consultants are sandburs

Saturday, August 13, 2016

Chancellor Bubba.

powerlineblog image
Clinton spousal tax return for 2015 released publicly, apart from Foundation 2015 taxation/reporting. Chicago Tribune, here, carries the same AP feed as Strib, this excerpting:

The filing shows that the Clintons paid a federal tax rate of 34.2 percent in 2015. The bulk of their income — more than $6 million — came from speaking fees for appearances made largely before Hillary Clinton launched her campaign in April 2015. They gave more than $1,042,000 to charity, with $1 million going to the Clinton family foundation. That is the financial vehicle the family uses to give money to museums, schools, churches and other charitable causes. It is not the same organization as the better-known Clinton Foundation.
Hillary and Bill Clinton's 2015 tax return
Hillary and Bill Clinton's 2015 tax return

The Clintons' income puts them well within the ranks of the top 0.1 percent of Americans, though they pay a higher tax rate than many of their elite peers, according to an analysis by the nonpartisan Tax Foundation, based on 2013 data.

[...] In total, the Clintons earned than $139 million between 2007 and 2014, according to eight years of federal income tax returns released by her campaign last July.

The bulk of their income came from speeches delivered to corporate and interest groups, which paid Bill Clinton and later Hillary Clinton after she resigned as secretary of state in early 2013.

Clinton delivered six paid speeches in 2015, including one to the Canadian Imperial Bank of Commerce. She commanded her highest rate from eBay, which paid her $315,000 for a March 2015 address in San Jose, California.

Bill Clinton's consulting work for GEMS Education, a global network of for-profit schools based in Dubai in the United Arab Emirates, earned him more than $5.6 million in fees between 2010 and 2015, according to the tax returns.

He also earned more than $17 million over the same period for consulting work for Laureate Education Inc., a for-profit education system based in Baltimore that makes most of its profits from overseas operations. Several former students have sued a school operated by the company, alleging fraud.

Bill Clinton's office previously said he had ended his consulting work with Laureate last year. On Friday, his office confirmed that Clinton also halted his business dealings with GEMS Education last year. His office said he had "engaged with GEMS students and faculty around the world and assisted the Varkey GEMS Foundation in its efforts to increase access to education to underprivileged children."

RT online reports:

Hillary Clinton’s presidential bid put a big dent in the Clintons’ income, which went from $28 million in 2014 to just over $10 million in 2015, while the vast majority of charitable donations by the couple went to their own charity, their tax returns reveal.

Former President Bill Clinton and his wife file tax returns jointly. Their 2015 filings show an income of $10.6 million, far less than the $28 million reported in 2014. Speaking fees continued to make up two-thirds of the Clintons’ income, but dropped to $6.7 million from almost $20 million in the year prior.

The links to the 40 page 2015 filing and to the 44 page 2014 item are in the original. Continuing:

In 2015, the Clintons reported $1,042,000 in charitable donations. Of that number, however, $1 million went to their own Clinton Family Foundation, a separate endeavor from the Clinton Foundation. Only 4 percent of their contributions went to other charities, a fact that did not escape some observers.

RT notes that as "a whopping 0.4% of their income given to non-Clinton-run charities."

RT concludes:

After resigning from the State Department in February 2013, Clinton went on the speaking circuit, charging $225,000 or more per appearance. Among the hosting organizations named in the documents were the National Association of Chain Drug Stores, Institute of Scrap Recycling Industries, and the International Deli-Dairy Bakery Association, but the former top diplomat also gave three speeches to investment giant Goldman Sachs. Clinton has refused to release the transcripts of those speeches.

Politico reported in November 2015 about Foundation returns being amended and filed up to 2014, with no 2015 Foundation filing information found online; Politico reporting was thin on detail, but with the item ending:

The newly filed 2014 [Clinton Foundation] return and amended returns for the previous three years break out “speech revenue” on a separate line and categorize it as a payment for a service, not a donation.

The figures show speech-related payments to the foundation totaled about $1.1 million in 2010, dropped slightly to about $980,000 in 2011, before ticking up markedly to nearly $1.5 million in 2012 and $1.8 million in 2013--and then doubling in 2014.

