A Texas Millionaire Plots the Future of Higher Education

(retrieved from http://charlesmiller.org/a_texas_millionaire.html on May 20, 2008)

cover of final commission report As President Bush strode by on his way to the podium, he paused and turned to Mr. Miller, who was sitting between a former education secretary, Lamar Alexander, and Diana S. Natalicio, president of the University of Texas at El Paso, and narrowed his eyes in mock scorn. "Miller!" he growled playfully. "You're the thorn between two roses."

Mr. Miller, the amiable and opinionated chairman of the federal Commission on the Future of Higher Education, chuckles as he recalls this story over tea at the Four Seasons Hotel in Washington, where he is staying during three days of meetings with political and academic leaders. At 72 he is a rare combination of insider and provocateur, a man whom Secretary of Education Margaret Spellings considers a mentor, but who has never been afraid to take on the educational establishment, to be a thorn in the side of academe.

Yet he remained relatively unknown outside Texas until last fall, when Ms. Spellings named him chairman of her higher-education commission, handing him both a national platform for his blunt critiques of academe and a vehicle for his big ideas.

From that post, he has poked, prodded, and sometimes provoked academe, challenging its "complacent," "change resistant" culture and calling for it to become more accountable to families and taxpayers.

He scoffs at the notion that "only the high priesthood of academia" knows how to improve higher education, arguing that colleges could learn a lot from the business world. Among his ideas: testing college students, overhauling accreditation, and remaking the federal student-aid system.

Mr. Miller says he realizes that some of his ideas may not make it into the commission's final report, due this September, which must be vetted and approved by the panel's other 18 members. But he has made it clear that he will not settle for the status quo. As Ms. Spellings put it in an interview with The Chronicle, Mr. Miller is "a game changer."

"He's a change agent in people's lives and in the life of Texas policy, and maybe national policy, too," she said.

No Neophyte

When Ms. Spellings appointed Mr. Miller as chairman of her higher-education commission, the reaction on some college campuses was "Charles who?" Yet Mr. Miller is no Johnny-come-lately to the education scene, a fact he is quick to point out.

"I'm not here as a newcomer," he says. "People may think I parachuted in from nowhere, but I have a lot of government and policy experience."

Indeed, Mr. Miller has been at the birth of nearly every change in Texas' education system since the mid-1980s, including the creation of an accountability system for the public schools that became the model for President Bush's signature No Child Left Behind Act, and of accountability testing in the University of Texas System.

The accountability system for the schools grew out of a policy center he helped create.

Unexpectedly, the Educational Economic Policy Center, as it was called, proved to be a training ground for the future heavyweights of national education policy. Its top staffer was David Dunn, now chief of staff to Ms. Spellings, and its board included Alexander B. (Sandy) Kress, a Dallas lawyer who went on to become President Bush's chief adviser on the No Child Left Behind Act. Darvin M. Winnick, now chairman of the National Assessment Governing Board, was a consultant, and Ms. Spellings, then a lobbyist for the state school-board association, helped secure the association's backing for the group's proposals.

They were a "merry band of reformers," and Mr. Miller, the board chairman, was the resident taskmaster, as tough and demanding as any first-year law professor, recalls Mr. Kress. When Mr. Miller was particularly hard on one of the members of the group, they would call the others to report that they'd been "Charlesed."

"Charles is a tough customer," says Mr. Kress. "He gets to the core of the issue in his mind, and he wants you to, too. He could get impatient if you were wandering off, if you weren't getting to the core."

Not everyone in Texas was enamored of Mr. Miller's plan to impose testing on the public schools. As he recalls, the only education leader to support the plan was Gayle Fallon, president of the Houston Federation of Teachers. "The other 99.9 percent of the education establishment was against it," he says.

The proposal also got a frosty reception in the Texas House education subcommittee, says Mr. Kress, who testified before the committee. "It was pretty bloody," he says.

To sell their plan, Mr. Kress, a Democrat, and Mr. Miller, a Republican, traversed the state, talking to editorial boards and business and civic groups. Eventually they secured the support of Lt. Gov. Bob Bullock, who agreed to attach their proposal to a school-finance bill in the Legislature. The measure passed the Senate and cleared the House after "Bullock made it clear that nothing would be done if [testing] were not in there," says Mr. Kress.

