When it comes to public policy, killing two birds with one stone is always ideal, and some House lawmakers are trying to accomplish that goal by defunding a harmful regulation, while also reducing wasteful government spending.

A recently released House Appropriations Committee draft bill to fund the 2012 budgets of the Departments of Labor, Health and Human Services, and Education takes a huge whack at an Obama Administration regulation that will inhibit thousands of Americans from attending the college or university of their choice.

The budget proposal includes a provision that prevents the Department of Education from using Federal dollars to enforce its so-called “gainful employment” rule. Defunding the rule ensures college hopefuls will have access to badly needed financial aid so they can advance their skills and careers.

An added benefit to blocking funding for this burdensome rule and other wasteful Federal programs is a $4 billion savings for taxpayers according to bill sponsors. At a time of record deficits and voter outrage at the level of profligate government spending, this is welcome news for everybody.

With stubborn unemployment and a lack of confidence in the business community, the dismissal of wasteful regulations is an added step in restoring certainty for our limping economy. Indeed, the Obama Administration has made a push as of late to reduce regulations that waste taxpayer dollars and create insecurity for business owners. The House Appropriations Committee proposal will reinforce what the administration has already set as a priority.

The fact is, private sector colleges and universities have begun to play a pivotal role in training a new American workforce that can compete in the global economy. It is becoming increasingly apparent that 21st Century jobs are and will be in high-tech, healthcare and business management sectors. That means an emphasis on career-focused curriculum is an essential aspect of college training so that students are prepared toenter the workforce with the specialized skills unique to their desired profession.

When looking across the spectrum of post-secondary schools, it is clear that career focused private sector institutions are tailoring programs to meet the demands of this increasingly competitive job market.

It is welcome news to see the president finally take on unemployment and start creating jobs. And the new Congressional super-committee tasked with reducing the deficit should produce some valuable and fair savings for the government. But going forward, it will be responsible budgets like the proposal put forward by the House Appropriations Committee that will put America on a path toward fiscal sanity, giving businesses the confidence toinvest and expand.

More importantly, college hopefuls will be able to go back to having access to the degree program that best fits their needs without having to worry about whether the government will interfere.

Henry Herzing is the founder and chancellor of Herzing University.

Officials from The Institute for College Access & Success (TICAS) and the James, Hoyer, Newcomer & Smiljanich law firm edited Josh Pruyn’s testimony for a pivotal Aug. 4, 2010 hearing before the Senate Health, Education, Labor and Pensions Committee (HELP), as did Harkin aides. (RELATED: Document suggests witness tampering by Sen. Tom Harkin’s office)

Pruyn, a disillusioned former employee of the for-profit Westwood College online, testified about high-pressure sales tactics used to enroll new students at the school. But ethics experts say the involvement of outside groups undermines the credibility of his testimony.

“That’s not an investigation, that’s just a charade,” said Richard Painter, a law professor at the University of Minnesota and formerly the top ethics lawyer for President George W. Bush, “Witnesses’ testimony should be their own, not that of outside groups that ‘edit’ the testimony to say what they want it to say.”

The criticism is another blow to Harkin’s embattled investigation of the for-profit schools, following questions about an error-ridden Government Accountability Office (GAO) report commissioned by Harkin on the same subject and unveiled at the same hearing in which Pruyn testified.

As reported by TheDC last week, Harkin investigative counsel Ryan McCord supplied a suggested answer to Pruyn to help him distance himself from the Hoyer law firm. Pruyn followed McCord’s suggested answer almost verbatim in the hearing itself.

But emails and tracked document revisions show intimate involvement by the law firm in shaping Pruyn’s testimony, although the answer Pruyn gave in the hearing was technically true.

A Testimony Evolves

Before Pruyn even drafted his testimony, Angie Moreschi, a lawyer at the Hoyer firm, helped him brainstorm what he would include.

Pruyn and Moreschi were close. For instance, when Moreschi was injured in a December 2010 car accident, Pruyn sent her flowers, emails show.

The two met when Pruyn came to the Hoyer law firm to describe, over six to eight hours, his experience as an employee at Westwood College online. The Hoyer firm is pursuing four class action lawsuits against Westwood; it has “tried to make a business of suing” for-profit colleges, the sector’s top lobbyist has charged.

“Angie knows my story well enough I liked having her around” to help craft the testimony, Pruyn said Monday, adding that he is not a party to the lawsuits and the firm never paid him besides reimbursing minor travel expenses and taking him out for several meals.

