I like a good conspiracy theory as much as anyone, but unfortunately the one about Goldman Sachs's embattled Education Management Corporation and the UVA coup isn't true. According to the theory proposed by my fellow UVA alum Anne-Marie Angelo, President Sullivan was sacked because she declined to go into business with EDMC. As Angelo writes, EDMC
wanted to make or made a bid to offer online education through UVA. From this endeavor, EMC [sic] would invest profits back into the University, helping to heal some of the University’s fiscal woes. When Sullivan was reluctant or refused to agree to the venture, key members of the Board threatened litigation related to her performance as a fundraiser for the University.
But this couldn't have happened, for several reasons:
1) EDMC has been embroiled in multiple legal proceedings, including an ongoing "multibillion-dollar fraud suit" brought by the Justice Department and four states. Along with the market-leading University of Phoenix, EDMC is a caricature of for-profit education unscrupulousness. What university, public or private, would go near EDMC given its radioactive status? Sullivan could've been cited for negligence per her employment contract.
2) EMDC doesn't provide online-education services to extant institutions like UVA: it creates and runs its own universities, most of which are online. (It has four main brands: the Art Institutes, Argosy University, Brown Mackie College, and South University.) Accordingly, it would be unprecedented for the company to offer services "through" UVA. EMDC doesn't license other university brands.
3) Angelo says an EMDC investor presentation occurred in the Charlottesville area this February or March, but the exact details are unclear. According to an EMDC press release, there were indeed investor presentations in February and March (as there are at other times of the year), but they occurred in Boston and Arizona; furthermore, they were investor presentations, not meetings with universities seeking EMDC's services.
4) The "online education" to which Sullivan subscribed per her leaked strategic memo is clearly a "hybrid" course model, in which some introductory classes would contain an online element. Sullivan wasn't referring to any sort of Virginia-branded online education that might be offered for profit—nor has any such suggestion surfaced from others.
5) Within a wider context of peer institutions, Harvard, MIT, Stanford, Princeton, Penn, and Michigan have so far embarked on free online courses for non-matriculated students. If UVA wanted to keep pace, it would take a similar approach and not strike out on its own into the uncertain for-profit sphere.
Based on these facts, it's impossible to see how EDMC played any role in Sullivan's ouster. Indeed, it seems dubious at best that online education itself influenced Dragas's actions. Sullivan's strategic memo certainly shows that she was attuned to online solutions as one way of closing the "reputation gap" that previous university leadership, both administrators and the board, had allowed to develop.
(NB: Dragas was appointed to the board in 2008 and served on the presidential search committee that led to Sullivan's election. So did former rector Thomas Farrell, who some have speculated is interested in the UVA presidency. Farrell runs the Dominion power company, on whose board Dragas and vice-rector Mark Kington sit. Farrell also chairs Virginia's Higher Education Commission.)
As for the real reason Dragas took the action she did, that remains a mystery. As Angelo notes, the board of visitors met in closed "executive" session at its February 2012 meeting to discuss "personnel matters" regarding fundraising and gifts to the university's ongoing capital campaign. At the same meeting, the minutes reveal, a host of changes to the board's manual were approved, including this:
The President shall promote the development of the endowment funds of the University and shall be authorized to accept any gift or grant subject to the approval of the Governor as required, making a report to the Board of such gifts or grants
But though the capital campaign missed its target last year, total philanthropic giving was up almost 14% in the first two quarters of the university's current fiscal year from the previous year. In the third quarter, however, the gain was only 3.25% year over year. (See the board minutes here.) This slowdown, combined with the missed capital-campaign target, may have triggered Dragas and her backers "strategic dynamism" (bye, Kiernan!).
Who knows—the Sullivangate scandal turns more bizarro by the day.