Last January, at the World Economic Forum in Davos, Switzerland, Bono sat on a frigid outdoor television set for a friendly chat with Andrew Ross Sorkin, the New York Times columnist and co-creator of the hit show Billions. As it happens, the show—a fictionalized account of a hedge-fund billionaire and the federal prosecutor who sets out to bring him down—provided a bit of ironic foreshadowing at the annual gathering of the world’s wealthiest do-gooders. Joining Bono onstage that morning was William McGlashan Jr., a managing partner at TPG Growth, who had helped the U2 frontman launch The Rise Fund, a $2 billion portfolio of investments committed to creating “social and environmental impact” that leads to “meaningful, measurable, and positive change.”
In a Times column, Sorkin once described McGlashan as resembling “a Buddhist monk” more than “a cigar-chomping banker in pinstripes.” Now, improbably bundled against the cold in both a vest and a parka, McGlashan was swathed in a sea of gray down. Bono, sporting his signature black leather jacket and purple spectacles, recounted how he and McGlashan came up with their vision for Rise, which has invested in everything from supporting small dairy farms in India to expanding financial access to the poor in Nigeria.
“We had this wild and crazy idea that capitalism—this tool that had taken more people out of extreme poverty than any other ‘ism’—could perhaps be deployed to support the work I was doing trying to get people out of extreme poverty,” Bono explained. “But he”—gesturing to McGlashan—“also accepted that it’s a wild beast and, if not tamed, can and has chewed up a lot of lives.”
Sorkin asked the pair how often they discussed the investments that Rise has made since its founding in 2016. “All the time,” McGlashan gushed. Later at the conference, on another panel with Bono, he summed up Rise’s save-the-world ethos. “Businesses go extinct if they don’t get on the side of authentic good,” McGlashan declared. “We need to hold ourselves humbly accountable” and deliver on the promise of impact investing: that business can “solve these otherwise intractable problems that we are facing.”
What McGlashan did not share with his fellow elites at Davos, humbly or otherwise, was something he had known for months: that federal authorities were closing in on a college admissions fixer he had allegedly conspired with to get his older son into the University of Southern California. As part of the scandal known as Operation Varsity Blues, prosecutors say, McGlashan paid the fixer $50,000 to falsify his son’s ACT scores. As additional insurance, he allegedly discussed paying a bribe of $250,000 to gain his son admission through a “side door” at USC as a promising athlete, enabling him to do an end-run around the entire application process.
On March 12, six weeks after Davos, McGlashan was arrested at his home in Marin County, California, and charged with conspiracy to commit mail fraud. After TPG placed him on leave, he either resigned or was fired, depending on which version of events you choose to believe. But unlike some of the other high-profile defendants in the scandal, including the actress Felicity Huffman, McGlashan decided to fight the criminal charges. He essentially claims he did nothing wrong. While he admits to making a $50,000 “payment” to the fixer, he says “there is no allegation” that the extra time his son was provided to take the ACT was “obtained fraudulently or was unwarranted.” What’s more, he asserts, he never paid $250,000 to get his son into USC through the “side door”— and his son, sad to say, has now “withdrawn” his college applications. “The prosecutor’s case against Mr. McGlashan is deeply flawed and ignores important exculpatory facts,” his attorney said. “We look forward to presenting his side of the story.”
McGlashan’s colleagues at TPG were stunned. Given his prominence as one of the world’s leading advocates of “social impact” investing—the ethos of “doing well by doing good”—his fall from grace has the potential to undercut projects that help millions worldwide. “What he did was inexcusable and just reprehensible,” says Jon Winkelried, the co-CEO of TPG. “It makes it all the more distasteful because of the things he proclaimed he stood for. It makes people second guess what our motivations were. Because the personal and the professional, given how vocal he was, kind of bleed together.”
Anand Giridharadas, a visiting scholar at New York University and author of Winners Take All: The Elite Charade of Changing the World, seconds that concern. “We have to understand McGlashan being arrested as a moment of reckoning for the headmaster of a big experiment in social change,” he says. “When someone like that is caught showing how desperately they cling to the status quo, and how clinging to the status quo is so overpowering that they’re willing to break federal law, it doesn’t just implicate one man. It raises a question about the sincerity of a lot of people in that field. Because the whole premise of impact investing is that the rich—while advancing social justice—should actually make a buck from it.”
A legacy graduate of both Yale and the Stanford Graduate School of Business, McGlashan joined TPG in 2004 after a stint at Bain Capital. Some who worked with him were struck by his hunger for fame. “There’s no one more obsessed with red carpets and celebrities than this guy,” says a former colleague. “I mean it’s sad to watch, for a grownup. Everything was really about him becoming a star at TPG. The first conversation we ever had was him telling me he wanted everybody to know his name.”
Impact investing provided McGlashan with his own star turn. In 2016, he co-founded Rise with Bono and Jeff Skoll, the billionaire first employee and president of eBay, and attracted a host of Silicon Valley luminaries to its Founders Board, including Reid Hoffman, Pierre Omidyar, and Laurene Powell Jobs. Before long, Rise was pouring millions into micro-lending in China, coding classes in Argentina, and wilderness protection in Botswana. In 2017, the fund’s success earned McGlashan a spot at No. 66 on Vanity Fair’s New Establishment list—higher than Beyonce and Reese Witherspoon, but lower than J.J. Abrams and Dwayne Johnson.
