Indicted USC administrator’s side business spotlights the university’s oversight

Editor’s note: This story was reported by the Beacon Project, a student journalism initiative supported by the University of Southern California Annenberg School for Communication and Journalism to report on USC. It is independent of the university’s administration. KPCC/LAist has an internship program with the Annenberg journalism school, and Mark Schoofs, one of the Beacon Project’s founders, is an adviser to KPCC/LAist.

When the “Varsity Blues” admissions bribery scandal broke in March, USC declared itself as a victim of fraud, asserting it had no reason to believe that senior administrators were aware of the wide-ranging scam, which helped unqualified students gain entry to USC by way of bogus application materials. Now, new details about Donna Heinel, the senior associate athletic director who prosecutors say was a key conduit in the scheme, shed light on just how expansive her role within the athletics department was — and on whether USC monitored her activities closely enough.

Heinel ran a thriving side business that was tightly entwined with her duties at USC and involved more athletics department personnel than has been publicly known. One of the principal members of that side business — a consulting company that helped promising high school athletes and their coaches navigate college recruiting rules — was a mid-level USC administrator named Alex Garfio. He worked in the athletics department until he resigned on Oct. 31. The Beacon Project first contacted Garfio and USC with questions for this story in August.

Garfio’s involvement in Heinel’s side business has not been previously reported.

The private business, called Clear the Clearinghouse, profited from events it hosted on university property and featured USC coaches as speakers, according to documents and interviews. At least one coach who spoke at forums organized by Heinel said he thought he was speaking at university events, not giving talks on behalf of a private business.

These revelations raise questions not only about how Heinel’s and Garfio’s consulting work may have blurred the lines between their private business and their university affiliation — but also about how rigorously USC monitored financial activity inside its athletics office.

Garfio declined to comment for this story. USC confirmed that Garfio voluntarily resigned his position at the end of last month, but declined to answer questions for this story, citing the ongoing federal investigation.

In a statement on the admissions case, Heinel’s lawyer said that she “did nothing wrong” and at all times followed instructions and did the job expected of her by USC. She has pleaded not guilty.

Through her lawyer, Heinel declined to comment on the consulting business. But by reviewing court documents, archived web pages, USC press statements and staff directories, as well as interviews with those who interacted with Heinel, it’s possible to reconstruct much of her career. During more than a decade at USC, she grew to be a well-liked and influential administrator. At the same time, however, she and Garfio were running the consulting firm, and, prosecutors allege, she was helping to orchestrate the admissions scam, all under the noses of USC’s leadership.

A RISING STAR, A GENEROUS MENTOR, AND AN ENTREPRENEUR

Heinel, 58, was a popular — and pivotal — figure in USC athletics. She grew up in Philadelphia and was an All-American collegiate swimmer at Springfield College in Massachusetts. She later earned a doctor of education from USC, and joined the USC athletics department in 2003.

Her attention to detail stood out, particularly in regards to navigating the arcane recruiting and admissions rules of the NCAA, the governing body of college sports, according to press releases and interviews with high school counselors who knew her. But she also distinguished herself in other ways. Openly gay, she advocated for LGBTQ athletes at USC.

In 2006, she received what would be the first of many promotions, becoming the assistant admissions coordinator for the athletics department. In this role she took on more responsibility for shepherding student-athlete recruits through the admissions process, making sure both USC and the high schools from which it recruited adhered to all NCAA procedures. The job required her to master the minutiae of NCAA’s rules.

That same year marks the first appearance of the private consulting firm she ran, Clear the Clearinghouse. A web registration laid claim to the domain cleartheclearinghouse.com. There was no name associated with the registration documentation.

The company’s name is a reference to the NCAA Eligibility Center, formerly called the “NCAA Clearinghouse.” The business’s credibility, according to marketing materials and interviews with several customers, was built upon Heinel’s professional responsibilities at USC and her deep knowledge of NCAA recruiting rules.

Running a private consulting business that was, in many ways, an extension of her day job raises red flags for possible conflict of interest, said B. David Ridpath, an associate professor of sports administration at Ohio University and a former athletics administrator. “On the surface, there’s a huge conflict of interest even if there’s nothing nefarious because they received money” from clients, he said. According to Ridpath, a business like Clear the Clearinghouse would usually require approval from the athletic director.

The university declined to answer specific questions about whether Heinel had ever sought or received official permission to run a side business tied so closely to her USC role. The university spokesperson said the university was not providing comment because of the ongoing investigation. Prosecutors have given no public indication that they are investigating Clear the Clearinghouse.