In the late 1990s, Mr. Miller turned his attention to higher education, becoming a member, and later chairman, of the University of Texas Board of Regents. During his four years as chairman, the board developed a comprehensive accountability system that included testing, crafted a data system to track students from kindergarten through college, and won from the Legislature the power to set tuition.

Mr. Miller concluded that the university system "had gotten sort of big and complacent." So he lured Mark G. Yudof, a former dean and provost on the flagship campus, in Austin, back from the University of Minnesota, where he was president, to reorganize the system as chancellor.

Mr. Miller "talked about all the great things we could do together," says Mr. Yudof. "He said the board and I would march arm in arm to get things done" The chancellor calls Mr. Miller a "visionary" and "a big believer in the power of ideas."

"He spends a lot of time thinking not about the crisis du jour, but looking at what might be the problem five, 10 years down the road," says Mr. Yudof.

Patrick C. Oxford, a Houston lawyer who served as a regent with Mr. Miller, says Mr. Miller was always well-informed about the issues before the board and expected his colleagues to be as well.

"If you were prepared, he'd listen," says Mr. Oxford. "He was always accommodating if you could make the case." If you weren't prepared, he could be short: "He does not suffer fools easily."

The Nuclear Option

To prepare for his role as chairman of the Commission on the Future of Higher Education, Mr. Miller read dozens of books on the history and culture of academe. A table next to his desk is heaped with scholarly texts: Laurence R. Veysey's seminal The Emergence of the American University, published in 1965, and Peter Smith's 2004 The Quiet Crisis: How Higher Education Is Failing America, among others.

Derek C. Bok's 2005 book, Our Underachieving Colleges, is there, too, even though the former and future Harvard president has publicly criticized Mr. Miller's proposals on testing, saying that no test would work for all institutions.

The books, combined with testimony given at commission meetings, have convinced Mr. Miller that American higher-education needs to undergo radical change.

He suggests, for example, eliminating regional accreditors, arguing that with the emergence of national online institutions, geographic boundaries have become immaterial.

He also talks of "nuking" the federal student-aid system, calling it "so badly designed that you really just want to step back and start over."

While Mr. Miller says he is not sure how he would design a new system, a paper written for the commission by two University of Texas lawyers proposes consolidating the multitude of federal programs into one grant program, one loan program, and one uniform tax benefit.

Financial-aid experts say simplification is not that simple. They acknowledge that the federal system is complex but argue that it would be hard to serve a diverse student population with only three programs.

"The system creates different incentives for different parties at different times," says Brian K. Fitzgerald, executive director of the Business-Higher Education Forum, a nonprofit group, and a former director of the Advisory Committee on Student Financial Assistance, which advises Congress. "It is certainly an inelegant system, but it is in no way dysfunctional."

Then there is Mr. Miller's idea — his obsession, some say — to test college students as a way of measuring what they have learned. Although he has emphasized that he will not propose mandatory testing of college students, he pushes measurement every chance he gets, urging colleges to adopt assessment of their own accord.

"If Charles had a broken record, that would be it," Richard K. Vedder, a member of the federal panel who is an Ohio University economist, said at a commission meeting last month.

Still, some commissioners say they admire the chairman's efforts to bring about change at the core of the higher-education enterprise, not just at the margins.

"We just don't have the luxury of sitting on our laurels and saying, We've done very well so far," says Arturo Madrid, a professor of humanities at Trinity University, in San Antonio, who met Mr. Miller in the late 1980s and invited him to serve on the board of the Tomαs Rivera Center, where Mr. Madrid was president. "Charlie knows that we have to keep adapting all the time," Mr. Madrid says, and higher education, "this very reactionary institution, has to contend with that."

Rags to Riches

Mr. Miller traces his independent-mindedness to a childhood spent fending for himself. He grew up poor in Galveston, Tex., the middle child of a Russian immigrant father who ran a struggling grocery store, and a Brooklyn-born mother who died of Parkinson's disease before he graduated from high school. To help feed the family, he and his brother fished using improvised tools — a stick with a spike in it to spear flounder, a chunk of old meat tied to a string to catch crabs.

Six and a half days a week, before and after school, he worked in his father's store, buying produce and stocking shelves. "That's probably how I got my business techniques," he muses. "Learning how to mark a can of peas."

It was a difficult upbringing, and one he recounts somewhat reluctantly over dinner at an Italian restaurant near his Houston home.

