Tuesday, June 9, 2015

Corinthian Colleges: The only thing necessary for the triumph of evil is for good men to do nothing

Leon Panetta Quits Corinthian Colleges Board; Marc Morial Should, Too | David Halperin:
The only thing necessary for the triumph of evil is for good men to do nothing

09/23/2013 5:12 am EDT

On April 30, I published an article criticizing former Obama Secretary of Defense Leon Panetta and National Urban League President Marc Morial for joining the board of Corinthian Colleges, one of the most irresponsible and predatory for-profit college businesses. (The Los Angeles Times ran a piece addressing this matter on May 31.)

Corinthian, which operates under the school names Everest, Heald, and Wyotech, is under investigation by the federal Consumer Financial Protection Bureau and at least six state Attorneys General. Corinthian has been been accused of falsifying records. Its tuition costs are as high as at top private universities, yet two-thirds of its associates degree students drop out, and three-quarters of its students can't pay back their loans. The company receives about 90 percent of its revenue from taxpayers, and it spent between $5 and $10 million of that money fighting in Washington against minimal standards to hold schools accountable for abuses.

I had questioned how Panetta, with his distinguished record of service, could endorse a business and an industry with a particularly bad record when it comes to recruiting and educating U.S. troops and veterans.

On Monday, Corinthian reported that Panetta has resigned from its board. Panetta had served on the same board prior to joining the Obama administration. This time, he quit after just eleven weeks of service. In a letter to Corinthian CEO Jack Massimino, Panetta explained, "I was struggling with a large number of commitments, requests and obligations on my time. Unfortunately, they have demanded a much greater time commitment than I had anticipated and made organizing my life more difficult."

Unfortunately but not surprisingly, Panetta's departure statement excluded any suggestion that he might be on the wrong side of this issue, but instead echoed industry talking points:

I believe in and support the educational role of Corinthian in delivering educational opportunities to those that otherwise would never have a chance to succeed. It is also obvious that the role of Corinthian is going to be continuously challenged legally and administratively because of what appears to be a slanted and misinformed attitude toward this form of educational opportunity.

I guess the slanting and misinforming is coming from people like Mr. Panetta's former boss, Barack Obama, who has warned military service members that some for-profit colleges "aren't interested in helping you.... They are interested in getting the money... trying to swindle and hoodwink you."

Whatever, though -- Panetta quit Corinthian almost as soon as he joined. Whatever his reason, it's good that he no longer stands as a validator for this troubled company, especially when it comes to signaling our troops and vets.

Perhaps it is relevant that Panetta's son, Jim, has announced plans to run for his father's old House seat when the incumbent retires. Jim Panetta, a deputy district attorney, is a decorated Naval officer and a strong advocate for veterans.

Panetta's resignation comes just weeks after Admiral Mike Mullen, former chair of the Joint Chiefs of Staff, did not appear after being announced as the keynote speaker at the annual convention of the for-profit college trade association APSCU. I had called on Mullen to cancel that appearance, in light of his long-standing commitment to veterans education, although the reasons for his non-appearance weren't disclosed.

Panetta and Morial each received Corinthian stock options at the end of June, 20822 shares each, which were to fully vest at the November 2013 shareholder meeting. Corinthian shares are trading at about $2.50 now, so that haul would be worth about $47,000. That would be a huge sum for one of the thousands of former Corinthian students who are deep in debt, but it may not have been enough for Panetta to outweigh the reputational burdens of associating with such a troubled institution.

So what about Marc Morial?

Last year, Morial's Urban League accepted $1 million in aid from Corinthian.

The Urban League's mission is " to enable African Americans to secure economic self-reliance, parity, power and civil rights." Corinthian's record shows that it accomplishes just the opposite -- it takes students' money and often leaves them deep in debt without giving them real training for a better career.

