Leadership Symposium Early Bird Deadline Is Today | Join K-12 leaders nationwide for three days of empowering strategies, networking, and inspiration! Discounted pricing ends today, Feb. 23. Register now.
Education Funding

DeVos’ Investment Stakes Raise Democratic Concerns

By Mark Walsh — February 07, 2017 3 min read
  • Save to favorites
  • Print

Betsy DeVos’ complicated investments continued to trouble Democrats on the Senate education committee even as DeVos’ nomination as U.S. secretary of education was debated by senators last week.

“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,” said a Jan. 27 letter to DeVos spearheaded by Sen. Elizabeth Warren, D-Mass.

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.

The lawmakers said in their letter that “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.”

In addition to Warren, the letter was signed by Democratic Sens. Tammy Baldwin of Wisconsin, Christopher S. Murphy of Connecticut, Sheldon Whitehouse of Rhode Island, and Margaret Wood Hassan of New Hampshire, as well as Independent Sen. Bernie Sanders of Vermont, who caucuses with the Democrats.

The Health, Education, Labor, and Pensions Committee voted 12-11 on Jan. 31 to advance the nomination, with the Democrats and Sanders voting in opposition.

Diverse Stakes

Among the investments DeVos indicated she would divest are a direct stake in Knowledge Universe Education LP, which changed its name to KinderCare Education late last year and operates KinderCare Learning Centers. The financial disclosure says DeVos has an investment worth somewhere between $500,001 and $1 million.

Most items on the divestment list, though, are funds with diverse stakes in assets that include an education-related company among others.

Among the education entities that DeVos has indirect investments in through such funds are Varsity News Network Inc., which is described in endnotes to the disclosure as a developer of web software for K-12 athletics; U.S. Retirement Partners Inc., a financial-services company specializing in public school and government employee benefits plans; and N2Y LLC, which is described as providing cloud-based learning services for special education.

DeVos said in a written response to Sen. Patty Murray of Washington, the ranking Democrat on the education committee, that she and her husband had once owned shares of K12 Inc., an operator of virtual charter schools, but sold them in 2008.

Warren, at last week’s committee voting session on the nomination, said she remained concerned because DeVos “plans to maintain financial ties that could create conflicts of interest” if she was confirmed.

DeVos’ financial disclosure provides details on only one of the three trusts in which she would retain an interest—Family Trust 2, which appears to have indirect investments in education-related firms.

The senators’ letter noted, for example, 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.

‘Political Exercise’

Other observers have also expressed qualms 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.

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’ 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 nonpartisan guidance with the personal opinions of partisan lawmakers on Capitol Hill.”

A version of this article appeared in the February 08, 2017 edition of Education Week as DeVos’ Investment Stakes Raise Democratic Concerns

Events

Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Reading & Literacy Webinar
Science of Reading: Emphasis on Language Comprehension
Dive into language comprehension through a breakdown of the Science of Reading with an interactive demonstration.
Content provided by Be GLAD
English-Language Learners Webinar English Learners and the Science of Reading: What Works in the Classroom
ELs & emergent bilinguals deserve the best reading instruction! The Reading League & NCEL join forces on best practices. Learn more in our webinar with both organizations.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding ESSER Isn't the Only School Funding Relief That's Disappearing Soon
Federal relief aid, policies to prevent schools from losing enrollment-based funding, and support for vulnerable families are expiring soon.
10 min read
Vector illustration of a businessman's hand holding a slowly vanishing dollar sign.
iStock/Getty
Education Funding Schools Lost Ground on Funding in Recent Years. The Recovery Could Be Slow
School funding took a hit a few years ago. It might be some time before it recovers.
5 min read
Tight crop of a dollar bill puzzle missing one piece
iStock/Getty
Education Funding Here's How the Feds Are Spending $277M for Academic Recovery
A new round of grants from the Education Department aims to spur innovation in academic recovery, with initiatives in math, reading, and AI.
4 min read
Image of a dollar bill folded into an upward arrow.
ImagePixel/iStock/Getty
Education Funding A Judge Just Ruled That Another State's School Funding System Is Unconstitutional
New Hampshire joins Pennsylvania on the list of states whose courts have ruled that it's underfunding poor school districts.
5 min read
Image of money symbol, books, gavel, and scale of justice.
DigitalVision Vectors