September, 2021
Washington — If you are a government employee, having taken an oath to discharge the duties of your office faithfully, and your office duties include the evaluation or supervision of government programs, you have an obligation to listen to all sides of issues surrounding those programs.
Especially to listen to those who may have information that the programs are not working well, perhaps due to waste, fraud, and abuse.
Who would think otherwise? I wouldn't. I spent five years at the Institute of Education Sciences, the research arm of the U.S. Department of Education, reviewing federal postsecondary education programs. The very idea that I would be limited to looking only at favorable or unfavorable evidence would be dismissed out of hand.
Once, in 2004, I read a Wall Street ratings agency's cryptic report about a new securitization by a for-profit lender of federal guaranteed student-loans. I called Fitch Ratings to get more information, because I was concerned that the lender may have been making false financial claims against taxpayers. Fitch told me its legal department had the same concerns. That was the beginning of an effort, ultimately successful, to save taxpayers from billions of dollars of false claims.
A few years later, a deputy undersecretary at the Department of Education, Bob Shireman, listened to a presentation in the Senate by a Wall Street investor who thought for-profit colleges were overvalued in the market because they were not the wonderful educational institutions they were claimed to be. Why wouldn't he listen? Wall Street can be a good source of information about federal education programs, pro and con.
Many in the for-profit school industry objected. They were accustomed to department officials, many of whom were in the revolving door between the industry and the department, singing the praises of the industry, and giving it regulatory breaks, in order to pump up industry stock prices on Wall Street.
Some in Congress objected as well. Especially those members like Buck McKeon, who held stock in a for-profit school and whose former aides had once populated key positions in the department.
So for his willingness to listen to industry critics, and maybe even look more critically at the industry, Bob Shireman became the object of a smear campaign, which has not let up over the years. He was accused of somehow profiting from short-selling, although subsequent investigations, demanded by his detractors, actually dispelled any such notion.
Now he is pushing back, as well he should. You can read about it in a new exposé of the smear campaign, published this week.* He wants his reputation back. Of course anyone who actually knows Bob Shireman, as I do, knows that his reputation and his legacy cannot be take from him by anyone, especially the ethically-challenged, revolving-door denizens of the halls of Congress and federal regulatory departments.
What is outrageous about the whole matter is that federal taxpayer money has fueled the smear campaign all along the way. And fueled the political contributions to those in Congress who participated in it. For-profit colleges are creatures of federal taxpayer largesse through the federal student-loan system.
A fitting conclusion would be for the Wall Street Journal, which abetted the smear, to issue a correction and an apology, and for its editorial page to take a stand against the incredible waste of taxpayer dollars in this sorry episode.**
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* The smear campaign has previously been noted in Dan E. Moldea's book Money, Politics, and Corruption in U.S. Higher Education, (2020), p. 320.
** If the newspaper needs a primer on for-profit colleges and student-loans, it would do well to read its own reporter's new book, The Debt Trap, by Josh Mitchell.