In the years after Clear the Clearinghouse first began operating, Heinel thrived at USC. In 2011 she became the highest-ranking woman in USC’s athletics department when she took on the job of Senior Woman Administrator, an official NCAA designation designed to “promote meaningful representation of women in the leadership and management of college sports.” She held that title until she was fired earlier this year after federal authorities arrested her for her alleged role in the college admissions scam.

In federal court documents, prosecutors describe Heinel’s duties as serving as “the admissions liaison between the USC athletic coaches and the university admissions office.”

In exchange for bribes, prosecutors say, Heinel helped concoct bogus athletic credentials and presented them to admissions officers. In addition, they allege, she exercised wide authority over some of the university’s own bank accounts: The indictment states that wealthy parents involved in the scam sent more than $1.3 million to USC accounts Heinel controlled, such as the USC Women’s Athletic Board.

According to prosecutors, USC officials knew that these and other funds were deposited in university accounts. Prosecutors, in charging documents, say they found evidence of one $50,000 payment in “USC records.” In the case of another payment, which went through the water polo coach, USC sent a formal gift receipt for what prosecutors say was a $100,000 bribe. The university has never publicly said whether those alleged bribes raised any accounting flags before the FBI got involved.

"There should be a firewall between admissions and development,” said Jerome Lucido, associate dean of Strategic Enrollment Services for USC Rossier and the executive director of the USC Center for Enrollment Research, Policy, and Practice. Any exceptions “should be made for the broader good of the university,” he said, and the university should be open about how many exceptions it’s making while taking steps to protect individual’s privacy. But, he said, “that’s not been the practices we’ve seen at USC, at least from all the reports that I’ve read.”

While prosecutors allege Heinel was taking $20,000 a month in bribes, at USC she was considered an enthusiastic and personable colleague, often helping younger athletics department staff. One of them was Alex Garfio, 34, a former University of California, Davis football player who first arrived at USC in the fall of 2010 seeking a master’s degree in athletic administration. In that program, Heinel taught a class called “The Student Athlete in Higher Education.”

In 2017, Garfio earned a doctorate from USC in higher education. His dissertation, titled “Examining the Experiences of High School Counselors When Advising Student Athletes on the NCAA College Going Process,” included this acknowledgement: “Dr. Donna Heinel, my mentor, thank you for providing me the opportunity to thrive in this field and for constantly pushing me to become a better athletic administrator.”

According to his LinkedIn page, Garfio joined USC’s athletics department in 2010, and, like Heinel, he held positions related to admitting student athletes, including “admissions assistant,” “director of admissions and initial eligibility,” and “assistant athletic director (admissions and initial eligibility),” the only person having the word “admissions” in the job title on the USC Athletics public directory between 2012 and 2016. In 2017, he assumed his final role at USC, assistant athletic director/director of development, also according to his LinkedIn page.

A SIDE BUSINESS WITH BLURRY LINES?

Garfio wasn’t just a Heinel protégé in the athletics department. He was also involved in her side business, Clear the Clearinghouse.

By 2013, Garfio became the official registrar of the company’s website domain, using his USC email as his contact. Between 2013 and fall 2018, the only two people listed on the team section of the site were Garfio and Heinel, according to pages on the Internet Archive. Garfio’s bio stated, “Alex’s goal is to equip high school counselors and staff with the NCAA knowledge to be confident when advising student athletes.”

Clear the Clearinghouse built up a powerful reputation across Southern California, according to interviews with multiple counselors from Southern California high schools. It held seminars at USC, charging $100 per person for a workshop, according to its own marketing materials. It also made presentations at high schools, charging between $1,250 and $2,700. Garfio gave some of those presentations, according to online records from several Southern California high schools. Clear the Clearinghouse also offered annual subscriptions for $300, $500 and $700.

Kristine McCullough, the NCAA liaison for Corona-Norco School District and a counselor at Norco High School, said in an interview that she attended Clear the Clearinghouse workshops “for at least three or four years.” Garfio was often the one who would send out emails to drum up attendance, she said. The mailing list, she recalled, included numerous local high school athletic directors. The quality of the workshops, she noted, was excellent.

Heinel “always stressed legitimately” following NCAA eligibility procedures at the workshops, McCullough said. “At no time did I feel I was receiving sketchy information. I always was extremely happy with the information I received. I felt I could email her or Alex [Garfio] with any questions I had about specific students.”

Garfio wasn’t the only athletics department employee to do work with Heinel for Clear the Clearinghouse. Katie Fuller, a volleyball player who graduated in 2013, started in an administrative role in the athletics department under Heinel in 2014. Three years later, around the time Garfio became a director of development of the Trojan Athletic Fund at USC Athletics, she was promoted to assistant director of admissions and initial eligibility of the athletics office. On her personal website, Fuller wrote that she helped prepare documents for prospective student-athlete admissions.

