Better in their words…

If this was justified, please respond.
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As government expands, so does its potential for abuse. Yet in the Obama era the media have largely abandoned their role as watchdogs, and even gross abuses of power go unpunished. Consider the sordid persecution of for-profit Decker College, which has belatedly received vindication after being driven into bankruptcy a decade ago by a malicious regulator.

Education Department administrative law judge Robert Layton recently affirmed a 2012 bankruptcy court finding that the Council on Occupational Education had failed to tell the truth in stating that Decker’s online programs were never accredited. The Council’s “factually erroneous” assertion caused the Education Department to withdraw federal student aid in 2005, which precipitated Decker’s bankruptcy.

As we wrote in July 2012, a large docket of evidence showed that the Council had in fact accredited Decker’s online programs. Its accreditation application included several mentions of distance learning, and Council inspectors who visited its campus also noted “Dist. Ed” on their evaluations, among other evidence.

The Council yanked Decker’s accreditation after its executive director Gary Puckett received an unusual phone call from Kansas City Federal Student Aid (FSA) case team director Ralph LoBosco. At the time the Council was itself up for review, and Mr. Puckett testified that he felt the need to assure its government regulators that Decker’s online programs were not approved.

Bankruptcy trustee Robert Keats alleged Mr. LoBosco was trying to exact revenge against Decker CEO William Weld who as a U.S. attorney during the 1980s had prosecuted Mr. Lo-Bosco’s former employer for fraud. While bankruptcy Judge Thomas Fulton didn’t infer regulators’ motivations, he ruled that Decker had been accredited.

Judge Fulton’s finding should have barred the Education Department’s bankruptcy claim for $31 million, as Mr. Layton has now ruled. Mr. Layton noted that “it is troubling that FSA relied exclusively on [the Council’s] letter as a scant basis for imposing a $31 million liability and that FSA chose not to conduct any examination of the facts and circumstances behind the letter,” especially since “in other actions FSA has factually looked to the underlying facts on an accrediting agency’s decision.”

Equally troubling is what Mr. Layton calls the procedural “quagmire” that the Federal Student Aid office and Council created to freeze the bankruptcy case for more than a decade. The Federal Student Aid office argued that the bankruptcy court decision was not final. However, the Council chose not to “make the Bankruptcy Court’s ruling on the accuracy of the letter appealable,” as Mr. Layton put it. This “procedural quirk” created “a permanent bar” that prevented administrative and bankruptcy claims from “proceeding, since both forums would be required to wait on the other to proceed.”

Mr. Layton has now lifted the “permanent stay” on Decker’s administrative appeal and rejected the government’s $31 million claim. “There is a point at which a delay in the hearing process becomes a constitutional violation of Decker’s right to procedural due process,” he explained, and that’s for sure. So at least now the bankruptcy can proceed and other creditors including many students and workers can recover their losses.

But all of this is too late for Decker’s employees, its students and investors. They were victims of statements found to be false in two court proceedings. Yet there has been no accountability that we can detect for those who destroyed Decker.

After all these years, Mr. LoBosco continues to draw a taxpayer salary from the Education Department, according to the Federal Student Aid website. The department IG hasn’t investigated complaints by Decker’s outside counsel— which were filed prior to the bankruptcy— against Mr. LoBosco. The Education Department renewed the Council’s recognition as a college accreditor in 2007 and most recently in 2013. A spokesman for the IG’s office hasn’t responded to our request for comment. Nor has Mr. Puckett, although the Council has said it disagrees with the bankruptcy court’s determination.

If Americans must live with a gigantic and intrusive government, then at least they should know there will be some accountability for abuses of power. Arne Duncan, the secretary of education for seven years, did nothing about the Decker outrage. John King was recently confirmed as the new secretary. The least he can do to set a better standard is to show that there is some accountability for regulators who scheme to destroy a company based on falsehoods and then spend years trying to deny the victims due process under the law.

The regulators who destroyed Decker College have never been held accountable

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