The Washington Post’s Hidden Agenda?

Published on December 7, 2010

By Andrew Kreig /JIP Executive Director's Blog

The Justice Integrity Project announced last month that we could fulfill our mission of legal reform only if we expanded our commentary to include media trends that curtail aggressive reporting of documented abuses. Today, we’ll examine how the Washington Post's revenue stream from its Kaplan subsidiary creates a hidden agenda that undermines the paper's coverage of sensitive issues involving government officials.

Kaplan provides 62% of Post revenue. Its educational services include those from government-supported initiatives in both K-12 and advanced education, such as for-profit colleges and various test-preparation courses. This Kaplan-generated revenue compares to just 4% from newspaper circulation, which is augmented by about 15% in newspaper advertising, according to recent quarterly reports.

On Dec. 6, Dr. David Goodstein published a column in the Daily Censored entitled, “So You Want To Blow Your Whistle?”  Goodstein, 72., described how the Kaplan-owned CHI Institute in Broomall, PA promptly fired him from his position as director of education in 2006 after he expressed reluctance to bribe hospital CFOs to place two externs in a program. The program cost students $18,000 per year in tuition, 90% of it funded with federal grant money. Students and state investigators suspected that the program failed in suspicious ways to provide adequate preparation for a good job. His column followed similar reporting based on his experiences by Dr. Danny Weil in Truthout. On Nov. 18, Weil wrote:

Over the past year, I have written extensively about the phenomenon of for-profit universities. My work included a series of interviews with a disgruntled former employee of Kaplan University who would not expose his name at the time due to pending Department of Justice suits (known as qui tam suits) against one insidious institution of higher predation -- in this case, notorious bilker and theft maiden, Kaplan University.

In a Tuesday, November 10, 2010, New York Times article, the whistleblower finally revealed his name. Whistleblower David Goodstein is a hero to many for putting his reputation and future job prospects on the line to bring attention to the subprime racket now called "private proprietary schools."

The Department of Justice would not unseal the qui tam case brought by David and three others, who sought justice for students, teachers, and others who are low-hanging fruit for the predators. Qui tam cases are whistleblower cases put forth by citizens acting as their own attorneys general. This particular case was first put to the Department of Justice, which sealed it pending the Department of Education's investigations. Kaplan is notoriously one of the worst of the for-profit, predatory colleges, competing with the University of Phoenix, Corinthian Colleges, and many others, in theft, larceny and criminal activity....

 

Andrew Alexander, the Post's ombudsman, has recognized a potential conflict of interest in several recent columns, but defends the paper on the whole as overcoming any problems.  As more context, the Post's former Managing and National Editor Robert Kaiser last year published, “So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government.”  Kaiser, who still works at the paper, wrote a hard-hitting book documenting what it calls, “The startling story of the monumental growth of lobbying in Washington, DC, and how it undermines effective government and pollutes our politics.”  Yet the book's documentation is only occasionally visible in the paper itself.

The Post frequently defers to those in authority, as indicated by an anonymous White House source praising the President in the paper’s Dec. 7 lead story. The same trait occurs in its characteristically flattering coverage of the career moves of former city school system chancellor Michelle Rhee, whose advocacy of school testing coincides with Kaplan financial and policy goals but not so much with voters who in November ousted her mentor, Mayor Adrian Fenty. Rampant corruption and other failure in government is so obvious that the paper Dec. 7 also quoted the farewell address of a longtime senator, George Voinovich, an Ohio Republican, as suggesting about the federal presence, "I think we have to blow up the place."  But rather than nailing down specifics, the morning Post was most comfortable with a separate column that focused in part on its familiar Watergate glory days. Thus, “A Fond Farewell” by longtime sports columnist Michael Wilbon.

We at JIP have fond memories also of aggresive reporting by the Post and other major news outlets in days of yore.  So, we publish today's criticism reluctantly, especially because all of us in civic affairs depend on the fairness if not goodwill of the conventional media.

Realistically, however, we must report as here problems with the system.  Reform of government cannot occur unless the major media do their jobs, regardless of the interests of their subsidiaries and parent companies. The insult used to be, "They're just trying to sell newspapers."  Today, at least for the Post, orienting news to reader concerns would be a huge improvement.

Updates

2012
Washington Post, Washington Post Co. fourth-quarter earnings drop 22 percent, Steven Mufson, Feb. 24, 2012. The Washington Post Co. reported Friday fourth-quarter 2011 net income of $61.7 million, or $8.03 a share, down 22 percent from $79.0 million or $9.42 a share a year earlier as its Kaplan education division and flagship newspaper operations continued to shrink.  Profits at the company’s cable television unit and local television broadcast stations remained relatively stable. The trials of Kaplan — and the education of The Washington Post Co.: The success of the Kaplan education division has brought unwelcome scrutiny to a family-run company that has long prided itself in serving the public interest. Operating profits at The Post Co.’s once high-flying Kaplan education division sank to $32.3 million in the fourth quarter, down 51 percent from $66.2 million the year before. Revenue for the education division fell but still accounted for nearly 60 percent of the company’s revenue during the fourth quarter and the year.

