Jun 14, 2018, 6:02 AM ET

Lawmakers demand review of Education Department ethics program after former for-profit college exec shapes policy: EXCLUSIVE

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Two Democrats are demanding a review of the Education Department's ethics program following an ABC News report that revealed a senior Education official, hired straight out of the for-profit college sector, helped dismantle regulations designed to protect students defrauded by predatory colleges.

Sen. Elizabeth Warren, a Massachusetts Democrat, and Rep. Raja Krishnamoorthi, a Democrat from Illinois, make the demand in a letter sent to the department's inspector general Thursday.

Robert Eitel, who was hired by the Trump administration last year after four years as a for-profit college executive, played a role in suspending an Obama-era policy known as "borrower defense to repayment," according to documents obtained exclusively by ABC through the watchdog group Democracy Forward.

The borrower defense rule made it easier for students, enticed into taking out pricey loans based on fraudulent claims by for for-profit colleges, to file for debt relief. It also allowed the government to recoup losses due to discharged loans from predatory schools.

When the Department decided to suspend the rule, Eitel – a former VP at for-profit college operators Bridgepoint Education and Career Education Corp. – circulated borrower defense talking points to staffers, edited background documents, and even signed off on the official delay notice, the documents obtained by ABC showed.

Publicly, DeVos asserted that under the rule, "all one had to do was raise his or her hands to be entitled to so-called free money."

After Trump took office, the borrower defense unit had been instructed "not to submit additional claims for approval... because borrower defense policies are being reviewed with the change in administrations." Just before the regulations would have kicked in, Devos officially, indefinitely pressed pause, and the Education Department is currently in the midst of writing "new regulation that will treat students, institutions, and taxpayers fairly."

Until ABC's report, Eitel had refused to tell lawmakers whether he'd had a hand in the delay.

"A May 2018 report by ABC News revealed that Mr. Eitel played a more central role than previously indicated in the Department’s decision to delay the enforcement of borrower defense and gainful employment, and raised questions about whether key Department officials have provided full and complete information to Congress," Warren and Krishnamoorthi wrote in the letter to the Education Department's inspector general.

Ethics laws forbid Eitel from working on "particular matter involving specific parties that are directly and substantially related to former employers."

But according to documents cited by Warren, agency ethics officials advised Eitel that delaying the borrower defense rule – which his former employers acknowledged in SEC filings last March could affect their bottom line – could not be considered a "particular matter," because it is "directed to the interests of a large and diverse group of persons."

He was therefore free to be involved on borrower defense policy, as long as he didn't participate in the adjudication of claims filed against his former employers, the ethics office said.

"We disagree," Warren and Krishnamoorthi wrote in their letter to the inspector general. The rule applies "only to institutions of higher education that participate in the federal student aid program" and is thus considered a particular matter, they said.

"We are deeply troubled that Mr. Eitel’s questionable compliance with federal ethics rules ... signal a critical breakdown in federal ethics at the Department of Education," Warren and Krishnamoorthi wrote.

The lawmakers also questioned Eitel's possible involvement in the rollback of the so-called "gainful employment" rule, another Obama-era regulation which penalizes institutions with unreasonably high debt-to-earnings ratios.

Eitel claimed he had "voluntarily recused myself" from matters related to gainful employment, "regardless of whether the ethics rules required such a refusal."

But in the letter to the inspector general, the lawmakers question whether he actually did so, citing emails organizing meetings on the topic in question.

They have asked the office to inspect Eitel's involvement in both the gainful employment and borrower defense rules, to "provide clarity on what constitutes a legitimate and full 'recusal.'"

More broadly, they asked the inspector general to "examine the Department of Education's entire federal ethics program to determine if it ensures department employees are 'observing both the letter and spirit of the ethics laws and regulations."

"I take seriously my ethical obligations and have meticulously followed the ethics guidance that I have received from the Department’s Office of the General Counsel," Eitel said in written testimony to Congress obtained by ABC News. "I have gone above and beyond my ethics obligations."

