Archive for April 30th, 2007
The Bush administration killed a proposal to clamp down on the student loan industry six years ago following allegations that companies sought to shower universities with financial favors to help generate business, according to documents and interviews with government officials.
The proposed policy, which Education Department officials drafted near the end of the Clinton presidency and circulated at the start of the Bush administration, represented an early, significant but ultimately abortive government response to a problem that this year has grown into a major controversy.
Now, as the $85 billion-a-year student loan industry faces an array of investigations into questionable business practices that some officials believe could have been curtailed by the 2001 proposal, the Education Department has embarked on a new effort to set rules for the industry to prevent conflicts of interest and other abuses. If approved, the rules would be implemented in summer 2008, a few months before Bush leaves the White House.
The abandonment of the 2001 proposal underscores what some consumer advocates and Democratic lawmakers believe is lax federal oversight of the financial aid system by a department they say is too cozy with the industry. More than a dozen senior department officials either previously worked in the student loan business or found high-paying jobs in the sector after they left the agency.
“The Department of Education has been run as a wholly owned subsidiary of the loan industry under this administration,” said Barmak Nassirian, a longtime advocate for industry reform at the American Association of Collegiate Registrars and Admissions Officers. “They are running the federal loan program for the profit of their friends and not for the benefit of students and taxpayers.”
Chad Colby, a department spokesman, said he was not aware of the 2001 proposal but noted that a task force was created last week to consider new rules. The department also defended its hiring of loan industry veterans, saying their expertise was invaluable, and pointed to a 2005 decision by the Government Accountability Office to remove federal student financial aid from a list of “high-risk” programs.
“The U.S. Department of Education takes its role as steward of federal financial aid very seriously,” Education Secretary Margaret Spellings, who took office in 2005, said in a statement last week.
No one has been charged with any crime in the investigations led by the New York state attorney general’s office and other agencies, but in recent weeks there have been a series of revelations about conflicts of interest and financial links among universities, lenders and government officials. Some Bush administration appointees have said they were unaware of the extent of these controversial practices.
But the 2001 policy draft shows that Education Department officials knew of the issue and that at least some saw a need to act. In addition, some industry executives had sought guidelines on what would qualify as prohibited payments, or “inducements,” from lenders to financial aid directors, according to current and former department officials. Several of them spoke on condition of anonymity because of the sensitivity of the matter.
Sen. James Inhofe (R-OK) on Friday:
Inhofe, speaking to the press before Cheney’s arrival, lambasted Democrats for Thursday’s Senate vote to begin withdrawal from Iraq by Oct. 1 and the press for “mischaracterizing” the reasons for U.S. involvement.
“The whole idea of weapons of mass destruction was never the issue, yet they keep trying to bring this up,” Inhofe said. […]
Pressed for an explanation, Inhofe said weapons of mass destruction were “incidental” to the decision to invade Iraq.
“The media made that the issue because they knew Saddam Hussein had used weapons of mass destruction.”
Sen. James Inhofe (R-OK) in August 2002:
Our intelligence system has said that we know that Saddam Hussein has weapons of mass destruction — I believe including nuclear. There’s not one person on this panel who would tell you unequivocally that he doesn’t have the missile means now, or is nearly getting the missile means to deliver a weapon of mass destruction. And I for one am not willing to wait for that to happen.
When the Army Corps of Engineers solicited bids for drainage pumps for New Orleans, “it copied the specifications — typos and all — from the catalog of the manufacturer that ultimately won the $32 million contract.” That manufacturer: MWI. “MWI employed former Florida Gov. Jeb Bush, President George W. Bush’s brother, to market its pumps during the 1980s, and top MWI officials have been major contributors to the Republican Party.”
The bitter fight over the latest Iraq spending bill has all but obscured a sobering fact: The war will soon cost more than $500 billion.
That’s about ten times more than the Bush administration anticipated before the war started four years ago, and no one can predict how high the tab will go. The $124 billion spending bill that President Bush plans to veto this week includes about $78 billion for Iraq, with the rest earmarked for the war in Afghanistan, veterans’ health care and other government programs.
