GAO’s intentional distortions drove DOE’s gainful employment regulations

Lanny Davis Former Special Counsel to President Bill Clinton
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“Facts are stubborn things, and whatever our wishes, our indications, the dictates of our passions, they cannot alter the state of facts and evidence.” — John Adams, second President of the United States

“Get the facts, or the facts will get you. And when you get them, get them right, or they will get you wrong.” — Thomas Fuller, noted 17th-century English churchman and historian

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This is good advice for Secretary of Education Arne Duncan. I have already written three prior columns about why the “gainful employment” (GE) regulations are unwise, carelessly worded, ignore the fact that they will hurt more than anyone else minority and lower-income students who predominantly attend career colleges at the worst possible time. See these columns here, here and here.

Now in the last several weeks, we have a brand new fact — a shocking fact: The Government Accountability Office (GAO,) once considered the one institution in Washington that is above politics and cannot be influenced to fulfill anyone’s ideological agenda, on August 4 published an intentionally distorted report to put career colleges in the worst possible light.

And we also now know a second fact: that the Department of Education (DOE) has relied heavily on this GAO report to defend singling out almost exclusively career college programs to be subject to the draconian GE regulations — and is not applying them equally to not-for-profit and public colleges.

1. Evidence of intentional distortions in GAO August 4 report

For four months since the GAO August report, the 15 career colleges that were the subject of the undercover testing asked for the tapes of the interviews, suspecting that they didn’t seem quite right. And for four months, the GAO resisted making those tapes available.

Then on November 30, with no fanfare at all, with no press release, the GAO posted a “new” version of the August 4 report — this one containing many changed words from the earlier version, based on the actual transcripts of the tapes. The stunning conclusion: the drafters of the GAO August 4 version cooked the books, distorting the words actually used on the tapes to slant the conclusions heavily against the career colleges. Specifically:

  • Out of the 26 undercover “applicant” interviews reported in the August 4 GAO report 16 — 62% — were shown in the November 30 report to require wording changes, or three-out-of-five.
  • Were the changes trivial or insignificant? No. Every one of the 16 changes showed that the August 4 version had changed actual words reported on the tapes to create or enhance a negative impression of career colleges. To put it another way, not one of the wording changes from the actual transcripts to the August 4 inaccurate version put the career college in a better light. Question: If you flip a coin 16 straight times, what are the chances of the coin coming up heads 16 straight times? The inference of intentional deceit and misrepresentation is unavoidable.
  • And when you read the 16 changes, you cannot regard them as trivial. Each one, in its own way, (i) take statements made by career college representatives from the tapes that were neutral and make them more negative; (ii) take positive statements and delete them or make them more negative; and/or (iii) literally invent words that were never uttered bolstering the pattern of fraud and abuse at career colleges. If you don’t believe it, then read all 16 here. You be the judge.

You can pick and choose from any of the 16 changes made to the bogus August 4 version of the report, reflected in the new version issued on November 30, to see the actual words as they appeared on the tapes to decide which is the most egregious. Here are my three nominees:

A. On Page 8, Table 1, second bullet; the August 4th version stated:

“The [career college] representative told the undercover applicant that by the time the college would be required by the [Department of] Education to verify any information about the applicant, the applicant would have already graduated from the 7-month program (Emphasis added).”

The November 30th version made the following two changes:

“The undercover applicant suggested to the representative that by the time the college would be required by the [Department of] Education to verify any information about the applicant, the applicant would have graduated from the 7-month program. The [career college] representative acknowledged this was true.”

If you believe the decision to substitute “the representative” for “the undercover applicant” and the deletion of the last sentence that the representative “acknowledged this was not true” was an inadvertent error, I have a bridge in Brooklyn to sell to you for $5.00.

B. On Page 24, College #11, Scenario 1, the August 4th report stated:

[Career College] Admissions representative told the undercover applicant that she should take out the maximum amount of federal loans she could, even if she did not need all the money. She told the applicant she should put the extra money in a high interest savings account. While subsidized loans do not accrue interest while a student is in college, unsubsidized loans do accrue interest. The representative did not disclose this distinction to the applicant when explaining that she should put the money in a savings account. (Emphasis added).

Yet in the November 30th version based on the actual tapes, now at Page 25, we now know that the word “could” was actually used all three times, not should. This is a significant difference — the difference between improperly instructing the applicant what he/she “should” do vs. what “could” optionally be done. (If there were no difference between “should” and “could,” then why did the drafter intentionally change the word to “could” three times in a row in three consecutive sentences?)

C. On Page 20, College #3, Scenario 2, third bullet, the August 4 version stated:

The career representative told the undercover applicant that getting a job is a “piece of cake” and then told the applicant that she has graduates making $120,000 — $130,000 a year. This is likely the exception, according to the BLS, 90% percent of architectural and civil drafters make less than $70,000 per year.

The November 30th version reflecting the actual tapes repeated the sentence but then added another sentence:

She also stated that in the current economic environment, the applicant could expect a job with a likely starting salary of $13 – $14 per hour or $15, if the applicant was lucky.

So the drafter of the August 4 version decided to omit a sentence that would leave a more favorable impression of the career college representative — i.e., referring to the current difficult economic environment and the likely starting salary of $13-$15 per hour for architectural and civil drafters “if the applicant was lucky,” not $70,000-$130,000.

