Selling Out: a Textbook Example

Insiders say kickbacks and payoffs have tainted both the industry and the professors who profit

By THOMAS BARTLETT
The Chronicle of Higher Education
June 27, 2003

James Williams received his letter last fall. "Dear Professor," it began. The form letter went on to offer him $4,000 for reviewing an introductory history textbook. "I thought, 'That's an interesting amount of money,'" says the associate professor of history at Middle Tennessee State University.

Mr. Williams filled out a form online, as the letter requested. A few days into the application process, however, he began to feel uncomfortable. When it became clear that in order to receive the money, he would have to require his students to buy the book, he backed out. He had "several ethical issues" with accepting money to adopt a textbook, he told the company.

"I could come to no other conclusion," Williams says, "than the reason they do this is to sell expensive books to large numbers of students, and the professor would be bribed to do it."

His colleague, Amy Staples, received the same letter. The assistant professor of history had similar reservations. But the lure of the $4,000 -- "twice what I make in a month take-home pay," she says -- was too strong. "I bought a house in June, and I needed a washer and dryer. I had decided to use a textbook and -- poof! -- all the stars aligned and I got this letter in the mail."

When asked whether she understands that she was adopting a textbook for money, Ms. Staples pauses for a moment. "Yeah," she says.

The average college student spends $450 a year on textbooks. That student coughs up the money assuming that the books listed as "required reading" have been selected by a professor concerned with what's best for the class.

Yet what goes on behind the scenes between professors and publishers might make students question whether anyone has their interests at heart. Interviews with top publishing executives, textbook sales representatives, and professors across the country reveal a pattern of ethically questionable financial arrangements between deans and publishers, of kickbacks masquerading as royalties, even of professors' being paid thousands of dollars to adopt a book.

"To be blunt, you have to find a way to buy off the professor," says one sales representative at a large textbook company.

As the industry has become more competitive, sales representatives are feeling the pressure. Their jobs often depend on the number of "textbook adoptions" they win. That's industry-speak for persuading a professor to require a book. Big publishers like Thompson Learning, McGraw-Hill Education, and Pearson Education dominate the $6-billion market, while smaller players like Houghton Mifflin, W.W. Norton, and Wiley Publishing fight over what's left, carving out niches in certain disciplines.

But the publisher that is attracting the most attention is not among those giants. It's a tiny California company with just a handful of books in its catalog. North West Publishing, the source of the letters to Mr. Williams and Ms. Staples, has been offering thousands of dollars to professors who adopt its books. Some argue that such an approach is not much different from what larger publishers do -- just less subtle.

"They've pushed the envelope one notch further from where it already was," says Robin Hahnel, a professor of economics at American University.

By pushing that envelope, North West has also forced professors to ask themselves which comes first -- their students or their wallets.

Strings Attached

Francine M. Butler's qualms about North West's offer were overcome by the desire to pay off her back taxes. "I failed an audit with the IRS and this caught me up," says the professor of economics at Grand View College. "They made me do it by the pure profit angle."

For Julie L. Smith, too, profit was the deciding factor. "I had a student-loan payment come due," says the assistant professor of history at the University of North Carolina at Pembroke.

To Gerhard Grytz, an adjunct professor of history at Idaho State University, $4,000 seemed like a hefty sum, considering his $26,000 salary. "I thought, 'Oh, that's a lot of money.'" Like the others, he adopted the book.

Professors who took the deal say they knew they were being paid to use North West's textbooks. Ms. Smith says she understood that the payment had nothing to do with her review of the book. That bothered her, but not enough to hold her back. "On that day, a thousand dollars sounded good," she says. Now she wishes she had thrown the letter away. "I don't think it's right," she says. "It sounds like a kickback: Here, use our book and get our money."

Ms. Butler concurs. " 'Under the table' is a good phrase to describe it," she says. "Maybe I was lured by the money, and maybe other people were, too. But I've only done it once, and that's it."

Likewise, Mr. Grytz says he regrets his decision. He realized only after he had adopted the book that there was something suspicious about the offer, he says. "I thought, 'This might be a scam -- you adopt the book, you get money.'"

Other professors, like Anna Bates, an assistant professor of history at Aquinas College in Michigan, say they were aware of North West's intentions from the start. "I went into this knowing that it was a marketing ploy," she says. When asked why she decided to use the book anyway, she answers, "Everybody needs cash. That's why I did it."

North West denies that the payments are tied to textbook adoption. As proof, Jason James, the textbook-review manager, said he could provide the names of professors who were paid for reviews but did not adopt a book. Despite repeated requests, he never did turn over such a list. The company has refused to answer other questions about its business practices.

