More of this might help balance the budget:
The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.
While the civil lawsuit is one of many raising similar charges against the expanding for-profit college industry, the case is the first in which the government intervened to back whistle-blowers’ claims that a company consistently violated federal law by paying recruiters based on how many students it enrolled. The suit said that each year, Education Management falsely certified that it was complying with the law, making it eligible to receive student financial aid.
“The depth and breadth of the fraud laid out in the complaint are astonishing,” said Harry Litman, a lawyer in Pittsburgh and former federal prosecutor who is one of those representing the two whistle-blowers whose 2007 complaints spurred the suit. “It spans the entire company — from the ground level in over 100 separate institutions up to the most senior management — and accounts for nearly all the revenues the company has realized since 2003.”
Education Management, which is based in Pittsburgh and is 41 percent owned by Goldman Sachs, enrolls about 150,000 students in 105 schools operating under four names: Art Institute, Argosy University, Brown Mackie College and South University.
In 2003, Education Management’s chief executive was Jock McKernan, a former governor of Maine who now serves as chairman of the board. Mr. McKernan is married to Senator Olympia J. Snowe, a Maine Republican whose 2010 financial disclosure form lists Education Management stock and options worth $2 million to $10 million.
By the way, what happened to the GOP House pledge to seek out waste, fraud and abuse in government? Did they mean going after individual food stamp recipients? This approach seems much more efficient. $11 billion dollars is a lot of food stamps.
BGinCHI
Really glad to see this. Let’s see if any GOP pols applaud this.
I’d put the over/under at 0.
ed drone
I think a slap on the wrist is in order here.
… with a katana!
A few more of these and the deficit starts going down!
Ed
RalfW
Will this help the Tea People to decide to primairy Ms. Snowe?
a hip hop artist from Idaho (fka Bella Q)
They didn’t mean their own, of course.
secondlaws
Holy **** ! Eleven billion smackeroos? That’s not just a lot of food stamps. It would more than fully fund my 10,000 student university’s operation for ONE HUNDRED years!
kay
@a hip hop artist from Idaho (fka Bella Q):
Right. They’re staking out Medicaid offices in strip malls in Ohio, and this was going on right under their noses.
Drats! The Goldman waste fraud and abuse trail went cold while they were interrogating that one social worker in Cleveland.
mclaren
Silly rabbit. There’s no waste, fraud and abuse in the 1.2 trillion dollars per year America pisses away on its worthless incompetent military.
Stories like “Pentagon’s lightning gun sold for scrap on eBay” are just made-up fantasy. As many people on this wise and insightful forum have pointed out, I’m craaaaaaaaaaaazeeeeeeeeeeeeeeee when I cite documented facts like this. Mentally ill. In need of help. Hallucinating. Sick in the head.
BGinCHI
@secondlaws: Mine too. Meet me in the parking lot.
Peggy
Not only is the US taxpayer on the hook for these bad school loans, the students who graduate without any hope of a job because these “vocational” schools ripped them off are now in debt past their eyeballs.
The Raven
Just remember, the Secretary of Education, Arne Duncan, thinks for-profit schools are really kewl, there are only a few bad apples among them.
Is there any corrupt business that this administration has not cozied up to?
Redshift
I have this fantasy that someone on the White House political staff has sent a private message to the WaPo editorial board that they have a nice corporate cash cow supporting them; shame if something were to happen to it.
Normally, I would consider such tactics with respect to the press out of bounds, but since the Post pretty much openly threatened to use the editorial page against the administration if the regulation of for-profit colleges went through (which it did), turnabout is fair play.
kay
@Peggy:
It’s really a bad scene. The debt can’t be discharged in bankruptcy, and they’ll never, ever be able to pay it back.
It’s going to blow up, big.
bemused
I look forward eagerly to learn from the rightwing why this is big government again stifling the free market, job creators and stirring up class warfare.
Martin
SNAP (Food Stamps) budget is $77B per year, so yeah, $11B is a lot of food stamps.
jl
The teabaggers have more dire threats to worry about than for profit school fraud:
‘ Tea-party activists called McCain “out of touch” when the senator said he didn’t know about United Nations “Agenda 21.”One man described the initiative as a “takeover of the United States of America by taking over our farms.”
“First, our firearms, then our farms,” another man added. ‘
Couldn’t Happen to a Nicer Guy
Josh Marshall | August 9, 2011
http://talkingpointsmemo.com/archives/2011/08/couldnt_happen_to_a_nicer_guy.php?ref=fpblg
PaulW
Oh crap. I put in for a librarian opening with Brown Mackie College…
PaulW
@The Raven:
Um, maybe the self-published authors business. I think I can talk Obama into promoting my ebooks… ;-)
redshirt
One of the Sisters with her hand in the cookie jar! This will definitely play in Maine going into 2012.
