Copyright © 2016 Albuquerque Journal
WASHINGTON – Over the summer, Donald Trump came under intense political fire for the now-defunct Trump University, which has been besieged by lawsuits and allegations of fraud.
Meanwhile, Hillary Clinton pledges to put for-profit colleges such as Trump University under the ethical microscope if elected president.
But her husband’s multimillion-dollar deal with one such university system deserves scrutiny of its own, according to House Republicans and an independent analyst.
Federal records show that from 2010 to 2015, former President Bill Clinton earned more than $17 million from Baltimore-based Laureate Education in exchange for his high-profile role as “honorary chancellor.”
And during the time he was earning millions making international appearances and speeches to help boost Laureate’s enrollment, the for-profit company donated between $1 million and $5 million to the Clinton Foundation, a massive charity run by the Clinton family.
Laureate International Universities – formerly known as Sylvan Learning Systems – runs roughly 80 higher-education institutions with almost a million students in 28 countries. One of Laureate’s five U.S. campuses – the Santa Fe University of Art and Design – is in New Mexico.
There were also connections between the Clintons and Laureate’s founder, Douglas Becker.
From 2009 to 2013, when Hillary Clinton was secretary of state, USAID – a federal agency aligned with the State Department – awarded the nonprofit International Youth Foundation more than $52 million in federal grants. Becker is IYF’s unpaid chairman of the board.
Clinton’s five-year contract as Laureate’s chancellor ended in 2015, two weeks after his wife announced her presidential campaign.
None of the actions appears to be illegal, but a prominent professor of public interest law at George Washington University described the relationship between former President Clinton and Laureate as “very dubious.”
“It had obvious benefits for Laureate,” GWU’s Jonathan Turley told the Journal . “Laureate was trying to open up schools in areas that received U.S. aid and contracts with USAID and/or the State Department. The Clintons made an ungodly amount of money off of Laureate University just before she announced her campaign for the presidency.”
In mid-July, 64 congressional Republicans led by Rep. Marsha Blackburn of Tennessee wrote to the heads of the FBI, Internal Revenue Service and Federal Trade Commission requesting investigations of the Clinton Foundation. The letter raised concerns about the foundation’s tax status, its dealings with a Russian uranium company, Laureate’s multimillion-dollar payout to former President Clinton and the USAID grants later disbursed to the International Youth Foundation, where Becker is chairman of the board.
The GOP letter characterized the Clinton Foundation as “a lawless ‘pay-to-play’ enterprise that has been operating under a cloak of philanthropy for years and should be investigated.”
“USAID operates under substantial guidance from the secretary of state, which creates an appearance that millions of dollars in taxpayer money was channeled to IYF by Secretary Clinton’s State Department as a kickback for her husband’s generous contract as an honorary Laureate chancellor,” the letter said.
Hillary Clinton’s campaign strongly denied the allegation in a statement to the Journal .
“This is another baseless political attack from House Republicans who just spent two years and $7 million of taxpayer dollars on the sham Benghazi Committee and are now just regurgitating the debunked claims from the widely discredited book ‘Clinton Cash,’ ” Clinton campaign spokesman Josh Schwerin said.
“Clinton Cash,” written by conservative author and commenter Peter Schweizer, was a 2015 New York Times best-selling book that was released to mixed reviews. Some of the passages in the book were found to be false or inaccurately reported. Since its publication, the Clinton Foundation has announced that it will no longer accept donations from corporations or foreign governments.
Representatives of Laureate Education also denied any impropriety.
“Allegations of any quid pro quo between Laureate, the International Youth Foundation and the Clintons are completely false,” Laureate spokesman Adam Smith said. “IYF and Laureate Education are independent organizations. Laureate has never received any funds from IYF.”
State Department spokesman John Kirby told the Journal the relationship among Laureate, IYF and the federal government is misunderstood – at least by some.