In one sense, North West's offer is unusual. Major publishers don't send form letters to professors. Instead, they send sales representatives. And they don't offer thousands of dollars, just hundreds.

Unlike North West, major publishers will pay for reviews -- not for publication, they are used internally by the companies -- even if the professors don't adopt the books they are reviewing. But the reason for the payments is the same: The companies hope to convince professors to use a certain textbook. A marketing specialist at a large textbook company, who asked not to be named, acknowledges that the primary reason for paying a professor to write a review is to get that professor to adopt the book.

Daniel Bartell, vice president and national sales manager at W.W. Norton, says the real purpose of textbook reviews is no secret in the industry. "You'll pay $250 or $300 for a review, and that doesn't always lead to an adoption," he says. "It's not quid pro quo, but they'll give you a closer look."

Mr. Hahnel has written his share of reviews. He says he has been paid "two, three, four hundred dollars" to review textbooks over the years. But he doesn't kid himself that the publishers were interested in his insights. "I think publishers take it and put it immediately into the circular file," the economics professor says. "We know it's really just a come-on to get us to adopt the book."

He criticizes what he calls "the commercialization of supposed academic integrity." Yet he has no compunction about accepting payments for reviews from publishers, or about assigning books he has written -- and from which he receives royalties -- to his students, a practice that many colleges frown on. And when North West's letter arrived, offering him thousands of dollars to review and adopt their textbook, he signed up right away.

"Do I support this kind of activity on the part of this company? No," says Mr. Hahnel. "But it's not an effective way for me to change the world by turning down these people's money." He has bills to pay, he says, including "college tuition for my kids."

"I think most people are susceptible to twinges of guilt," Mr. Hahnel adds. "I'm not susceptible to those twinges of guilt."

Henry Rosovsky believes that professors who accept money to adopt textbooks should feel guilty. The former dean of the Faculty of Arts and Sciences at Harvard University, who has written about ethical questions faced by professors, sees the issue as clear-cut. "Just the way a physician should pick the best and most effective drug, the professor should choose the best textbook regardless of side payments," he says. "If they use money as a reason, even in a marginal way, then it's unprofessional conduct."

Winthrop Jordan agrees. Consequently, whenever the professor of history at the University of Mississippi requires students to buy a book he has written, he estimates his royalties and donates the amount to charity to "avoid conflict of interest." It is always wrong for professors to make money from the books they assign to their students, he says.

And that is why he is particularly upset that his name is associated with North West. The publisher's introductory history textbook was written by Mr. Jordan and Leon Litwack, a professor of history at the University of California at Berkeley, both of whom are well known in the discipline. The book had been published by Prentice Hall, but was out of print for several years when North West decided to resurrect it last year.

At first, the two professors were happy that their book might be given a new life. That happiness disappeared when Mr. Jordan started receiving e-mail messages from professors around the country asking about the money that the book's new publisher was offering professors who adopted it. "They make it clear if you don't adopt, don't bother reviewing it," Mr. Jordan says. As for professors who sign up for the deal, he says simply, "I think it's unethical."

To add to the authors' displeasure, there is some doubt about whether North West even has the legal right to publish their two-volume work, The United States, which costs $150. North West says via e-mail that it took the proper steps to obtain the copyright for the book. Wendy Spiegel, a spokeswoman for Pearson, which owns Prentice Hall, says it still holds the copyright and has turned the matter over to its lawyers. The two authors, for their part, say they have received no royalties from North West.

Behind Closed Doors

Adoption decisions are not always made by individual professors. Often, a department will decide to use one textbook in every section of a particular course. Such decisions are usually made by a panel of professors, who examine several textbooks before choosing one. While some institutions have specific guidelines about adopting textbooks, they are often vague. Many colleges have no such guidelines at all.

When trying to win these important adoptions, publishers like to tout their custom-publishing capabilities -- that is, creating a book specifically for one professor or one department. A company like Pearson can draw material from a number of its subsidiaries and combine it into one book, giving the publisher an advantage over companies with smaller catalogs. In addition, customizing a textbook makes it harder for students to sell their used copies. As a result, customized books can mean more profits for publishers in the long run.

Colleges, too, can profit from customized books.

When Virginia Tech's English department was looking for a textbook to use in its first-year composition course, the word among publishers was that the cash-strapped department was interested mostly in raising money. Whoever cut them the best deal would win the adoption. Or so went the rumor.

It was pretty much true, according to Paul Heilker, director of the first-year composition program at Virginia Tech, which has been subject to large budget cuts. Though he says the department wasn't really searching for the highest bidder, bringing in money was definitely the point. "We were looking for external revenues," he says. "That's how this thing got started. Going in it was, 'Wow, this could really help financially.'"