July 23, twelve days before the hearing in which Pruyn would testify, Moreschi sent Pruyn an outline of his experiences working at Westwood based his interviews with her law firm.

“Here’s the outline I put together from our talk to get your thoughts together for your testimony,” she wrote.

“Thanks for helping with this, Angie,” Pruyn replied several days later. “I did much of the work last night (and used this as a guide to make sure I’m including everything).”

July 26, 2010, Pruyn sent the initial draft of his testimony to Harkin staffer Ryan McCord.

McCord edited the testimony that same day, mostly for tone and style. “You might want to change the word ‘evil,’” tracked document changes show McCord wrote. “It implies the people you worked with were doing evil. Maybe they were?” (Pruyn ultimately ignored the suggestion.)

On July 29, Moreschi heavily edited Pruyn’s draft. “Include a sentence about ‘pain points’ here,” she urged, according to more tracked document changes. (Pruyn did add such a sentence to the final testimony.)

Pruyn sent a revised version to McCord, who then looped in Jennifer Webber from TICAS, a left-wing nonprofit organization.

Despite TICAS’s relatively small $2.3 million budget in 2009, the group was tremendously influential in pushing strict new regulations on the for-profit colleges, finalized June 2, with its former president, Robert Shireman, joining the Obama administration in 2009 as a top deputy to Education Sec. Arne Duncan.

“Jennifer,” McCord wrote, “Here’s the latest draft. I just sent it to Josh for review of my comments.

“The next step is to narrow down the written testimony to get a solid oral. And we want to start running through possible questions – pro and con – from the members. Are those things that you feel comfortable helping with?” Beth Stein, Harkin’s chief investigative counsel on the HELP committee, was cc’d on the email.

Webber was indeed “comfortable” with helping. Her main suggestion was to eliminate an analogy that may have inadvertently made Westwood look good.

“I do have one suggestion … and that is to remove the phrase where it says that he functioned like a salesperson with leads, like an encyclopedia salesperson. I don’t think an analogy is needed, plus, aren’t encyclopedias a good thing? They were (are?) are [sic] great resource in the days before the internet!” she wrote in a July 30 email.

“You’re right – not the best example. We should think about rewording that part, Josh,” McCord wrote back.

Webber also took charge of shortening Pruyn’s written testimony for his five-minute oral presentation at the hearing. “Here is the testimony edited for length of oral testimony. Josh, as you edit it to make it feel more like yourself talking, if we can cut out any more words, that would be good,” she would later write.

Aug. 1, 2010 — three days before the hearing — Moreschi had some more suggestions. Again, she focused on emphasizing “pain points,” the “emotional triggers” sales representatives hone in on to make the sale. (Could it be emphasizing these “pain points” was important for her firm’s lawsuits? Moreschi did not return a call for comment).

“Josh, Another thought. I know you’ve told me many times about how reps misled students about cost and also played on a student’s emotional triggers. I think these might be important points to add where you discuss the examples of deception in more detail….Perhaps add these two paragraphs or something like this,” Moreschi wrote.

“I think that we can incorporate your suggestions, Angie, into the existing structure,” Harkin staffer McCord wrote, finding places to include the substance of the two recommended paragraphs into the testimony. (Both made it into the final version.)

They were almost done. Both McCord and Moreschi — seeming to have found a factual weakness, saying, “I just want to make sure he’s giving the most accurate information” — made a few final edits.

Pruyn’s testimony was ready. Lory Yudin, the committee clerk, sent out the final version to senators on the HELP committee on Aug. 2.

Hiding Moreschi’s Role?

The next day, McCord helped craft Pruyn’s answer regarding his connection to the Hoyer law firm.

“In order to get out ahead of this issue we might have the chairman straight up ask you if you’re suing Westwood,” McCord wrote in an Aug. 3, 2010 email.

“It’s fine to say something along the lines of ‘I am not suing Westwood. I felt strongly that the culture at the school was unethical. I have a journalist friend who was interested in writing a story about for-profit schools. Through him I talked to a few reporters and lawyers at a law firm that was representing Westwood students. So my name has been in the news a few times, but I have never sued or wanted to sue the school,’” McCord wrote.

The next day at the hearing, when Harkin asked as expected whether Pruyn was suing Westwood, Pruyn answered almost exactly as McCord had suggested he should.

