March 5, 2021

Independence University Operator Seeks To Conceal Record of Trial It Lost


Independence University Operator Seeks To Conceal Record of Trial It Lost

The Center for Excellence in Higher Education, which runs online Independence University, CollegeAmerica, and other schools, received a devastating $3 million judgment last summer from a Colorado judge who presided over the trial of a case brought by the state’s attorney general. Now, while CEHE appeals that decision and seeks to fend off an effort to cut off federal aid for its colleges, it’s also desperately trying to prevent the public release of the trial record. 

The August 2020 opinion by the Colorado judge, Ross Buchanan, carefully documented how CEHE schools used a detailed playbook to manipulate vulnerable students into enrolling in high-priced, low-quality programs; how the school directed admissions representatives to “enroll every student,” regardless of whether the student would likely graduate; how the schools’ recruiters and advertisements greatly overstated starting salaries that graduates could earn; how the schools falsely inflated graduation rates; and more.

Judge Buchanan’s decision not only found CEHE and its schools liable for the abuses, he also found personally liable CEHE’s billionaire founder, Carl Barney, and its CEO, Eric Juhlin.

In the wake of the verdict, nineteen pro-student organizations, and I, sent a letter in October to then-Secretary of Education Betsy DeVos arguing that, because of the Colorado court decision finding CEHE, Barney, and Juhlin liable for fraudulent behavior, federal law requires that all company’s schools be cut off from federal aid.

For a range of bad behavior and poor educational quality, CEHE also has been in deep trouble with its accreditor, ACCSC. And CEHE faces a False Claims Act lawsuit being pursued by the U.S. Justice Department for alleged defrauding of taxpayers; a pending investigation by the U.S. Consumer Financial Protection Bureau; and actions by the board of the Colorado Division of Private Occupational Schools.

Current staff members have spoken to me recently about aggressive recruiting tactics and poor-quality instruction at the Barney schools, leading to bad outcomes for students. 

Barney, when not squabbling with fellow Ayn Rand acolytes, is back to railing on his blog against Judge Buchanan and Libby Webster, the assistant attorney general who prosecuted the case. Someone even printed out Barney’s latest blog attack, put it in an envelope marked with Barney’s website address, and mailed it to the Colorado Court of Appeals, which acted like a court and filed it in the docket. [UPDATE: On March 3, Barney and Juhlin filed a motion with the appeals court to strike this filing from the record, informing the court that neither Barney nor any other defendant mailed the article to the court and asserting that the document “may have been filed by a third party in an attempt to prejudice the appeal.”  The appeals court denied the motion.]

The appeal docket now also includes a brief filed for CEHE by lawyer Sean Connelly, who formerly was a judge on the Colorado Court of Appeals, i.e., the court that is hearing this appeal. There’s also a brief filed for Barney and Juhlin by the law firm Gombos Leyton, long-time protectors of for-profit colleges. These are the kinds of expensive lawyers Carl Barney can buy with the millions and millions in taxpayer dollars we’ve sent to his schools.

At the same time, CEHE also is trying to prevent the public from reading the transcripts and documents from the Colorado trial. In November, a journalist asked the attorney general’s office for access to the trial record, and the state notified CEHE of the request. The U.S. Department of Education, Consumer Financial Protection Bureau, and the U.S. House of Representatives also contacted the AG office seeking records from the trial. 

CEHE filed a “Motion to Retain Confidentiality” declaring that the journalist, Larry Kirsch, “has a clear progressive platform designed to paint industries like private career colleges in a negative light.” CEHE argues the record of a public trial should be suppressed because it includes “confidential commercial information” as well as  personal identifying information regarding individual students. Even though the AG office proposes to strip out this confidential and private information, CEGE charges that “the State’s real objective” is “to smear the reputation of private career colleges like CollegeAmerica…” 

The Colorado AG office filed a brief in response, noting that the trial record could be useful to former students of CEHE schools who have filed claims with the U.S. Department of Education seeking to have their student loan debt cancelled because the school deceived or defrauded them. The AG office stressed that the trial proceeding was open to the public, with the exception of 22 minutes where Carl Barney was permitted to impart I guess some super-secret information about his business operation, and that CEHE during the trial never made efforts to keep the public from hearing the information it now claims must be protected. 

CEHE filed a reply, claiming the request to make the record of a public trial public is “plainly driven by an improper political agenda.”

An additional brief supporting the AG office position was filed last week by lawyers representing Debbi Potts, a former CEHE employee who blew the whistle on the company to Colorado authorities; Nannette Wride and Katie Brooks, two more whistleblowers who brought the federal False Claims Act case that the Justice Department has joined; the non-profit pro-student groups Veterans Education Success and the Century Foundation; and me. 

One item of interest in the trial record is the testimony of Diane Auer Jones, who at the time of the October 2017 trial was a higher education consultant and a former executive of one of the biggest for-profit college companies, Career Education Corporation. CEHE paid Jones $50,000 for her consulting services, and she testified at trial as an expert witness. Her testimony is a matter of public interest especially because Jones, by early 2018, was at the Trump Department of Education, where she served as Betsy DeVos’s top higher education aide and worked to cancel many Obama-era reforms aimed at holding predatory schools accountable. These DeVos-Jones anti-reforms included a reversal of the Obama administration’s decision refusing to give Carl Barney’s schools the advantageous non-profit status they sought, after converting from for-profit in a troubling transaction. (The Department of Education claimed Jones recused herself from that decision.) Jones also repeatedly misled Congress over her role in bungling for-profit college bailouts. At one point in his decision, Judge Buchanan expressly held that he “did not find…persuasive” Jones’ testimony on a key issue. (I previously posted one of Jones’s written statements filed in the case.)

The records of any public trial should be public. Here the case was a dispute between the state itself and an institution that has received hundreds of millions, maybe even billions in taxpayer dollars over the years, sometimes close to 90 percent of all its revenue. The case was therefore emphatically the public’s business. Carl Barney has no right to a secret trial. If he and Eric Juhlin, as they often claim, are so proud of their work and their institutions, what are they trying to hide? 

UPDATE 04-07-21: A supplemental brief filed by CEHE this week restates the company’s absurd  claim that the state of Colorado “is working with others who share its political objective in a continued effort to do harm to Defendants by any means possible.” It remains unclear what is “political” about seeking to protect students from predatory practices or about allowing the public and government agencies to have access to the records of a public trial. “Political” is just a word that Carl Barney and other predatory college operators bandy about when people question their unfettered access to millions in taxpayer funds.