The only reason why a pedophile’s donations did not violate any MIT policy is that MIT does not have any policy to prevent embarrassing donors damaging the institution’s reputation. An independent investigation proved that many MIT executives were aware of Epstein’s gifts but they pretend they never checked Google or Wikipedia to get some information on his past. Two senior professors who helped Epstein to connect with MIT received money on their personal accounts or ventures.
The only reason why MIT did not violate any policy in accepting money from convicted sex offender Jeffrey Epstein is that MIT does not have any policy regulating donations by pedophiles and other criminals.
MIT has just published the 61-page Report Concerning Jeffrey Epstein’s Interactions with the Massachusetts Institute of Technology. Surprisingly, it received very little media coverage, maybe because it comes four months after the scandal that led to the resignation of MIT’s Media Lab director, Joy Ito, and five months after Epstein’s controversial suicide. However, the independent investigation conducted by the law firm Goodwin Procter LLP provides a unique understanding of how affluent criminals can manipulate respected institutions to whitewash their reputation.
The investigation assessed what many newspapers had already revealed: Between 2002 and 2017, Jeffrey Epstein made ten donations to MIT totaling $850,000. Nine out of the ten donations were made after his 2008 conviction for procuring for prostitution a girl under 18, and they supported the Media Lab ($525,000) or Professor of Mechanical Engineering Seth Lloyd ($225,000). Epstein’s donations were far from secret: The financier visited the MIT campus nine times between 2013 and 2017, where he met senior MIT professors and executives; he also took credit for his supposedly anonymous grants in press releases.
Epstein’s connection with MIT was based on his personal relationship with two professors, Joy Ito and Seth Lloyd. The internal investigation by Goodwin Procter sheds light on two crucial details: They were both perfectly aware of the seriousness of Epstein’s criminal conduct, and they both enjoyed personal benefits in addition to research funding. Professor Lloyd met Epstein in 2004, and he eventually visited Epstein in Florida after a 2008 conviction. Lloyd was also invited to Epstein’s notorious private island, where the financier allegedly committed many of the sexual abuses he was accused of. Lloyd, the report states, spent “only a few hours for lunch” on the island. What is more relevant is that in 2005 or 2006, Lloyd received “a personal $60,000 gift to support his MIT research.” Lloyd confessed to Goodwin Procter’s lawyers that he deposited the gift into a personal bank account and did not report it to MIT.
In 2012, Epstein was disappointed that his reputation following his conviction was so bad that other academic institutions (like Harvard) were returning his offered donations. He asked for Professor Lloyd’s support to test whether things might be different at MIT. He sent “two 50k tranches to see if the line jingles,” as he wrote to Lloyd in an e-mail. According to Goodwin Procter’s report, even if Professor Lloyd did not solicit these donations, “he knowingly facilitated Epstein’s plan to circumvent any possible MIT vetting process.” A few years later, in 2016, Lloyd asked Epstein for funding for his sabbatical. Epstein sent $125,000 from Gratitude America, one of his charitable foundations. This time, Professor Lloyd disclosed to an MIT office that the donation came from Epstein. Lloyd was placed on a paid leave of absence after MIT disclosed the investigation report.
Joy Ito, MIT Media Lab’s (former) director, is much more famous. What was not previously known, however, was how he first met Jeffrey Epstein. They were both at a TED conference in Long Beach, California. Ito participated in the conference, while Epstein was “barred by the conference organizers (…) and so Epstein instead met people in the hallways or in a hotel lobby.” Apparently, Ito decided that MIT’s ethical standards were lower than those of TED conference events. He was aware that Epstein’s reputation was potentially problematic, and he consulted with many influential people, including MIT Lab co-founder Nicholas Negroponte, a former Israeli prime minister, and Woody Allen.
Ito ignored his staff’s protests against accepting money from a convicted sex offender, and he cultivated Epstein as a crucial donor for both the Media Lab and MIT. It is not a trivial detail that he also received considerable personal benefits from the relationship, whose amount was much more relevant than the $60,000 that Professor Lloyd put into a personal account.
According to Godwin Procter’s report:
“Epstein funded two of Ito’s personal ventures: $250,000 in a company that was formed to commercialize technology developed at MIT, and $1 million into a $9 million private investment fund that Ito manages. Ito told us that, as of the time of our interview, both of those investments were being held in “escrow” and that he was attempting to “eject” Epstein’s money from those ventures. In January 2018, Ito also asked Epstein if he would invest $5 million to $15 million in another non-MIT fund that Ito was attempting to establish, but Epstein did not make that investment.”
