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Democrats Raise Additional Questions About DeVos Financial Disclosure

By Mark Walsh — January 30, 2017 4 min read
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As a Senate committee nears a vote on Betsy DeVos’s nomination as U.S. secretary of education, several Democrats on the panel continue to press concerns about the nominee’s financial disclosure and ethics agreement.

“Your ethics review process has revealed dozens of financial interests that you and your family hold through a complicated network of investment entities, assets, and trusts,” says a Jan. 27 letter to DeVos spearheaded by Sen. Elizabeth Warren of Massachusetts. “You have agreed to divest yourself of interests in more than 100 companies—some of which make money by collecting student loan debt, refinancing student loans, providing online learning platforms or education reference materials, or running for-profit educational institutions.”

“We are concerned that if confirmed, you would continue to benefit from significant financial holdings in family trusts that may hold investments in companies affected by the Department of Education’s activities,” adds the letter, which was also signed by Senators Bernie Sanders of Vermont, Sheldon Whitehouse of Rhode Island, Tammy Baldwin of Wisconsin, Christopher S. Murphy of Connecticut, and Margaret Wood Hassan of New Hampshire.

DeVos vowed in a Jan. 19 ethics letter approved by the federal Office of Government Ethics that she would divest her stakes in 102 assets that hold potential conflicts of interest should she be confirmed as education secretary. But she also stated in the letter that she will remain as a trustee and beneficiary of three family trusts, of which she and her husband, Dick DeVos, are the sole beneficiaries.

DeVos’s financial disclosure provides details on only one of the three trusts, Family Trust 2, which appear to have indirect investments in education-related firms.

“You have disclosed the assets in only one of these family trusts (Family Trust 2),” the letter from the six Democrats says. “You have not disclosed the underlying assets in the other two (Family Trusts 11 and 12). Members of the Senate--and the public--therefore do not know whether these trusts contain investments (like those contained in Family Trust 2) in companies related to higher education that could pose conflicts of interest or misalign your incentives as the Secretary of Education.”

For example, the senators’ letter expresses concern that DeVos would retain interests that are connected to Performant Financial Corp., which is involved in student debt collection and has had contracts with the U.S. Department of Education in the past.

Other observers have also expressed concerns that DeVos would retain direct or indirect investments in some education-related companies, such as a stake valued at between $5 million and $25 million in Neurocore LLC, a Grand Rapids, Mich.-based company that has claimed its biofeedback technology helps children with attention-deficit hyperactivity disorder and autism perform better in school.

“Will you commit that neither you, nor your spouse, nor your children, nor your extended family beyond your spouse and children, will benefit financially from actions you take as secretary through any of the Attachment C entities in which you plan to retain a financial interest, including Neurocore?” and other firms, the Democratic senators asked DeVos in the letter. That was one of seven questions in the letter that asks DeVos to reply by Monday, Jan. 30.

Mary Bottari, the deputy director of the Center for Media and Democracy in Madison, Wis., which publishes several ethics watchdog newsletters on the web, said in an interview that DeVos’s investments in education-related companies are “particularly concerning” despite her vow to divest of many of them.

“These types of financial ties present a conflict over the long term that is very difficult for the public to track,” she said.

Ed Patru, the head of the informal group Friends of Betsy DeVos, said the Democratic senators’ letter was “a political exercise through and through.”

“The Office of Government Ethics has cleared Betsy and affirmed that she will have no conflicts,” he said. “We think it would set a grave and dangerous precedent to substitute the OGE’s non-partisan guidance with the personal opinions of partisan lawmakers on Capitol Hill.”

On Jan. 24, the chairman of the Senate Health, Education, Labor, and Pensions Committee, Sen. Lamar Alexander of Tennessee, and the panel’s ranking Democrat, Sen. Patty Murray of Washington, held a brief debate on the Senate floor about the concerns over DeVos, including her ethics agreement and financial disclosure.

Democratic senators on the committee have asked 1,397 followup questions after DeVos’s Jan. 17 confirmation hearing, Alexander said. And, they are throwing around conflict-of-interest accusations,” he said. But the OGE agreement has settled those concerns, Alexander said.

Murray responded that there remain “serious questions that remain regarding her ethics paperwork, her tangled finances, and her potential conflicts of interest—questions that Democrats have continued to demand answers to.”

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