Fortunately, low-income communities have other strong advocates standing up against the abuses of for-profit colleges. Morial, a former mayor of New Orleans and an inspiring national spokesperson on issues of the day, like the Trayvon Martin case, should stand with these leaders. He should quit the Corinthian board now. If he doesn't, Urban League board members like former U.S. cabinet secretaries Alexis Herman and Rodney Slater should consider the issue.

This article also appears on Republic Report.

Leon Panetta Quits Corinthian Colleges Board; Marc Morial Should, Too | David Halperin:

Corinthian Colleges (COCO) Shareholder Derivative Lawsuit

This is a shareholder derivative action brought against certain officers and directors of Corinthian Colleges (COCO). The Attorney General for California (AG) has filed an action against Corinthian alleging that the company systematically misrepresented to potential students and investors important metrics associated with its college programs. Remarkably, Corinthian settled a similar case brought against it in 2007. It therefore had notice about steps needed to stay in compliance with state and federal laws. This shareholder derivative action then seeks damages from certain officers and directors for violating their respective duties to shareholders.

Corinthian Sued For Intentional Misrepresentation to Students and Investors

California Atty. Gen. Harris (AG) filed a lawsuit against Corinthian Colleges and its subsidiaries, accusing Corinthian of false and predatory advertising, securities fraud and intentional misrepresentations to students. California AG explains suit against Corinthian Colleges

California AG explains suit against Corinthian Colleges

Corinthian is one of the world's largest for-profit college businesses. The AG asserts that the company targeted low-income Californians through "aggressive marketing campaigns" that inaccurately represented job placement rates and school programs, the complaint said. The complaint also accused Corinthian Colleges of unlawfully using military seals in its mailers and on its website in violation of California law. The company, which also offers job training programs under the names Everest, Heald and WyoTech, is also accused of reporting false work placement rates to investors and accrediting agencies. The AG was harsh in her assessment, stating Corinthian executives devised a "predatory scheme" that is "unconscionable," and was "[d]esigned to rake in profits and mislead investors, they targeted some of our state's most vulnerable people -- including low income, single mothers and veterans returning from combat."

Not the First Time Corinthian Colleges Faced Government Action Regarding Corinthian's Misrepresentations About Its College Programs

The company has a history of issuing questionable statements about its college programs. For example, in 2004, following an extensive investigation, the AG brought a civil action against Corinthian alleging systemic misrepresentations of job placement rates. In July 2007, the Superior Court of the State of California for the County of Los Angeles entered a final judgment in this action. Among other things, the court permanently enjoined Cointhian from making or causing to be made: (i) any untrue or misleading statement about the employment or salaries that students will or may obtain after enrolling in or completing any of Corinthian's programs; (ii) any statement related to Corinthian's own student's employment or salaries that is not substantiated by the Company's records; or (iii) any statement based on information in Corinthian's records that the Company knew or should know is inaccurate. Further, Corinthian was required to pay $4.3 million to the Attorney General for distribution to students, and cancel $1.5 million of outstanding credit contract obligations owed to the Company and incurred by students on or after January 1, 2003. COCO stoakc Chart

The Corinthian College Shareholder Lawsuit

Board of Directors have specific duties to shareholders. This derivative action asserts that certain officers and directors breached those duties for personal gain. If you are a Corinthian College shareholder, please complete the web form to join our continuing investigation.

AACTE in the News https://aacte.org/news-room/aacte-in-the-news/293-corinthian-colleges-names-dr-sharon-p-robinson-to-board-of-directors

Corinthian Colleges Names Dr. Sharon P. Robinson to Board of Directors

Corinthian Colleges Inc. Layoffs - TheLayoff.com http://bit.ly/1MFFf3D

Leon Panetta and Marc Morial Join the Board of Corinthian, For-Profit College With Troubling Record | http://bit.ly/1MFFr2O

Head of Teachers College Group Sits on Board of Predatory Corinthian Colleges | http://bit.ly/1MFFtrq

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