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By Kevin Kuzma
Since taking legal action against Florida State College Jacksonville and alleging short seller Steve Eisman as part of a conspiracy, there’s been significant interest throughout the higher education community in Keiser University’s recent law suit filing. The action was taken last week in Broward County, Fla., and it gained immediate headlines given its unusual terminology and its inclusion of Eisman.
The open records information involved in the case is now available on www.CareerCollegeCentral.com. We’ve posted a repository that can be perused by our fellow journalists who are researching this story and of course by you, our readers, who we realize are intrigued by this extraordinary case and its possible ramifications. Of the 12,000 pages of material available on our site, we’ve sorted and highlighted some of the key documents showing communication between community college leaders and elected officials, members of the Department of Education, and individuals called to testify before the Senate. We encourage you to look through it at your leisure.
The materials posted here include e-mail and other information sequestered from the community college. Keiser University’s suit alleges that the materials show a smear campaign was being orchestrated by the community college’s leaders, president Steven Wallace and vice president Susan Lehr, and others to drive Keiser and other for-profit schools from the state. What’s attracted so much interest is the leap that includes Eisman.
Mr. Eisman, who was once unknown to executives in the career college sector is now infamous after testifying before the Senate’s Health, Education, Labor and Pensions Committee last summer about the practices of for-profit schools.
Initially, there was confusion among the career education crowd as to how Eisman could be invited to testify before the committee. Eisman makes a living "shorting" stocks, which means with his investments, he would actually stand to make a profit if education stocks suddenly took a fall. The confusion turned to suspicion. How and why would Eisman be allowed to participate in a formal hearing process led Senator Tom Harkin (D – Iowa), whose intent was to look at the allotment of financial aid dollars in and the marketing and recruitment practices of for-profits. What could Eisman possibly bring to the conversation besides wild accusations that the for-profit sector could be the next sub-prime mortgage crisis (again, a situation where Eisman shorted stocks and turned a profit)?
So far, there’s been three Senate HELP hearings and they’ve all continued a witch hunt to burn down career education. The proceedings have been so one-sided that even Harkin’s Democratic colleagues began asking their own questions around Capitol Hill. They’ve used student anecdotes, secret shopper sting operations, and, of course, threatening-sounding financial aid data to show how for-profit colleges bury students and graduates in debt. Most of these accusations have been made without any witnesses from the career college side being invited to refute them. And yet nothing — nothing — about the proceedings has been more perplexing than Eisman’s involvement as a witness.
The Keiser open records material might offer the first explanation about Eisman’s participation. Rather than making the determination for you, we invite you to take a look through the repository. Does Lehr’s communication with Eisman constitute a conspiracy? We plan to explore this and many, many other angles to this suit in our November edition of Career College Central.
View the open records material here.
KEVIN KUZMA
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