The New York Times reported Fuller sent emails advertising Clear the Clearinghouse workshops to about 150 high school and private counselors, but it couldn’t be determined whether she did anything else for the business. In one court proceeding, USC was compelled to release an email that had been sent to Heinel. The subject line of the email is “Cumulative Special Interest” and contained a list of applicants. (The sender’s name was redacted in the court document, but the USC title of the sender and the cell phone number listed in the email’s signature match those of Fuller.)

There is no allegation that either Fuller or Garfio were involved in the admissions scheme and neither has been accused of any wrongdoing. The U.S. Attorney’s office and the FBI declined to say if investigators have spoken with Garfio or Fuller, or whether they plan to.

USC declined to describe the roles and duties of the positions that Garfio and Fuller have held. The university said that Fuller resigned, leaving the university in June, but declined to say why she left. “Alex Garfio voluntarily resigned from his position,” the university said in a statement, “and his last day at the university was Oct. 31.”

Fuller did not respond to numerous emails or calls to her cell and office phone. Her home address could not be determined, but the Beacon Project hand-delivered a letter of inquiry to Fuller’s mother. Prior to the publication of this story, the Beacon Project mailed a full account of its reporting to the address of Fuller’s mother but received no response. Fuller currently works at a tax company, according to her LinkedIn profile.

Garfio also did not respond to multiple phone calls and emails. Attempts to contact him in person at his home and office were unsuccessful. The Beacon Project drafted a letter outlining everything it had learned about Garfio’s role in the athletic department and his work with Heinel. That letter was hand-delivered during a chance encounter with Garfio outside his office in USC’s Heritage Hall Building several weeks before he resigned. During the brief exchange, he declined to comment, citing the ongoing investigation.

“I DIDN’T KNOW THERE WAS SUCH A THING”

Clear the Clearinghouse’s reputation, brand and operations appeared to have been tightly entwined with USC, though it’s unclear whether the business was even disclosed to the university. Some of its workshops were held at USC venues such as the Founders Club, a 400-seat conference room nestled in the Galen Center, and the John McKay Center, where the football coach has his office, and where the team works out in an extensive weight room and practices on an underground field. Crescenta Valley High School counselor Karen Bomar, who attended two workshops at USC, recalled that one workshop at USC had about 100 people present.

In addition to declining comment as to whether Heinel or anyone else advised the university of the side business or whether the university gave approval to operate it, USC declined to answer questions about whether Clear the Clearinghouse requested permission to use university venues for its activities, or whether it paid the university a fee to rent the space.

One of Heinel’s USC colleagues who participated in Clear the Clearinghouse workshops said he was unaware that his presentations were for Clear the Clearinghouse, a private business she ran on the side. McCullough said she attended a Clear the Clearinghouse workshop sometime between about 2015 and 2018 that featured the colleague, USC baseball coach, Dan Hubbs, who held the position from 2013 until May of this year. In an interview, Hubbs said that during his tenure Heinel asked him to speak at three or four workshops that were held at USC. His presentations, he said, usually lasted 30 minutes. “Usually there were two coaches, but I don’t remember who the other one necessarily was,” he said.

At the workshops, Hubbs said that he spoke about “how the different sports go about recruiting” and how counselors “can advise their high school student athletes on what they need to prepare for.”

“I didn’t really think anything of it,” he said. He was not paid, he said, and was not even aware that he could have been giving his time for a private business, not the USC athletics department.

“I didn't know there was such a thing as Clear the Clearinghouse,” Hubbs said. “I guess I always thought it was part of her role as a senior woman administrator. I thought it was something that she was doing through us.”

Ridpath, the sports administration professor, said that if USC coaches were unaware that the workshops were in the service of a private business, that would show a lack of transparency on Heinel’s part. “Certainly not telling them that, even though it shouldn't have been done in the first place, is a problem.”

USC’s policy on conflict of interest states that employees should not have a financial, professional or personal business that could “compromise, or have the appearance of compromising,” an employee’s “professional loyalty and responsibility to the university, or professional judgment and ability to perform his or her duties.”

Adrianna Kezar, a professor of higher education at USC, said in an interview that if either Heinel or Garfio weren’t informing USC, that would be a “personal violation” of the university’s conflict of interest rules. She added that if “the activities were being reported, but not explored or examined” by USC, that was “an indication of a blind spot in our policies as it relates to certain consulting and profit-making activities and how they can violate the integrity of the mission of our institutions.”

This story was co-published with LAist.