Roger Moore
@RalfW:
Now that she’s proven she can grift with the best of them? This is a lot more likely to win them over to her side than turn them off.
Lolis
Corporations can’t commit fraud, waste, or abuse. It is literally impossible.
/wingnut
Kyle
They’ll get to it right after the rigorous investigation into the $8 billion in cash missing in Iraq. Which will happen sometime after OJ finds the real killer.
Teatard: Waste! Fraud! Evil big government!
(Reads further) “…for-profit college company”…
(cough) Never mind.
sven
The wikipedia entry for EMC suggests a clear revolving door between the company and financial aid regulators.
EMC and other for profit ‘colleges’ also cooperate in an
front groupadvocacy group called “The Coalition for Educational Success”. Guess which worm they have retained as their chief lobbyist. Hint: he was prominent in the 2008 campaign cycle.Pat yourself on the back if you said Lanny Davis.
Roger Moore
I think it’s waiting in line behind their promise to focus on jobs, jobs, jobs. Once they’re done getting us back to full employment, they’ll start worrying about waste, fraud, and abuse. Unless, of course, the waste, fraud, and abuse can somehow be tied to the Kenyan in Chief, in which case it will be priority #1.
Suffern ACE
@jl: I do not want to look up Agenda 21, because I don’t want to go to web sites ranting about it. So what’s the gist of it this time? Mugabe going to come over here with Venezuelan “peacekeepers” to drive the whites off their lands?
Peggy
NYT on the worthless education offered by these vocational schools. The article highlights two companies, Career Education Corporation and Apollo Group.
More potential targets.
Catsy
It’s more than that. Under the False Claims Act, the government will be entitled to treble damages if they prevail.
Suffern ACE
@Roger Moore: Silly, they can’t do jobs until they’ve tracked down every instance of waste, fraud and abuse…of a certain kind. Once we have gone through the quick process of amending the constitution, we can get on to jobs.
Jay B.
This is great. Of course, I think there are trillions in fraud to be found, oh, I don’t know, in other places Goldman Sachs are vampire squidding, but this is an unmitigated good.
evap
Yikes, a friend of mine teaches at one of the Art Institutes.
arguingwithsignposts
@evap: I know some people who teach at Art Institutes too. People shouldn’t blame the drones for the actions of the upper echelons.
Also, this will likely be settled out of court, I assume. They’ll write a big check with a “no admission of guilt” stipulation. Easy Peasy, unfortunately.
jl
@25 Suffern ACE
You can read about the
sinister secret plotbland common sense sustainability initiative, with plenty of room for maneuver,at this brave truth telling underground resistance websiteat the UN.UN Department of Economic and Social Affairs
Division for Sustainable Development
http://www.un.org/esa/dsd/agenda21/
The fell plot was approved under GHW Bush, the communist America Destroyer, who has inspired many an action movie super villain.
Commenting at Balloon Juice since 1937
Who would name their kid Jock? or is that some type of a nickname?
Belafon (formerly anonevent)
Did you see the stat that said for-profits have 10% of college students but represent half of all student loan defaults.
Napoleon
@Catsy:
I thought that only applied to private citizens bringing an action under it.
hamletta
@The Raven:
So…they cozy up to businesses by siccing the DOJ on them?
Fucking logic, how does it work?
Mojotron
Draw a venn diagram with all the businesses that Goldmann Sachs and Lanny Davis are currently involved in and where they overlap send in the DoJ.
Captain Haddock
Those young bucks and their t-bones strike again.
Damn you, young bucks. Damn you!
Maude
@Mojotron:
That would make it easier to find the rotters.
MD Rackham
I feel bad for graduates of these schools. I have to interview them for jobs on a regular basis and it’s just sad how badly prepared they are for the real job market, yet they are sitting on $100K in student loans.
If the graduate fits my criteria I’ll hire them, but it’s *despite* their “degree” because I know how much work it will be to convince them that knowing every keyboard shortcut for After Effects does not an artist make, and that they need to study *art* not technology.
Sadly, I’ll bet the eventual settlement doesn’t exceed $5 million and only requires that they promise to “quit it” when it comes to the illegal activities.
Nutella
@Commenting at Balloon Juice since 1937:
Jock is the Scottish version of Jack. His full name is John Rettie McKernan, Jr. which sounds very Scottish.