He says a sales representative from Pearson Longman, a subsidiary of Pearson Education, explained to Lucinda Roy, the chairwoman, that the English department could receive a royalty on every copy sold if professors were willing to write some of the content. "Longman was very interested in helping folks out," Mr. Heilker says.

This "helping out" included a 15-percent royalty on each sale of the $48 book, which meant $2,400 for the department this past year. The book will yield an even bigger return next year, when it is purchased by the more than 3,000 freshmen who will take the first-year composition course.

Ms. Roy and Pearson's spokeswoman both defend the royalty as a legitimate payment for the content that professors have added to the book; about 20 percent was written by Virginia Tech professors. But, Ms. Roy concedes, some in the department are uncomfortable with the idea of profiting from the books that it requires students to buy. And she worries that departments across the country will soon encounter "major ethical issues" as custom publishing -- already a $122-million-a-year business -- continues to grow.

"You can get publishers to offer you quite a bit more, but then you have to ask, 'What's ethical?'" she says. "What happens when there are hidden student fees in the book?"

A $30,000 Check

Pearson Longman struck a similar deal with Pennsylvania State University at University Park. This time it was economics instead of English. And rather than a royalty, it was a lump-sum payment.

In 2001, representatives of several publishers went to Penn State's campus to pitch their introductory economics textbooks. A committee of professors chose Longman's book solely on the basis of its merits, according to Robert Marshall, chairman of the economics department.

The Longman sales representatives were ushered into the office of Ronald Filippelli, associate dean for administration and undergraduate studies in the liberal-arts college. When the closed-door meeting was over, Longman had agreed to write Penn State a large check, reportedly around $30,000.

What that money was for depends on whom you ask. Ms. Spiegel, the Pearson spokeswoman, says it was for "in-kind services," including content that had been added to the book by Penn State professors, and for time spent "evaluating our course-management system." But both Mr. Filippelli and Mr. Marshall say the money had nothing to do with a course-management system. And while Penn State professors did contribute material to the book, Mr. Marshall estimates it at only about 15 percent of the content.

"We believe that, in cases where it's doable, it's not improper for the university that provides the infrastructure for the educational process to get some return on the business, so that money can be put into services," says Mr. Filippelli. When asked whether this might be called a kickback, the dean said he preferred to call it "good will."

Sometimes the payments from customized textbooks go directly to professors rather than departments. Last year, Ms. Staples, the Middle Tennessee State historian who adopted a North West textbook, made an agreement with Kendall/Hunt to publish a "reader" for one of her classes. (A reader is a collection of excerpts from various works, usually selected by the professor.) The agreement, under which she would receive $2 for every copy of the reader that was sold, required her to continue to assign it until 400 copies had been purchased by her students. The deal fell through when it turned out that Ms. Staples would be teaching fewer sections than she had anticipated.

Whether professors should receive royalties on books they didn't write is an issue on which Kendall/Hunt executives remain silent. "That's a policy I would prefer not to comment on," says Mark C. Falb, the company's owner and chief executive officer.

But others in the industry are willing to comment. "We're seeing a great deal of custom publishing where the department will include a syllabus or study-guide material, and then the department will receive a royalty for every copy sold," says a textbook executive who asked not to be named.

Patrick Kasenenko, a sales representative for Houghton Mifflin, says such payments are increasingly a part of the business. "When they're putting in something small and they want money, I don't think that's legitimate," he says. "If a professor says, 'McGraw-Hill will give me $4 per copy. Can you give me another $2?,' that's when it gets low-bally," he says. "That's when students get toasted."

Leigh Harlem, a sophomore majoring in aerospace at Middle Tennessee State, took Ms. Staples's class and says he considers her a "good teacher." But he was surprised to learn that she had received several thousand dollars from the company that published the textbook he bought. "That's a bribe," he says. "If it were a good textbook, the publisher wouldn't have to pay professors to take it."

Talk like that worries Mr. Bartell, the Norton vice president. "A number of our reps are calling me and saying this company is offering this kickback or that incentive and we need to match it," he says. He has heard, for example, of sales representatives from other companies offering professors $1,000 to customize a book. "It's turning toward professors saying, 'What can we get?' There are some real borderline questions out there.... We want to do the right thing, but you wonder how much of the wrong thing is going on."

Most of the professors who accepted money from North West, including Ms. Staples, say they now wish they had not. The lone exception is Mr. Hahnel, the American University economics professor, who says he has no misgivings about cashing his check. Even so, he hopes that money will cease to influence which books students are required to buy.

"Someone really needs to write an article that says, 'This kind of stuff was already sleazy, but look how it's gotten out of hand.'"

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