Archives for category: Fraud
« Older Entries
Newer Entries »

Eric Holder Blasts Bill Barr for Acting as Trump’s Lapdog

By dianeravitch
December 12, 2019 //
12

Today in the Washington Post,  Eric Holder criticized Bill Barr for his aggressive, partisan support of Trump.

Holder was Obama’s Attorney General. Barr is Trump’s Roy Cohn.

Barr has professed his belief that the president’s powers have no limits; Congress must bow to the president.

He has joined the “culture wars” by attacking “liberals,” which is an opinion, not an expression of the law.

Republican moderates, a nearly extinct breed of person, once hoped that Barr would be a stabilizing force in this administration.

They were wrong.

Whatever and whoever Trump touches dies or loses their reputation.

As a former U.S. attorney general, I am reluctant to publicly criticize my successors. I respect the office and understand just how tough the job can be.

But recently, Attorney General William P. Barr has made a series of public statements and taken actions that are so plainly ideological, so nakedly partisan and so deeply inappropriate for America’s chief law enforcement official that they demand a response from someone who held the same office.

Last month, at a Federalist Society event, the attorney general delivered an ode to essentially unbridled executive power, dismissing the authority of the legislative and judicial branches — and the checks and balances at the heart of America’s constitutional order. As others have pointed out, Barr’s argument rests on a flawed view of U.S. history. To me, his attempts to vilify the president’s critics sounded more like the tactics of an unscrupulous criminal defense lawyer than a U.S. attorney general.

When, in the same speech, Barr accused “the other side” of “the systematic shredding of norms and the undermining of the rule of law,” he exposed himself as a partisan actor, not an impartial law enforcement official. Even more troubling — and telling — was a later (and little-noticed) section of his remarks, in which Barr made the outlandish suggestion that Congress cannot entrust anyone but the president himself to execute the law.

In Barr’s view, sharing executive power with anyone “beyond the control of the president” (emphasis mine), presumably including a semi-independent Cabinet member, “contravenes the Framers’ clear intent to vest that power in a single person.” This is a stunning declaration not merely of ideology but of loyalty: to the president and his interests. It is also revealing of Barr’s own intent: to serve not at a careful remove from politics, as his office demands, but as an instrument of politics — under the direct “control” of President Trump.

Not long after Barr made that speech, he issued what seemed to be a bizarre threat to anyone who expresses insufficient respect for law enforcement, suggesting that “if communities don’t give that support and respect, they might find themselves without the police protection they need.” No one who understands — let alone truly respects — the impartial administration of justice or the role of law enforcement could ever say such a thing. It is antithetical to the most basic tenets of equality and justice, and it undermines the need for understanding between law enforcement and certain communities and flies in the face of everything the Justice Department stands for.

It’s also particularly ironic in light of the attorney general’s comments this week, in which he attackedthe FBI and the Justice Department’s Office of the Inspector General — two vital components of his own department. Having spent the majority of my career in public service, I found it extraordinary to watch the nation’s chief law enforcement official claim — without offering any evidence — that the FBI acted in “bad faith” when it opened an inquiry into then-candidate Donald Trump’s campaign. As a former line prosecutor, U.S. attorney and judge, I found it alarming to hear Barr comment on an ongoing investigation, led by John Durham, the U.S. attorney in Connecticut, into the origins of the Russia probe. And as someone who spent six years in the office Barr now occupies, it was infuriating to watch him publicly undermine an independent inspector general report — based on an exhaustive review of the FBI’s conduct — using partisan talking points bearing no resemblance to the facts his own department has uncovered.

When appropriate and justified, it is the attorney general’s duty to support Justice Department components, ensure their integrity and insulate them from political pressures. His or her ultimate loyalty is not to the president personally, nor even to the executive branch, but to the people — and the Constitution — of the United States.

Categories Democracy, Fraud

Network for Public Education Releases Explosive New Report on Federal Charter Schools Program

By dianeravitch
December 10, 2019 //
14

Last spring, the Network for Public Education published a report on waste, fraud, and abuse in the federal Charter Schools Program. The report, called Asleep At the Wheel, documented the Department of Education’s failure to monitor the veracity or feasibility of applications for the program or to follow up on what happened to the money spent to launch new charter schools. It found that nearly $1 billion of federal dollars had been wasted on charters that either never opened or closed soon after opening.