Harkin spokeswoman Justine Sessions said the suggested answer “was simply a reiteration of what the witness had told our staff previously.”

But didn’t the answer hide the very significant role Moreschi — and the Hoyer law firm — played in shaping Pruyn’s testimony?

“I don’t think so,” Pruyn said Monday. “My impression is [McCord] was trying to establish that one, I was not getting paid, and two, that I was not party to the lawsuit, and that’s what the question was for.”

Outsourcing Committee Work to Special Interest Groups

Congressional veterans and ethics experts say the collaboration between Harkin’s staff and the outside groups in editing Pruyn’s testimony is unusual and raises serious questions about the integrity of the hearing.

Don Goldberg, a Democratic veteran of the Clinton administration and Capitol Hill, says Harkin’s staff “crossed a line.”

“Coaching on how to answer a question goes to the heart of the independence of these oversight hearings,” Goldberg told TheDC. “In my ten years on Capitol Hill we never gave a witness an answer to a question.”

Goldberg worked as deputy chief of staff on the House oversight committee under two Democratic chairmen, Reps. John Brooks and John Conyers. “Where I draw the line is if you have a fact witness, anything that appears to be shaping the facts crosses the line,” he said.

“It’s one thing to tell a witness what the questions are. It’s another to tell them what the answer is. That’s highly inappropriate,” said Painter, the law professor and top ethics lawyer during the George W. Bush administration.

On Harkin’s staff collaborating with outside groups to edit Pruyn’s testimony, Painter said: “These groups can provide their own testimony if they like, but they should not be altering that of other people. And committee staff should not be involved in this helping one person alter another person’s testimony.”

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW), a watchdog group that has investigated the role of Wall Street investors on new regulations on for-profit colleges, said, “It is entirely inappropriate for outside entities to be involved in editing witness testimony. It undermines the credibility of the hearing.”

Because of its ongoing lawsuits, the Hoyer law firm had a distinct financial interest in making Westwood look bad in the hearing. Additionally, a trial lawyer at the firm, Chris Hoyer, is a major donor to Democratic politicians. For instance, Hoyer donated $28,500 to the Democratic National Committee in May 2008.

Harkin spokeswoman Sessions defended the arrangement, calling it routine.

Committee staff “helped” Pruyn — a “brave young man” — to “condense his personal experience into a compelling statement based on what we thought Committee members would respond best to, which is part of typical hearing preparation for our and, we presume, other committees,” Sessions said in a written statement.

TICAS’s Webber said her group “was happy to serve as a resource” to Pruyn.

Pruyn said his motivation in letting Moreschi, McCord and Webber edit his testimony was to ensure it came off as professional and not too angry. He noted that many of the edits toned down his language, rather than sensationalizing his account or making Westwood look worse. But he conceded by making his testimony sound more reasonable — and credible — the edits could have made his testimony a more potent force against the school.

By Jonathan Strong

The Daily Caller

July 26, 2011

http://dailycaller.com/2011/07/26/harkin-staff-collaborated-with-interest-group-outside-law-firm-to-edit-witness-testimony/print/

Asked why he has spent considerable resources helping the Hoyer firm on lawsuits to which he is not a party, and for no pay, Pruyn said, “Occasionally I wonder about that myself. But, I really hate that place,” referring to Westwood College. Pruyn left college with considerable debt, searing into his memory how difficult that situation could be. As a result, he said, he felt particular sympathy for students ill-served by Westwood, who left their time there with significant debt.

Westwood is under scrutiny from numerous local, state and federal authorities. In 2009, Westwood’s parent company, Alta Colleges, agreed to pay a $7 million fine to settle Justice Department allegations brought under the False Claims Act.

By Jonathan Strong
The Daily Caller
July 26, 2011
http://dailycaller.com/2011/07/26/harkin-staff-collaborated-with-interest-group-outside-law-firm-to-edit-witness-testimony/print/

WASHINGTON – In response to Chairman Darryl Issa’s House Oversight and Government Reform Committee hearing on the Department of Education’s controversial ‘Gainful Employment’ rule, the National Legal and Policy Center, chairman, Ken Boehm issued the following statement:

“The National Legal and Policy Center applauds Chairman Issa for his efforts to shine a spotlight on the irregularities and improprieties surrounding the Department of Education’s ‘Gainful Employment’ rulemaking process. NLPC has helped to document what has been a biased, compromised process throughout, one involving gross collusion between DoEd executives and Wall Street short-sellers. An unethical, tainted process produces flawed regulatory policy. Many predict that this rule will create staggering shock waves for tens of thousands of students looking to enter the worst job market since the Great Depression.

