NEW YORK – Bill and Hillary Clinton’s attack on Donald Trump over Trump University could invite increased scrutiny of the Clintons’ involvement in a for-profit education scandal in which a company that runs shell colleges paid Bill Clinton $16.5 million to be its pitchman.
While the Clintons were collecting millions, Hillary Clinton’s State Department funneled at least $55 million to a group run by the college company, Laureate Education Inc., according to Peter Schweizer’s book “Clinton Cash” as Breitbart reported.
Clinton abruptly resigned from his post as “honorary chancellor” in April 2015 when the disclosure was publicized.
Documents uncovered by Washington-based watchdog Judicial Watch show Laureate Education paid the former president through a “shell corporation” pass-through account that evidently passed State Department scrutiny while Hillary was secretary of state.
Further, in a story showing how for-profit colleges encourage huge student debt, Forbes found the biggest borrower on the for-profit college list is Laureate Education’s Walden University, whose grad students borrowed $756 million in 2014.
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Bill Clinton’s hiring in 2004 as “honorary chancellor” sent the former president scurrying around the globe to make promotional appearances at Laureate campuses in countries such as Malaysia, Peru and Spain.
The company, created in 2004 on the base of the tutoring chain Sylvan Learning Centers, already owned 75 schools in 30 countries and was poised for a massive expansion as Bill Clinton’s name drew top-name, left-leaning investors, including George Soros, Henry Kravis of Wall Street investment banking firm KKR and Paul Allen of Microsoft fame.
For-profit college built on student debt
The Washington Post in a 2014 story described the boiler room telemarketing techniques used to entice students into enrolling.
“Inside a building on a narrow Rio de Janeiro street, nine telemarketers sit in small cubicles, talking frenetically into headsets as scripts scroll across their computer screens,” wrote reporters Mina Kimes and Michael Smith for the newspaper.
“On an October morning, these salespeople are urging high school seniors to attend Centro Universitário IBMR, a for-profit university. Their supervisor, Rafael Morine, strains to be heard above the clatter of an air conditioner,” the article continued.
The Washington Post reported that before the day was over, the telemarketers would make almost 1,300 calls, induced by bonuses to salespeople capable of persuading at least 250 students to take the entrance exam for IMBR. They offer what the university’s owner, Douglas Becker, promises in his Baltimore office 5,000 miles away will be an opportunity of a lifetime: “Be part of Laureate Network, the biggest university network in the world.”
The newspaper further noted that by the time Laureate Education was taken private in 2007, in a $3.8 billion management leveraged buy-out, the company with $4 billion in annual revenue and 800,000 students could lay claim to being the largest U.S. for-profit college then in operation.
But, as Forbes pointed out in its July 12, 2015, story, Laureate Education’s Walden University was built by inducing prospective students to incur massive tuition debt to attend a school with no academic reputation and virtually no standards for admission other than ability to pay.
“Don’t confuse Walden University with Walden College, the fictional school made famous in the Doonesbury comic strip. Garry Trudeau did poke fun at Walden U. once, in his August 2012 strip,” Forbes warned. “In that strip, the president of Walden College laments that the graduation rate is so low that ‘it’s like we’re a for-profit school!'”
Citing data from the leftist Center for American Progress, Forbes pointed out that Laureate Education’s Walden University led the list among all U.S. for-profit colleges by amassing student debt of $756 million in 2013-2014.
The Miami Herald reported that since 2010, Bill Clinton has been paid more than $16 million to serve as “honorary chancellor” of Laureate Education.
“The firm is being sued by several online graduate students for allegedly dishonest practices, and a 2012 U.S Senate report found that more than half of Laureate’s online Walden University revenue went to marketing and profit,” the Miami Herald noted.
Bill Clinton’s ‘shell corporation’ pass-through account
In October 2015, Judicial Watch released 789 pages of State Department ethics review documents concerning Secretary of State Hillary Clinton that included a copy of Bill Clinton’s May 1, 2010, draft consulting agreement dated with Laureate Education, which had been submitted for ethics review by the State Department.
The document revealed Bill Clinton was being paid through a “shell corporation” pass-through account, WJC LLC, designed to keep consulting fees paid Clinton off the books of the Clinton Foundation.
It allowed Clinton to avoid disclosing the existence of the shell company even to the IRS, as long as compensation payments to him were withdrawn as soon as they were deposited, ensuring the account always showed a zero balance.
Stephen Braun of the Associated Press broke the news of Bill Clinton’s shell company on May 26, 2015. Braun reported Doug Band at Teneo made ready use to the WJC LLC bank account to pay Bill Clinton on the side for lucrative business dealings the Clintons wanted to keep out of audited financial statements and IRS Form 990s prepared for the Clinton Foundation.
Braun reported that in February 2009, Band asked State Department ethics officials to clear Bill Clinton’s consulting work for three companies owned by influential Democratic Party donors.
The AP report noted Band’s memos proposed that Bill Clinton would provide “consulting services regarding geopolitical, economic and social trends affecting the entity and philanthropic opportunities” through the WJC, LLC entity.
Clinton legitimates Becker
Laureate’s founder and CEO, Douglas L. Becker, claims he was accepted at Harvard but declined, preferring to continue working in a local computer store over getting a degree at the prestigious Ivy League university.
The New York Times noted in 1985 that Becker had also declined to attend the University of Pennsylvania, where supposedly he had been accepted as a premedical undergraduate student.
In 2014, while the Clintons were still trying to keep secret how much Bill Clinton was being paid by Laureate Education, Eric Owens, education editor at the Daily Caller, took Clinton to task for the assignment with Becker.
Noting that Laureate was “ensnarled in controversy all over the globe,” Owens speculated the secret sum Becker was paying Bill Clinton had to be considerable to get him “to hawk” the company worldwide.
Owens further noted that Hillary Clinton “helped legitimize Laureate in the eyes of the world by making the for-profit education behemoth part of her State Department Global Partnership.”
Clinton Foundation gets into the act
A Laureate Educational press release in 2013 announced that its schools were scheduled to begin live broadcasts of the Clinton Global Initiative (CGI) annual meeting, with more than 45,000 Laureate students scheduled to hear presentations by President Obama, rock star Bono and Archbishop Desmond Tutu.
“Four Laureate students from Brazil, Malaysia and Mexico will be granted private, one-on-one interviews with several CGI attendees,” the press release noted.
”The students are scheduled to interview such CGI attendees as Sheryl Sandberg, Facebook’s Chief Operating Officer and author of The New York Times best-selling book ‘Lean In,’ as well as Chelsea Clinton, a member of the Clinton Foundation’s board of directors. The conversations will be broadcast in English, Spanish and Portuguese,” the press release continued. This is the second consecutive year Laureate has broadcast CGI’s annual meeting.”
In 2012, when Bill Clinton was in his fifth year running his own CGI University, “CGI U,” Becker’s Laureate Education was a sponsor.
Bloomberg Politics reported in 2015 that Bill Clinton decided to leave his five-year position as Laureate Education’s “honorary chancellor,” but not before he had visited 19 of Laureate’s 88 campuses around the world and spoke to tens of thousands of its students.
Epstein noted Clinton’s departure was precipitated by his wife’s unfolding 2016 presidential campaign. Hillary Clinton joined Massachusetts Democrat Sen. Elizabeth Warren in blasting the federal government “for currently subsidizing a for-profit industry that is ripping off young people.”
Epstein noted these concerns evidently had not surfaced in 2008 when Hillary Clinton accepted a contribution of $4,600 to her presidential campaign from Becker. He also gave her $2,000 for her 2000 Senate campaign.