"I don't look back on my past very much. I don't like doing it, and I don't think it's very constructive," he says. "I don't try to psychoanalyze myself."

He pauses. "I wish I'd learned to be smoother, nicer, a better communicator. I've had to learn people skills."

In 1950, when he was 16, he hitchhiked to Austin to attend the University of Texas, where he majored in mathematics and began playing bridge, a game that suited his analytical mind and competitive nature. In 1955 he won the collegiate championship, and became a nationally ranked player.

A "nontraditional student," Mr. Miller put himself through college slowly, working at the university library for 50 cents an hour and winning some money playing poker and bridge. He took two years off to serve in the Navy. He finally graduated in 1959, with a bachelor's degree in math, and got a job managing retirement funds for Texas school employees. He took some courses toward a business degree but dropped out, he says, because he was uninspired by the business faculty and didn't see the value of the degree.

He met his future wife, Beth Patton, in 1960, at a bridge table in Austin. She stuck her cards in front of his face and asked, "What would you bid?" he says. "Her hand was shaking, so I said, 'Hold it still!'" They played bridge together for several years but gave up the game after their wedding, in 1969.

"It's a partnership game," Mr. Miller explains, "but it's not for married couples."

'The Billion-Dollar Bulls'

He left his state job in 1966 to join a Houston firm that managed pension funds, endowments, and foundation money. He bought the company a decade later, renamed it Criterion Group Inc. and became a nationally known investor, managing — and making — millions. In 1983 he appeared on the cover of Barron's with a colleague, Dick Nieland, under the headline "The Billion-Dollar Bulls From Texas." In the photo, Mr. Miller wears a conservative power suit, a cowboy hat, and a goofy grin. (The hat, he is quick to point out, was a prop. "I would have never worn a hat like that," he says.)

Two years later, he was on the cover again, this time alongside the headline: "This Man Has $10 Billion. How Is He Investing It?"

Mr. Miller says he relished the intellectual challenges and competition that the investment world provides: "I felt that I could compete with anybody in the world, and I liked that."

To build his international business, he traveled extensively, spending a lot of time in Asia. The Millers' vast Houston condominium bears testament to those travels: A Tang-era sculpture of a camel from China is in the pub, a framed Tibetan robe on a hallway wall, a Tibetan crown over his bed. On the kitchen island, a ghoulish four-toed devil from Japan hoists an enormous potted plant.

Mr. Miller took Criterion public in 1986, but the stock market crashed a year later, and he sold the company in 1989 for $94.3-million. He collected $22.2-million from the sale, on top of $9.3-million from the initial public offering, according to an article in Forbes.

Mr. Miller spent three years as chief executive officer of the company that purchased Criterion before forming an investment partnership, Meridian Group Inc., in 1994. He retired in 1998, trading in the gleaming steel buildings and wide streets of downtown Houston for the landscaped lawns of the campuslike Houstonian, a wooded oasis that houses his office, his condo, and a hotel he uses as a guesthouse. He can walk from his office to his terraced, 5,000-square-foot penthouse condo overlooking the city's arboretum.

But he remains a businessman at heart, committed to accountability, openness, and competition. In conversations about higher education, he uses terms like "fiduciary responsibility," "feedback mechanisms," and "market forces."

Mr. Miller's biggest complaint about higher education is that it is not accountable enough to what he calls its "investors": parents, students, and taxpayers. He talks of using testing as a tool to measure the "value added" by a college education, and of creating a database that would empower consumers by allowing them to create personalized rankings of colleges and universities.

"He's very much a bottom-line kind of guy," says Kati Haycock, a member of the commission and director of the Education Trust, a nonprofit research-and-advocacy organization. His mantra is "Show me the evidence."

Mr. Miller says he is not trying to remake academe in the image of businesses, but he believes that colleges could learn from some of the business world's organizational principles, like flattening hierarchies, eliminating bureaucracies, and making better use of technology.

Walking through Houston in late March, the businessman-turned-educational-reformer pauses to point out the courthouse where the Enron trial is taking place, and to offer a cautionary tale on the importance of openness.

"Higher education has an aversion to being open and facing reality," he says. "But when something happens and you've been immune from criticism, the public can turn on you. That's what happened with business, and I'm afraid it will happen with higher education."

