Chairman Miller Calls for Independent Investigation into Conflicts of Interest between Education Officials and Lenders

Thursday, April 26, 2007

WASHINGTON, DC -- Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, today asked the Inspector General for the U.S. Department of Education to investigate conflicts of interest among Department employees, lenders, and other participants in the federal student loan programs. Recent news reports have revealed that several Department officials responsible for administering federal student aid either held stock in or had close ties to some of the nation's largest student loan companies.

Miller's request comes a day after New York Attorney General Andrew Cuomo testified at a committee hearing that the Department of Education's lack of oversight over student loan programs has allowed corrupt practices and conflicts of interest to flourish within the system.

The full text of Miller's letter to the Inspector General is below.

***

April 26, 2007

The Honorable John P. Higgins, Jr.
Inspector General
U.S. Department of Education
400 Maryland Avenue, SW
Washington, DC 20202

Dear Mr. Higgins:

In light of recent reports questioning whether officials at the Department of Education are conducting themselves in a professional and ethical manner, I respectfully request that you investigate conflicts of interest or the appearance of conflicts of interest among Department employees, lenders and other entities participating in the federal guaranteed student loan program. 

Specifically, I ask that you determine whether the Department's existing policies, procedures, guidance and practices are adequate for ensuring the absence of financial conflicts of interest among Department employees and officers responsible for the oversight of the Federal Family Education Loan Program. I am particularly interested in the extent to which the Department informs, trains, or counsels existing and newly hired or appointed officials of federal conflict-of-interest statutes and standards of ethical conduct.

As part of your investigation, I ask that you review-for the 6 most recent years-the SF 278 Executive Branch Personnel Public Financial Disclosure Reports for these employees and officers.  In addition, please review any related records, as appropriate, including any:

(1)   certificates of divestiture;
(2)   Ethics Act qualified blind trust and qualified diversified trust instruments;
(3)   18 U.S.C.§208(b)(1) & (b)(3) waivers granted by the Department;
(4)   cover letters for approved gifts reporting waiver requests; and
(5)   cover letters for approved public reporting waiver requests for certain less than 130-day special Government employees.

Finally, please examine all instances of confirmed violations of conflict-of-interest and ethics rules and any disciplinary actions taken by the Department.

Sincerely,

GEORGE MILLER
Chairman

###

FOR IMMEDIATE RELEASE
Contact: Tom Kiley / Rachel Racusen
2181 Rayburn House Office Building
Washington, DC 20515
202-226-0853