands as the banks gain exclusive access to a campus remains largely hidden from view.
Robert Manning, a professor of consumer finance at the Rochester Institute of Technology in New York, calls that process a form of legalized money laundering that is intended to obscure the flow of cash between public institutions and private corporations.
The Register claims that the deals give information and access to Bank of America that goes beyond what the general public gets.
For example, a memo of understanding between the U of I and its alumni association states that in connection with the credit card program the school “may, from time to time, disclose to the association” both public information and unspecified “non-public information.” It goes on to say that the university must provide, if asked, updated addresses and phone numbers of students and parents for use in Bank of America’s credit card marketing program.
The U of I’s current contract with Bank of America calls for the athletics department to give the bank access to its electronic e-mail list
The Register also reports that the University itself benefits from the Bank of America relationship through donations from the Alumni association, including $20,000 annually to help pay for “credit card education and counseling for students.” Cute.
University data deals shroud money [Des Moines Register]