Under normal circumstances, when a process is found to be corrupt, any outcome or recommendation from that chain of events is either cancelled or put on hold until the full extent of the corruption can be uncovered. Essentially, good practice dictates that you start from scratch, to ensure that there is no undue influence.
But that’s not how the Obama Administration works when the final outcome is something they want. Displaying the “Damn the torpedoes, full speed ahead” attitude they’ve come to be known for on everything from health care and spending to cap & trade and net neutrality, the Obama administration is on the verge of adopting rules governing for-profit educational institutions, even though they have emerged from a wholly corrupt process that, to paraphrase Senator Tom Coburn (R-OK), may end up with people going to prison.
It all started last summer when Senator Tom Harkin (D-IA), chairman of the Health, Education, Labor and Pensions (HELP) Committee, held a hearing on whether or not students attending for-profit colleges should be allowed to receive federal financial aid. Harkin strongly supports a proposed Department of Education (DoE) rule, known as Gainful Employment, which would severely damage those institutions and kill higher education opportunities for thousands of Americans.
It was odd that one of the witnesses Senator Harkin chose as an “expert” on for-profit colleges had no expertise in the industry whatsoever. Steve Eisman is a Wall Street short-seller with no background or expertise on education policy. But with the stock prices of private-sector colleges and the companies that run them risking collapse, he does have a lot to gain by ensuring that happens.
This was just the first of what would be many curious developments in the Progressives’ crusade against for-profit education.
After the outrage of Eisman’s testimony slowed, a few more interesting facts came out that served to shed more shadows on why he and other short-sellers would be interested in the subject beyond just the concept stage.
Manuel Asensio, another short-seller who was debarred for life from working in the banking industry because of corruption, was found to be exchanging emails with Department of Education employees about the gainful employment rules and had information “that had not been released to the public.”
So we have two short-sellers involved in a policy discussion that could significantly lower the price of certain stocks. Red flags went up. But these revelations did nothing to deter the progress of the Obama administration’s proposed policy.
But it did create a group of strange bedfellows expressing concern.
The liberal Citizens for Responsibility and Ethics in Washington (CREW) asked the Securities and Exchange Commission to investigate the potential conflict of interest. Senator Joe Lieberman (D-CT) wrote a letter to Education Secretary Arne Duncan, expressing concern about the short sellers’ influence over the rulemaking process. Then a bipartisan group of 113 members of the House of Representatives sent President Obama a letter urging him to abort the process. None of this deterred or even slowed the process.
Then, in late April, the snowball had grown to the point it could no longer be ignored and DoE’s Inspector General (IG) launched a probe into the issue. You’d think this might give pause to those pushing this agenda, as most corruption investigations do, but you’d be wrong. A week later a DoE spokesman confirmed the Department had submitted their new regulations to the Office of Management and Budget for final review.
CREW called on DoE to hold off on finalizing any rules until an investigation is concluded, asking, “Given the ongoing IG investigation, the potential for an SEC investigation, and the significant congressional concern, why rush the regulation out?”
Why indeed.
Two days later, the Washington Times reported on why Harkin might be interested in the issue. “Interestingly, though, Mr. Harkin has much to benefit himself from seeing for profit educational institutions financially fail. The Des Moines Register reported last week that the Iowa Board of Regents, whom Mr. Harkin’s wife serves on, approved naming an Iowa State University Institute after Senator Harkin. Publicly funded State universities stand to lose out financially if for-profit schools continue to grow their student recruitment,” The Times said.
Now it is being reported that the GAO was politically pressured by Harkin’s staff to rush their report on for-profit schools to the point that they had to make an unprecedented set of corrections that dramatically altered their findings.
Beyond all the conflicts of interest and potentials to profit, DoE is also been targeted by minority groups that recognize the proposed rule will mostly prevent low-income and minority students from getting an education, and with it, opportunities to move beyond minimum wage jobs.
So with short-sellers standing to make a killing while testifying as experts and advising on strategy, senators with inter-family conflicts and corruption investigations, and the new revelations about a GAO report that was so rushed that it required unprecedented corrections that took it from making the case to muddying the water, why not delay the gainful employment rules in the interest of accuracy, honesty and integrity? After all, if you’re going to significantly alter people’s lives by limiting their personal education choices, taking the time to determine if you’re doing it based on accurate information or agenda and financially driven activism seems like a good thing.
Unfortunately, like much in the last few years, it seems those in power are more interested in their goals than the facts. It’s “Damn the torpedoes, full agenda ahead.”
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