The Department of Education did not immediately respond to ABC News' request for comment.

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  • Daniel Wainfleet

    Directing the claims unit to not submit any further claims for approval IS amajor change iof practice and is therefore indistinguishable from a policy change. Justifying it on the grounds that the policy is under review is absurd and possibly illegal. Baseball does not suspend the playing of games on the grounds that some rules are being reviewed

  • CatMom

    There is not enough space or time for me to assure everyone how sleazy for-profit colleges are and how horrible they are to our students. Having taught at state universities, private religious colleges, religious universities, and for-profits, I can say without hesitation they are just evil and are all about conning innocent potential students. Yes, I know students who have graduated & have been successful. At what cost? I was let go from a for-profit for not changing a student's "F" to a "C" so she could pass the course. That wasn't even the worse thing I was asked to do. 'nuff said.

  • Alex Ross

    Why NOT have a corrupt education department...?
    ---Trump U graduates and Trump cult-ists.

  • brian nrndss

    a name one would like to forget: Warren

  • Planet Earth

    If this woman's goal is to keep America dumb and uneducated, why would you be in support of her?

  • DuelingDogmas

    After this go to Florida and check on their programs.

    Federal dollars are being spent to teach children and skewed, scientifically inaccurate and completely made up curriculum. This is what the Conservatives want, a large population of people too stupid to function outside of the confines of their ideology and beholding to the fear represented by the bigotry and intolerance of the GOP designers.

  • TB

    Just the type of issues you run into when you have someone unqualified and incompetent running a department.

  • SayHey

    There is more slime in this Cabinet than in all the "B" movies of the Fifties.

  • Colinalcarz

    Eitel May have have gone “above and beyond” in covering his tracks and presenting a facade of ethical behavior, but, given the obvious benefit of his actions to the profitability of the category of business of his former employers, his behavior speaks otherwise. Good catch Warren et. Al.

  • Pologize3

    Whether you're repub or dem you should be very concerned that DeVos is in charge of public education in America.

  • Tstruck

    Sounds like Trump's planning to open up Trump U again ...
    DeVos is as dumb as a rock and as unqualified for her post as .... well, as most of the rest of Trump's appointments.
    I think DeVos sees her charge as taking education back to the early 1800s

  • Krimson

    MAGA and ethics are like oil and water.

  • TexasVulcan

    I wonder what percentage of "bad loans" was made to students who were pressured to attend one of these "for profit" colleges. They are a blight in general. Too many are simply scams to get student loan money.

    Please consider community colleges and then a transfer to a public institution. You will get an education that is at least as good at a much better price.

    I am sure there are places that provide excellent training in a skill (mechanics, etc). I wonder why we do not have state schools for that too.

  • Alex Ross

    Trump sure knows how to pick people, who know how to pay their friends.

  • Bluejay

    When Trump entered the WH, all ethics left the building...

  • John Barron

    Oddly, they mention Devos and ethics in the same sentence... Truly an oxymoron. Speaking of morons, cant wait to see what nonsense the orange one tweets today.

    -Publicly, DeVos asserted that under the rule, "all one had to do was
    raise his or her hands to be entitled to so-called free money.- She does realize these students were defrauded out of "their" own money.. How is that free money? (shakes head)

    Devos:Pay to play at its finest for sure.

  • Sal Monela

    Ethics and the Trump administration? That word shouldn't be used to describe anything associated with this administration.

  • Lee Thompson

    Great idea. The DOE Ethics Program should be looked at.
    DeVos is the perfect example of 'pay to play'. She is Sec. of Education because of major campaign donations to Trump. She has no qualifications to be Sec. of Ed., and she stands to gain with the increased number of charter schools.
    This 'administration' is the most corrupt ever. The swamp is swampier than ever.
    How far we have fallen.