“The State Department is not aware of any grants provided directly to Laureate Education since 2009 (when Clinton became secretary of state), though we are aware of some grants to educational institutions within or affiliated with the Laureate Education network,” Kirby said. “Importantly, in recent weeks, Laureate Education has been conflated with an entirely separate organization, the International Youth Foundation, a nonprofit that funds international development initiatives. The International Youth Foundation has received federal grants from USAID and State going back many years, under both Democratic and Republican administrations.”
While Laureate’s connections to the Clintons are beginning to become an issue in her campaign, controversies over Trump University have dogged the Republican nominee all summer. The New York attorney general is suing Trump University for fraud, and a class-action lawsuit is also pending against Trump stemming from the school’s operations in California. In June, Trump asked U.S. District Judge Gonzalo Curiel to toss out the class-action lawsuit that alleged Trump University violated the Racketeering Influenced and Corrupt Organizations Act. When the judge, who was born in Indiana but is of Mexican-American heritage, refused, Trump publicly accused him of bias because of the judge’s Hispanic heritage. Numerous public officials – Democratic and Republican – denounced Trump’s remarks as racist.
For his part, Trump and his lawyers have argued that the lawsuits against him and Trump University stem from a small number of disgruntled students. Trump’s lawyers have cited a large number of student evaluations in which the students said they were satisfied with their investment in education at Trump University.
Since announcing her White House run, Clinton has actively pursued endorsements of public school teachers unions, and in June 2015 she secured the backing of the nation’s largest such union, the National Education Association.
She has also pledged that her administration would more closely scrutinize for-profit colleges. During the primary election campaign – but after her husband pocketed $17 million from Laureate – Clinton echoed Sen. Bernie Sander’s call for billions in new federal spending on public colleges and universities, including community colleges that frequently compete for students with for-profit institutions.
“That’s the great irony,” Turley said. “Clinton has actively pursued teachers unions for endorsements and the teachers unions and academics, in general, are overwhelmingly opposed to Laureate University and many of these companies … that are selling easily attainable degrees. The Clintons effectively cashed out right before the announcement of her campaign.”
Clinton’s education platform vows to “strengthen” rules that President Barack Obama’s administration put in place to keep for-profit colleges and universities honest. Clinton’s platform also singles out online education for greater scrutiny. A significant portion of most for-profit universities’ business models – including Laureate’s – is based on internet learning and testing.
The national Democratic Party’s education platform adopted at the convention in Cleveland this summer also pledges to “go after” for-profit universities.
“We will go after for-profits that engage in deceptive marketing, fraud, and other illegal practices,” the document says. “It is not right that for-profit schools with low graduation rates keep encouraging their students to take out federal loans they will have trouble paying back.”
In June, Politico reported that three former officials representing an investment firm run by President Barack Obama’s best friend “staged a behind-the-scenes campaign to get the Education Department to green-light a purchase of the biggest for-profit of them all – the University of Phoenix.”
Asked about accusations of hypocrisy in connection with the Clintons, Laureate, public teacher unions and her pledge to more closely regulate profitable private education, Clinton’s spokesman suggested he saw none.
“Hillary Clinton has made it clear that all for-profit institutions should be held to the same standards, and she will crack down on lawbreaking for-profits by expanding support for federal regulators to enforce laws against deceptive marketing, fraud, and other illegal practices,” Schwerin said.
Meanwhile, the for-profit education company ITT Tech announced last week that it would close all 130 of its campuses nationwide – including one in Albuquerque with nearly 400 students enrolled – after the U.S. Department of Education ruled the company could no longer accept students who use federal financial aid. New Mexico Attorney General Hector Balderas sued the company in 2014 alleging unfair trade practices. Last week, he asked the Department of Education and New Mexico’s congressional delegation to look into ITT’s business practices and seek financial remedies for its students.
“The for-profit education industry has boomed over the past few decades, and the federal government has continued to subsidize the industry, while federal oversight has moved in the wrong direction,” Balderas said.