Today, NPE released a new report that delves into what happened with federal money from the Charter Schools Program in the states. The findings were even more concerning than last spring’s report.
The new report is called Still Asleep At the Wheel.

An excerpt:

This report, Still Asleep at the Wheel: How the Federal Charter Schools Program Results in a Pileup of Fraud and Waste, takes up where our first report left off. In it, we provide detailed information, state by state, on how federal dollars were doled out to schools that no longer exist or never existed at all.

In 2015, the U.S. Department of Education (the Department) published a list of charter schools that received grants between the years of 2006 and 2014. Using that database of 4,829 schools, we meticulously determined which charters that received grants were still open, which had closed and which had never opened, resulting in state by state records of enormous waste. We examine the detailed spending records of some of Michigan’s ghost charter schools that received grants exceeding $100,000. We explain how money moves into the hands of for-profit management organizations and tell the stories of subgrantees that engaged in fraud—sometimes amounting to hundreds of millions of dollars—all beginning with funding from the federal Charter Schools Program.

Major findings of our research include the following:

Documented charter school closures and the waste of federal funds exceeds our first report’s estimations.
We believed that about 1,000 recipient charters were defunct. However, using the 2015 database (active grantees from 2006-2014), we identified 1,779 grantee schools that either never opened or had shut down. The number of non-operational recipients, across 25 years of the program is inevitably in the thousands.
In the first report, we estimated the fail- ure rate for recipient schools to be 30 percent. For schools listed in the database, however, our latest review found a failure rate of 37 percent.

It is impossible to document total waste for the entire 25 year program because the Department never required the states to report the names of funded schools until 2006. However, we have now documented $504,517,391 (28 percent of the total database amount) that was awarded to schools between 2006-2014 that never opened or that have closed. Applying that percentage to the total expenditures ($4.1 billion) of the CSP programs designed to create new schools, approximately $1.17 billion in federal funding has likely been spent on charters that either never opened, or that opened and have since shut down.

The disbursement of over one billion dollars during the program’s first decade was never monitored for its impact or results. There is no record of which schools received the funds.

From 1995 to 2005, enormous funds were pushed out to the states to distribute to schools via subgrants. Yet the Department has no complete record of which schools re- ceived funding during the program’s early years, because it never required the states to report the names of subgrantee schools or their status. The Department’s over- sight ended when the funds left Washington.

During the first decade of the program when states did not have to report where the money went, Florida, a state where nearly half of all charter schools are run by for-profit organizations, received four grants totaling $158,353,525. Michigan, where about 80 percent of all charters are run by for-profit management companies, received four grants totaling $64,608,912. California also received four grants, totaling $190,857,243.
Although the overall rate of failed charter projects was 37 percent, in some states the rate of failure was much higher.

Iowa and Kansas have the largest propor- tions of failed subgrantee charter schools. Eleven charter schools in Iowa received grants. Ten failed, wasting over $3.66 million. As of 2014, the database indicates that Kansas doled out $8.51 million to 29 schools. Twenty-two (76 percent) of those schools either never opened or are closed today–$6,389,964 of the $8.9 million was wasted.

States with a subgrantee failure rate exceeding 50 percent include: Delaware, Georgia, Hawaii, Iowa, Kansas, Maryland, Mississippi, Virginia and Washington (state). Mississippi had only one grantee and that school failed. Georgia had 75 failures, resulting in over 23 million federal dollars wasted.

The percentage of defunct charter school grantees in Florida was 37 percent ($34.2 million); the Michigan failure rate was over 44 percent ($21 million) and Lou- Asian’s failure rate was 46 percent ($25.5 million).
The most astounding loss, however, was California’s: nearly $103 million was awarded to charters that never opened or have shut down—37% failed.

Five hundred thirty-seven (537) schools list- ed in the database never opened at all. Many received over $100,000 in federal funds.

Since 2001, charter school entrepreneurs have been eligible to receive CSP grants before they have even identified an authorizer or submitted a detailed application to open a school. In total, we identified 28 states that had at least one charter school (537 schools in total) that never enrolled even one student for one day and yet had received federal funds. According to the CSP database, those schools received, or were due to receive when the database collection ended, a total of $45,546,552 million.

