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TPG Growth Founder Among Financiers Charged in College Bribery Scandal
William McGlashan, who founded TPG's growth equity engine, was among those charged on Tuesday with paying bribes to get their kids into specific colleges.
The founder of TPG Growth was among dozens of people charged by federal prosecutors in an alleged $25 million college admissions cheating scandal that has ensnared prominent financiers and Hollywood actors, among others.
TPG said on Tuesday evening that it had placed William McGlashan, who is a managing partner at TPG Growth and co-founded The Rise Fund, a social and environmental impact fund, on indefinite administrative leave, effective immediately, “as a result of the charges of personal misconduct” against him.
McGlashan was among those accused of paying bribes to facilitate their children's admission to colleges including Yale University, Stanford University, the University of Texas, and the University of Southern California, among others, court documents show. The defendants, who also included a former chief executive of PIMCO, were charged with conspiracy to commit mail fraud and honest services mail fraud in the U.S. District Court of Massachusetts on Tuesday.
Some of the defendants allegedly bribed college entrance exam administrators to help students cheat on those entrance exams, either by providing the students with correct answers or by posing as the student, according to court documents. Other defendants allegedly bribed college athletic coaches and administrators to designate their children as athletic recruits, regardless of whether they actually played the sport they were recruited for, the documents show.
William Rick Singer — whose company, Edge College & Career Network, was behind the alleged activity — pleaded guilty on Tuesday to charges including racketeering conspiracy, conspiracy to defraud the U.S., and obstruction of justice, according to the Wall Street Journal.
The payments were allegedly funneled through a purported charity, the Key Worldwide Foundation, the documents show. Singer, who also served CEO of the purported charity, was one of three cooperating witnesses involved in facilitating the college entrance exams and athletic recruiting who helped the FBI to charge several of those involved, according to the court documents.
McGlashan is not the only financier alleged to have participated in the scheme, according to court documents.
Gordon Caplan, the co-chairman and partner in Wilkie Farr & Gallagher's private equity practice; Manuel Henriquez, founder and chief executive officer of venture capital firm Hercules Capital; Douglas Hodge, former chief executive officer of PIMCO; Bruce Isackson, president at WP Investments; John Wilson, president and CEO of Hyannis Port Capital and a trustee of the Franklin Funds at Franklin Templeton; and Robert Zangrillo, founder and CEO of venture capital firm Dragon Global were also implicated in the scheme, according to the court documents.
McGlashan allegedly conspired to bribe Donna Heinel, the senior associate athletic director at the University of Southern California, to facilitate his son’s admission as a recruited athlete, according to the documents. One of the cooperating witnesses allegedly created a fake athletic profile for McGlashan’s son. Heinel, who along 11 others was charged in a related indictment with racketeering conspiracy, did not respond to a request for comment in time for publication.
While McGlashan’s son’s high school did not have a football team, the profile showed that he went to a football kicker camp and that he wanted to be recruited as a punter, the court documents show. The profile allegedly included Photoshopped images of McGlashan’s son.
In a recorded telephone conversation with McGlashan and one of the cooperating witnesses, McGlashan, called the profile “totally hilarious” and said “I love it. I love it” upon hearing that the witness had concocted a similar profile for another applicant, according to the documents.
McGlashan was also involved in the testing scheme, according to the documents: he allegedly paid $50,000 for the cooperating witness to correct his son’s ACT exam in 2017.
McGlashan also serves on a number of corporate and nonprofit boards, including Brava, Common Sense Growth, e.l.f. Cosmetics, and Fender Musical Instruments, the site shows. He also serves as a member of the Stanford Graduate School of Business Advisory Council, according to TPG’s website. Jim Coulter, co-CEO of TPG, has been named interim managing partner of TPG Growth and The Rise Fund and will lead all investment work for both going forward, TPG said in the statement.
Hodge also allegedly agreed to use bribery to help two of his children gain submission to the University of Southern California, court documents show.
His daughter’s 2008 application to Georgetown University allegedly indicated that she had won multiple United States Tennis Association tournaments, despite her having never played a match with the association, according to the court documents. Her application was reviewed by the school’s tennis coach, Gordon Ernst, who allegedly rated her admission to the school as “likely.” She never played tennis for Georgetown, according to court documents. Ernst, one of the 11 people charged along with Heinel in the related indictment, did not respond to a request for comment in time for publication.
Hodge’s younger daughter’s application to USC was also allegedly embellished, with fake soccer accolades. She was accepted to the school in 2013, while Hodge, in return, allegedly paid the purported charity $50,000 and the college counseling business $150,000, the court documents showed.
Isackson, president at WP Investments, along with his wife, Davina Isackson, allegedly engaged in both schemes as well. They allegedly had a fake recruitment profile featuring their older daughter created and paid $250,000 to the foundation after their daughter was accepted to UCLA, according to court documents.
They allegedly engaged in the testing scheme with their younger daughter in 2017, according to the court documents. Their daughter was also allegedly recruited for the University of Southern California as a rower, despite her not being involved in the sport, the documents show.
Caplan allegedly donated $75,000 to Key Worldwide Foundation in November or December 2018 to have one of the cooperating witnesses purport to proctor his daughter’s ACT exam and then correct it after she finished.
A spokesperson for Isackson declined to comment. Spokespeople for Caplan, Henriquez, Wilson, and Zangrillo did not immediately respond to phone calls seeking comment.