“The rulemaking process behind ‘Gainful Employment’ is a textbook example of how a regulation should not be made. The process has been secretive, biased and probably corrupt. It’s no surprise that it produced a biased rule that does little to address the very real problems in our nation’s postsecondary education sector.  It is heartening to see Rep. Issa step forward to demand transparency and accountability from a bureaucracy whose arrogant rule making has been directed exclusively at for-profit colleges. The rule will undoubtedly impact the very students who are most vulnerable in this economy – i.e., the many thousands trying to get their feet on the bottom rung of thecareer ladder.

“The NLPC strongly supports Rep. Issa’s call for investigation. The Inspector General at the Department of Education has begun its process. But that is not enough. Hopefully, we will see full-blown Congressional and SEC investigations that will generate the momentum for Congress to invalidate the rule. In the meantime, we urge DoED to refrain from any steps toward implementation until the rule has been properly reviewed.”

About the National and Legal Policy Center

The National Legal and Policy Center was founded in late 1991 following the release of the Senate Ethics Committee report whitewashing the Keating Five. The report made reference to the Code of Ethics for Government, but not by name, presumably for fear of giving it greater standing. NLPC was founded to promote ethics, and to give the Code the visibility it deserves. NLPC promotes ethics in public life through research, investigation, education and legal action.

For more information, please call 703-237-1970 or visit www.shortsellingstudents.com.

Today’s lesson shines a spotlight on another reason why the National Black Chamber of Commerce is calling for the Department of Education to do away with the Gainful Employment rule. On top of proposing bad policy that will harm minority students—The Department of Education is working behind the scenes with Wall Street short-sellers who have launched an aggressive campaign to bring down the stocks of for-profit colleges and make millions. These money-grubbing short-sellers are playing a destructive role in promoting a rule that will limit opportunities for minority students who wish to attend career colleges.

The Wall Street Journal recently featured a front-page story detailing how “A Short Plays Washington.” How are short-sellers shorting minority students? Well it’s not so easy, but now it’s been done, as detailed in the lesson plan below:

Lesson #1: Identify your prey: Wall Street investor, Steve Eisman of Frontpoint Financial Services gained notoriety (see: Michael Lewis’ The Big Short) for successfully betting against the subprime mortgage market as it began to collapse. He made a killing for investors. This time, Eisman turned his sights on the rapidly-growing for-profit, career college sector, whose stock prices have risen sharply in recent years. Volatility in the sector continued to be fueled by a series of staged public hearings called for by the Department of Education in mid-2009 to discuss reforms.

Lesson #2: Dig up some dirt: Analyzing the vulnerabilities of the for-profit college sector, Eisman and others on Wall Street hatched a plan to torpedo the stock prices. They began by recruiting a private investigator to dig up evidence of shady recruitment tactics. The investigator recruited homeless shelter executives to write a letter to the Department of Education asking for stricter regulations. Many who signed on to the letter had no knowledge that a P.I. was organizing behind the scenes.

Lesson #3: Hire a lobbying firm and talk to Department of Education and Congress. In early 2010, Eisman et al. began meeting with government officials, offering expert counsel and spurious research findings. Eisman also lent his notoriety and media star power to testify at the Senate Committee on Health Education Labor and Pension Committee Hearings.

Shortly thereafter, another HELP Committee Hearings was held where the Government Accountability Office issued a report condemning the recruiting practices by the for-profits…the GAO later redacted significant portions of this bogus report due to false information. I have never seen nor heard of a bogus GAO report before. This was done to crash the stock value of the for profit colleges which would allow the short sellers to rack up their stock at bargain basement prices and gain millions as it returned to normal after the truth would eventually come out.

Lesson #4: Influence the markets. In a widely publicized keynote, “Subprime Goes to College Speech,” delivered to hedge fund managers at the Ira Sohn Conference, Eisman likened for-profit education to the sub-prime mortgage industry. This is extremely vile and perhaps racist. The sub-
prime attack targeted Black families in large numbers and victimized us beyond any hint of morality. In the end, Black Americans lost approximately 35 percent of their total net worth to the effects of the sub-prime mortgage scandal. That was extremely costly and probably the worst single blow to a race of people since the Holocaust of Europe. They did it with a smile and are smiling now while they try to perform this new atrocity.