Marc McKenzie
“By the way, what happened to the GOP House pledge to seek out waste, fraud and abuse in government?”
Hah, very funny. The GOP pledge going after waste is as relevant as a kleptomaniac’s claim that he can keep his hands to himself in a jewelry store.
BalJu Commenter #2401
When oh when will the light shine on Kaplan?
piratedan
and in other fraud news…..
http://azstarnet.com/article_8d9a4d32-c23b-11e0-9283-001cc4c03286.html
Looks like the Feds are starting to slowly tighten the noose around Sheriff Joe…..
A Mom Anon
I briefly looked into sending my kiddo to the Art Institute for the music/audio engineering program. It’s nearly 90 grand for 4 yrs and there’s not a ton of aid nor any scholarships available for a kid with pretty lousy HS grades. I about fell out of my chair. Needless to say we’re exploring other options via Vocational Rehab(he’s autistic and qualifies for some state based programs). Shortly after I contacted them the phone calls and emails started trying to talk me into taking on massive loans. I finally had to tell them we were dealing with a job loss to get them to leave me alone. I’m glad someone’s at least starting to look into this crap. It’s wrong on so many levels and it pisses me off.
Three-nineteen
@Suffern ACE: Here are a couple of Mother Jones articles about Agenda 21.
Martin
@Mojotron:
Given that GS is an investment bank, they’re going to be involved in most businesses. That’s sorta why they exist. You’ll find that the California Public Employees Retirement Fund owns a chunk of pretty damn near every corporation in America as well. Sometimes quite a large chunk.
burnspbesq
@efgoldman:
Except that Goldman doesn’t own it. A consortium of private equity partnerships, one or more of which was sponsored or is managed by Goldman, owns it. Fucking reporters need to learn how to read a 10-K.
A Mom Anon
I’d LOVE to see the Feds start looking at the for profit standardized testing business too. What a freaking racket that shit is.
hamletta
@A Mom Anon: If he really wants to go into audio engineering, check out Middle TN State. It has one of the best programs in the country, and it’s a state school.
Be aware, though, that these programs are cranking out more graduates than the industry can absorb.
evap
@arguingwithsignposts: I’m not blaming the drones, I think my friend is a fine teacher. Just worried about her losing her job if their students can no longer get student loans.
bkny
christ, it’s about time these thieving shitheads get investigated. i see an endless stream of ads on the subway advertising “NEW FUN CAREERS” in medical transcription, elevator mechanics…. i feel so sorry for the kids they are preying on.
El Cid
I too was curious about a local Art Institute, even touring the place, even for a while checking into a possible minor part time job with one. Even before looking into the context, I felt alarm bells ringing in the far distance. First, it just didn’t make sense that what they were training people for were not lucrative positions, generally, and it was a private company, and yet they were *very* lavish surroundings. And the ones attending didn’t strike me as rich. And then, I got a clearer discussion of what the prices were.
I was saddened to read around and see that the situation was worse than I thought. I’m sure a lot of people really benefited from the programs at AI; I’m more sure, though, that the studies showing low job placement rates at extraordinarily high debt burdens were more important.
Of course, now I feel much better about the place since it’s owned by Goldman Sachs.
Anyone mention how Goldman Sachs is actually going all 19th-early 20th century style and manipulating aluminum prices by hoarding?
Pfah. Conspiracy theory by non-experts in commodities economics.
Plus, wouldn’t this be an actual case of supply-side economics?
askew
This would only impact the university not the students who took out the loans, right? My friend is almost done with his graduate degree from one of those schools. It has actually helped him land a better job already. I’d hate to see him or other students punished because of this school’s practices.
A Mom Anon
@hamletta: Thank you hamletta,I’ll check that out. I’m more concerned that he has an education in something he loves(he’ll be more apt to work hard),and we’ll worry about the job part later. He hates HS,mostly because he’s bored to tears(except for Biology and Zoology),so any degree works IMO. He needs direction of some kind.
geg6
Heh.
The rumblings about this began months ago in the local financial aid community. About damn time. These proprietary schools are the biggest ripoff in all of education.
Newsflash, folks. There is nothing you can learn in one of these schools that you can’t learn at your local community college for about 1/10th the price.
Redshift
@sven: I don’t know whether to be amused that Davis has screwed up in yet another gig, or be impressed that he convinced them to hire him with his long record of failure.
kindness
57 posts and no one has bagged on Obama yet….I think we have a new BJ record.
geg6
@Peggy:
Kaplan. Kaplan “University” is the one I’m waiting for the shoe to drop on.