Topping the list was the state of Michigan where 72 never-opened schools received grants, most exceeding $100,000. Over $7.7 million was wasted. In California, we identified 61—with waste of $8.36 million.
Other states with large numbers of never- opened schools receiving CSP funds in- clude Arkansas (18), Florida (46) Illinois (20), Maryland (38), Massachusetts (17), New Jersey (23), Ohio (20), Oregon (40), Pennsylvania (41), South Carolina (34), Tennessee (43) and Wisconsin (15).

This report provides details on how several of these never-opened charters in Mi- chigan spent those federal funds.

Although Congress forbids for-profit opera- tors from directly receiving CSP grants, they still benefit by having their schools apply.

Although we could not identify every charter in the CSP database that was run by a for-profit management company, we were able to identify those run by the large for-profit chains including Academica, K12, National Heritage Academies, White Hat and Charter Schools USA. In total, we found 357 schools in the database run by major for-profit chains. These schools had received a total of $124,929,017 in federal CSP start-up funds. Unsurprisingly, most of this money flowed to for-profit run schools in Florida ($46,936,979) and Michigan ($26,452,927). Eighty-three (83) schools run by the Flor- ida-based, for-profit chain Academica received CSP grants, totaling $23,426,383.


Still Asleep at the Wheel also describes why so many charter schools fail, along with the stories of grantee schools that abruptly closed, sometimes with little or no notice to their students and families. Far too often those schools shut down due to corruption and fraud. Our report provides disturbing accounts of grifters and profiteers who took CSP and other taxpayer funds only to enrich themselves at the expense of the students they had promised to serve.

The staggering amount spent on schools that have closed or never opened, as well as those that have engaged in fraud, is nothing short of a national scandal. As public dollars are diverted from public schools, the students who attend their neighborhood schools have fewer resources. It is time to put on the brakes and chart a new course.

We were heartened that after the publication of our first report in March of 2019, the U.S. House of Representatives reduced funding for the CSP program for 2020. However, a small reduction is not sufficient to address the program’s structural flaws.

We therefore strongly recommend that Congress end appropriations for new charter school grants in the upcoming budget and continue funding only for obligated amounts to legitimate projects. Once those grants have been closed, we recommend that the CSP be ended and that charter schools continue to receive federal support only through other federal funding streams such as Title I and IDEA. Students, not charter school en- trepreneurs, should benefit from federal funds.

We also recommend thorough audits by Congress of previous grant awards, the establishment of regulations to ensure grant awards still under term are being responsibly carried out and that misspent money is returned to the federal coffers.

 

 

Categories Accountability, Charter Schools, Education Industry, Education Reform, Florida, For-Profit, Fraud, Funding, Michigan, Privatization, U.S. Department of Education

Politico: Betsy DeVos and ED Collected Student Debt in Error on Thousands More Defrauded Students

By dianeravitch
December 5, 2019 //
0

Politico Morning Education reports that the U.S. Department of Education mistakenly collected debt from many thousands of students who had been defrauded by a failed online for-profit college and were previously unreported. The last time the Department acknowledged having hounded students in error, it was fined $100,000. Why not fine the Secretary and the officials in charge personally so that they get the message that it is wrong to pursue collections from students whose debt should have been forgiven? (Today’s Politico was underwritten by the Waltons.)

 

A COURT FILING THIS WEEK REVEALED TENS OF THOUSANDS OF ADDITIONAL CORINTHIAN COLLEGES STUDENT BORROWERS WERE TARGETED FOR COLLECTION BY THE EDUCATION DEPARTMENT. The new disclosures have infuriated plaintiffs of an ongoing lawsuit against the government.

— In October, after the Trump administration initially said it erroneously collected on the loans of some 16,000 Corinthian borrowers, a federal judge held DeVos in contempt of court and imposed a $100,000 fine for violating an order to stop collecting on student loans from the defunct for-profit college.

— Now, according to the department, that means a total of 45,801 borrowers “were erroneously taken out of forbearance or stopped collections status.” That includes the roughly 29,000 newly identified borrowers, plus the original 16,034 borrowers. “FSA has now placed all 45,801 borrowers in the correct status,” the government’s court filing said.

