As controversy including a $10m lawsuit and ‘ghost’ offices continues to swirl around Jamie Beaton, his fellow Rhodes scholars have slammed him for trying to recruit them.

Those who gain a prestigious Rhodes Scholarship must display “truth, courage, devotion to duty, sympathy for and protection of the weak, kindliness, unselfishness and fellowship”.

Given this ethos of serving humanity, it’s little wonder that Crimson Education founder Jamie Beaton’s use of a private Rhodes message channel to recruit them as tutors raised their ire.

The co-founder of Crimson was one of only three New Zealanders awarded a highly sought-after Rhodes Scholarship to study at Oxford University in 2018. The 117-year-old programme funds just 100 postgraduate scholars worldwide each year, welcoming applications from talented young leaders “regardless of gender, gender identity, marital status, sexual orientation, race, ethnic origin, colour, religion, social background, caste, or disability”.

By the time the high-achieving Beaton arrived at Oxford he had already completed a masters degree at Harvard University and set up Crimson, a tutoring and mentoring service that charges families as much as $60,000 for the chance of getting their children into elite overseas schools. Crimson is now worth a reputed $380m and counts former prime minister John Key among its investors. Its latest venture is an upcoming online high school.

While at Oxford in October 2018, Beaton posted on a WhatsApp message group of around 90 fellow Rhodes scholars, offering them paid tutoring work with Crimson. It angered American scholar Spencer Dunleavy, who had grown up in a low-income family relying on social services and attending Philadelphia public schools. He confronted Beaton on the WhatsApp group and kicked off a lengthy debate among members.

“I wrote a huge response, saying ‘Jamie, the services you provide are largely tailored towards people who could afford it’. I remember saying, ‘the amount you charge for a student is like what my family brings home every month’.”

The Rhodes incident comes to light as controversy continues to surround Crimson Education. An investigation by USA Today discovered that some of the many international offices it lists on its website do not appear to be operational. Reporters who visited locations in New York, San Francisco, Los Angeles and London found no one at desks in the offices, and in one case no sign Crimson had ever been there. Calls to the listed numbers often rang without answer, or calls were cut off abruptly.

In an unregulated industry that has come under fire following the celebrity college admissions bribery scandal, the newspaper also found that Crimson overstated how many of its employees had undertaken the required training to be members in college advisers’ industry associations. Crimson’s membership had even expired at one association it claimed to be part of.

Meanwhile, back in New Zealand, Crimson is once again before the courts, this time in a $10m breach-of-contract claim being brought by tutoring company Eurekly. The two companies had been in talks about a joint venture when Crimson pulled out late last year. Eurekly claims Crimson then took steps to acquire the core of its business through other means. It is also suing former Eurekly project manager Natalia Rozova who went to work for Crimson. Both are likely to deny the allegations.

The High Court provisionally granted The Spinoff and other media outlets permission to view key documents in the case. But at the 11th hour, Crimson’s lawyers appealed that decision, a move the court described as “based largely (or possibly entirely) on arguments that can or should have been” put before it over seven months ago. The question of media access to the documents has now been pushed into next year.

It’s not the first time Crimson has done battle in the courts to keep details of its alleged actions when acquiring smaller competitors under wraps. In 2018 it went all the way to the Court of Appeal in a bid to prevent media viewing claims made against it by Dunedin company UniTutor. When the heavily redacted documents were finally released, they showed UniTutor’s owner Samantha Berry alleged Crimson broke its agreement with her by failing to issue her shares or pay her share of revenue. Berry also claimed Crimson failed to commit any resources to the development of UniTutor, and undercut UniTutor by offering its tutors more money to work for Crimson’s other businesses instead. The matter was eventually settled.