Redshift
@askew: It definitely wouldn’t impact the students; they didn’t do anything wrong, they’ve just been taken advantage of. Who knows, a possible settlement might even involve some loan forgiveness.
Thoughtful Black Co-Citizen
@askew: Nope. The DOJ has merely filed a case. They’ll probably settle in a year or so.
bemused
@Three-nineteen:
I should have known that Michele Lightbulbs Bachmann would be freaked out about Agenda 21.
Suffern ACE
@kindness: See 11.
freelancer
@kindness:
Scroll through the archives. I’m sure there were hundreds of threads from 2001-2004 where commenters weren’t flipping out about Obama.
Chris
@jl:
The only thing more ridiculous than the teabagger belief that the UN is in a conspiracy to take over the world, is their belief that if there was such a conspiracy, it really would have nothing better to do than to worry about Arizona hillbillies’ hunting rifles. Or their farms, for that matter.
geg6
@Redshift:
Loan forgiveness might be possible, but only if the whole operations shuts down and students are left without the ability to finish their programs.
Or if the DoJ allows it through a settlement agreement with the schools. Though I wouldn’t count on that.
Southern Beale
Just heard some idiot on an NPR call-in show yesterday make the ludicrous claim that whenever the government does something it’s always inefficient, corrupt and leads to waste.
SIGH
Johnny Gentle (famous crooner)
“By the way, what happened to the GOP House pledge to seek out waste, fraud and abuse in government?”
Good point. I’m sure they’ll be trying to cut the DOJ’s funds imminently. That should teach them for messing with commerce. That is what you meant, right?
El Cid
@Chris:
It’s ancient history to recall that one of the freakout issues of the more-or-less mainstreamed ultra-Bircherite paranoid survivalist militia shortwave right of the 1990s* was Hillary Clinton planning to have the UN invade and occupy the USA and institute a soshullist One World Gubmit.
This was the main significance of the “black helicopters” meme — they were supposedly scouting around for targets of resistance which would oppose the UNHILLARY gubmit.
* Now we can save a lot of space and accurately substitute Tea Party for those identifiers.
askew
@Redshift:
@Thoughtful Black Co-Citizen
That makes me feel much better. I’d hate for students to get punished.
What people forget about these for-profit schools is that you get degrees much faster than you would at most community colleges and/or public/private universities. They also have a more flexible class schedule than the other choices. That’s why they get so many students to attend their schools.
Thoughtful Black Co-Citizen
I had to laugh when I saw Florida is one of the states joining this case. Gov. pRick Scott is probably pissed at the idea that EMC^2^ made off with more money than HCA.
arguingwithsignposts
@evap: Sorry, the “don’t blame” part wasn’t aimed at you.
Roger Moore
@Southern Beale:
This is true but incomplete. Inefficiency, corruption, and waste are natural products of any large undertaking, whether it be by the government, business, or non-profit. It’s more noticeable when it’s the government because the government tends to A) take on bigger projects than anyone else, B) have higher expectations for probity than private enterprise, and C) be more open and accountable than private enterprise.
djork
@hamletta:
This. I went to MTSU for audio engineering for a brief while, until I saw the writing on the wall. (Audio software on home computers is killing the industry.) However, like Hamletta says, the market is saturated and it’s an almost dying industry, given that most people have more power than Abbey Road on their laptops. However, MTSU will at least give him the liberal arts / math / science foundation of a 4 year degree.
And look into something called the Academic Common Market when researching MTSU’s tutition. If your home state is part of it, you could only pay in-state tution, provided no schools in your state offer a degree in audio engineering.
Chris
@El Cid:
And what’s fascinating about that is that it’s happening now. You’d think the fall of communism and the triumph of Reagan/Thatcher supply-side bullshit would’ve calmed them down a bit. But it seems like there’s more paranoid lunacy about soshullist One World Gubmints coming to get us today than there was when, you know, there was actually a Soviet Union.
Maybe it’s simply their pathological need to have an enemy – when the enemy disappears, all that does is make them more paranoid and insecure (cause after all, there’s always someone out to get them, and they just have to find out who that is).
Joseph Nobles
What are the odds Snowe gets appointed to the Joint Committee?
Derf
DOW up +430 today. Where are all the breathless headlines? Or is it only news when it’s bad?
Stay Gloomy Baboon Juicers.
Suffern ACE
@Chris: To think, they learned all this for free, with a little help from the likes of Michelle Bachman and Exxon, whereas the people who actually are trying to get an education to help them get actual jobs get shafted and a huge debt burden.