— What’s to blame for the mixup? The department said an “isolated communication” between Federal Student Aid and its contractors, plus “other logistical issues” caused the undercount. The government said FSA “now believes that it has an accurate account of existing borrower defense applicants.”

— “Students and taxpayers should be infuriated by the Department of Education’s complete disregard for student borrowers,” said Toby Merrill, director of the Project on Predatory Student Lending. “Secretary DeVos has already been found in contempt of court for her illegal collections on students. Now we find out the impact was far greater than previously reported, and she still hasn’t returned all the money owed to students. It is galling, it’s unlawful, and it can’t be tolerated.”

Categories Accountability, Betsy DeVos, Fraud, Higher Education, Student Financial Aid and Student Debt, U.S. Department of Education

Jan Resseger: Cory Booker Wants to Privilege the Few, to the Detriment of the Many

By dianeravitch
November 20, 2019 //
9

In this post, Jan Resseger challenges Cory Booker’s newly rediscovered support for privately managed charter schools. She says “that school choice privileges the few at the expense of the many.” That’s not quite right. If the charter school is staffed with inexperienced, under qualified teachers, if the charter is operated by grifters intent on profit, if the charter exercises harsh disciplines and has high suspension and dropout rates, if the charter lacks the financial stability to keep its doors open, then the children who enroll in them are by no means “privileged.” Instead they are marks, dupes, collateral damage.

She writes:

The essential point to remember about school choice—whether it is a system of private school tuition vouchers or privately operated but publicly funded charter schools—is that school choice privileges the few at the expense of the many.

The scale of the provision of K-12 education across our nation can best be achieved by the systemic, public provision of education. Rewarding social entrepreneurship in the startup of one charter school at a time cannot possibly serve the needs of the mass of our children and adolescents. In a new, September 2019 enrollment summary, the National Center for Education Statistics reports: “Between around 2000 and 2016, traditional public school… enrollment increased to 47.3 million (1 percent increase), charter school enrollment grew to 3.0 million students (from 0.4 million), and the number of homeschooled students nearly doubled to 1.7 million. Private school enrollment fell 4 percent, to 5.8 million students.”

Booker argues for well-regulated and high-performing charter schools. The problem he fails to acknowledge is that charter schools were established beginning in the mid-1990s by state legislatures smitten with the idea of innovation and experimentation. None of these legislatures, to my knowledge, provided adequate oversight of the academic quality of the schools, and none imposed protections to guarantee the stewardship of public tax dollars.  Malfeasance, corruption, and poor performance plague charter schools across the states. Charter schools have now been established by state law across 45 states where stories of outrageous fiscal and academic scandals fill local newspapers. The Network for Public Education tracks the myriad examples of outrageous fraud and mismanagement by charter schools. Because advocates for school privatization and the entrepreneurs in the for-profit charter management companies regularly donate generously to the political coffers of state legislators—the very people responsible for passing laws to regulate this out-of-control sector—adequate oversight has proven impossible.

 

Categories Accountability, Charter Schools, Corruption, Cruelty, Education Industry, Education Reform, Failure, For-Profit, Fraud, Privatization

Cory Booker Slams Warren and Sanders for Criticizing Charters and Privatization

By dianeravitch
November 20, 2019 //
24

Almost 90% of American students attend public schools, subject to democratic control. 6% of American students are enrolled in privately managed charter schools. Under the leadership of Betsy DeVos, it is obvious that the promotion of both charters and vouchers is central to the education policy of the Trump administration.

Two Democratic senators who are candidates for president, Bernie Sanders and Elizabeth Warren, have released education plans that recommend an end to federal support for charter schools (currently $440 million), which DeVos has handed out to corporate charter chains like IDEA and KIPP.

Senator Cory Booker, having equivocated during the campaign about his previous zealous support for charters, vouchers, and Betsy DeVos, surprisingly reversed course and wrote an article in the New York Times, once again stating his support for charters.

Since Senator Booker is polling at less than 2% in the primaries, he may be looking past the election to restore his relationship with his funders, who love charter schools and were disappointed by his apparent defection from their cause.

Leonie Haimson writes here about Senator Booker’s curious use of the word “boogeyman” to belittle critics of charter schools.

