A key watchdog group issued a legal filing Thursday demanding e-mails and other documents from Education Department Sec. Arne Duncan and his top aides under the Freedom of Information Act relating to the influence of Wall Street short sellers on a controversial new regulation governing for-profit or "career" colleges.
The filing is the latest step in a lawsuit Citizens for Responsibility and Ethics in Washington filed in October to compel the release of documents under the law.
After dragging its feet for months — and suddenly facing legal action — the Education Department released almost 2,000 pages of documents in late December, according to CREW’s March 17 filing.
However, the agency did not search for documents from Arne Duncan, his top aides in the Office of the Secretary, or several other top officials. CREW is now demanding in court the Education Department produce documents from those officials.
The documents are important because they could show the extent of involvement by Wall Street short sellers at the top levels of the agency in a bitter fight over strict new regulations of the for-profit education sector.
Critics of the schools pushing the regulations say they trick unprepared students into enrolling with false promises of high wages from the jobs they’ll get after graduation, leaving taxpayers on the hook when those students default on their student loans.
Industry representatives say the charges are overblown and warn the regulations will decimate the sector, rather than reform it.
The Education Department is still finalizing the most contentious piece of the regulations, but the House passed a rider banning the regulation in H.R. 1, the FY 2011 spending bill on which final action is still pending.
Justin Hamilton, a spokesman for the Education Department, defended his agency’s work on the regulation Thursday and took a veiled shot at CREW’s director, Melanie Sloan.
“We’ve been happy to work through the requests from CREW, Lanny Davis and others and will continue to operate in a fair and transparent way in our efforts to protect students and taxpayers,” Hamilton said.
Sloan provoked controversy in November when she accepted a job working for Davis’s lobbying firm.
Davis is registered to work for the Coalition for Educational Success, a group representing the for-profit schools.
Sloan ultimately decided in January against working for Davis. Critics like liberal Salon blogger Glenn Greenwald – who left CREW’s board in protest – said the move to a lobbying firm working on an issue CREW was also working on was suspicious. Sloan and Davis both said the work was done independently.