The Washington Post Company’s annual meeting of stockholders was not a joyous occasion for many in the room Thursday morning.
Since the Post’s cash cow, for-profit higher education company Kaplan, has taken a turn for the worse in recent months due to the Department of Education’s implementation of stringent regulations on the profit-driven education industry, the company as a whole appears to be in dire straits.
Washington Post Company Chairman Donald Graham tried to reaffirm stockholders’ confidence in Kaplan at the meeting by making a humanitarian, rather than a fiscal, argument. He said Kaplan is helping people in needy communities who wouldn’t otherwise be able to pursue higher education, even though it’s “expensive” to do what the company is doing.
With Kaplan, the Washington Post Company is giving students a “trial” four to five weeks at the beginning of their enrollment to test out the program, according to Graham. If they don’t like it at the end of that trial session, they can drop out without ever paying for it and without accumulating debt.
Graham argues that this is a societal good because it provides educational opportunities to more people with “at-risk factors,” like potential students with kids or full-time jobs. Graham’s comments didn’t seem to suggest that there is a clear path to profitability.
Billionaire investor Warren Buffett officially ended his tenure as a member of the Washington Post Company’s board of directors on Thursday, even though he continues to hold stock in company and provide financial advice to Graham. Graham said the reason Buffett left the board is because he’s 80 years old and wants to retire. But Buffett continues to maintain his leadership role in Berkshire Hathaway.
The Post’s top leadership took heat at the meeting for Columbia University President Lee Bollinger’s board of directors position as well. Accuracy in Media’s Cliff Kincaid, who is a stockholder in the Post, pointed out that Bollinger has never showed up to an annual meeting of stockholders.
Kincaid also pointed out that Bollinger is an advocate for taxpayer-subsidized journalism, having recommended that the government fund news outlets in a Wall Street Journal op-ed last summer.
Graham said he doesn’t subscribe to Bollinger’s point of view when it comes to government subsidies for news outlets, and denied any taxpayer subsidies for the Post. When Kincaid asked Graham about The Daily Caller’s report showing that his company and CBS Corporation received hundreds of thousands of taxpayer dollars from the Early Retiree Reinsurance Program (ERRP) in the Obamacare legislation, Graham claimed ignorance of the issue as a defense.
“Mr. Kincaid, I have no idea what you’re talking about,” Graham said. “I suspect, if the federal government has disclosed this, it is true, but a normal reimbursement for health services.”
When TheDC approached Graham after the meeting, Graham refused to comment on the issue until he did further research into it. He has not yet responded to TheDC’s email requests for comment.
Other Post officials at the event also repeatedly refused TheDC’s request for comment on the issue, alleging the Obamacare funding is part of a “normal” program that taxpaying companies can benefit from.
Tennessee Republican Rep. Marsha Blackburn told TheDC that the Post’s coverage may be biased in favor of Obamacare as a result of the funds it receives because of the legislation.
“It is fine with me if they continue covering the ObamaCare debate,” Blackburn said in an email. “When NBC used to cover energy issues, they identified themselves as a subsidiary of General Electric. CBS and Washington Post just have to disclose that they are subsidiaries of the Obama Administration.”
Post officials denied to TheDC any merit to the allegations of bias.
Kincaid pushed Graham on the Post’s lobbying efforts, too. The Post has paid outside firms tens of thousands of dollars in the first quarter of 2011, according to lobbying disclosure forms. For example, the Post paid lobbying firm Elmendorf Ryan $80,000 to lobby for Kaplan. Kaplan spent its own money as well.
The for-profit university spent $110,000 with one lobbying firm this past quarter and $90,000 with another. It spent another $230,000 on lobbying efforts in-house this past quarter, too. In each case, the lobbying was for issues relating to for-profit education business models and regulations.
Graham also admitted to personally lobbying for the company on Capitol Hill, but would not tell Post shareholders which lawmakers he’s met with or any details about the meetings.
Investor Evelyn Y. Davis berated Graham for the Post’s lack of financial community coverage as of late. She asked Graham to reinstall Len Downie as the Post’s editor, after ripping the Post for being the only major news organization not to send a reporter to cover the recent Goldman Sachs annual meeting.
Davis called Goldman Sachs the “laughing stock of the country,” and questioned Graham on why the Post hasn’t ramped up its coverage of the financial firm. Graham responded by saying the Post has provided “straightforward coverage of Goldman Sachs.”