Monday, May 07, 2007

Add another whistle-blower to the list

Its now been well established that the Bush administration hates whistle-blowers. That's understandable, given that it's likely one of, if not, the most corrupt administrations in U.S. history. But the New York Times today has a story about a Dept. Of Education researcher who got the cold shoulder from the administration when he tried to warn "student lending companies were improperly collecting hundreds of millions in federal subsidies."

The department “does not have an intramural program of research on postsecondary education finance,” the supervisor, Grover Whitehurst, a political appointee, wrote in a November 2003 e-mail message to Mr. Oberg, a civil servant who was soon to retire. “In the 18 months you have remaining, I will expect your time and talents to be directed primarily to our business of conceptualizing, competing and monitoring research grants.”

For three more years, the vast overpayments continued. Education Secretary Rod Paige and his successor, Margaret Spellings, argued repeatedly that under existing law they were powerless to stop the payments and that it was Congress that needed to act. Then this past January, the department largely shut off the subsidies by sending a simple letter to lenders — the very measure Mr. Oberg had urged in 2003.

The story of Mr. Oberg’s effort to stop this hemorrhage of taxpayers’ money opens a window, lawmakers say, onto how the Bush administration repeatedly resisted calls to improve oversight of the $85 billion student loan industry. The department failed to halt the payments to lenders who had exploited loopholes to inflate their eligibility for subsidies on the student loans they issued.
I believe (actually, secretly hope) that future generations will look back with absolute bewilderment that the American public was not outraged to the point of furor over the flat out unethical crony capitalism of the Bush administration. The article is 3 pages long ... but it is full of little bits like this

He [Oberg's supervisor] told Mr. Oberg to stop because he wanted him to be monitoring grants, not lending practices. Officials also rewrote Mr. Oberg’s job description, documents show, barring him from further research into the subsidies. Although Mr. Oberg was a civil servant, the Bush administration may have seen him as a holdover from the Clinton administration.
But what is clear from the article is this: the Bush administration was intent on allowing the lending companies to continue robbing the tax payer. Sally Stroup "who was then serving as senior aide to the Republican chairman of the House education committee", to whom Oberg at one point had brought legislation that would have eliminated the loophole that allowed these companies to profiteer off the student loan program, told him that the legislation wasn't going to happen. Period.

Stroup is now an aide on Capitol Hill, but before that had become an assistant secretary of education in the Bush administration. And not surprisingly, Stroup is a former employee of the very lending companies that are now under investigation. This is a trademark of this administration - to appoint wolves to guard the chickens.

Oh, but it gets better.

Then, in 2005, the Education Department’s inspector general recommended that $36 million be recovered from a New Mexico lender. Ms. Spellings (Bush's Secretary of Education] overruled the finding that the payments were improper and declined to recover the payments. And in January 2007, after the inspector general recommended that $278 million in overpayments be recovered from Nelnet, the department instead reached a settlement under which Nelnet could keep the money — if it dropped plans to bill the department for another $800 million in subsidies.

Nelnet was the nation’s most generous corporate donor to the National Republican Congressional Committee in 2006, and its top three executives were the largest individual donors to the committee as well, according to the nonprofit Center for Responsive Politics.

Nelnet was also well connected at the department. Don Bouc, Nelnet’s president through 2004 and president emeritus thereafter, sat on the department’s Advisory Committee on Student Financial Assistance from 2001 through Feb. 1 of this year, even while the department was auditing the company’s subsidies and negotiating the settlement. Mr. Bouc resigned from the committee 11 days after the department announced that it would not seek to recover the $278 million.

The story, however, has somewhat of a happy ending in that once the problem finally came to attention after the Nelnet audit, legislation was passed (the same legislation Oberg had proposed years earlier) which ended the loophole that allowed these companies to steal "hundreds of millions in subsidies." But the rank corruption illustrated by the Nelnet decision is staggering. Staggering.

For more on the Bush administration's war on whistleblower's, see this article from Mother Jones about how the Office of Special Counsel had a policy to ignore whistleblower complaints. From the description:

OSC is investigating Karl Rove's political machine. But until recently OSC head Scott Bloch's policy was to ignore whistleblowers' tips on murder, espionage, and terrorism, while vigorously rooting out any signs of the "homosexual agenda."
What a dark period in American history these days will mark.

No comments: