As House Education Chair Probes For-Profit Colleges, Ranking Republican Foxx Takes Their Donations
As chair of the House Education and Labor Committee, Rep. Bobby Scott’s responsibilities include protecting against waste, fraud, and abuse with the hundreds of billions in federal aid dollars that go to U.S. colleges and universities. Rep. Scott (D-VA) has diligently met that obligation, holding hearings and asking questions of controversial college operators and the Department of Education.
In April 2021, Scott presided over a committee hearing focused on the troubling phenomenon of for-profit colleges converting to non-profit status on terms that continue to enrich the prior for-profit owners — an abuse of non-profit laws and a multi-billion dollar scam against students and taxpayers.
One of the converted schools is Florida’s Keiser University, which also has faced law enforcement probes for student recruiting abuses. On January 31 of this year, Rep. Scott called on the education department to investigate Keiser and the millions in financial benefits that Keiser’s billionaire “Chancellor and CEO” Arthur Keiser, his family members, and related businesses have annually received from the non-profit school he controls.
But if, as widely predicted, Republicans take control of the House of Representatives next January, Scott will be replaced as committee chair, likely by the current ranking member, Rep. Virginia Foxx (R-NC), who has long pressed the arguments of for-profit colleges that oppose serious accountability rules. Foxx’s fealty to predatory school interests has been matched by a steady stream of dollars from the industry to her campaigns for re-election.
Republic Report has learned that on the morning of Saturday, January 22, at the start of a “District Work Period,” during which House members normally go home to meet with constituents, Foxx was not in her western North Carolina district but instead was in the Miami area, at the for-profit Miami Media School, attending an event to raise money for her campaign from Florida for-profit college operators.
Participants at the Foxx fundraiser included Arthur Keiser, head of the very school chain that her committee chair is investigating, along with other career college executives.
Nancy Rodriguez, CEO of Beonair, the operator of Miami Media School, told me today that the fundraiser was solely to benefit Rep. Foxx. About 20 donors attended, contributions started at $250, and the average donation was around $500. Students at the school also attended, along with some employers who have hired graduates.
Explaining why her school held a fundraiser for Foxx, Rodriguez said, “We support people that support our students.” She said Foxx is “an advocate for education and for a level playing field.”
Rodriguez was sincere and strikes me as a straight shooter with a commitment to her students. But not everyone would agree that Foxx is a true advocate for students and education. At the April 2021 hearing that Rep. Scott chaired, Rep. Foxx tried to run interference, proclaiming that there was nothing to see here with respect to the conversions of Keiser and other for-profit schools. The issue, Foxx asserted, was unimportant, because it affected a very small number of colleges and involved only “the possibility of a narrow type of fraud.” “Whooppee!” she scoffed. Foxx attacked a 2021 Government Accountability Office report, requested by Scott, on the issue of conversions and argued that the committee lacked jurisdiction over some of the issues. Democrats, she charged, were “chasing phantoms,” had a “socialist” agenda, and wanted to “eliminate” for-profit education.
Contrary to Foxx’s claim that the conversions trend is insignificant and innocuous, in fact over the past decade or so many of the biggest for-profit college operations have converted to nonprofit — not just Keiser, but CEHE, EDMC, Kaplan, Ashford, Grand Canyon, and more, companies that have been getting hundreds of millions, even over a billion dollars annually from taxpayers, and enrolling tens of thousands of students. The dubious conversions, devised by clever executives and their lawyers, have appeared aimed at evading the regulations and taxes applies to for-profits, as well as the stigma that their industry’s bad behavior has created, while still remaining lucrative ventures for insiders and connected for-profit companies. All of the operations I referenced, to one degree or another, also have faced law enforcement and oversight scrutiny and penalties for improper recruiting practices or other abuses.
But one can infer a motive for Foxx to downplay these kinds of offenses. In the current election cycle, she is the top congressional recipient of campaign funds from the for-profit education industry, with the Open Secrets website tallying her 2021-22 haul at $81,800 — nearly four times what any other House Member or Senator has received from the industry.
Executives from one Florida for-profit college, Full Sail University, have given $20,600, making them Foxx’s largest source of campaign cash.
Foxx has aggressively sought funding from the industry, including, in 2020, apparently pressuring the head of CECU, the for-profit and converted colleges’ Washington DC trade association, to push his industry’s executives to ratchet up their campaign giving to the GOP. CECU’s CEO at the time was former Republican congressman Steve Gunderson (WI), who reported Foxx’s urgent plea in an email we obtained.