However, those sums are still just a fraction of what the Clintons made personally on speeches in recent years. Hillary Clinton pulled in almost $10.5 million in speaking fees last year [2014], while her husband made $9.7 million, before expenses, according to tax returns that Hillary Clinton’s presidential campaign released in April.

Trump appears adamant about not releasing personal or closely held business entity tax returns. It is a fair point to raise, and much of the online coverage of Clinton filing releases was clucking over Trump not doing so, rather than analyzing much at all about the Clinton filings. The point here, given Trump reticence, and Clinton releasing, it is factually easier to look at the Clinton record.

So what's the Chancellor Bubba bit about? Recall the AP reporting noted:

Bill Clinton's consulting work for GEMS Education, a global network of for-profit schools based in Dubai in the United Arab Emirates, earned him more than $5.6 million in fees between 2010 and 2015, according to the tax returns.

He also earned more than $17 million over the same period for consulting work for Laureate Education Inc., a for-profit education system based in Baltimore that makes most of its profits from overseas operations. Several former students have sued a school operated by the company, alleging fraud.

Much has been published about "Trump University" and related litigation charging the operation with fraud and boilerroom and "free session" arm twisting to get pidgeons to sign up for highly priced, low value seminars, including an opportunity to be photographed next to a cardboard life sized full color image of The Donald.

Truly shabby stuff and one might wonder why the Clintons have not made more of the fiasco; wondering being in terms of whether they've skeletons of a like kind in their closet; possibly of a larger scale in terms of brought-in income.

Websearch for Gems Education seemed to suggest off-shore operations, and no questionable conduct uncovered; e.g. the GEMS Wikipedia entry, and the GEMS homesite:

http://www.gemseducation.com/

Nor was it clear what Bill Clinton did for his GEMS compensation. The story differs regarding Laureate Education Inc., which does operate stateside.

The opening image, being from Powerline, is not neutral sourced. From neutral online reporting, CNBC, here, in Dec. 2015 reporting online, notes:

The for-profit education company targeting the whole world

With the reputation of U.S. for-profit colleges in tatters, one company has found a convenient way to circumvent regulation in this country: by operating primarily in overseas markets.

Baltimore-based Laureate Education, the world's largest for-profit higher-education company by enrollment (with about 1 million students now enrolled worldwide), operates in a sector plagued by government scrutiny in the U.S. and in which one major for-profit education company, Corinthian Colleges, declared bankruptcy earlier this year.

But Laureate gets 84 percent of its revenue from outside this country, most of it from Latin America. There, nations lack the infrastructure of established universities that the U.S. has, and their development means a steady demand for educated workers and training, the company argues in its IPO paperwork. (It filed for an IPO in October, but IPO watchdogs don't expect the deal to occur until next year.)

"The world embraces the power and importance of education and is seeking new ideas and technologies to deliver better education to more people at an affordable cost," Laureate founder and CEO Douglas L. Becker wrote in a letter in Laureate's IPO prospectus in the fall. "We believe we are uniquely positioned to meet this need through our unparalleled scale and resources, and our growing capacity to provide our intellectual property and services to other universities and governments."

[...] critics of Laureate's Walden University in Minnesota claimed professors were inaccessible and that continual delays stretched out the time — and thus money needed — to earn an advanced degree. Three students have filed a lawsuit against Walden, hoping to make it a class-action suit, alleging breach of contract, unjust enrichment, violations of state consumer protection and unfair competition laws.

n October, U.S. District Court Judge Marvin J. Garvis in Maryland dismissed four of the counts from the plaintiffs alleging breach of state consumer protection laws. The plaintiffs are seeking tuition refunds, payment of loan debt incurred while attending Walden and litigation costs.

In its prospectus, Laureate says: "We believe the claims in this case are without merit and intend to defend vigorously against the allegations."

[links in original omitted] While further excerpted below, the CNBC item is lengthy, with readers encouraged to toggle to it to read everything there. Details of that litigation exist online here, linking to a final terse stipulation of dismissal, it likely being the suit was settled with gag orders, terms non-public, which would make business sense with an IPO pending.

