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As vote approaches, senators still in the dark on DeVos finances, possible conflicts

Local officials and activists say disclosure is crucial before a vote. Sen. Casey says he is "deeply concerned."
  • trump and devos
    AP Photo/Carolyn Kaster

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Although her notion that some schools may need guns to ward off grizzlies made the headlines, Tuesday’s Senate hearing for Secretary of Education nominee Betsy DeVos revealed almost nothing about her finances – both the money she might make while in office and the money she might spend.

U.S. Sen. Bob Casey, a Democrat on the committee that will vote on DeVos’ proposed appointment Tuesday, has confirmed that members will not receive a full financial disclosure from DeVos in time to ask her detailed questions about specific potential conflicts, despite reports of her investments in several for-profit education entities.

“I am deeply concerned that Senate Republicans are pushing these nominees through their Senate hearings without their completed ethics paperwork, including Mrs. DeVos,” Casey said in a statement.

Likewise, senators heard little about DeVos’ plans for her future philanthropic work, beyond her pledge to refrain from making personal donations to candidates, which represents just a fraction of the millions spent each year by the DeVos family supporting charters, vouchers, and other political and policy causes.

“I don’t know of any prior Cabinet members with this kind of track record for philanthropic and political activity,” said Paul S. Ryan, legislative director for the watchdog group Common Cause. “Her money, her family’s money, can certainly drive the policy debates in the direction she wants to see them go.”

Under the schedule established by  Sen. Lamar Alexander (R-Tenn.), who chairs the Health, Education, Labor, and Pensions (HELP) Committee, Casey and other senators have until Thursday evening to submit final questions for DeVos.

But Alexander gave DeVos until Friday to submit her completed ethics paperwork, meaning that senators will be unable to consider her detailed record before asking their last questions.

“Even if she submits her paperwork by Friday, we will have our vote on Tuesday without the opportunity to question her on the facts found in these documents,” Casey said. “Ms. DeVos, a billionaire, has a myriad of potential conflicts of interest, including the fact that she has invested in companies whose bottom line she could impact as secretary.”

Casey announced Wednesday that he would not support DeVos or two other Cabinet nominees. His fellow Pennsylvania senator, Republican Pat Toomey, will vote on DeVos in the full Senate. He did not respond to a request for comment.

Robert Fayfich, head of the Pennsylvania Coalition of Public Charter Schools, praised DeVos as “knowledgeable” and “focused on … trying to get good schools for kids,” but said it was “inappropriate” to ask senators for their final questions before giving them DeVos’ completed ethics paperwork.

“I think all of the senators should have all of the information before they proceed so they can ask appropriate questions,” Fayfich said. “It’s going to come out anyway. It’s in the best interest of both parties that any interests come out early, as opposed to later.”

Donna Cooper,  executive director of the advocate group Public Citizens for Children & Youth, echoed that point of view.

“In general, the [Trump] administration is taking a very bold approach to force through nominees before any reviews can happen. But that can come back and bite them,” Cooper said.

“Some of these nominees have significant conflicts of interest, and they will come out, and the senators will be left holding the bag. … If I was a U.S. senator – particularly if I were Pat Toomey, who is somebody very interested in integrity in government – the idea that we’re going to approve any nominees before seeing their ethics documents is very, very dangerous,” Cooper said.

Money going in and out

Financial concerns about DeVos’ Cabinet appointment fall into two main categories: money that she or her family could potentially make through for-profit education investments that could be affected by her decisions as a public official and money that they could potentially spend to shape policy through donations to politically minded groups and causes.

Reports indicate that DeVos has several potential investment conflicts, including ties to a firm called Performant that specializes in student loan collections and does millions in business with the Department of Education.

DeVos has pledged to divest herself of all such holdings, which Fayfich takes as a good sign.

“She made the commitment to divest herself – hopefully she’ll act in accordance,” he said.

But without complete documentation of her interests, it’s impossible to know where conflicts might be, Cooper said.

“The Education Department has a lot of lines of business,” she said, including publishing, research, loans, and professional development. “There’s a lot of vendors. And it’s useful to know if the appointee has any financial relationships that present policy challenges.”

Avoiding such conflicts isn’t a choice, but a matter of law, said Ryan of Common Cause.

