Freedom Line Blog

Darrell Issa (R-CA), Chairman of the House Government Oversight & Reform Committee, wants the Census Bureau to explain why it failed to tell Congress that it would change the way it measures whether people have health insurance in the same year ObamaCare goes into effect.

The new survey produces a lower uninsured rate than previous versions asked by the Census Bureau. The concern is that the new lower numbers will make ObamaCare enrollment figures now and the in the future appear to be higher than they would have had the same questions been asked.

“A two-percent adjustment in the nationwide uninsured rate would represent a change in status for six million Americans and could be used in misleading arguments about the coverage impact of the Affordable Care Act,” Issa wrote in a letter to the Census Bureau.

Politically-motivated shenanigans are nothing new for ObamaCare, but this latest revelation indicates that even a highly respected agency like the Census Bureau – which researchers in several fields look to for objective data – is being used to push the narrative that the controversial health law is a historic success; data to the contrary notwithstanding.

H/T: Washington Examiner

The festering “Collegegate” saga that CFIF has been following for weeks today reached front-page status in The Wall Street Journal.

We’ve detailed the allegations of insider trading against career colleges, which prompted Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) to ask whether officials within Obama’s Department of Education, “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”  We also detailed how the Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer involving undercover “students” sent to capture information on for-profit colleges.  The GAO’s revisions all slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  According to the GAO’s own estimate, only 1 percent of reports require correction, and the statistical likelihood that all of its flaws skewed in the same direction (unfavorably toward for-profit colleges) was 1 in 65,536.  Tellingly, the stock value of for-profit colleges reportedly fell 14%, or $4.2 billion, following the GAO report.

Now, under the headline “A ‘Short’ Plays Washington,” the Journal exposes how hedge fund operators sold short their stocks in for-profit career colleges, and sought meetings with federal officials at the Department of Education:

‘Hello, my name is Steven Eisman,’ began an email to an Education Department official in May.  ‘I wanted to bring to your attention many of the unsaid or unknown aspects of this industry.’  Mr. Eisman runs a hedge fund called FrontPoint Financial Services, whose hugely profitable 2007 bet that housing would collapse was chronicled in the book ‘The Big Short.’  In the past year, Mr. Eisman has sold short the stocks of for-profit education companies.  He and some other investors betting on these stocks to fall have sought meetings with Education Department officials, and in some cases gotten a hearing.  In emails and presentations, the investors have painted the for-profit industry in a highly critical light.”

The Journal also quotes Citizens for Responsibility and Ethics in Washington (CREW), which wrote Obama’s Education Secretary Arne Duncan that hedge fund managers were able to secure “direct and sustained input into the regulatory process.”  “In what the group called ‘more troubling,'” the article states, “it said Education Department officials sought and received investors’ input despite knowing their financial motives.”

Career colleges have flourished for good reason.  They offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  Unfortunately, the Obama Education Department seeks to cripple them by declaring them ineligible for federal aid.  CFIF has formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges, and that investigation is underway.

We at CFIF do not begrudge any citizen’s First Amendment right to petition the federal government for redress of grievances.  It is important, however, that the new 112th Congress ensure that these troubling allegations don’t reveal impropriety within the government itself.

It was embarrassing enough when the Government Accountability Office (GAO)  recently withdrew its defective “undercover study” issued last summer as part of the Obama Education Department’s campaign against for-profit colleges.  Readers will recall how the GAO sent undercover “students” to several schools to capture information as evidence for the Education Department and a Senate committee.  This was all part of their larger effort to justify the proposed “Gainful Employment” rule targeting for-profit career colleges that provide critical training and education to struggling Americans.  Worse, this came on the heels of a letter from Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) seeking investigation into allegations of insider trading within the Education Department relating to its campaign to cripple career colleges.

Now comes a report providing greater detail on just how malignant that the defective GAO “undercover” report was.  According to Frederick Hess and Andrew Kelly, fully 16 of the report’s 28 findings required revision.  Tellingly, every single one of those “findings” skewed the same direction – casting for-profit career colleges negatively.  The statistical likelihood of all 16 randomly tilting the same way, according to Mr. Hess and Mr. Kelly, is 1 in 65,536.

That doesn’t suggest extreme coincidence.  It suggests intentional malfeasance.

Amid persistent unemployment and intense global competition, for-profit colleges provide important alternatives for education and job skills.  That is why CFIF has formally petitioned Chairman-Elect Darrell Issa (R – California) of the House Committee on Oversight and Government Reform  to investigate this matter.  It is also important that supporters and activists across the nation contact their Senators and Representatives to help stop the Obama Administration’s unjustifiable scheme.

This week, CFIF formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges.

Career colleges have flourished because of their ability to nimbly respond to our evolving economy, offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  The Obama Education Department, however, seeks to foist a proposed “Gainful Employment” rule that would declare academic programs ineligible for federal aid if some specified proportion of their graduates failed to meet an arbitrary income-to-loan payment ratio.

The natural consequence of such a rule:  vital for-profit career colleges would be eliminated.

The need for Congressional investigation became even more obvious this week.  The Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer in which it sent undercover “students” to several schools to capture information on recruiting policies, promises of post-graduation pay, federal and other funds for tuition and expenses, and more.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, so an inquiry into the reasons behind this particular revision – with its original report clearly biased – is justified.

That news comes on the heels of allegations that Education Department officials communicated with short-sellers to inform them of their intentions, providing certain traders with inside information potentially allowing for illegal financial advantage.  The cooperation, however, was allegedly a two-way street.  According to media accounts, these same short-sellers may have concocted elaborate schemes to cast a negative light on career colleges, helping them rationalize the proposed rule.   These allegations are sufficiently serious that Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have formally sought an investigation.

At a minimum, an alarming pattern has emerged that points to the Department of Education specifically working to inflict economic harm upon career colleges, while possibly collaborating in the shadows with the very short-sellers on Wall Street who would most likely benefit from such activity.