The MIT Problem: Not Using Google and Wikipedia
MIT offices were completely unaware that two senior professors received money on their personal accounts or ventures by Jeffrey Epstein. However, they knew that Epstein was donating to the university. Many senior executives at MIT Corporation, the governing board of trustees that rules the institution, had the opportunity to discuss the connection between Epstein and MIT, despite the fact that they minimized the intensity of that internal debate. MIT President Rafael Reif, for example, has always denied being aware of what was going on with Epstein and the Media Lab, and he has stated that he never authorized the decision to accept Epstein’s donations. However, he signed an acknowledgment letter to Epstein in August 2012, after one of his many gifts to MIT.
“President Reif does not recall discussing Epstein prior to 2019,” the report states, and “there is no evidence that anyone brought the significance of Epstein or his crimes to President Reif’s attention at any time prior to 2019.” Anyone but Google, Wikipedia, the New York Times and the Miami Herald: Epstein’s conviction was a public news item, extensively covered by international media. After a senior team meeting in 2015, Reif wrote “Epstein – Ito” on his copy of the agenda for the April 28 meeting, but the minutes of the meeting did not reflect any conversation about Epstein or Epstein’s donations. We don’t know whether the participants omitted to take notes on such a sensitive topic or if they never touched it: They do not recall the details of the meeting.
According to his version, for over four years President Reif has never been exposed to any news regarding Epstein’s criminal records. In an August 26, 2019 email to Vice President and Secretary of the Corporation Suzanne Glassburn, Reif writes that “I don’t remember anyone saying anything about what JE [Epstein] was convicted for and served prison for . . . . I certainly remember nothing being said about minors . . . . I have never heard of the guy and his reputation before, and even after, until he got back in the news a few months ago . . . .” In the absence of any specific policy on donations from convicted sexual offenders, the decision of whether or not to take a criminal’s money apparently depends on the alleged frequency of MIT’s president’s visits to the New York Times website or Wikipedia.
Vice President Gregory Morgan, involved in a discussion regarding Epstein in 2013, was told that Epstein was a convicted sex offender and received a link to Epstein’s Wikipedia entry “although he claims he did not open it.” The report spends many pages arguing that senior MIT executives cannot be considered informed of Epstein’s past if nobody sent them an email with the full text of an article on his crimes. However, many Media Lab and MIT staffers were perfectly capable of using Google, Wikipedia, or other websites dedicated to Epstein without any external support and they raised their objections, with poor results.
Anonymity and Reputational Whitewashing
The report concludes that “MIT has no formal, written policy addressing when to accept donations from controversial donors or what processes to use in considering them. Over the years, donation-acceptance policies have been proposed and discussed, but attention to the issue has been sporadic at best.”
In a widely-commented Medium essay and subsequent New York Times interview, Harvard Law professor Lawrence Lessig defended the good faith of his friend Joy Ito and the legitimacy of educational institutions receiving money from controversial donors, as long as doing so would not compromise academic freedom and the university would not become a PR instrument. “I think that universities should not be the launderers of reputation. I think that they should not accept blood money,” Lessig argued, but if they decide to accept money from criminals, “anonymity (…) is the least a university should do to avoid becoming the mechanism through which great wrong is forgiven,” he said.
After Epstein’s May 2013 donation, corporate MIT senior members decided to keep the $100,000 and accept further gifts on the condition that each donation “be recorded as anonymous and Epstein could not publicize it.” The money came, but Epstein never remained anonymous: He repeatedly leveraged his relationship with MIT to improve his public reputation. In July 2014, for example, he even issued a press release claiming to have made a donation to MIT for art restoration that he never made. He also pretended to support specific MIT projects, violating an additional MIT condition: that donations had to be “unrestricted.” On September 16, 2014, he issued a press release titled “MIT Financier, Jeffrey Epstein, Helps Launch Revolutionary Computer Coding for Toddlers.”
Epstein was never ambiguous about his purpose: He wanted to use MIT’s respectability to whitewash his reputation as a pedophile. It proved to be such an easy job only because MIT had no procedures and apparently no interest in preventing this result.
The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.