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Slamming Gates
Is Bill Gates' plan to pay tuition for minority students immoral and illegal?

By Roger Clegg

Bill Gates has announced that his foundation will donate $1 billion over the next 20 years to establish the Gates Millennium Scholars Program.

The program, which begins in the fall of 2000, will provide 1,000 new students each year with scholarships for undergraduate and graduate study. Support is available for advanced degrees in math, science, engineering, education, and library science. Awards will be renewed annually and recipients are expected to maintain a cumulative grade-point average of 3.0 or better.

So far, so good, but here's the problem: White students need not apply. Asians are eligible but are apparently less welcome than other minorities, since the program is aimed at increasing the number of math and science students in "underrepresented" groups-blacks, Hispanics, and Native Americans. The United Negro College Fund (UNCF) will administer the program, in collaboration with the Hispanic Scholarship Fund and the American Indian College Fund.

It makes no sense for Gates to limit the scholarships to particular races and ethnicities. In announcing the program, he attempted to justify the discrimination by saying that the computer industry is "not fully representative." But there is no reason to insist that every ethnic group have the same percentage of butchers, bakers, tailors, mathematicians, and scientists.

An individual student who needs money for college should not be excluded just because he has the same skin color as some students who don't need help. And if there are a disproportionately large number of Hispanic students who would be good chemists but can't afford the tuition, then they will receive a disproportionate amount of Gates' money-without turning away disadvantaged white students.

It is illogical for Gates to say that there is such a critical need for talent that we cannot afford to exclude anyone, while deliberately shunning thousands of white students. It is particularly bizarre to advocate racial and ethnic preferences in the hard sciences. Perhaps a cosmetics marketer needs a "diverse" sales force, but electrons do not know skin color or ancestry.

The legality of Gates' scholarship program will hinge on how cleverly and carefully his lawyers structure the flow of foundation money to the UNCF, the students, and the colleges. Each entity that handles the money will face some legal risk.

Colleges and universities may not discriminate on the basis of race or national origin if they are state schools, because of the equal protection clause of the 14th Amendment. In addition, Title VI of the Civil Rights Act of 1964 bars schools from discriminating if they get federal money. The 14th Amendment and Title VI are coextensive in the racial discrimination they ban, and together they cover the vast majority of higher education.

These prohibitions can create problems for a school-even one that does not originate a discriminatory program-if it becomes too enmeshed in handling money from someone who does. For instance, if the school agrees to provide Gates with a list of deserving students that's divided by race, then it's asking for trouble.

The key decisions in this area were handed down by the Warren Court. In Pennsylvania v. Board of Directors of City Trusts (1957), the justices held that a state agency violated the 14th Amendment when it enforced the racially discriminatory terms of a private will. In Evans v. Newton (1966), the Court prohibited a city in Georgia from honoring a will by establishing a "whites only" public park. Stressing the public nature of a park, the Court declared that the 14th Amendment "bars a city from acting as a trustee under a private will that serves the racial segregation cause."

And in Burton v. Wilmington Parking Authority (1961), the Court concluded that a state agency violated the Constitution by leasing property to a restaurant that excluded blacks. Here the Court stressed the indirect financial gain to the state from the restaurant's business. Likewise, schools-which also have a public nature-will be the indirect beneficiaries of the lucre thrown around by Gates.

Gates' foundation and the UNCF could lose their tax-exempt status if they discriminate. Remember the Court's 1983 decision in Bob Jones University v. United States? The justices upheld the Internal Revenue Service's revocation of two schools' tax-exempt status because each engaged in racial discrimination. Bob Jones University refused to admit students in interracial marriages or who advocated interracial marriage or dating. Goldsboro Christian Schools, citing doctrinal reasons, "for the most part accepted only Caucasians." The IRS was correct to revoke the schools' exempt status, reasoned the Court, because "racial discrimination in education violates a fundamental public policy. . . . It would be wholly incompatible with the concepts underlying tax exemption to grant the benefit of tax-exempt status to racially discriminatory educational entities."

In addition, 42 U.S.C. §1981 prohibits racial discrimination in private contracting. If there are enough strings attached to the Gates scholarship money as it goes from one hand to another, it may amount to a legal contract.

In Runyon v. McCrary (1976), which involved a racially exclusive school, the Court held that §1981 "prohibits racial discrimination in the making and enforcement of private contracts." This reading of §1981 was almost certainly wrong as the law was originally written, but Congress amended the statute in 1991 to clarify that it does indeed protect contractual rights "against impairment by nongovernmental discrimination."

If a white student completes a scholarship application and Gates refuses to consider it, then the student will have suffered what the Runyon Court called "a classic violation" of §1981, namely a refusal to "offer[] services on an equal basis to white and nonwhite students."

Some will argue that it should be up to Gates, not federal law, to decide how his money ought to be spent. It may be silly and even immoral for Gates to discriminate in this way, but it's his money. If he thinks that the world will be a better place if he can pump up the percentage of black and Hispanic electrical engineers, why should federal law stand in his way?

To which the response is: Where were these critics when the Reagan administration was condemned for supporting Bob Jones University or when §1981 was butchered in Runyon? Were they defending the private sector during the passage of the Civil Rights Act of 1964?

One can certainly defend Gates' right to discriminate in the way he spends his money. Some may find that argument more persuasive than a belief that racial discrimination is so offensive that it should be forbidden even in private transactions, including employment, education, contracting, and donations.

But if one accepts that it is all right for Gates to discriminate against whites, then one shouldn't object if a rich David Duke wants to discriminate against blacks. That's something that those defending the Gates scholarships should keep in mind.

Derek Bok and William Bowen, the former presidents of Harvard and Princeton, respectively, have written a book defending racially preferential admissions policies, in which they argue that the "institutional autonomy" of universities and colleges should be respected. In other words, they want to be allowed to discriminate against whites and Asians. But of course they don't want to repeal the Civil Rights Act of 1964 or the 14th Amendment. Rather, they favor a regime where discriminating against some groups (whites, Asians) is permissible, but discrimination against other groups (blacks, Hispanics) remains flatly prohibited.

This would literally "deny . . . the equal protection of the laws," to quote the 14th Amendment. It shows that what the left wants is not freedom and autonomy for everyone, but-no surprise here-a set of laws that allows what the left wants done and prohibits what it doesn't.

Perhaps Gates' lawyers have figured out a way through the various U.S. laws that prohibit racial discrimination. But these legal issues are only secondary. Lawful or not, it is unfortunate that Gates has put political correctness above human fairness.

Many white people do not happen to be billionaires and are as deserving of financial aid as anyone else. Diamonds in the rough come in every color.

Roger Clegg is general counsel of the Center for Equal Opportunity, a D.C.-based think tank. He can be reached at comment@ceousa.org. "Discriminating Eye" appears monthly in Legal Times.

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Page Updated Mon Nov 8, 1999 3:00am EST