Some Interesting Details on the Wright State Case

In yesterday’s post, I discussed a scandal that emerged involving Wright State University and a local defense contractor, UES. The latter apparently used WSU as a vehicle under which UES could hire a foreign worker, Satya Ganti, without worrying about the H-1B cap, with the added bonus that the legal wage requirement, being for an academic, could be lower.

A fellow academic researcher called my attention to the fact that a number of documents related to the case were posted by the Dayton Daily News. Though most involve things like letters to various administrators, informing them that they are being placed on leave while the scandal is investigated, there also are documents pertaining to the hiring of Dr. Ganti. These turned out to be interesting reading.

Before continuing, I wish to stress that I am not saying that any laws or regulations were violated in the Ganti case. On the contrary, readers who know my writings well will recall that I constantly point out that most abuse of H-1B and related programs is perfectly legal, due to gaping loopholes. There may or may not have been illegalities here, though there definitely seems to be a gray area, as you’ll see.

The documents show that UES had a project that needed to be done, and it wanted to hire Ganti for it. However, Ganti, a 2012 PhD at WSU, had come to the end of her OPT period, which allows foreign students to work for a while in the U.S. after they earn their degrees. Thus she needed to be hired as an H-1B.  In fact, her OPT time had expired, but the WSU people noted that there is a 60-day grace period.

But since the H-1B visa program is greatly oversubscribed, there was no guarantee UES could get a visa for Ganti — unless she were hired through WSU, as academic institutions are exempt from the visa cap.

So, Ganti was hired for a position for which WSU was the nominal employer, but in which she would basically report to UES. One of the WSU memos wondered who should be Ganti’s listed supervisor at WSU. The reply from another WSU person suggested a name, but then added, “Obviously we know that the employee [Ganti] will take their day-to-day direction from their supervisor on the customer side [UES].” In the contract, in which WSU is referred to as the Seller, the Customer, UES, specifies that the job funded by the contract is required to be filled by Ganti.

So who is the real employer here? This is the gray area, something that USCIS policy people have struggled with for some years now. I know that some readers will think that UES is obviously the employer, with the university being a “launderer,” but it may not be quite that simple. It may have been planned, for instance, that Ganti would write research papers, based on her work for UES but published under the university’s name, in which case she would interact with WSU researchers who would coauthor the papers.

Or, of course, it may be that UES simply wanted to circumvent the H-1B cap and get a break on wages.

But what was in it for WSU? The documents show an Overhead item in the amount of $20,000. If a university is awarded a grant or contract for $x, it adds a percentage to that figure, ostensibly to offset expenses incurred in the project in question. Ganti would be using electricity, the university might have to buy a new desk for her, and so on, hence the Overhead charge. In practice, universities simply use Overhead as “profit centers.” In this case, the university apparently charged UES a $20K “tax” on top of Ganti’s $65K salary.

Note by the way that that made her effective cost $85,000, which is more in line with what UES would have to pay a comparable American. But as I always point out, “comparable” means young, and the typical American with those qualifications would command much more. And note that the WSU documents point out that all WSU workers are exempt from Social Security tax, whereas UES would have to pay that tax if it hired a worker directly.

By the way, Ganti’s pay of $65,000, low by industry standards, was actually listed at Level III in WSU’s application for the H-1B visa. Since the vast majority of visas are awarded only at Levels I and II, one might think that those at Level III are not underpaid. But again, her pay was judged at an academic-sector level, even though she was doing industry work.

To understand further why WSU was likely anxious to land this contract, it is vital to realize the huge role that extramural funding plays in U.S. universities. Professor Sundaram Narayanan, who was recently fired for his role in a similar H-1B scandal, was also lauded for his role in founding the WSU research institute in which Ganti was hired. The institute has grown tremendously, bringing in lots of funding, which in turn makes it in line for even further funding from the state.

The 2012 report, for example, shows the enormous importance of funding. Note that Dr. Narayanan, then just a faculty member, had grants of sizes $1.5 million from the Air Force, $750,000 from the state employment department, another $500,000 from the Air Force, and two “smaller” grants of $165K and $100K — all acquired just within one year. His prowess as a “rainmaker” likely played a role in his 2013 appointment as Provost, at a salary of $340K/year. Had he not had this fall from grace, university presidencies and so on at even higher pay, maybe even prestigious high-level government positions, say Undersecretary of Commerce, would have been his in the coming years.

Finally, one of the WSU documents suggests deceptive behavior is commonplace:  “Please note: if new employment is for research position & he/she/you decide to apply for Permanent Residency (aka ‘green card’) the job title needs to sound permanent. IE – titles with “Postdoctoral or Postdoc”…won’t be approved for green card applications.” In other words, conjure up a fake title so as to fool USCIS. Having observed the H-1B/green card process closely for more than 20 years, I can tell you that such chicanery occurs everywhere, in all the big mainstream firms, and yes, in academia too.