She notes that reporters at the New York Times have also used that term to belittle charter critics. Then she googled and found that the same word has been used by charter defenders thousands of times.

Haimson points out that charters in NYC divert more than $2 billion each year from the public school system. That money might have been spent to meet crucial capital needs and to reduce class sizes.

Also, Senator Booker did not mention that the national NAACP passed a resolution in 2016 calling for a moratorium on charters.

There are many reasons to be critical of charters, including their diversion of funding from public schools, their private governance, their long and well-documented record of waste, fraud, and abuse.

To dismiss all criticism of charters as a fear of a boogeyman is cynical, to say the least, and serves only the interests of the charter industry.

 

 

Categories Accountability, Betsy DeVos, Charter Schools, Education Industry, Education Reform, Fraud, Funding, New York City, Privatization

Yes, Something Stinks about the State Takeover of the Houston Independent School District

By dianeravitch
November 18, 2019 //
11

A trio of activists on behalf of public schools wrote a blistering critique of the pending state takeover of the Houston Independent School District, based on the failure of ONE high school that has an unusually high proportion of students who are poor and have disabilities.

Zeph Capo is president of the Houston Federation of Teachers and Texas AFT, James Dixon is pastor of the Community of Faith Church in Houston and a vice president of the Houston Branch of the NAACP, and Hugo Mojica is president of LULAC Education Council #402.

They write:

Residents of this community are increasingly frustrated with the upheaval in the Houston Independent School District. As Houstonians who work directly with the educators, parents and students in the district, we don’t blame them. But something doesn’t add up in the state’s decision to take over HISD.

Houston schools have been on an improvement track for years — the district recently earned a B grade from the state — just two points away from an A. After years of struggle among legislators, administrators and educators to figure out how best to serve our kids, HISD should be celebrating our progress. But instead of cheering parents, educators and students, who came together and turned around the city’s schools, the state slapped our community in the face by announcing this punitive takeover of the entire district.

A byzantine Texas law enables the state to trigger a district takeover — all 283 Houston public schools — if just one school chronically underperforms. So instead of investing in that one school — Wheatley High School, in this case — and providing it the attention and resources it needs, Austin bureaucrats chose to scapegoat and punish the entire city. Given that Houston students just scored second in math and third in reading within their national peer group, HISD seems like it should be a model rather than a takeover target.

The writers might have also mentioned that Houston was the only city to win the Broad award for most improved urban district twice, an honor conferred by the Broad Foundation, which has the same worldview of disruption as the Texas State Board of Education and State Commissioner Mike Morath. Morath previously served on the Dallas board of education but he is not an educator. He is a software developer. He has no ideas about how to improve schools, nor has he ever improved a school.

The authors write:

This political power grab is the epitome of overreaching, but it also reflects an insidious, ongoing effort to deny black and brown communities the educational opportunities their kids deserve. It represents a classist, old-school view of public education that rewards the privileged few and ignores the difficult work that must be done to ensure schools are safe and welcoming and meet the needs of all kids, regardless of geography or demography.

What’s also incredibly disappointing is that this takeover comes on the heels of a democratic election, in which the community elected new school board members. If this untenable takeover proceeds, duly elected trustees won’t get a chance to take their seats, defying the will of the people and denying a voice for those elected to represent the needs of students.

Gov. Greg Abbott and Education Commissioner Mike Morath aren’t actually looking out for Houston’s kids. They want to privatize Texas’ largest school district through a charter scheme. If that happens, this plan will funnel money out of our traditional public schools and into for-profit alternatives. This recent election vote reflected the community’s mandate that Houston public schools continue to invest in evidence-based wraparound services, including health care, before- and after-school programs, and enhanced social and emotional services.

State officials would prefer to privatize rather than invest new resources in a major district that is facing challenges and doing well compared to other urban districts.

Yes, indeed, something stinks in Texas.

The state officials behind the takeover are vandals, disrupters, corrupters of democracy.

They should not be allowed to mess with the HISD.

 

Categories Accountability, Charter Schools, Disruption, Education Reform, Fraud, Houston, Privatization, Texas

Eric Blanc: Why Little Rock Teachers Went on Strike

By dianeravitch
November 17, 2019 //
3

If you want to understand what is happening in the Little Rock school District today, read Eric Blanc’s article. 