Congressional Democrats and Bush agree that they cannot let their dispute over a withdrawal timetable block the latest cash installment for Iraq. Once that political fight is resolved, Congress can focus on the president’s request for $116 billion more for the war in the fiscal year that starts on Sept. 1.
The combined spending requests would push the total for Iraq to $564 billion, according to the nonpartisan Congressional Research Service.
What could that kind of money buy?
A college education – tuition, fees, room and board at a public university – for about half of the nation’s 17 million high-school-age teenagers.
Pre-school for every 3- and 4-year-old in the country for the next eight years.
A year’s stay in an assisted-living facility for about half of the 35 million Americans age 65 or older.
Not surprisingly, opinions about the cost of the war track opinions about the war itself.
“If it’s really vital, then whatever it costs, we should pay it. If it isn’t, whatever we pay is too much,” said Robert Hormats, author of “The Price of Liberty,” a newly published book that examines the financing of America’s wars.
Before the war, administration officials confidently predicted that the conflict would cost about $50 billion. White House economic adviser Lawrence Lindsey lost his job after he offered a $200 billion estimate – a prediction that drew scorn from his administration colleagues.
“They had no concept of what they were getting into in terms of lives or cost,” said Winslow Wheeler, who monitors defense spending for the Center for Defense Information, a nonpartisan research institute.
Bush and his economic advisers defend the growing cost as the price of national security.
“It’s worth it,” Bush said last May, when the tab was in the $320 billion range. “I wouldn’t have spent it if it wasn’t worth it.”
For war opponents, the escalating cost is a growing source of irritation. A Web site showing a running tally of the war’s cost, http://costofwar.com/index.html, attracts about 250,000 visitors a month, according to the National Priorities Project, the site’s sponsor.
“It comes down to the question, how do you want to spend a half trillion dollars? Do you want to spend a half trillion dollars on this or would you rather spend it on something else?” said economist Anita Dancs, the organization’s research director. “It’s all a matter of costs and benefits.”
More at the link.
While American troops fight and die to try to achieve their current mission (establish a functioning government in Iraq). Isn’t this beyond the pale? Shouldn’t our troops also get a two-month break? In fact, shouldn’t they come home? They can’t establish an Iraqi democracy on their own. Or does Bush just want them to stay there indefinitely?
If this guy has the evidence that he says he has. I’m old enough to recall a vice-president having to leave office because of dishonesty (Spiro Agnew).
Murray Waas has a good article, which begins:
Attorney General Alberto Gonzales signed a highly confidential order in March 2006 delegating to two of his top aides — who have since resigned because of their central roles in the firings of eight U.S. attorneys — extraordinary authority over the hiring and firing of most non-civil-service employees of the Justice Department. A copy of the order and other Justice Department records related to the conception and implementation of the order were provided to National Journal.
In the order, Gonzales delegated to his then-chief of staff, D. Kyle Sampson, and his White House liaison “the authority, with the approval of the Attorney General, to take final action in matters pertaining to the appointment, employment, pay, separation, and general administration” of virtually all non-civil-service employees of the Justice Department, including all of the department’s political appointees who do not require Senate confirmation. Monica Goodling became White House liaison in April 2006, the month after Gonzales signed the order.
The existence of the order suggests that a broad effort was under way by the White House to place politically and ideologically loyal appointees throughout the Justice Department, not just at the U.S.-attorney level. Department records show that the personnel authority was delegated to the two aides at about the same time they were working with the White House in planning the firings of a dozen U.S. attorneys, eight of whom were, in fact, later dismissed.
A senior executive branch official familiar with the delegation of authority said in an interview that — as was the case with the firings of the U.S. attorneys and the selection of their replacements — the two aides intended to work closely with White House political aides and the White House counsel’s office in deciding which senior Justice Department officials to dismiss and whom to appoint to their posts. “It was an attempt to make the department more responsive to the political side of the White House and to do it in such a way that people would not know it was going on,” the official said.
Continue reading. The really good stuff is later in the story.