More from the CNBC reporting [links again omitted], with suggestions that the operation has fiscal isecurity:

As Laureate's Becker attempts an initial public offering, which would reverse a 2007 leveraged buyout led by KKR & Co., he has to convince the market how his company differs from the rest of the for-profit education industry. The industry has lost 42 percent of its value in the past year, according to Motif Investing data, amid mounting complaints about student loan defaults and courses of study that didn't help students get the jobs they wanted. It won't be easy.

Laureate has seen results in its bottom line: Revenue last year rose 13 percent to $4.41 billion, with a loss of $162.5 million driven completely by $385.8 million in interest payments on its $4.33 billion of long-term debt. The debt is left over from the 2007 deal that took Laureate private, as well as from acquisitions of universities and colleges.

Laureate, like many leveraged-buyout companies, isn't profitable. It has posted a net lost for the past three years (and every year going back to 2010), based on formal accounting standards. Based on EBITDA (earnings before interest, taxes, depreciation and amortization), Laureate has posted profits, including a $754.2 million profit for the 12 months ending in June.

Laureate's backers are a who's who of the top ranks of capitalism, drawn to the idea of finding new, more efficient methods of schooling and professional training, particularly in emerging markets. Private-equity mogul Henry Kravis, George Soros and Point72 Asset Management's (formerly S.A.C. Capital) Steve Cohen, all have invested in the company, according to Bloomberg. Former U.S. President Bill Clinton served as honorary chancellor of Laureate's colleges and universities, collecting more than $16 million for his work and the reflected glow of his popularity, until his wife, Hillary Clinton, began her White House run.

Got that? Fiscal teetering, but Bubba clears a cool sixteen million as figurehead Chancellor. As in, "If we've got Bubba, we're legit." There appears little to distinguish the situation from Trump licensing his name/brand to others who actually did the day-to-day Trump University thing, such as it was done. Whether Trump cleared anywhere near to sixteen million from the fiasco is not known, publicly, at present.

And while Trump University without much doubt looked to have been a bad joke to be played on fools from the get go, CNBC has more to say about Laureate,

The criticism of Laureate, here and abroad, is similar to charges leveled at competitors from Apollo Education Group, owner of the University of Phoenix, to the now-bankrupt Corinthian Colleges. In April, Corinthian shut down after a series of investigations by federal agencies and state attorneys general.

Both at its U.S. and foreign schools, critics say, Laureate puts too much emphasis on marketing, advertising, executive salaries and recruitment of students and too little on quality education.

"At both public and private [nonprofit] institutions, we're based on quality — how highly ranked our program is, how good our faculty are," said Andrew Ainslie, a critic of for-profit schools who is dean of the Simon Business School at the University of Rochester.

He said generating that quality demands in-person instruction and small classes, and that's very expensive. [...]

As Laureate has bought universities, it has sometimes followed up by cutting faculty and staff and trying to boost enrollment through telemarketing and advertising. It has grown from about 245,000 students eight years ago and has come under fire in Latin America as it grows there, Bloomberg News reported from Brazil.

After Laureate took over Centro Universitario IBMR in 2010, the school's quality ranking among small colleges in Brazil plunged from 41st place to No. 132, the Brazilian government's National Institute of Studies and Educational Research says. Last year the Rio State Legislature criticized for-profit colleges for firing professors and cited Laureate's takeover of IBMR.

[...] Speaking of Laureate executives, Ainslie said: "They're compensated for revenue and getting students through the door. They're compensated purely for quantity."

Again, read the entire item. Even with extensive excerpting, the full report might ring better to readers.

Further neutral sourcing, Wikipedia, here gives the public taken private to IPO to go public again history, including acquisitions detail; then noting

Though former United States President Bill Clinton's role as a chancellor of Laureate was officially described as "honorary", from 2010 until early 2015, Bill Clinton was paid just short of $16.5 million for his role as honorary chancellor, including $2.5 million in 2011. These numbers were disclosed in his publicly released tax returns.

In April 2015, Clinton ended his ties with Laureate amidst ongoing financial problems at four of its six U.S.-based universities.

