March 4, 2021

Biden Hiring Risks Oversized Influence For Big DC Law Firm

Biden Hiring Risks Oversized Influence For Big DC Law Firm

The Biden Department of Education has hired two lawyers who recently worked at the DC-mega law firm WilmerHale, amid other signs of that firm’s increasing influence over matters in the new administration. The deep penetration of the Biden-Harris administration by WilmerHale, which has repeatedly represented, among many other special interests, predatory for-profit colleges, comes as one of the biggest for-profit college companies has hired another WilmerHale lawyer to help manage a controversy that could soon come before the education department.

Greg Schmidt and William Desmond, both Harvard Law School graduates, joined the Department of Education this year, each as senior counsel in the Department’s Office of General Counsel. Schmidt was at WilmerHale until January; Desmond was at the firm until he joined the Biden transition operation in September. 

Meanwhile, one of the biggest for-profit college companies, Adtalem, has hired current WilmerHale lawyer Ronald Machen to address an urgent problem. Adtalem has reached a deal to buy for-profit Walden University from another company, Laureate Education. Two hedge funds are arguing that Adtalem should not buy Walden, citing, especially, a current Justice Department / Department of Education investigation into a whistleblower lawsuit alleging abuses in Walden’s graduate nursing program. The hedge funds clearly have done a lot of  investigating and have written to Adtalem and others criticizing the planned sale. Machen was hired by Adtalem’s management to review and address the controversy, according to a source familiar with the deal.

Adtalem was formerly known as DeVry Education, before it sold DeVry University in 2017 to a private equity owner. DeVry had faced multiple law enforcement investigations and actions for alleged deceptive practices, which the company of course denied, but it did agree in 2016 to pay $100 million to settle Federal Trade Commission claims of false advertising.

If Adtalem proceeds with the purchase of Walden, the Department of Education, where Machen’s former Wilmer colleagues now work, would have to approve the change of ownership of the school, because Walden is dependent on federal student aid. 

WilmerHale’s growing hold on the Biden legal team should be of concern to anyone who wants to see the new administration shake off the heavy influence of special interests, including when it comes to predatory for-profit colleges. For-profit college interests dominated the Trump education department, run by Betsy DeVos; she put former for-profit college executives and lawyers in charge of higher education policy, and they trashed all the Obama-era reforms and twisted policy and enforcement decisions to fulfill the wishes of the predatory industry. 

Top WilmerHale partner Jamie Gorelick knows something about trashing Obama-era reforms. Gorelick, who was the deputy attorney general in the Clinton administration, represented during the Obama years a range of bad actors with problems before the new Democratic administration. She tried to stop Congress from enacting a common sense Obama administration reform to eliminate billions of dollars in wasteful student loan subsidies to banks; she pushed the Obama Department of Defense, where she was once general counsel, to drop its punishment of for-profit giant the University of Phoenix after the company was caught engaging in serious recruiting violations; she defended BP before the Obama White House after the Gulf oil disaster; she advised Google as it faced antitrust and criminal probes by the Obama Justice Department.  Gorelick also sits on the board of Amazon, which has its share of federal challenges because of its labor and business practices.

After Donald Trump was elected, Gorelick found some new friends: She served as ethics advisor to the ethically challenged Ivanka Trump and Jared Kushner, justifying their nepotistic White House roles and rationalizing their sketchy divestment, disclosure, and business actions. 

With Joe Biden’s coming to power, Gorelick has pivoted again, publicly boasting about her close friendship and professional relationship with attorney general pick Merrick Garland, whom she knew at Harvard College and who worked under her at Justice. Gorelick’s public musings about Garland have seemed, at least, to remind corporations that her law firm might be well-positioned to help them seek breaks from the new Justice Department. A WilmerHale web page touting Gorelick’s ties to Garland was deleted the day after we wrote about it. 

Another lawyer, Brian Boynton, who until recently worked with Gorelick at WilmerHale, and also has represented the for-profit college industry, was tapped by Biden to work in, and temporarily run, the Justice Department’s powerful civil division. In that role, Boynton already has teamed with a private lawyer for DeVos, going to court seeking to block a deposition of DeVos by students who were scammed by their colleges and stonewalled by DeVos’s department. 