Eric Blanc has covered every one of the teachers’ strikes since the West Virginia strike in the spring of 2018. Now he is in Little Rock, where he interviewed teachers who went on strike yesterday to protest the State Board of Education’s heavy-handed control of the district and its decision to strip school employees of collective bargaining rights.

Teachers are outraged that the State Board of Education, which took control of the district in 2015, utterly failed to improve student outcomes, yet refuses to relinquish control to a democratically elected board. Teachers believe that the state wants to resegregate the district.

Blanc writes:

Little Rock teachers today are not demanding raises for themselves, but an end to the state’s push to resegregate schools, its takeover of their district, its decertification of their union, and its disrespect for school support staff. As second grade teacher Jenni White explains, “this is literally about standing up for our kids and not dividing our community…

The immediate roots of this week’s action go back to January 2015 when the Arkansas State Board of Education announced that it was taking over Little Rock’s schools due to low standardized test scores. By all accounts, the ensuing state takeover failed to accomplish its nominal goal of improving stability and educational opportunities for the town’s low-performing schools. Yet rather than return Little Rock School District to local control in 2020 as promised, the state board instead proposed in September of this year that it would continue to oversee so-called “F”-rated schools, those with the lowest test scores.

Since all but one of the “F” schools were in black and brown neighborhoods south of I-630, teachers and parents saw this an attempt to create a two-tier school system. “The plan was blatantly racist, it separated the haves and the have notes,” Jenni White told me.

In a dramatic protest on the evening of October 9, thousands of teachers, support staff, students, and community members congregated on the steps of Central High, where the Little Rock Nine had famously confronted the National Guard decades earlier. Teresa Knapp Gordon, president of the Little Rock Education Association (LREA), closed the rally with the following declaration: “Either we accept segregation, or we stand and fight.”

This public outpouring forced the state board to change tactics. At the next evening’s contentious Arkansas Board of Education meeting, it dropped the proposal to split Little Rock’s school district. But surprisingly, the board then immediately proceeded to cease recognition of the LREA as the educators’ representative, thereby scrapping the last remaining collective bargaining agreement for school workers in Arkansas. The decision was blatant retaliation against not only teachers but also Little Rock’s school support staff, who were in the midst of negotiating a pay raise.

Next, the board issued a draft “Memorandum of Understanding” explaining that instead of returning full local control to the school board set to be elected in November 2020, the state would appoint a parallel “advisory board” that could veto local decisions. The Memorandum also insists on closing up to eleven neighborhood schools — which would thereby accelerate privatization, since state law gives charters first access to any vacant school. Stacey McAdoo, a teacher at Central High, told Labor Notes, “they are trying to charterize the [district] like what happened in New Orleans and disenfranchise people and make a separate school system out of the areas that are primarily Black and Latino.”

As in so many other states across the country, this offensive against the labor movement, public education, and working-class communities of color is being directly funded by billionaires. And it’s not just any billionaires: Little Rock teachers and students are up against the Arkansas-based Waltons, founders of Walmart and the richest familyin America.

The Walton family: the Death Star of Public Education. The ingrates who graduated from Arkansas public schools but now want to destroy them and public schools everywhere. Rich and shameless.

Categories Arkansas, Charter Schools, Democracy, Education Reform, Failure, Fraud, Little Rock, Resistance, Segregation, Teachers, Unions

Federal Judge Holds DeVos in Contempt of Court, Fines Ed Department $100,000

By dianeravitch
October 24, 2019 //
48

 

A federal judge found Secretary of Education Betsy DeVos in contempt of court and fined her Department $100,000, which is less than a slap in the wrist. It won’t begin to cover the losses suffered by students who were hounded by the Department to repay fraudulent student loans for a fraudulent education at for-profit colleges. DeVos believes it is her duty to protect the fraudsters, not the students.

A federal judge on Thursday held Education Secretary Betsy DeVos in contempt for violating an order to stop collecting loan payments from former Corinthian Colleges students.

