Monday, November 7, 2016

Clinton’s For-Profit Chancellorship

Laureate, Bill and a case study in modern crony capitalism.

By Review & Outlook
The Wall Street Journal
November 7, 2016

No matter who wins on Tuesday, political reformers should focus on the lucrative ties between big business and big government. Consider the $17.6 million that Laureate International Universities paid Bill Clinton to be its “honorary chancellor” from 2010-2015.

We wrote about this in “The Clinton For-Profit Standard” (Sept. 7), and Laureate CEO Doug Becker criticized us in a letter for suggesting that Mr. Clinton may have been hired to provide political protection. Recently released emails via WikiLeaks provide a little more, er, color on the Clinton-Laureate relationship.

Clinton factotum Doug Band wrote a memo in 2011 to lawyers at Simpson, Thacher & Bartlett showcasing Laureate as one of the relationships that his company Teneo cultivated for the Clinton Foundation. “Laureate is a Foundation relationship that evolved into a personal advisory services business relationship for President Clinton,” the memo says. “I have managed this relations and, since 2011, Teneo partners have helped this relationship, which is very time-consuming.”

We can only imagine. The memo says Laureate donated $1.35 million in 2009 and 2010 to the Clinton Global Initiative, plus another $50,000 for CGI University in 2011.

As the Washington Post reported, Laureate was invited to a State Department dinner related to higher education with academic leaders world-wide in August 2009. Another email that was released in a public records request last year shows that then Secretary of State Hillary Clinton said Laureate should be invited to that dinner because it is “the fastest growing college network in the world.” Oh, and Mr. Becker is someone “who Bill likes a lot.”

The State Department redacted Mr. Clinton’s consulting duties from his publicly released Laureate contract, which the agency’s ethics office had to approve. However, part of Mr. Clinton’s honorary job involved giving speeches, schmoozing with foreign leaders, and lending his imprimatur to the for-profit.

The Baltimore-based company operates 87 campuses in 28 countries, most of which are in the developing world. Since 2007 Laureate’s enrollment has swelled to more than one million students from about 300,000 as it has expanded even in countries that in the past have been hostile to for-profit operators. In 2011 Laureate became the first private university approved in Australia in 25 years. According to a company SEC filing in October 2015, Laureate was awarded eight of the 37 contracts to operate technical institutions in the Kingdom of Saudi Arabia, more than any other provider.

Laureate is also a rare major for-profit college in the U.S. that has been spared from President Obama’s war on the industry. Laureate may have an impeccable compliance record and provide a world-class education. But it’s hard to know since the Obama Administration’s College Scorecard doesn’t include a graduation rate for Laureate’s largest U.S. college, the online Walden University, which makes up the majority of its U.S. enrollment.

Walden’s accreditor also doesn’t require colleges to disclose job-placement rates, which is what the Administration used to drive Corinthian Colleges out of business. An Education Department spokesperson says the Scorecard doesn’t report a graduation rate for Walden because the students who were measured didn’t include full-time, first-time undergraduates receiving federal aid.

To sum up, Laureate helped make Bill Clinton richer and donated big bucks to the Clinton Foundation that promoted the Clinton political brand. Meantime, the company avoided regulatory assault and received political access that helped promote the Laureate brand. Readers can decide if all of this was a coincidence.

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