One of Silicon Valley’s most prominent private equity investors — and one of the tech sector’s leading proponents of how to invest ethically and for social impact — has been forced out of his firm in the wake of the explosive college admissions scandal.
Prosecutors charged Bill McGlashan, a founder and managing partner at TPG Growth — which has made landmark investments in companies like Uber and Airbnb — on fraud allegations for trying to engineer the admission of his son to the University of Southern California.
What is particularly damaging for TPG is that McGlashan has positioned himself as a leading voice in Silicon Valley for social responsibility. In addition to overseeing TPG’s late-stage growth investing arm, McGlashan has partnered with other conscious leaders like Bono and Laurene Powell Jobs at The Rise Fund, a TPG investing arm that tries to make the world a better place through investments in things like dairy farms in India.
It’s a major shake-up at one of the most influential investing firms in Silicon Valley. McGlashan’s roles at TPG Growth and The Rise Fund would be filled for now by Jim Coulter, TPG’s co-CEO.
TPG said Tuesday that it had placed McGlashan on “indefinite administrative leave effective immediately.” But on Thursday, a permanent rupture was announced — although TPG and McGlashan sharply disagreed on who made the decision for their split. Two statements, arriving four minutes apart, painted different pictures.
“Bill McGlashan has been terminated for cause from his positions with TPG and Rise, effective immediately,” a TPG spokesperson said. “After reviewing the allegations of personal misconduct in the criminal complaint, we believe the behavior described to be inexcusable and antithetical to the values of our entire organization.”
Here’s how McGlashan put it to TPG’s board of directors, released by his own spokesman:
“Though it breaks my heart to write this, I feel it is now the right thing to resign from The Rise Fund and TPG Growth,” he said. “The progress we have made is too important for you to be distracted by the issues I am facing personally.”
The sweeping charges against 50 people offer a window into the world of high finance and seem to reveal a system where the wealthiest Americans can play by their own set of rules. And it comes at a time when America’s concentration of wealth is under the microscope — confirming many of the suspicions that the college admissions process can be lobbied and gamed, just like other arenas that the wealthy quietly shape.
Schools like these admit single-digit percentages of the thousands of students that apply each year. But despite generous financial aid programs, students tend to be disproportionately wealthy — and they need to be, given that tuition alone can cost upward of $50,000 per year. Those families are also able to better master the college admissions system with legacy histories, expensive test prep, and, apparently, special “favors.”
At the center of the scandal are schools like Stanford University, where athletic coaches allegedly were targeted with bribes to guarantee the admissions of the elite’s children. Others in finance and tech charged in the case are Bob Zangrillo, a Miami-based venture capitalist at Dragon Global; Manuel Henriquez, the head of Hercules Capital; and John Wilson, a Boston-based private equity investor.
But the biggest name by far is McGlashan, who sits on the board of companies like Hollywood powerhouse Creative Artists Agency.
Prosecutors say that McGlashan was one of dozens of parents who bribed intermediaries to “facilitate” his child’s entry to a top-tier school, in this case USC. McGlashan allegedly agreed to make a $50,000 payment to doctor his son’s ACT test performance.
McGlashan also allegedly made a $250,000 donation to USC in order for his son to enter through the school’s “side door,” according to the charges, by creating the impression that he was a potential recruited kicker or punter for the school’s football team — all thanks to Photoshop. This was all accomplished through mail fraud, prosecutors say.
“I’m gonna make him a kicker/punter and they’re gonna walk him through with football, and I’ll get a picture and figure out how to Photoshop,” William Rick Singer, the college prep adviser at the heart of the scandal, allegedly told McGlashan in August 2018.
“He does have really strong legs,” McGlashan told Singer. “Maybe he’ll become a kicker. You never know.”
“Pretty funny,” McGlashan would later add. “The way the world works these days is unbelievable.”
On that, he has a point.
This article originally appeared on Recode.net.