Lesson #5: Fan the flames in the media. The HELP Committee hearings and “Subprime Goes to College” created frenzy with the media. Stock prices for many of the for-profit companies were substantially driven down in the wave of negative publicity.

Lesson #6: Enjoy the spoils. But, don’t get caught! While Eisman et al. delivered substantial financial awards to their clients, their attempts to unduly influence the Department of Education’s rule making process has not gone unnoticed, including by The Wall Street Journal. NBCC and other groups, such as the Citizens for Responsibility and Ethics, in Washington, have pointed to this improper relationship and asked Education Secretary Arne Duncan to investigate. Our Department of Education should be focused on providing opportunities for the thousands of minority students who gain valuable skills from for-profit colleges, not creating rules that have been influenced by the corruption of Wall Street short-sellers.

The above seems like old school Chicago corruption. But, it isn’t. It is your federal government teaming up with some of the sleaziest attitudes known to mankind at the expense of our children. We must fight this and fight it hard. It is time for us to rise up and say “Hell no!” They are putting our college students at risk and also negatively affecting our future workforce. We need educated persons to fulfill the jobs we create. The stakes are just too high.

By: Maritza Vega

While Americans have been focused on other things, the Obama Administration has been quietly waging a war on career colleges and universities – a war that could end up destroying necessary opportunities for people like me, and for our children.

Recently, the Department of Education, under pressure from not-for-profit community colleges, education policy institutions and Wall Street interests has proposed a “Gainful Employment” rule that would place a heavy burden on students who decide to go to career schools. These new rules would only target career schools, and could eliminate Federal financial aid to as many as 360,000 students. Many of those students are single mothers like I was – women who depend on the flexibility of for-profit institutions to pursue their dreams while still caring for their families.

When I graduated high school, the prospect of a college education was daunting, despite having a scholarship in hand to a big university in Illinois. As an eighteen-year-old, the cold hallways of a university seemed impersonal and uncaring. I knew that a massive institution couldn’t provide the kind of guidance I would need to find success in the workplace, nor would it provide the smaller classroom sizes that I needed to really learn. After two years of working administrative jobs and now a single mother of one, I finally decided I was ready to pursue higher education, yet the traditional four year universities still seemed unappealing.

Northwestern College here in the Chicagoland area was different. For once, an admission counselor asked me what I wanted to do, not what classes I needed to take. The financial aid office explained the Federal loan process, but was careful to counsel me to accept only as much as I needed, and helped me weigh the pros and cons of using government assistance to pursue my education. I earned my Associates in Computer Programming & Information Systems, was hired immediately out of school and went on to become known as the “start-up queen” for human resource departments, helping students and businesses across Chicago achieve success. I went on to earn my Bachelors and am in the process of completing my Masters, and currently, I am the executive director of human resources for a major corporation here in Illinois.

If it weren’t for the care and concern of Northwestern College’s admissions offices, particularly at their Chicago Campus where I attended, my life might have turned out very differently. Now, I counsel my clients to seriously consider hiring graduates of career colleges and universities because I know that they received the kind of personal attention and training that will best benefit a company. I also encourage young women raising families on their own to pursue higher education at these schools.

Further, I am hoping that short-sighted regulations will not prevent my own children from attending a career college – because like me, they also learn better in smaller classes with more individualized instruction. Affording my children true choice in education – including access to career schools – is critical in ensuring they receive the education that best suits them and prepares them for success in tomorrow’s job market. I firmly believe that personal attention equates to success, and career schools like Northwestern College here in Chicago, Bridgeview and Naperville, provide just that/

The administration does not seem to understand how their actions will impact the lives of thousands of low and middle-income students who need the flexibility and opportunity that these schools offer. Not to mention, graduates of for-profit schools have a 38% higher completion rate than their counterparts at community colleges, and over the next several years will provide almost 1.6 million new employees to some of the fastest growing industries in America. Driving these institutions out of business would deal a crushing blow to the aspirations of thousands of students who know this is their best option, and negatively impact our economy in the middle of a very difficult time.

Maritza Vega of Elmwood Park, Illinois is a 2001 graduate of Northwestern College and currently serves as an executive human resources director at a Chicagoland corporation.