Short-Sellers Got to Obama, Says Apollo’s Sperling

John Sperling, the founder of for-profit education company Apollo Group (APOL), has been trying to exert political pressure to keep the Obama administration from reining in for-profit colleges. In a long Bloomberg article today, Dan Golden recounts Sperling’s rise, and his efforts to keep federal loans flowing to students at Apollo’s schools.

As federal regulators crack down on suspect practices at for-profit colleges shares of companies in the sector have plummeted. Apollo is down 35% on the year.

The article delves into the conflict between Sperling’s history of trying to reach low-income students and allegations that schools like Apollo’s University of Phoenix offer those students few useful skills while the company rakes in federal loan money. It also includes several choice nuggets about Sperling’s lobbying efforts:

  • He sent every member of Congress a 74-page Powerpoint presentation on the benefits of for-profit schools.
  • He believes the Obama administration was “manipulated by investors betting against higher-education stocks,” according to an aide at a meeting Sperling attended.
  • Apollo’s political action committee gave incoming House Speaker John Boehner $36,600, the most of any member of Congress. Sperling has also drawn on his past Democratic fundraising to meet with top Democrats on the Hill.

Apollo shares were up 2% in morning trading.

 

BARRON’S

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