J. David Cox, president of the American Federation of Government Employees, testifies before a House Committee on Oversight and Government Reform subcommittee. Credit: AFGE

Consumer groups, veterans advocates, ethics experts and union leaders continued to blast the Department of Veterans Affairs today for its plan to unilaterally scrap a 50-year-old anti-corruption statute, even though VA officials already promised to withdraw the effort.

One of them, the Campaign Legal Center, called the Trump administration’s plan to allow for-profit colleges to enrich officials who implement the GI Bill “contrary to law and arbitrary and capricious.”

“We couldn’t just rely on informal assurances offered to the media,” said Walter Shaub, the former director of the Office of Government Ethics, who resigned in protest in July.

Chief White House ethics lawyers for former Presidents George W. Bush and Barack Obama weighed in as well. In a letter sent by Citizens for Responsibility and Ethics in Washington, Richard Painter and Norm Eisen noted that “several for-profit colleges have been the subject of investigations by state and federal agencies for deceptive and misleading recruiting or other possible violations.”

Permitting VA employees to accept payments from for-profit colleges, they wrote, would “enhance the overall influence such entities likely will have on VA’s policy making on issues involving these entities.”

The proposed change, exposed by Reveal from The Center for Investigative Reporting, was set to go into effect Monday. It would have allowed VA employees to receive “wages, salary, dividends, gratuities” and services from for-profit schools that receive GI Bill funds. VA employees also would be allowed to have an ownership interest in such schools.

The VA had said other criminal laws would prevent those employees from making decisions that could benefit for-profit colleges. Veteran and consumer groups responded that those laws were narrowly crafted and filled with loopholes.

On Wednesday, after five U.S. senators and a long list of veterans groups registered their opposition, the VA said it was pulling the measure. But as of this afternoon, it still appeared on the Federal Register.

VA press secretary Curt Cashour told Reveal that the agency would formally pull the rule Monday, the day the change was set to take effect. He sent a link to a withdrawal notice that had not yet been published, set to be effective Monday.

“The VA received a significant number of comments and has determined not to pursue implementation of the waiver as originally proposed,” it reads.

Meanwhile, opponents of the change continued to register their displeasure. Many were worried that the agency might return with a revised waiver to allow more limited financial relationships – such as permitting for-profit colleges to offer free classes to VA workers.

In a letter to the VA ethics office sent Thursday, J. David Cox, president of the American Federation of Government Employees, which represents 250,000 VA workers, said: “Common sense suggests veterans would not be served by allowing inappropriate financial entanglements between VA employees and for-profit colleges that want GI Bill benefits.”

“VA employees’ mission is to serve veterans” Cox said, “and as dedicated public servants they refuse to allow for-profit colleges to undermine this mission by preying on veterans.”

A coalition of consumer advocates, including the Consumer Federation of America and the National Consumer Law Center, noted that existing law already gives the secretary of veterans affairs the authority to waive the law on a case-by-case basis.

“We acknowledge that there may be some legitimate waivers for a narrow set of employees,” the coalition said in a comment filed with the government. “However, these should be done on a case-by-case basis and appropriately documented to ensure that any employee receiving the waiver is completely segregated from communicating about any potential matter related to veterans’ education benefits.”

The consumer groups noted that similar ethics safeguards are present throughout the federal government. Federal Aviation Administration employees are barred from owning stock in airlines, they said, and workers at the Food and Drug Administration are barred from owning shares in companies that agency regulates.

Our country’s investment in veterans to transition to civilian life through investments in higher education has paid significant dividends for our entire society,” they wrote. “But there is significant and long-standing evidence that veterans’ education benefits are often targeted by unscrupulous actors.”

Aaron Glantz can be reached at aglantz@revealnews.org. Follow him on Twitter: @Aaron_Glantz.

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Aaron Glantz was a senior reporter at Reveal. He is the author of "Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream." Glantz produces journalism with impact. His work has sparked more than a dozen congressional hearings, numerous laws and criminal probes by the Drug Enforcement Administration, FBI, Pentagon and Federal Trade Commission. A two-time Peabody Award winner, finalist for the Pulitzer Prize, multiple Emmy Award nominee and former John S. Knight journalism fellow at Stanford University, Glantz has had his work has appear in The New York Times, Chicago Tribune, NBC Nightly News, Good Morning America and PBS NewsHour. His previous books include "The War Comes Home" and "How America Lost Iraq."