Political Beginnings

A self-described "free-market capitalist," Mr. Miller stayed out of politics until his retirement. His "political coming out," as he calls it, was in 1993, when he signed on as state finance chairman for the campaign of his friend Kay Bailey Hutchison, a Texas Republican who was running for the U.S. Senate.

A year later, George W. Bush, who was running for governor of Texas, came to Mr. Miller to ask for his help in fund raising. They spent two hours discussing accountability.

When Mr. Bush was elected, Mr. Miller became one of his closest advisers on education. Four years later, he was in on the strategy meeting at which Mr. Bush's supporters developed the concept of the "Pioneers," the elite cadre of fund raisers that the governor would rely on in his run for president. Mr. Miller went on to become a Pioneer, meaning he raised at least $100,000 for Mr. Bush's campaign.

On the "ego wall" of his Houston office, Mr. Miller has arrayed dozens of photographs of himself with Mr. Bush and other Texas political celebrities, including U.S. Secretary of Commerce Donald L. Evans, Gov. Rick Perry, and U.S. Sen. John Cornyn. There is even a photo of the first President Bush, with his arm around Mr. Miller.

Some of the pictures "represent checks, some friends," he jokes.

Economically conservative, Mr. Miller leans libertarian on social issues. He describes himself as "pro-abortion," saying labels like pro-choice and pro-life "avoid the real issue."

He is also an avid environmentalist, a quality he attributes to his wife, who once won a silver medal at the prestigious Chelsea Flower Show, in London, for designing an ecologically sustainable garden. In the 1980s, the Millers bought a 20-acre homestead in New Mexico from the heirs of the artist Georgia O'Keeffe and transformed it into an ecological oasis and modern-day salon. The retreat, which they called Sol y Sombra (Sun and Shade), drew politicians, intellectuals, and celebrities of all stripes, including John Denver, Robert Redford, and the Dalai Lama, who brought the Millers a seed for a bodhi tree — the kind the Buddha sat under when he attained enlightenment.

"It was like the field of dreams," says Mr. Miller. "We built it, and people started coming." A Blunt Critic

Since his appointment to the commission, in September 2005, Mr. Miller has taken a critical, sometimes combative stance toward American higher education, warning that it will not remain globally competitive without significant change. In meetings and in memos, he gives a litany of its problems: It's inefficient, it's risk-averse, it won't admit its failures, and it's unresponsive, particularly to the needs of adult students.

"The message from higher education has been, 'We're the best in the world; leave us alone and send us more money,'" he says. "You can't just keep patting yourself on the back; you'll break your arm."

That tone troubles some commissioners, who worry that the panel's final report will be too negative and will alienate academe. They say the report should focus on building on the strengths of the higher-education system, not on tearing it down. The report will probably be written by the commission's staff, consultants, and a writer hired by the panel, with "continuous feedback" from commission members, Mr. Miller has said.

"The tone should be that while higher education in the United States is the best in the world, the imperatives of our time require that we raise the bar and become even better to serve the nation," says James J. Duderstadt, a commissioner who is president emeritus of the University of Michigan at Ann Arbor.

Mr. Miller says he is surprised by the attention being paid to the report's tone. "There seems to be a delicacy in the academy about language," he says. "I've never been in a situation where it's been such an urgent issue."

Other commissioners have accused Mr. Miller of being heavy-handed at times, of making decisions without consulting them first. A few were particularly peeved that he had hired two consultants without first vetting them with the panel.

Mr. Miller acknowledges that he could have handled some "process things" better. "Sometimes we've done things quickly. ... I won't argue that everything has been perfect," he says.

Still, most commissioners say they appreciate the chairman's intensity and drive.

"He's a very forceful person of strong opinions, but his intentions are good," says Arthur J. Rothkopf, president emeritus of Lafayette College and senior vice president of the U.S. Chamber of Commerce. "He is seriously committed to improving higher ed."

With just under four months left until the commission's late-September deadline, the panel has begun what Mr. Miller has called "the tricky, sticky" process of whittling down hundreds of proposals into a few "bold ideas."

Many of them won't make it into the final report, he acknowledges: "People like bold ideas until they see them."

But he promises that the report will spare no one, not even the Education Department, which commissioned it.

"We will address everyone's shortcomings," he says. "We may offend half the people in Washington, but who gets criticized will depend on substance, not on politics."

By Kelly Field
The Chronicle of Higher Education