Magistrate Judge Sallie Kim of the U.S. District Court in San Francisco slapped the Education Department with a $100,000 fine for violating a preliminary injunction. Money from the fine will be used to compensate the 16,000 people harmed by the federal agency’s actions. Some former students of the defunct for-profit college had their paychecks garnished. Others had their tax refunds seized by the federal government.

“There is no question that the defendants violated the preliminary injunction. There is also no question that defendants’ violations harmed individual borrowers,” Kim wrote in her ruling Thursday. “Defendants have not provided evidence that they were unable to comply with the preliminary injunction, and the evidence shows only minimal efforts to comply.”

Categories Betsy DeVos, Education Reform, For-Profit, Fraud, Higher Education, Student Financial Aid and Student Debt

DeVos to Judge: “Don’t Lock Me Up”

By dianeravitch
October 16, 2019 //
25

Politico reports that the Trump administration is apologizing profusely for hounding students whose loans for attending the predatory (now closed) Corinthian Colleges should have been forgiven. The judge in the case had threatened to punish Betsy DeVos for violating her court order. This is a case of “accountability for thee, but not for me.”

MAKING THE CASE AGAINST CONTEMPT FINDING: The Trump administration, in a court filing on Tuesday night, outlined why the Education Department and DeVos shouldn’t be held in contempt or face fines for violating U.S. Magistrate Judge Sallie Kim’s May 2018 order to stop collecting the student loans of former Corinthian Colleges students.

— Justice Department attorneys wrote that the Education Department “has been working diligently and in good faith to correct the errors” that led to the agency collecting on the student loans of thousands of borrowers despite the order. Kim is now deciding whether to hold the department and DeVos in contempt and impose sanctions, including fines, against them.

— “Loan servicers made an error on a small # of loans,” DeVos tweeted last week. “We know & we’re fixing it.” She also accused Sen. Elizabeth Warren of lying about the issue.

— The Trump administration’s filing mostly strikes a conciliatory tone. The department said it appreciates the “gravity” of the situation and the effect it had on affected borrowers. The department also said it was committed to coming into full compliance with the court’s order and asked that any sanctions be “forward-looking” rather than punitive.

— The Education Department conceded, though, that it had been “negligent” in its oversight of student loan companies. The “errors at issue here were not the result of any willful or intentional conduct on the part of the Department, but, as the Court has recognized, gross negligence, including negligent oversight of the Department’s servicers,” attorneys for the department wrote.

— Education Department officials last week sent letters admonishing its loan servicers over the issue and moved to discipline two department officials.

Categories Accountability, Betsy DeVos, Education Reform, Fraud, Higher Education, Student Financial Aid and Student Debt

ProPublica Reviews Trump’s Tax Documents and Finds Troubling Practices

By dianeravitch
October 16, 2019 //
12

 

Heather Vogeli of ProPublica reports on property tax documents of Trump properties and reports some troubling discrepancies.

The story begins:

Documents obtained by ProPublica show stark differences in how Donald Trump’s businesses reported some expenses, profits and occupancy figures for two Manhattan buildings, giving a lender different figures than they provided to New York City tax authorities. The discrepancies made the buildings appear more profitable to the lender — and less profitable to the officials who set the buildings’ property tax.

For instance, Trump told the lender that he took in twice as much rent from one building as he reported to tax authorities during the same year, 2017. He also gave conflicting occupancy figures for one of his signature skyscrapers, located at 40 Wall Street.

Lenders like to see a rising occupancy level as a sign of what they call “leasing momentum.” Sure enough, the company told a lender that 40 Wall Street had been 58.9% leased on Dec. 31, 2012, and then rose to 95% a few years later. The company told tax officials the building was 81% rented as of Jan. 5, 2013.

New York City’s property tax forms state that the person signing them “affirms the truth of the statements made” and that “false filings are subject to all applicable civil and criminal penalties.”

The punishments for lying to tax officials, or to lenders, can be significant, ranging from fines to criminal fraud charges. Two former Trump associates, Michael Cohen and Paul Manafort, are serving prison time for offenses that include falsifying tax and bank records, some of them related to real estate.

This explains why Trump is so determined to hide his tax returns and is marshaling the resources of the Justice Department to conceal his business affairs. This may be the first time in history that the Justice Department shielded potentially criminal behavior.

 

Categories Accountability, Fraud, Trump
« Older Entries
Newer Entries »