2. Senator Enzi demands GAO withdrawal of testimony before Harkin Committee

On December 7, Senator Michael B. Enzi (R.-Wyo.), the Ranking Member of the Senate HELP Committee, wrote the acting Comptroller General of the GAO and asked that Gregory Kutz, the Managing Director of the GAO’s Forensics, Audits and Special Investigations division, who testified on August 4 concerning the GAO undercover study, withdraw his testimony. Senator Enzi wrote that “over 50 changes were made to 12 pages of the original testimony…These changes appear to undermine many of the allegations made in Mr. Kutz’s testimony, and suggest that information was either intentionally or recklessly omitted and/or misrepresented.” He asked the GAO to “provide a copy of all written correspondence, email or otherwise, regarding the decision to issue a substantially revised version nearly four months after testifying before the Committee.” (Not sure it matters, but Enzi asked him to submit revised testimony in addition to withdrawing previous testimony.)

Is there valid suspicion of a cover-up here? How many people involved — within and outside of GAO?

On Monday, December 20, apparently feeling the heat, Senator Harkin penned a commentary piece for Inside Higher Ed, which attempts to brush off and dismiss the changes between the actual recorded interviews and the August 4 GAO Report as just commonplace revisions.
That spin just doesn’t wash: 16/16 all in the same negative direction is more than innocent revisions. The above examples and the other 13 changes are not just changes in “tone,” as a December 17 letter sent from the Senate HELP Committee to other congressional staff attempted to portray.

3. DOE’s reliance on the GAO distorted report to defend GE regulations

As to fact two — there can be no doubt that the DOE relied heavily on the GAO August 4 distorted version to validate its decision to target virtually exclusively for-profit career colleges as subject to the draconian GE regulations.

Nine days after the GAO August 4 report, on August 13, Secretary Duncan wrote the leaders of the Senate HELP committee:

“As you know, GAO sent undercover investigators posing as students to 15 for-profit colleges. Recognizing that the severity of the issue varies, at all 15 schools GAO found false or misleading statements about accreditation, the requirements of student loans, graduation rates, job placement, or likely earnings….” (Emphasis added).

It didn’t take much longer in the letter for Secretary Duncan to link the fraud and abuse at “all 15 colleges” with the need to formulate gainful employment regulations applied almost exclusively to educational programs at for-profit colleges:

“These proposed rules [to curb fraud and abuse at career colleges], when finalized, will complement the Department’s companion set of proposed program integrity rules, which set the standards for non-degree programs at all institutions and most educational and training programs at for-profit institutions to demonstrate that they are preparing students for gainful employment….” (Emphasis added).

There can also be no doubt that the DOE and career college critics succeeded in their media campaign to conflate the two issues of fraud and abuse as described by the August 4 GAO report with the GE regulations, which had nothing to do with curbing fraud and abuse but addressed only the issue of limiting student debt.

One measure of their success in linking the GAO report to the need for the gainful employment regulations in the media can be seen by Googling:

Combining “Duncan” + “Gainful Employment” + “GAO” = 17,400 hits

Combining “Gainful Employment” + “GAO” = 41,900 hits

Can anyone doubt the connection between the GE regulation and the GAO report?

What to do? Certainly at least two things:

First, an appropriate oversight committee of Congress must conduct a thorough investigation, subpoenaing documents and putting people under oath — not only of the GAO officials for writing and supervising this intentionally distorted report, but perhaps others outside of GAO who were complicit or knowledgeable about the deception.

We still cannot be sure that the GAO has released all the tapes; nor can we be sure anymore that only 15 colleges were visited by undercover agents. We have been told that there were 80 hours of interview tapes; yet only 30 hours have been released. We have been told there have been “redactions” to protect privacy rights. 50 hours worth of redactions?

Second, the DOE appears ready to plough ahead with the GE regulation and send them to Office of Management and Budget (OMB) early next year. This is despite opposition from a substantial number of Members of Congress, including members of the House Congressional Black Caucus and leaders of minority communities, receiving over 90,000 public comments, the most in Department history, and strong statements of opposition during their public hearings.

I hope by now Secretary Duncan — and President Obama — recognize the danger of this course. They would be much better off to put the amber light on the issuance of the gainful employment regulation and let Congress address the issues of abuses and student debt at all colleges on a national basis, as Harry Alford, president and CEO of the National Black Chamber of Commerce, has repeatedly urged. If they insist on pushing the GE regulations into law before the next Congress, they risk legal challenge, congressional override, and worst of all, seriously risking congressional support for their K-12 reform programs that the Secretary has promised would be his highest priority when he came to Washington.

Moreover, the last thing President Obama needs is to face hundreds of thousands of minority and lower-income students losing their federal loans and tens of thousands of lost jobs in the career college industry in the presidential campaign year of 2012, when the gainful employment regulations are due to be implemented.

Davis, a Washington lawyer and former special counsel to President Obama from 1996-98, served as a member of President George W. Bush’s Privacy and Civil Liberties Oversight Board in 2006-07. He is the author of Scandal: How ‘Gotcha’ Politics is Destroying America (Palgrave Macmillan, 2006).