[...] According to the Washington Post, "Laureate is backed by several of the biggest names in finance, including Henry Kravis, George Soros, Steve Cohen and Paul Allen". [34] Laureate’s annual revenue is approximately $4 billion.[34] The company holds $3.5 billion [35] to $4.7 billion in debt.[9]

Laureate spends in excess of $200 million per year on advertising, including television commercials, online campaigns and billboards. There have been claims that "Laureate boosts revenue at struggling colleges by turbocharging enrollment, often without a parallel increase in academic investment."

[footnotes and links omitted] Again, read the full Wikipedia item for a better understanding.

Less neutral sourcing:

Jonathan Turley, here, writes in a judgmental but factually thorough manner. Worthwhile reading. WaPo writes of boiler room methods of soliciting students at IBMR, Brazil, segueing to:

Though Laureate isn’t well-known in the United States, it employs one of the country’s most recognizable figures: former president Bill Clinton. In 2010, the company hired Clinton to serve as its honorary chancellor. In this paid position, Clinton has trekked to Laureate’s campuses in countries such as Malaysia, Peru and Spain, making more than a dozen appearances on its behalf.

Laureate is backed by several of the biggest names in finance, including Henry Kravis, George Soros, Steve Cohen and Paul Allen. When Laureate’s founder and chief executive, Doug Becker, persuaded these investors’ firms to take his company private in a deal worth $3.8 billion, Kravis’s firm, KKR, took a $487.5 million stake.

By 2010, according to a KKR memo to investors, its investment had increased in value to $710.8 million.

Laureate has thrived by exporting many of the practices that for-profit colleges adopted in the United States, such as offering career-oriented courses and spending heavily on marketing. Such strategies helped build what was a booming industry until 2010, when recruiting abuses and mounting student debt spurred a regulatory crackdown by the Obama administration.

As a result, the Bloomberg U.S. For-Profit Education Index has fallen 54 percent since its 2010 peak. Enrollment at Apollo Education Group’s University of Phoenix has declined 44 percent to 269,000, according to regulatory filings.

Laureate’s supporters say the company performs an important service by expanding access to education in emerging markets. In January 2013, the World Bank’s investment arm, the International Finance Corp., invested $150 million in Laureate.

“Many universities, after Laureate has invested, have been able to put their houses in order, apply financial discipline and really grow,” says Atul Mehta, a director at Washington-based IFC.

That growth may come at a cost. While some of Laureate’s colleges rank high in private surveys, including Universidad Andrés Bello in Santiago, Chile, and Les Roches International School of Hotel Management in Bluche, Switzerland, others have drawn criticism from teachers, students and government officials.

They say Laureate boosts revenue at struggling colleges by turbocharging enrollment, often without a parallel increase in academic investment. Since Laureate took over IBMR in 2010, its quality ranking among small colleges in Brazil has dropped to 132 from 41, according to the government’s National Institute of Studies and Educational Research.

[...] Laureate counters that several of its schools in Brazil have improved in government rankings since 2009.

Laureate has stirred controversy throughout Latin America, where it derives two-thirds of its revenue. In October, Chile’s National Accreditation Commission voted to strip accreditation from one of the company’s schools, Santiago-based Universidad de Las Américas, or UDLA.

In its decision, the commission wrote that, since 2010, UDLA’s academic standards have suffered as it has added almost 10,000 students while reducing the number of full- and half-time teachers to 399 from 408. Graduation rates were as low as 15 percent in some majors.

[...] Laureate says the number of teachers at UDLA has grown since 2009. It has appealed the withdrawal of accreditation; if the appeal fails, new students will be unable to get government loans.

Laureate’s fiercest defender is its 47-year-old chief executive, Becker, an entrepreneur who started his first business as a teenager. He dismisses the complaints from government officials in Brazil and Chile. IBMR was almost bankrupt when Laureate bought it, he says.

“The choice was to be highly ranked or have a viable scale,” Becker says. “I feel we have done the right thing.” He says the Chilean commission misunderstood Laureate’s nontraditional approach to education.

Becker, who didn’t attend college, describes himself as deeply passionate about education. “You can be a serious educator with high standards and still think of the student as your customer,” he says at breakfast at a Manhattan hotel.