Spencer Dunleavy has a fair idea how much Crimson charges parents, because Beaton’s WhatsApp approach wasn’t the first time he’d been shoulder-tapped about tutoring work. A Crimson employee asked him to apply while he was an undergraduate student at Harvard in 2017. He was offered at least US$700 if he helped a student apply to five universities, regardless of whether they were accepted. “As soon as I saw how much it was, I realised that it was not meant to be giving educational opportunity to people. It was meant to be a resource for wealthy people who could afford it.”

Beaton’s Oxford message a year later offering ‘Rhodies’ the chance to make money and have a great impact made him “mad”, Dunleavy says.

“The idea that Crimson Education was an avenue for people around the world to get access to the resources they needed to get to places with premier education seemed very misleading to me, because the price point they set for their services would exclude the people who would most need additional help.”

He says he would be fine with it if the thousands Crimson charges affluent families helped subsidise others who can’t afford that support, he says. “But that obviously is not the case, given that they’re a profitable company. It’s not a nonprofit.”

Some Rhodes scholars are from low-income backgrounds and he does not begrudge them the opportunity to make money through tutoring. But he wants them to know that not everyone in the Rhodes community thinks Crimson is a company making “equitable and altruistic decisions”, Dunleavy says.

Other students in the WhatsApp chat added to Dunleavy’s comments, questioning whether it was within the Rhodes ethos of serving humanity to co-opt Rhodes scholars to bolster Crimson’s profile and expand the company.

Beaton responded, pointing to the needs-based scholarships Crimson offers, such as the Te Ara a Kupe Beaton Scholarship for Māori students, and the range of free educational resources the company offers online. In response to questions from The Spinoff, Crimson co-founder Sharndre Kushor provided the following statement. “In analysing how Jamie and I could build a transformative education offering in 2013 we considered both a charitable and for-profit structure with a social mission, and concluded that the latter would be substantially more effective and sustainable.

“A significant proportion of Rhodes Scholars are big proponents of entrepreneurship and the power of the free market to solve issues and some are not and we respect that valid and important debate.”

A few days after the WhatsApp debate, another Rhodes scholar emailed the warden of Rhodes House expressing concern that Crimson was trying to monetise Rhodes scholarship interview preparation services. The student pointed to a Rhodes application tutorial video in which Beaton suggests viewers reach out to Crimson for an academic assessment if they are thinking about applying for the scholarship.

“I take issue with the general principle of selling interview support for the Rhodes scholarship on an individual or company basis. In my view, this manifestly imbalances the playing field for applicants from low-income backgrounds, and is not something the Rhodes Trust should condone,” the student wrote.

A spokesperson for Rhodes House told The Spinoff they could not confirm whether any steps were taken in response to these concerns, but said that a number of Rhodes scholars provide mentorship through Crimson’s platform. None provide paid advice on the Rhodes interview process, however.

“We are excited to see the impact Jamie is having on international education through his entrepreneurial efforts. It is also exciting to see him leverage many of his learnings studying online schooling in his DPhil programme in the recent launch of Crimson’s online school in New Zealand,” the spokesperson said.

It’s also not the first time a group of fellow Rhodes scholars have taken issue with the entrepreneur. In November 2017, when Beaton was first selected for the programme, a group of New Zealand Rhodes scholars emailed the New Zealand Rhodes Trust questioning his links with US billionaire Julian Robertson. In 2012 Robertson helped secure the future of the Rhodes Scholarship in New Zealand with a $14.4m donation. He is also a significant investor in Crimson Education, and Beaton worked for his hedge fund Tiger Management.

“The concern… is that even if there was no actual conflict of interest, there was a significant perception of a conflict of interest here,” they wrote. “What the scholars here were wondering was whether the selection committee this year put in place procedural safeguards to manage the possibility that the committee could be perceived to be beholden to Julian Robertson.”

Secretary of the New Zealand Rhodes Trust Jane Harding told The Spinoff this week that she was unable to provide comment. “I am sure you will understand that I cannot comment on details of election of individual scholars,” she said.

maria@thespinoff.co.nz