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May 06, 2011 12:56 PM That’s Awkward, Olympia Snowe

By Daniel Luzer

The Department of Justice has joined a whistleblower lawsuit against a company that operates several for-profit colleges.

The suit alleges that the company, Education Management Corporation , illegally took advantage of federal financial aid by paying admissions staff for enrolling more students. Education Management Corporation turns out to be rather closely connected to Maine Senator Olympia Snowe (R).

According to an article by Scott Wong at Politico:

The Department of Justice has joined a whistleblower lawsuit against an education company chaired and formerly run by John McKernan, the former GOP governor of Maine and husband of Sen.Olympia Snowe.
McKernan has been a top executive at EDMC, the nation’s second largest chain of for-profit colleges, for the last 12 years. He and his wife have done well in that time, with the couple reporting between $6 million and $30 million in assets from EDMC., likely stocks or stock options, according to Snowe’s 2009 personal financial disclosure records.

Education Management Corporation owns Argosy University, the Art Institutes, Brown Mackie College, South University, Western State University College of Law. It’s one of the largest for-profit education companies in the country.

Snowe, admittedly, is not much of an educaiton politician. The moderate Republican is not on any education committees and doesn’t appear to have ever offered an opinion about for-profit schools. Well she might have to now.

Her husband is chairman of the board at EMC. McKernan was chief executive officer of the company from 2003 to 2006.

The lawsuit maintains that EMC admissions employees were paid based on the number of students they enrolled. This is in violation of the Higher Education Act and Education Department regulations.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • Texas Aggie on May 07, 2011 1:27 PM:

    Interesting. I thought Texas was the only state where this kind of crap went on. Maine was supposed to be part of the anticorruption culture, but I guess not. I wonder how much Olympia knew about what was going on, and whether a divorce is in the works.

  • Chuck Blakeman on May 08, 2011 3:00 PM:

    Olympia Snowe has pretended to be a small business advocate as well. But in 2009 she quietly slipped in legislation to kill the ARC loan (which she had sponsored months earlier) because her giant banking friends and her SBA buddy, Karen Mills were telling here to get rid of it.

    It was the only loan the SBA and Congress has ever sponsored that was actually targeted at small businesses with fewer than 10 employees. The giant banks hated it, the SBA, which hasn't been supportive of businesses under 10 employees since its inception in 1953, and Karen Mills (she's from Maine) hated it. And so guess who else decided they hated it? Olympia Snowe.

    When people show you who they are, believe them.