Becker’s peers in the education industry paint him as a tireless promoter, skilled at pitching Laureate to investors and persuading universities to sell to him.

“He’s a hustler, for sure,” says Michael Moe, the chief executive of GSV Capital, an investment fund that specializes in education. “Basically, he saw this gaping hole in the market and drove a truck through it.”

[...] As Laureate has pursued growth in developing countries, it has capitalized on demographic trends. More people in emerging markets are joining the middle class, but there aren’t enough colleges to meet the soaring demand.

In Latin America, for example, higher education has long been dominated by state-run schools and Catholic universities. Most of these schools are inexpensive or free but have limited space.

The supply shortfall has driven governments to embrace private operators. In Brazil, where just 17.4 percent of 18-to-24-year-olds attend college, President Dilma Rousseff has increased the number of government-backed student loans sevenfold and for-profit companies have flourished.

“Education is the industry of the future,” says Paulo Guedes, chairman of Rio-based Bozano Investimentos.

In the past three years, Guedes says, his $155 million investment in Brazilian education firms has tripled.

[...] Private operators have long dominated higher education in Chile, where just 23 percent of college students attend public institutions, according to the Paris-based Organization for Economic Cooperation and Development.

In 2011 and 2012, hundreds of thousands of Chilean students staged protests, demanding free college education and clashing with riot police armed with tear gas. President Sebastián Piñera responded by raising taxes to fund student loans.

Former president Michelle Bachelet won a landslide victory in December to succeed Piñera on promises of free college education for the poor and tighter regulation of tuition and profit at private schools.

For-profit education is technically illegal in Chile. Laureate has legally circumvented the ban, it says, by acquiring seats on the boards of colleges and then selling services such as building management and online courses to those schools.

The company used the same tactics to establish a presence in Turkey, where for-profit colleges are also banned. Since taking control of Istanbul Bilgi University, Laureate has boosted its enrollment by 44 percent, to more than 12,000 students, and raised its tuition by more than 50 percent to $14,000. A round of staff cuts in 2011 prompted protests from faculty holdovers, who unsuccessfully tried to form a union.

Becker says he started Laureate because traditional colleges weren’t serving their customers.

“I found that most universities were inward-looking and focused on the needs of the staff and faculty,” he said, “and not so much focused on the needs of the students.”

Though Becker’s glasses and dark suit make him look like a banker, he speaks in a gentle tone, like a kindergarten teacher. His only hobbies, he says, are spending time with his two young children and chairing nonprofits, such as the International Youth Foundation.

Much has been omitted by cutting off the already extended quote there. WaPo wrote a good report.

Shifting to the ever more judgmental Clinton foes; WND here, headlined, "Clinton for-profit education scandal dwarfs Trump U -- Bill and Hillary made millions while students racked up debt;" and here, headlined, "Students claim 'Clinton U' is a scam -- They 'got paid millions and I got stuck with $120,000 debt'." Trump supporter Roger Stone at dailycaller.com.

For a listing of the "18 companies that go by the name of Walden University, LLC," which is U.S. based Laureate branding; this link, showing nationwide reach.

For an international Laureate venture listing, Wikipedia, indicating other U.S. brands besides "Walden."

Clearly this is bigger than Trump U, with "$4 billion" having been noted in earlier excerpting. Trump U. looks like a latecomer effort to cash in on the private student loan generating cash flow potential hitting market at about the time the fan was loading up and Col. Kline might have been reevaluating, prior to not seeking one more term.

For a closer, a Walden page itself, make of its legalese proneness what you will. In fairness, the homepage; but no effort was made to research all that "Our Accreditations" stuff for veracity or gravitas (note that each image in the original lacks hotlinks just as this screen capture does; so anyone can invent a name and design a logo; but there might be more substance than that). Research would be needed for a determination.

click the image to enlarge it

UPDATE: Gary Trudeau/Doonesbury; who used the "Walden brand" earlier than Laureate, if memory serves correctly. Supplementing that "for profit" motif, Trudeau also noted the parallel "adjunct professor" motif/usage now afoot.

Here, linking here.

Why is there not MORE student unrest? Exploitation abounds, with "the adjuncts" taking their own hit.

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