Here’s a look at cronyism at its most hypocritical. A group of investors close to President Obama is buying the Apollo Education Group, which owns the University of Phoenix. That pioneering for-profit university, still the largest in the country, was battered to near-death by an Obama administration campaign against for-profit education.
So now some of the same actors are purchasing it. As Politico writes:
What stands out about the proposed deal is that several key players are either close to top administration officials, including the president himself, or are former administration insiders — especially [former Deputy Undersecretary Tony] Miller, who was part of the effort to more tightly regulate for-profit colleges at the very agency now charged with approving the ownership change. For-profit college officials have likened those rules to a war on the industry, and blame the administration for contributing to their declining enrollments and share prices. (My emphasis.)
One result of that war (which Senate Democrats enthusiastically joined in on) was a drastic decline in the stock of the Apollo Education Group. After reaching a high of more than $86 per share in 2009 (just before Obama took office), it fell to under $7 and has been trading at around $9. The agreed-upon price for the deal is $10.
Now that’s cronyism! First, engineer a stock decline and then buy the stock at a bargain price!
And the investors need the approval of the Department of Education (I don’t exactly know why, but the department seems to run its own little Federal Trade Commission). So, as Politico says, the group of investors “has mounted a charm offensive on Capitol Hill to talk up the proposed sale.”
Some charm.
H-T to Bridgett Wagner.