The Rancho Santiago Community College District Foundation’s controversial consulting deal with Saudi Arabia appears to be at a standstill.
While district officials haven’t responded to questions about the status of the consulting work, there are indications that little to no work has been done.
For one thing, a joint venture between the foundation and its Saudi partner in the deal, Al Khaleej Training and Education, hasn’t yet appointed members to the partnership’s board of directors, according to the foundation’s attorney, Robert Feldhake.
Meanwhile, recent news reports show that other colleges pulled out of their consulting agreements to provide support to Saudi technical colleges. And the Colleges of Excellence, the Foundation’s Saudi government client, has been under a Saudi corruption investigation, according to The New Arab, a London-based news website.
The reason why the Saudi government would strike up a partnership with a somewhat obscure Orange County community college, along with many other institutions of higher learning, is that the country is facing a youth unemployment crisis. Nearly 30 percent of Saudis between 15 and 25 are without a job, and the primary culprit, according to many, is a substandard education system.
So the country has reached out to Western institutions for help. In recent years, universities in the UK, Canada and the U.S. have contracted with the country to help improve a technical schools system that can prepare the country’s burgeoning workforce. It’s a business venture that comes with promises of millions of dollars in profit for the colleges.
But many of these ventures, including the one involving Rancho Santiago, have faced pushback from local residents and faculty who abhor the idea of doing business with a country that has a terrible human rights record. And for many colleges, the profits have failed to materialize or, in some cases, have turned into losses.
One of the biggest problems is student enrollment, which has been far lower than expected. Officials with Algonquin College in Canada earlier this month said Saudi government misled them in regards to how prepared students would be to enter the colleges. Students “dropped out of their foundation year in droves” and were unprepared for school, the Ottawa Citizen reported.
Another provider, TQ Education and Training, a subsidiary of the UK-based publishing conglomerate Pearson, backed out of its venture to provide consulting for three technical schools in the Middle Eastern kingdom due to low enrollment. Pearson is now in a “legal dispute” with the Colleges of Excellence, according to the Education Investor, a magazine covering the business of education.
An expert involved in the Pearson deal warned that UK colleges who partner with Saudi Arabia on its technical schools could “go bankrupt.”
However, Rancho Santiago officials say their deal with Saudi Arabia exposes them to minimal liability. Costs for the joint venture not covered by revenue are being funded by Al Khaleej through a loan from the company, contract documents state. But even if the deal collapses, Feldhake insists that the joint venture agreement states that the district’s foundation won’t be liable for the debts of the joint venture, which is a separate company organized in Saudi Arabia.
The foundation’s liability is limited to its $13,500 contribution to the joint venture, Feldhake said. But that doesn’t include costs the foundation spent setting up the deal, including over $25,000 paid to Feldhake’s firm last year, invoices show.
Meanwhile, the finances of the joint venture remain a mystery. The partnership was supposed to include a first-year budget attached as an exhibit to the contract. But the foundation’s board of directors approved it without the budget attached. Feldhake says the foundation is still waiting on the Colleges of Excellence for the budget.
While the controversy has raged, a consultant with longtime connections to Rancho Santiago Chancellor Raul Rodriguez has been paid significant amounts of money. As of last August, Christopher Mackie and his firm fiveDLearning received $202,562 in salary and consulting fees from Al Khaleej, according to an invoice obtained by Voice of OC. A separate line item indicates another $132,179 was paid to someone named “Chris.”
The faculty association’s president Barry Resnick had described the contracting as cronyism because the foundation didn’t put the work out to bid.
Rodriguez insisted at a Rancho Santiago Board of Trustees meeting last June that Mackie hasn’t made an exorbitant amount of money working for the district.
“The guy hasn’t gotten rich from working on our projects, I’ll tell you that much,” Rodriguez said.
Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek