Senators urge Trump administration to scrap plan to waive VA ethics rule

Four U.S. senators are demanding the Trump administration scrap a plan to waive a 50-year-old anti-corruption law that prevents officials who administer the GI Bill from accepting money from for-profit schools backed by taxpayer subsidy.

In a letter sent late Wednesday, the senators asked Department of Veterans Affairs Secretary David Shulkin to “immediately suspend” a proposed regulation, published in the Federal Register on Sept. 14, that would allow VA employees to receive wages, salary, dividends, profits, gratuities and services from for-profit schools that receive GI Bill funds.

VA officials also would be able to own stock in those schools, creating a situation where the senators said government employees “would be able to be employed or own stock in the very institutions” they “are charged with regulating.”

The proposed change was exposed by Reveal from The Center for Investigative Reporting, which has repeatedly documented abuses by for-profit colleges who seek to cash in on veterans’ GI Bill education benefits. The New York Times highlighted it as well.

The letter was led by Sen. Patty Murray of Washington, the ranking Democrat of the Senate Health, Education, Labor and Pension Committee, and signed by fellow Democrats Elizabeth Warren of Massachusetts, Sherrod Brown of Ohio and Richard Durbin of Illinois.

“Many for-profit colleges have been found by numerous law enforcement entities and investigative reporting to have preyed on veterans and service members for access to their educational benefits, and have invested heavily in obtaining special access to military bases and populations,” they wrote.

At VA headquarters in Washington, press secretary Curt Cashour said the agency would respond to the senators directly.

In an email to Reveal, he said: “the department could lose thousands of employees” if prohibitions against payments by for-profit colleges were vigorously enforced and that “our ability to serve Veterans would be seriously impeded.”

He argued a blanket waiver of the decades old ethics law was necessary because reviewing and granting waivers to individual employees “would be a tremendous waste of government resources, when we know that the duties of the vast majority of VA employees have no impact on for-profit educational institutions.”

The agency had previously downplayed the importance of the change, stating that despite the blanket waiver other conflict-of-interest laws would still apply. For example, materials attached to the proposed rule stipulate that VA employees would be required to “recuse themselves from VA matters when an employee’s participation would cause a reasonable person to question the employee’s impartiality.”

But critics say the rule change would effectively nullify critical consumer protections. They say it could create a situation where VA officials, who are charged with ensuring GI Bill funds are well spent, could accept payments from colleges that are facing civil suits or probes from enforcement.

In their letter, the Democratic senators also questioned whether the Trump administration had the legal authority to grant a blanket waiver allowing government employees to ignore a law passed by Congress and signed by President Lyndon Johnson.

The anti-corruption law, they wrote, “does not allow for blanket waivers, but requires the Secretary to grant waivers only on a case by case basis and with specific legal justification,” they wrote. “It is alarming (that) an executive agency would seek to waive entire statutory provisions and the Department further provided little to no justification in its Federal Register announcement.”

The rule was set to take effect on Oct. 16, “without further notice, unless VA receives a significant adverse comment.”

Cashour, the VA press secretary, said “there has been no change in implementation plans,” but added that the agency was still accepting comments on the rule change.

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