Roger Moore
@El Cid:
ISTR that the black helicopter paranoia started during the GHWB administration, what with the New World Order business, though it obviously intensified during the Clinton administration. I remember there was somebody who loved writing to my home town paper about black helicopters and UN takeover, until he eventually got hauled in by the DEA. I guess the helicopters he was seeing were looking for his pot farm.
Davis X. Machina
@Suffern ACE: Any Agenda 21 story needs to cover the UN/manatee threat to the Republic. No, they’re not being armed with lasers…it’s much, much worse.
Bonfire of the Manatees.
Suffern ACE
@Roger Moore: I think the founders actually understood that, which is why they didn’t even bother write “an absolutely permanent union” in the preamble.
ETA: I meant perfect. Geez. I guess I read a bunch of stuff about conspiracies held by people in Arizona and my Id wants to move to break the whole union thing up as soon as possible.
El Cid
@Chris: As with Christian fundamentalist evangelical movements, the closer they are to power and the better off the movements are, the louder and more paranoid their complaints become.
I don’t see many people mention it clearly, but I think one of the things driving so many more right wingers over-the-top ultra-Bircherite nuts (i.e., more than the constant core) was that the right held absolute power here and lost it.
They had it. They can pretend now like they thought Bush Jr. illegitimate blah blah blah.
But the right had the Presidency, the two houses of Congress, the Supreme Court (hell, it gave them the Preznitzy), most state governments, and a press at the greatest degree of fealty to the right than they’d ever seen. And that’s not even counting Fox and the ultra-right radiosphere.
They had it all. They could have been on their way to paradise. No IRS, the Bible back in schools, ending the Department of Education, opening up all national parks to hunting, logging, paved roads, and 4-wheeling, etc. I’m talking the paradise of the low level righties, not the internationalist corporate right.
But somehow they lost it. Somehow it got tooken away.
It couldn’t be the voters — everyone knows that Americans just hate Democrats and liberals and liberalism!
Everyone knows that finally when the right has the chance to do everything promised by the right wing political establishment for decades, it’ll work, and everyone will love it.
But no, someone did stuff wrong, and San Francisco Liberal NANCY PELOSI WHO WENT TO SYRIA and Teddy Kennedy won the Congress back, and then it was all stoled by a Kenyonesian Bill Ayers soshullist black man.
Having power and losing it is even more enraging than knowing how close you are to power and not yet having it.
El Cid
@Roger Moore: Yes — you’re right to distinguish. The black helicopter meme was about the One World Government as early as Bush I stamping out resistance to their Soshullist nightmare, and it got way more intense under Clinton and was very frequently seen as something especially under the command of Hillary.
Chris
@El Cid:
That’s probably a huge part of it, but I’d also say another big part was having the power and not having it be what they expected. Their ideology absolutely swore to them that it’d make everything okay, yet both times they’ve held power (Reagan/Bush and Bush II) it left the country in such a ruinous state that the voters went back to the Democrats. That wasn’t supposed to happen either. And yet it did. The discrepancy’s probably another big piece of what’s driving them mad.
lol
Last year, the USDA found $6 billion (over ten years) by doing something the Bush administration never did – actually negotiating with crop insurance companies instead of just paying them what they want.
Lojasmo
Now for some good news. My governor list ordered Minnesota to opt out of NCLB. Go Mark Dayton!
trollhattan
Art Institute, eh? I always wondered who backed them.
Would love to see this go somewhere but with that list of backers I’ll be surprised if it doesn’t quietly go down some drain.
The Raven
@hamletta: “So…they cozy up to businesses by siccing the DOJ on them?”
It’s weird. Duncan (who is bad news in a lot of ways) had a lot of good things to say about for-profit education. He also said there were “a few bad actors,” and I suppose EMC is going to now be declared one of them. Problem is, between EMC and Apollo (another “bad actor”) there’s a huge fraction (I can’t quickly find how much) of the for-profit trade school business.
Except for the sun, there are few stars near earth.
Thoughtful Black Co-Citizen
Well, a bunch of guys who promised to make everything perfect forever in exchange for Das Bases’ votes had the power. Nothing really changed for Das Base and it wasn’t ever going to.
A more reality connected group would perhaps maybe discover that the life lived vicariously still sucks if you’re a poor schlub.
Alas.
Misha
@Johnny Gentle (famous crooner): Or they’ll move to cut wasteful “education spending”…
SiubhanDuinne
@hamletta: I do some work with MTSU (albeit not in any way connected to Audio/Engineering). Good solid school for many things.