He said that federal law “prohibits an executive branch employee from participating personally and substantially in any particular government matter that would affect that person’s financial interest, as well as the financial interest of any organization in which the person serves as an officer, director or trustee.”

However, Ryan added, although conflict-of-interest laws prevent public officials from using their office to make money, no law prevents them from spending money personally in order to amplify the power of the office and move its agenda.

“They can’t use their official authority or office to do any fundraising for others, but in their personal capacity, they can be quite involved in politics,” Ryan said.

The federal Hatch Act prohibits Cabinet members from using the power of their office to endorse candidates, he said. But officials can still make donations to candidates or advocacy groups or play an active role in charitable foundations or nonprofits that seek to shape politics and policy.

For politicians to advocate for causes and policy priorities is not unusual, and Senate Republicans showed no concern about DeVos’ spending at Tuesday’s hearings.

“She’s used her considerable wealth and effectiveness to advance [her] ideas,” said Alexander, the committee chairman. “I believe she’s in the mainstream of public opinion, and her critics are not.”

The scale of involvement

What distinguishes DeVos is the scale of her and her family’s work. Together the family has donated an estimated total of $1.2 billion through its various foundations, including $94 million in 2014 alone, much of it to conservative education causes, including charter schools and vouchers.

Devos herself has donated an estimated $2.7 million over the last 20 years, mostly to Republicans, including Toomey and some other senators who will vote on her nomination.  In fact, some reports say DeVos has given money to 10 of the 12 Republicans who sit on her confirmation committee. Under questioning by Vermont Sen. Bernie Sanders at her hearing, she acknowledged that the family has given as much as $200 million to the GOP. That includes $2.7 million during the 2016 presidential campaign.

Many a politician has arrived in office backed by a substantial personal war chest, and that in and of itself shouldn’t be disqualifying, Fayfich said.

“If you eliminate anybody who has that … you eliminate a lot of capable people,” he said.

Philadelphia City Councilwoman Helen Gym, a veteran education advocate who is actively lobbying against DeVos, said that the concern isn’t just DeVos' wealth, but her long track record of using it to shape policy and, as DeVos herself once put it, “buying influence.”

Gym compared DeVos to billionaire Michael Bloomberg, who as mayor of New York was not without his critics, but largely avoided scandals and the appearance of impropriety by following the city’s ethics guidelines.

“The difference between him and DeVos is that she falls under a presidency in which there’s open disdain about conflicts of interest – dismissing them, poo-pooing them, diverting attention away from them,” said Gym.

DeVos told the Senate committee that she would avoid any personal political donations while serving the Trump administration. “I will not be involved and engaged in political contributions, and my husband will not be either,” she said.

But Cooper cautioned there are many ways for the DeVos family to use their money to “gin up state-level acceptance of their federal initiatives” – most notably through donations to “social welfare” 501(c)4 groups such as Students First or issue-oriented 529 groups that “can’t coordinate with a candidate but … can echo a point of view of a candidate.”

Such groups will likely be active in Pennsylvania’s upcoming gubernatorial elections, and nothing would prevent DeVos or her family from contributing to those that seek to unseat Gov. Wolf, a Democrat, Cooper said.

“Republican social welfare organizations and 529s have been very active at the state level,” Cooper said. “They have 33 governors – they want more.”

DeVos said at her hearings that she won’t seek to force states to expand charters, but did not address how her philanthropy might influence policy.

“I would hope I could encourage that maybe in some future legislation, but I would not mandate that from within the department,” DeVos said.

But critics such as Gym remain deeply concerned about the potential influence of her dollars.

“The fact that Betsy DeVos still runs the family foundation is still a major issue,” Gym said. “It’s not possible to operate behind the scenes with your money and foundations [and] openly claim to want to buy influence, and then function as a public servant in the democratic sphere.”

Fayfich said that he, too, hopes that as secretary, DeVos sticks to developing good policy and avoids mixing her work as a public servant with her spending as an advocate.

“I do not think she should use her money to influence decisions over which they have some authority or to support organizations that advocate for them one way or another,” he said. “And this would apply to any secretary, Democrat or Republican. That would apply to anybody.”






 

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Bill Hangley Jr.

@BillHangley
Bill Hangley Jr. is a freelance contributor to the Notebook.