2010
The Washington Post published two articles about its Kaplan subsidiary on Dec. 7 that illustrate themes we addressed in our blog the same day, which we entitled, "The Washington Post's Hidden Agenda?" Our colum addressed the inherent conflict when the Kaplan subsidiary provides 62% of the Post's revenue, with some methods allegedly so deceptive they are being aggressively investigated by state and federal authorities and other methods government funded or otherwise controversial. A newspaper's watchdog function on behalf of its readers, who contribute 4% of the Post's revenue via circulation and some 15% via advertising, is inevitably compromised when the lion's share of revenue is from another source. Here are the two Post articles:

Washington Post, GAO revises its report critical of practices at for-profit schools, Nick Anderson, Dec. 7, 2010. The Government Accountability Office has revised portions of a report it released last summer on recruiting practices in for-profit higher education, softening several examples from an undercover investigation but standing by its central finding that colleges had encouraged fraud and misled potential applicants. The revisions have come as the Obama administration and senior Democratic lawmakers are pushing for tougher regulation of the industry. A Republican senator said the revisions called into question some of the conclusions in the report. The original report, issued Aug. 4 in testimony to the Senate Committee on Health, Education, Labor and Pensions, examined recruiting practices at 15 for-profit colleges, including campuses operated by the Apollo Group, Corinthian Colleges and The Washington Post Co.'s Kaplan unit. Undercover GAO investigators posed as prospective students in encounters with college representatives that were captured in audio and video recordings. The GAO is a nonpartisan investigative arm of Congress.

Washington Post/Bloomberg, Washington Post's Kaplan unit to cut 770 employees, Olga Kharif, Dec. 7, 2010. Washington Post Co.'s Kaplan Higher Education division said it plans to cut about 770 employees, or about 5 percent of the workforce, because of slowing enrollment. "These are difficult decisions to make, but necessary if we are to maintain the same high-quality education and support services our students expect," Jeff Conlon, chief executive officer of Kaplan Higher Education, said in a statement today…Last week, a former dean of the unit alleged the company engaged in fraud to get U.S. student aid as he defended himself against criminal cyber-harassment charges in a federal jury trial under way in Chicago. In testimony in U.S. District Court, Bennie Wilcox, a former dean of law and legal studies at Kaplan University, said he witnessed Kaplan executives commit "multiple schemes" to defraud the U.S. government and taxpayers out of $1 billion. Kaplan denies the allegations. Wilcox claims the company retaliated against him when he exposed fraud in a pending whistleblower lawsuit in Florida filed in 2007.

Meanwhile, the Huffington Post began explored the situation, as follows:

Huffington Post, For-Profit Colleges Cashing In On Veterans, Chris Kirkham, Dec.  9, 2010. Veterans returning from the wars in Iraq and Afghanistan have been enrolling in for-profit colleges and institutions at substantially higher rates during the past two years, raising questions about the degree to which such institutions are seeking higher enrollment rates at the expense of true educational opportunities. A report released today by the Senate's Health, Education, Labor and Pensions Committee, which has been examining aggressive recruitment practices and high student loan default rates in the burgeoning for-profit education industry over the past several months, shows the share of their revenue coming from veterans has increased fivefold from 2008 to 2010. For-profit colleges have been one of the primary beneficiaries of the Great Recession, with many institutions capturing anywhere from 85 to 90 percent of their revenues from federal financial aid dollars. But veterans present a particularly attractive opportunity to boost enrollment, because their generous benefits through the GI bill and other programs are not counted as federal financial aid dollars -- a point singled out in the Senate report.

Earlier, Salon weighed in:

Salon/War Room, Did DC's top ethics cop break her own rules? When the head of an ethics watchdog teams up with a corporate lobbyist, questions arise about her past work, Justin Elliott, Nov. 22, 2010. When the executive director of a prominent Washington ethics watchdog group goes to work for a well-known corporate lobbyist, it's bound to raise a few eyebrows. But in the case of Melanie Sloan of Citizens for Responsibility and Ethics (CREW), who last week announced she is joining the new firm of lobbyist Lanny Davis, there's another layer of intrigue: Sloan came under fire over the summer for appearing to go to bat for the for-profit schools industry, which is currently a paid lobbying client of Davis. At the time, Sloan and CREW explicitly cited a column Davis wrote defending the for-profit industry. Now, Sloan is going to work for Davis.
In interviews with Salon, Sloan and Davis both said that the concatenation of events is a pure coincidence. But the developments cast a different light on Sloan's -- and CREW's -- past work on the for-profit issue. The situation is analogous to a senator who stood up for industry interests on the energy committee retiring and promptly going to work for a firm that represents Exxon Mobil.
More recently, the Huffington Post published two front-page stories on the same topic:
Huffington Post, Kaplan Tarnishes Washington Post Legacy, Peter S. Goodman, Dec. 23, 2010 Inside the corporation today, the newspaper is vastly overshadowed by a fast-growing business known as Kaplan Higher Education -- a sprawling empire of for-profit college campuses and sundry online course offerings alongside the test preparation business that first made the brand famous. The Kaplan name has been doing no favors for the Washington Post's reputation or that of the Graham family.

Huffington Post, At Kaplan University, 'Guerrilla Registration' Leaves Students Deep In Debt, Dec. 22, 2010.
Managers at Kaplan--the highly profitable educational arm of the Washington Post Co.-- have for years pressured academic advisors to use this method to boost enrollment numbers, the former employees said, offering accounts consistent with dozens of complaints filed by former students with the Florida Attorney General's Office and reviewed by The Huffington Post.

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