DC Trawler

Issa sets his sights on the GAO

Mike Riggs Contributor
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If you thought Darrell Issa’s first big play after taking over the Oversight and Government Reform committee would be to subpoena the entire Department of Justice, think again: Issa’s going after the GAO. Issa’s office today released a letter to the Government Accountability Office and signed by the chair-elect of the oversight committee and five other committee members (including Democrats Alcee Hastings and Carolyn McCarthy).

“A bipartisan group of six lawmakers today released a letter sent to Acting U.S. Comptroller General Gene Dodaro seeking answers about controversial revisions to an August 2010 U.S. Government Accountability Office (GAO) report critical of recruiting practices at proprietary colleges and universities,” reads the email from Issa’s office. “The revisions to the GAO report were released on November 30, 2010, and included major changes to 16 of the 28 key investigative “scenarios” in the report. The factual changes to the report have raised new questions about conclusions reached by GAO regarding the recruiting practices of proprietary schools.”

The GAO study in question was released over the summer, and featured interview summaries conducted by GAO employees pretending to be prospective students applying to for-profit colleges like Kaplan and University of Phoenix. The report described for-profit college recruiters who called a prospective student more than 100 times in a month in an attempt to sell the student a large loan package, and recruiters who lied about starting salaries for various professions. Then on Nov. 30 of this year, the GAO released a revised report correcting some of the more horrifying claims allegedly made by for-profit recruiters.

The Washington Post noted the following corrections:

The revised report, posted Nov. 30 on the GAO Web site, changed some key passages. In one anecdote cited as an example of deceptive marketing, the GAO originally reported: “Undercover applicant was told that he could earn up to $100 an hour as a massage therapist. While this may be possible, according to the [Bureau of Labor Statistics] 90 percent of all massage therapists in California make less than $34 per hour.”

The revised version states: “While one school representative indicated to the undercover applicant that he could earn up to $30 an hour as a massage therapist, another representative told the applicant that the school’s massage instructors and directors can earn $150-$200 an hour. While this may be possible, according to the BLS, 90 percent of all massage therapists in California make less than $34 per hour.”

In another example, the report originally stated that a college representative “told the undercover applicant that by the time the college would be required by [the] Education [Department] to verify any information about the applicant, the applicant would have already graduated from the 7-month program.”

The revised version states that “the undercover applicant suggested” that possibility and the “representative acknowledged this was true.”

There were several other significant edits to the examples detailed in the report.

Cato (which is cited in Issa’s letter) noticed another:

[One] section went from only reporting that a representative told an applicant taht the school has graduates making $120,000 to $130,000 in a job that, according to the GAO, typically makes less than $70,00 [sic] a year, to reporting the representative also informed the applicant that she “could expect a job with a likely starting salray of $13-!4 per or $15 if the applicant was lucky.” $15 an hour translates into about $30,000 a year, and completely changes the tenor of the vignette.

These and other adjustments to the report (which the Washington Post outlined in magnificent, side-by-side detail), aren’t small potatoes. According to the letter, the stock of for-profit companies fell 14% in the wake of the original GAO report. The total value of the loss was $4.2 billion.

The committee members asked the following questions in their letter to Comptroller General Gene L. Dodaro:

1.) Has GAO’s Office of the General Counsel (“OGC”) examined or investigated teh facts surrounding the need to revise the August 4, 2010 report? Please explain.

2.) Has OCG reexamined the report’s conclusions to ensure that they accurately reflect the analysis contained in the report?

3.) Has OGC verified the allegations that the methodology GAO used in the report is flawed and biased? Please explain what was found.

4.) What are GAO’s precedures for revising a previously issued report? Please provide specific steps. Were these procedures followed in this instance?

If Issa was looking to forge a bipartisan alliance on the committee, joining Hastings in challenging the GAO is an interesting way to do it. Since the Department of Education set its sights on for-profit colleges, Hastings has received almost $10,000 in campaign contributions. Well, that was actually as of Sept. 17–the amount may have increased in the lead-up to the election. And he’s not the only Democrat fighting these regulations. Even Rep. Alan Grayson opposed for-profit regulations written by the Dept. of Education.

Also: Hastings was part of a very controversial ad campaign paid for by for-profit colleges and organized by former Clinton staffer Lanny Davis.

Mike Riggs