All of that money is fungible... Nothing he teaches adds any value to the quality of the scholarship at the school, and is likely something that students 'pick-up' when they get there and is not something that sells the school to prospective students.
Since the school would likey be better off spending the money elsewhere, they are subsidizing him and his hatred with tax dollars... If they didn't have those tax dollars they would not even have the program -- 100% of this man's pay comes from taxpayers.
All of that money is fungible...
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Exactly as soon as the tuition is paid, it become money that belongs to CO tax payers. I am pretty willing to be that they don't allow contractors that do business with CU to ignor the state bid regulations even though a high percentage of their bills are paid with "tuition" generated funds.