That same year, as McGlashan was traveling the world to preach the gospel of socially responsible investing, federal prosecutors say he entered into in a “cheating scheme” to benefit his son, then a student at a high school in Marin County. According to a federal affidavit, McGlashan conspired to bribe Donna Heinel, the senior associate athletic director at USC, to “facilitate his son’s admission to USC as a recruited athlete.” McGlashan agreed to make a “purported” donation of $50,000 to the Key Worldwide Foundation, which was run by William Singer, the fixer who has confessed to the bribery scheme. In return, Singer would arrange for McGlashan’s son to take his college admission test at a center in West Hollywood “controlled” by Singer, and then have an associate “correct his son’s answers after the test was completed.”
On December 6, 2017, according to the affidavit, McGlashan donated $50,000 to Key Worldwide from his personal charitable gift fund. Two days later, according to cell tower records, the cell phones belonging to both McGlashan and his son “traveled” from the San Francisco area to Los Angeles, where the aspiring college student was given two days to take his ACT exam. Afterward, according to the affidavit, an associate of Singer “corrected his answers.” (The associate has since pleaded guilty.) The younger McGlashan, whom the family claims was diagnosed by a “pediatric neuropsychologist” with “certain learning disabilities,” received a score of 34, out of a possible 36.
McGlashan was not done. In July 2018, in a phone call recorded by the FBI, Singer explained to McGlashan how he could get his kid into USC. For an additional payment of $250,000, he said, the boy would be accepted “before he even applies.”
“That would be great,” McGlashan said. “I’d do that in a heartbeat.”
What McGlashan did was “reprehensible,” says TPG’s co-C.E.O., “because of the things he proclaimed he stood for.”
Singer explained that the draft acceptance letter from USC would come to McGlashan in the fall, with the official letter arriving in March. After the first letter, Singer told McGlashan, a $50,000 check for “Women’s Athletics” was due, with the balance of $200,000 payable after the official letter came in March. “I love it,” McGlashan said.
Singer explained how the scam would work: He would create a profile of McGlashan’s son as an athlete that USC would be interested in recruiting. McGlashan tried to be helpful. “Well, we have images of him in lacrosse,” he told Singer. “I don’t know if that matters.” USC doesn’t have a lacrosse team, Singer lamented, but football is big business at the school. All he needed was a picture of McGlashan’s son playing football.
Unfortunately, his son’s high school didn’t have a football team. No problem, Singer told McGlashan a few weeks later, in another intercepted phone call. “I’m gonna make him a kicker,” Singer said. He would simply use Photoshop to place the son’s face on the body of a high school football player. He had used the trick before, turning one 145-pound kid into a “long snapper” on the football team. “The guy who runs the biggest kicking camp is a good friend,” Singer explained, “so we’ll put a bunch of stuff about that on his profile, and we should be in pretty good shape to get that done.” Kickers, he added, got preferential treatment in admissions.
“Yeah perfect,” McGlashan said. “Perfect.”
“So I’m gonna make him a kicker,” Singer said.
McGlashan laughed. “He does have really strong legs,” he said. Maybe he’ll become a kicker. You never know.”
“Yeah!” Singer replied. “Absolutely.”
“You could inspire him,” McGlashan said. “You may actually turn him into something. I love it.”
He promised to get Singer some photos of his son. “Let me look through what I have,” he said. “Pretty funny. The way the world works these days is unbelievable.”
At one point, McGlashan offered to call USC board members to lobby for his son. “Half the board knows me,” he said. But Singer urged him to hold off while he worked his connections at the USC athletics department. McGlashan agreed to sit tight.
McGlashan did express a qualm about the scheme: He didn’t want his kid to find out that his dad had rigged his entry into USC. His son, apparently, held himself to a higher ethical standard. In the July phone call, Singer assured him that his son wouldn’t know about the “side door”—only that Singer would “take his stuff” and “get him some help.”
McGlashan, who made his fortune pitching morality to billionaires, was apparently fine with deceiving his own child. His son, he told Singer, “would have no issue” with that arrangement. “You lobbying for him. You helping use your network. No issue.”
Things began to unravel for McGlashan last fall, when Singer was approached by the FBI and began cooperating with law enforcement. In late October, after agreeing to plead guilty to obstruction of justice, Singer called McGlashan at the urging of the FBI and told him that the IRS was looking into the payments from Key Worldwide to the associate “who took the test” for his son in West Hollywood. Singer told McGlashan that he was worried he was being followed and wiretapped. That was why he was calling McGlashan from his son’s cell phone—“so that there are, you know, no issues, just in case.”
McGlashan, so talkative on the earlier wiretaps, suddenly grew cryptic and monosyllabic. “Yep, he told Singer. “Yep.”
