March 23, 2022

Calls Mount in Congress for Federal Probe of Keiser University

Calls Mount in Congress for Federal Probe of Keiser University

Senior leaders in the U.S. Congress, including the chairs of the House Veterans Affairs, House Education and Labor, and Senate Judiciary committees, have now called on the Department of Education to investigate Florida’s Keiser University and its controversial conversion from for-profit to non-profit — a deal that has continued to enrich the school’s politically powerful “Chancellor and CEO,” Arthur Keiser.

The most recent letter to the Department, not previously reported, came from Representative Mark Takano (D-CA), the House Veterans Affairs committee chair, as well as North Carolina Democratic representatives Alma Adams and Kathy Manning. The three representatives cited “longstanding concerns over Dr. Keiser’s conflicts of interest, self-dealings, and predatory practices” and called for “additional scrutiny of Dr. Keiser’s record” and also his conduct as the chair of the Department of Education’s National Advisory Committee on Institutional Quality and Integrity (NACIQI).  

NACIQI is an 18-member panel that advises the Department primarily by reviewing the performance of accreditors, the private agencies that oversee the quality of schools and serve as gatekeepers for federal student grants and loans. Arthur Keiser was appointed to NACIQI by congressional Republicans, who by law pick six of the committee’s members, and he was later elected the chair by the NACIQI members.

In their letter, Takano and his colleagues call Keiser University’s conversion to non-profit “a prime example of a so-called ‘covert for-profit.'” They cite the 2011 deal under which Everglades College, a nonprofit institution led by Arthur Keiser, agreed to pay $521 million to acquire for-profit Keiser University, owned by Arthur Keiser, as well as the tens of millions in payments that have followed from the non-profit to Keiser and his family members. 

The three representatives also express concern that at a July 2021 NACIQI meeting, Keiser recused himself from review of accreditor ACCSC, which oversees another for-profit school owned by Keiser, Southeastern College, but then returned to the proceedings and “chastise[d] other NACIQI members for considering outcomes information not directly provided by Department officials” in evaluating ACCSC.

“Dr. Keiser,” the representatives write, “chose to use his post of leadership as a bully pulpit to undermine NACIQI’s role as the watchdog of the watchdogs. Rather than focusing on ensuring the quality of accrediting bodies and, ultimately, the interests of students, Dr. Keiser has inappropriately used his position to protect his own interests.”

Rep. Takano has taken a strong leadership role in protecting veterans and military service members from predatory college abuses. Rep. Manning has previously written to the Department raising questions about Keiser’s troubling influence over another non-profit school, North Carolina’s St. Andrews University.

(UPDATE 04-02-22: In additional to all the other connections between Arthur Keiser and St. Andrews we’ve previously documented, we recently noticed that Terrence “TC” Wolfe, a former Keiser University and Southeastern College employee who since 2016 has run his own lobbying firm and represented those two Keiser schools, has since early last year also been a registered lobbyist for St. Andrews. In addition, Wolfe has been lobbying in DC for: M&S Media, owner of the Beonair chain of schools, which recently hosted a political fundraiser attended by Keiser; Ember Education, a division of San Joaquin Valley College, another institution with connections to Arthur Keiser; bad-acting New York City for-profit Berkeley College; and NUC University, one of the biggest for-profit colleges in Puerto Rico.)

The letter from the three representatives came just days after a similar letter, dated February 14, from three senators: Senate Judiciary chair Dick Durbin (D-IL), Elizabeth Warren (D-MA), and Sherrod Brown. In a Senate floor speech at the time, Durbin charged that Keiser “embodies the worst of the for-profit industry.” 

And on January 31, Representative Bobby Scott (D-VA), chair of the House Education and Labor Committee, wrote to the Department asking it to reconsider the non-profit status of Keiser University and its parent institution, Everglades College. He wrote, “the owner and the owner’s family, substantially benefit from the earnings of the institution in violation of the principles of what makes an institution a nonprofit. Dr. Keiser, his family members, and related businesses have received millions of dollars since 2011 from loan payments, rental properties, and contracts to provide goods and services to Everglades College, including at above fair market values.” 

Arthur Keiser has dismissed the concerns raised about his schools as politically motivated, and he and his minions have stressed that the Department of Education, Internal Revenue Service, State of Florida, and Keiser University’s accreditor, SACS, were aware of and did not block the conversion to non-profit. But the fact that those entities did not object likely reflects the general lack of oversight that has persisted in higher education, and non-profits, for decades, as well as the fact that Keiser was an early adopter of a questionable conversion approach that has become more controversial as its implications have become more clear. 

In fact, questions about the 2011 Keiser University conversion to non-profit have been raised not only recently by the three letters from senior Members of Congress but going to back to the 2012 landmark report of the Senate HELP committee (“Keiser’s decision to convert to non-profit status should be more closely scrutinized”), and also including a 2013 article on this website, 2015 articles in the New York Times and Miami Herald, a 2015 report by former Deputy Under Secretary of Education Robert Shireman, who now serves alongside Keiser as a member of NACIQI, and a 2017 letter from senators Durbin, Warren, and Brown.

Moreover, as we have reported, in recent years the IRS has in fact scrutinized Keiser University’s operations — just one of several government probes of the Keiser schools, including investigations of predatory practices, in the past decade. Indeed the January letter from Chairman Scott to the Department includes this passage referencing, somewhat obscurely, that recently Keiser paid additional amounts to the IRS for overstating the value of leases in 2014 and 2015 between Keiser family interests and the non-profit run by Arthur Keiser: “According to Everglades College itself, the IRS found in 2014 and 2015 that some of the leases with Keiser-related companies were above fair market value and imposed an excise tax as well as unrelated business income taxes as a result.”

UPDATE 04-02-22: We’ve reported on how, since Arthur Keiser gained influence at St. Andrews University, satellite campuses of St. Andrews in the Carolinas have been co-located with campuses of Keiser’s Southeastern College. Here’s a recent St. Andrews mailing, promoting those satellite campuses, and not the main location in Laurinburg, NC. The photo provided to illustrate the exciting atmosphere at St. Andrews is in fact a stock photo that is for sale on multiple websites. 


Calls Mount in Congress for Federal Probe of Keiser University

Calls Mount in Congress for Federal Probe of Keiser University