Ethics Director Walter M. Shaub Jr. had said a full vetting of extremely wealthy individuals, such as DeVos, could take weeks, if not months, much to the chagrin of Senate Democrats who wanted to review it before DeVos’s confirmation hearing, which took place Tuesday evening. (See the full ethics report below).
Though Democrats bristled at having just five minutes each to question DeVos — during which they used some of their time complaining about it and asking for another round of questioning — Alexander limited them to the single round. Her opponents say Alexander is rushing what should be a careful examination of someone they say is unqualified to lead the nation’s education department.
Eli Zupnick, a spokesman for Washington Sen. Patty Murray, the top Democrat on the committee, said the senator is concerned that members will not have a chance to have their ethics concerns and questions answered before the vote.
“Ms. DeVos and her family have incredibly complicated and opaque financial entanglements and staff is now reviewing all of her and her family’s holdings that have conflicts with her role as Secretary of Education,” he said. “Senator Murray has also not yet received answers to her questions about missing information in Ms. DeVos’ Committee financial disclosure. And Committee Democrats have sent Ms. DeVos a number of reasonable questions for the record that she committed to answer and that they expect clear and complete responses to.”
Alexander has emphasized that DeVos has taken steps to prove herself, including answering questions for nearly four hours and meeting individually with committee members. Still, he agreed to postpone the vote.
“We know that Betsy DeVos is a passionate defender of improving opportunities for low-income children who has committed to implement the law fixing No Child Left Behind as Congress wrote it, support public schools, and work to protect all children and students from discrimination and ensure they are educated in a safe environment,” said Margaret Atkinson, a spokeswoman for Alexander.
DeVos has no professional experience in public schools, but she has lobbied for decades to expand charter schools and taxpayer-funded vouchers for private and religious schools. Her inexperience proved to be a liability at Tuesday’s hearing, as Senate Democrats grilled her on education policy questions that she had trouble answering.
At the hearing, DeVos pledged to resolve any conflicts of interest the office identified, a commitment she reiterated in a letter she sent Thursday to the ethics office of the Education Department. DeVos said she has resigned from a dozen foundations with education goals, including All Children Matter and Great Lakes Education Foundation.
She is, however, retaining her position as co-trustee of three family trusts, at least one of which has an indirect financial stake in Sextant Education, which operates a chain of for-profit colleges, through its parent company AEA Investors. Though DeVos lists AEA as one of the assets she intends to divest, it’s unclear whether she would retain a partial stake through the trust. And the other two trusts have no assets listed, so there is no sense of whether they have investments in other education companies. The nominee’s spokesperson did not immediately respond to requests for comment.
“It is not clear whether the family trust would divest from these assets, but if it does not, she will be in conflict,” said Jordan Libowitz, a spokesperson Citizens for Responsibility and Ethics in Washington. “She turned her forms in at 10 o’clock last night. There are significant issues that still need to be worked out and should have been dealt with before hearings started.”
DeVos listed 102 companies she plans to divest from within 90 days, if she is confirmed as secretary. Among them is LMF WF Portfolio, a limited liability corporation listed in regulatory filings as one of several firms involved in a $147 million loan to Performant Financial Corp., a debt collection agency in business with the Education Department. Performant lost out on a recent contract bid with the department and is now protesting the decision with the Government Accountability Office, which can dismiss the dispute if the department reverses course. The influence of the secretary in that decision left Democrats uneasy about DeVos’s indirect investment.
In the letter to the department, DeVos wrote that she “will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the financial interests of” any of the 102 companies “until I have divested.” She also said she would ensure that “all proceeds are invested in nonconflicting assets.”
Libowitz said DeVos would not have to recuse herself from any Education Department business involving companies such as Performant once she and her husband are fully divested. But he said there are still questions about her involvement with other assets, such as when she was the sole investor, that could result in her needing more than a one year recusal.
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