Still another big-firm lawyer who once represented for-profit colleges, Alicia O’Brien of King & Spalding, has joined the Biden White House counsel’s office. And Lisa Bureau, who represented for-profit colleges at another big firm, Cooley, and was hired by DeVos to run the education department’s investigative unit, is apparently, for now, still working there under Biden and his new education secretary, Miguel Cardona. 

When you have lawyers on both sides of a dispute — government on the one hand and regulated industry on the other — who both have worked for that industry, there is a familiarity, a set of shared assumptions, and less possibility that the government side will take decisive action, even where companies have engaged in awful behavior. By contrast, people who have spent time with abused students and conscientious whistleblowers from predatory college operations know that blocking accountability measures is the wrong thing to do. 

Despite years of overwhelming evidence of widespread, egregious deceptive practices, low instructional spending, and poor outcomes at numerous companies in the for-profit college industry, it took the Obama administration a full six years, until its final 20 months in office, to start genuinely penalizing even the worst actors — like Corinthian Colleges, ITT Tech, EDMC, and accreditor ACICS — and implementing serious reforms. Overcoming the clubbiness of the higher education world, and the coziness between federal agencies and for-profit college industry lawyers, took time, determination, and facts about abuses that finally become impossible to ignore.

Then Trump replaced Obama, and DeVos and her revolving door aide Diane Auer Jones reversed every reform. 

As 2020 candidates, Joe Biden and Kamala Harris each pledged to stop the abusive and deceptive practices at for-profit schools for real. The administration has now hired some experienced, dedicated higher education experts and advocates for the Department of Education and the White House, and that’s good news. But they need to make sure they also are assembling the right legal team to protect students and taxpayers, not predatory institutions.

WilmerHale’s influence across the administration raises concerns in that regard.

Other WilmerHale lawyers have joined in the administration in big roles. Alejandro Mayorkas, who recently worked with Gorelick and Boynton on the T-Mobile/Sprint telecom merger, is now Biden’s Secretary of Homeland Security. David S. Cohen (my law school classmate) is deputy CIA director. Two other WilmerHale partners, Danielle Conley and Jonathan Cedarbaum are working in the Biden White House counsel’s office.

No doubt these blue-chip Wilmer lawyers are all capable. Also, a number of my own friends and colleagues are or were at the firm, and they are fine people. WilmerHale often represents good causes and positions, and solves problems. But too frequently its role — personified by Jamie Gorelick — is to help special interests and predatory companies get their way, even when justice pushes in the other direction.

I think a central reason that, after twenty years, the liberal lawyers group the American Constitution Society (of which I was the first executive director back in 2001-03) (and to which Gorelick has donated and spoken) remains no match for the conservative Federalist Society is a contradiction at the heart of the former group: Many of ACS’s most enthusiastic lawyers, aiming at jobs and judgeships in Democratic administrations that spout progressive ideas, have day jobs, at least when Republicans control the White House, as corporate lawyers, where they defend just the opposite of progressive values — carbon pollution, tobacco impunity, predatory banking, telecom monopolists, fine print corporate denial of victims’ right to sue, anti-labor campaigns, and of course those for-profit colleges. Federalist Society lawyers don’t have that huge gap between their own corporate law jobs and the right wing and anti-regulatory views they share with Republican politicians. So there’s more drive, more certainty, and less hypocrisy for these conservative lawyers as they trash the rights of workers and consumers and the environment in all their roles. The fundamental contradiction among Democratic lawyers, meanwhile, stymies the cohesion and effectiveness of the ACS, and also of Democratic administrations. 

The new Biden legal hires at the Department from corporate defender WilmerHale, Schmidt and Desmond, have strong credentials and some public-minded work on their resumes. Schmidt worked at the Department of Education during the Obama administration, briefly worked for the Massachusetts attorney general, and was a public school teacher; he also was on the WilmerHale team that represented Harvard against the right-wing challenge to its admissions practices. Desmond interned in the Justice Department’s civil rights and economic crimes divisions. I hope both will be strong advocates for students and taxpayers, rather than protectors of the kind of predatory institutions WilmerHale often defends.