CECU has its own political action committee, and this election cycle, as in the past, it has donated to Foxx. Meanwhile, Arthur Keiser, operator of the university that Rep. Scott wants investigated, has given $20,000 to the CECU PAC over the past five years, thus subsidizing CECU’s giving to Foxx. Keiser University is a member of CECU, and the politically hyperactive Arthur Keiser serves on CECU’s board of directors and has long been a dominant figure in the group.
On Monday, Senator Dick Durbin (D-IL) went to the Senate floor and spoke about abuses at Keiser University, including its conversion to non-profit and the financial overlaps between Keiser University and Southeastern College, a separate for-profit school owned by Keiser and his wife, Belinda Keiser. Arthur Keiser, Durbin charged, “embodies the worst of the for-profit industry.” Durbin announced that he and senators Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) would be sending a letter to the Department of Education raising concerns over Keiser’s continued chairmanship of NACIQI, the Department’s outside advisory committee on college accreditation. (House Republicans appointed Keiser to the panel, and the NACIQI members subsequently elected him chair.) Durbin charged that Keiser’s position at NACIQI’s helm “poses a major threat” to students and represents “a major conflict of interest.”
When I sought comment on the January fundraiser, CECU’s current CEO, former Democratic congressman Jason Altmire (PA), told me, “Neither I nor CECU was involved in the Miami event with Dr. Keiser and Dr. Foxx.” But far from disavowing Keiser, Altmire came to his defense in an email to me. Addressing the congressional criticism of Keiser and his schools, Altmire echoed Keiser’s repeated statements that the IRS approved conversion of the school more than a decade ago. (He didn’t mention that more recently the IRS has investigated the school.) Altmire also cited, as Keiser University does, the school’s recent #5 ranking for social mobility by U.S. News.
Miami Media School, which hosted the fundraiser that Foxx and Keiser attended, is part of the Beonair network of schools, which bill themselves as training students for careers in radio and television broadcasting. The Beonair schools — with six campuses in Ohio, Illinois, and Colorado, as well as the Miami location — are also, Altmire confirmed, current members of CECU, as is big Foxx contribution source Full Sail University.
Miami Media and the other Beonair schools are operated by a company called M & S Media, owned by a man named Robert Mills, M&S’s two corporate directors are Mills, of Mt. Pleasant, South Carolina, and Cleveland lawyer Albert Salvatore.
Miami Media School has a mixed record. For a for-profit career college, it boasts an unusually high graduation rate: 73 percent, according to data collected by the U.S. Department of Education. Beonair CEO Rodriguez attributed those outcomes to the fact that the school is niche, attracting highly motivated students interested in broadcasting careers. But the school is expensive, at $24,000 per year, and ex-students have median annual earnings of just $29,000 ten years after enrolling. In the most recent year reported by the U.S. Department of Education (2018), 26.7 percent of the school’s former students defaulted on their federal loans — a high rate of failure. Miami Media School has been getting more than 80 percent of its revenue from Department of Education grants and loans.
Rodriguez is a former president of FAPSC, the Florida state trade association of for-profit colleges. Arthur Keiser is also a past president of FAPSC. The current FAPSC president is Keiser’s son, Robert, who also attended the January fundraiser and who, months after receiving his PhD from a for-profit, online university, was last year named Keiser University’s executive vice chancellor, in charge of the university’s graduate school.
Beyond their mutual affinity for for-profit education, Arthur Keiser has something real at stake in Foxx’s 2022 political race. Foxx has been running for years in North Carolina’s safely Republican 5th District, but this year redistricting may force her to face another House incumbent, Democrat Kathy Manning. Manning has become a critic of Keiser, focusing on the dominant influence he has gained over St. Andrews University, a non-profit school in Laurinburg, NC, whose new satellite Carolina campuses are co-located with branches of Keiser’s for-profit Southeastern College.
What does Foxx gain from the alliance with Keiser and the for-profit college industry? Even though she is by far the top congressional recipient of career college cash, the amount Foxx receives from the industry is still relatively small. And wouldn’t Foxx be bothered, even a little bit, by the numerous reports of people —veterans, single moms, and others, including in her home state — having their financial futures ruined by deceptive colleges? But maybe, especially this year, every campaign dollar counts for Foxx. And maybe she admires the wealth and success gained by for-profit college barons like Keiser, and wants to be part of the team.
The offices of Virginia Foxx and Arthur Keiser did not respond to requests for comment.