Rep. McKeon Traded Corinthian Colleges Stock While Shifting Billions To For-Profit College Industry
Congressman Buck McKeon (R-CA), the Armed Services Committee chairman best known today for his unapologetic support for pork spending for military contractors, has faced a recent wave of stories concerning evidence that suggests that he has used his elected office to directly benefit himself and his family. First, the Wall Street Journal last month reported that McKeon was among the bipartisan set of lawmakers who received VIP discount mortgage refinancing deals from Countrywide, the subprime mega-lender now owned by Bank of America. After that story broke, we reported that McKeon’s lobbyists allies were funneling large donations to the congressman’s wife, who is running for the legislature in California.
With the investigation into Congressman Spencer Bachus’ (R-AL) alleged insider trading during the financial crisis, it’s worth a look back at McKeon’s own history of trading stock in companies he oversaw. Last year, the Huffington Post’s Chris Kirkham published a fascinating overview of the growth of the troubled for-profit college industry. Buried in the piece is a note about how McKeon — at the time a senior member of a subcommittee with authority over higher education — bought stock in Corinthian Colleges Inc., a for-profit college that would reap the windfall of the deregulation policies enacted by McKeon and his colleagues:
The 50 Percent Rule had been put in place with other consumer safeguard measures in the early 1990s, in an effort to protect students and taxpayers in the face of widespread reports of abuse and fraud involving federal student aid programs. The deregulation was the result of a fierce lobbying effort waged by the for profit-college industry, coupled with strategic campaign donations distributed to Boehner, Enzi and Rep. Howard “Buck” McKeon (R-Calif.), the men who controlled the Education committees in the House and the Senate.
McKeon held and sold stock for Corinthian Colleges Inc., a for-profit college corporation, during the time he was crafting policies for the industry on the House Education committee, according to his required personal financial disclosure forms. According to the documents, he owned between $1,000 and $15,000 in Corinthian stock in 2003, and sold it off in 2004.
McKeon appeared be seeking a quick buck from a company he was showering with taxpayer money. What’s worse, the policy to promote for-profit colleges has led to the growth of an industry many experts say uses systematic fraud to deceive students. Corinthian College, the for-profit McKeon invested in, faces attorney general investigations and lawsuits in states from coast to coast, and has been cited for falsifying hundreds of student employment records, while maintaining a “policy” of misleading students. Republic Report’s David Halperin has more on the Corinthian College Inc. record.
McKeon voted for the Stock Act, the watered down legislation that was originally meant to curb insider trading in Congress. But he hasn’t distanced himself from the for-profit college industry. One top for-profit school lobbyist even donated to McKeon’s wife in her bid for State Assembly.
Update: If you have a Reddit account, vote up this article here.