At his initial court appearance in San Francisco in March, McGlashan was ordered to post $1 million in bail and surrender his passport. But the private equity mogul had a different idea. His lawyers argued that he should be allowed to travel to Mexico “for a long-planned family trip,” during his children’s spring break from their private school. Given his long ties to his home state, they insisted—McGlashan hailed from seven generations of Californians—he posed a minimal flight risk. Prosecutors, arguing that McGlashan had “essentially acknowledged the cheating” in the wiretapped phone calls, suggested that he and his family could spend spring break in Montana, at their $12 million home there. The judge ruled that McGlashan had to remain in the United States.
Inside TPG, McGlashan’s arrest set off a frantic scramble to contain the damage. That morning, Winkelried, the firm’s co-CEO, was also in Marin County, attending a meeting at the Cavallo Point Lodge. He quickly huddled with David Bonderman and James Coulter, the firm’s two founding partners, and Brad Berenson, the firm’s general counsel. After reading the federal affidavit, the executives immediately placed McGlashan on administrative leave, without pay. The following day, TPG says, he was fired. (McGlashan insists that he resigned.)
Coulter, Winkelried’s co-CEO, has stepped in to manage Rise, which is in the process of raising $3.5 billion for a second fund. Moving his office to the fund’s base of operations, two floors below the firm’s c-suites, he has been in regular touch with Rise’s high-powered Founders Board. Coulter has also been trying to steady the fund’s 100 or so employees. “People were shocked,” Winkelried says.
Several employees at the Rise Fund have children who are seniors in high school, making what McGlashan allegedly did all the more disturbing. “I was shocked that he would have been so careless,” says a senior member of the Rise Fund team. “Mostly because, ultimately, it hurts your kids when you do this. What he has done to his family and his children, who will live with this the rest of their lives.”
After McGlashan’s arrest, TPG hired Ropes & Gray, a Boston-based law firm, to conduct an internal investigation into “whether any other person or part of TPG was aware or implicated in Bill’s alleged misconduct.” The investigation found “no fraud” in McGlashan’s handling of the firm’s finances. At one point, however, he introduced Singer to members of TPG’s team “as a potential investment opportunity.” (The firm, after reviewing the proposition, decided against it.) Based on the findings, TPG announced that it was “recapturing” McGlashan’s interests in both Rise Funds—a decision that is almost certain to provoke a legal dispute.
At the time of his arrest, McGlashan had already closed on $800 million in investments for the new Rise Fund. TPG has offered to allow investors to withdraw their commitments, and some major players are weighing their options. A spokesman for the state investment council of New Jersey, which has committed $200 million to the two Rise Funds, said the state is “reviewing the impact” of McGlashan’s departure and will take “whatever steps are appropriate.”
Bono declined to comment on McGlashan’s arrest, but a source close to him says that the singer was “shocked”—and then “furious”—when he heard what his partner had allegedly done. But he’s sticking with Rise. “He’s not letting this deter him,” the source says. “He just feels there are big challenges we're facing that won’t be solved by government alone. Government is essential, but we need to leverage private capital, too.”
One person who is standing by McGlashan is his brother-in-law, Bill Price, a TPG partner emeritus who brought him into the firm. “I’m as shocked as anyone else at the allegation,” Price says by phone from Mallorca, where he and his family are spending the year. “But I am aware that at this point it’s just allegations.” He points out that the federal affidavit contains only excerpts of McGlashan’s wiretapped phone calls. “I hope that when Bill gets to tell his side of the story, it will look different than it looks today,” he says. “But no question it’s shocking to think of Bill being involved in some of the things that have been alleged. It just seems totally out of character for him.”
Price acknowledges the irony of the charges leveled against McGlashan, given his history as a leading champion of socially responsible investment. “Anytime someone is putting themselves out there as someone who believes in doing good in the world and wanting to make a difference, and has spent a lot of his life talking about the issues we face as a society and trying to do something about it, when allegations are made that they don’t live that way in their private life, yeah, you’re going to get a lot of heat,” Price concedes. “You put yourself out there and you establish a position for who you are in life. There are always plenty of people who are willing to look for flaws, real or not.”
Giridharadas, the NYU scholar, says the disconnect goes beyond a single individual like McGlashan. It’s baked into the zero-sum nature of capitalism itself. After all, if you try to generate a favorable return for yourself on a “social impact” portfolio, you’re ultimately profiting from someone else’s misfortune—just as the wealthy parents caught up in the admissions scandal took spots that might otherwise have gone to highly qualified students without the resources, or inclination, to game the system. Giridharadas points to a quotation from Tolstoy that he used as an epigraph in Winners Take All. “I sit on a man’s back choking him and making him carry me,” Tolstoy wrote, “and yet assure myself and others that I am sorry for him and wish to lighten his load by all means possible … except by getting off his back.”
Giridharadas reflects on the image for a moment. Then he shrugs. “I can’t describe this situation better than Tolstoy in that quote,” he says. “Bill McGlashan is Tolstoy in the quote.”
CLARIFICATION: This story has been updated to reflect the fact that McGlashan believed the IRS, not the FBI, was investigating Singer. Additional updates were made to clarify the nature and timing of the charges against both McGlashan and Singer.
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