Ever heard of Western State College of Law? If you haven't, it's a notorious TTTT located in sunny Southern California in Orange County. Western State is known for its atrocious attrition rate and even worse bar pass rate. Some years this school posts a sub 50% pass rate. Clearly a winner, not. It turns out that Western State and Goldman Sachs, the infamous vampire squid which has wrapped its tentacles everywhere from the Greek bond market fiasco to even the law school scam, have a very close relationship. In fact, Goldman Sachs (hereinafter the "squid") is one of several owners of the company that owns Western State. This scamshop company is Education Management Corporation, (NASDAQ: EDMC). EDMC is a private operator of post-secondary educational institutions, primarily in the United States. EDMC operates the following shitholes (H/T Nando); the Art Institutes, Argosy University, Brown Mackie College and (drumroll......................) Western State College of Law!
Western State is one of the few for profit law schools in the country and charges a hefty 35k per year for tuition. That sure is a ton of money for this terribly low ranked tier 4 school that can barely get half of it's graduates a license. But who is making all the money if this is a "for profit" institution? Let's take a look at the major holders.
This move to become a public company once again followed a June 1, 2006 transaction, in which a consortium of private equity investors acquired Education Management in a transaction valued at approximately $3.4 billion. The principal investors in Education Management are Providence Equity Partners, Goldman Sachs Capital Partners and Leeds Equity Partners. The leveraged buyout of EDMC was the largest buyout in the for-profit education sector to that point
And here is where the squid (Goldman) comes in! Per MSM, Goldman Sachs owns roughly 40% of the 136 million shares outstanding. Providence Equity Partners comes in second with 30% ownership. Yes Western Law grads, the squid owns your ass.
The story gets even more disturbing. This web of double dealing is ripe with conflicts and bribes. Observe the cozy relationship of EDMC's upper management with the Department of Education's Advisory Committee on Student Financial Assistance:
Former Governor, John R. McKernan Jr. (R-ME) is Chairman of the Board of Directors at EDMC and is husband of United States Senator Olympia Snowe. Snowe (R-ME) has publicly declared assets between $5 million and $25 million in EDMC. EDMC Senior Vice President – Regulatory Affairs and Strategic Development, Anthony J. Guida Jr., was appointed to the United States Department of Education’s Advisory Committee on Student Financial Assistance (ACSFA) by the Speaker of the United States House of Representatives in 2009 to serve a term that expires in September 2011. Guida also serves on the Board of Directors at the Association of Private Colleges and Universities, the chief advocacy organization of the proprietary higher education industry. Catherine A. Caponi serves as Vice-President, Government Relations for EDMC. Caponi also serves on the Business Board of Advisors—Associate Business Members at the National Hispanic Caucus of State Legislators (NHCSL). The NHCSL has spoken out regarding a proposed "gainful employment" rule which, arrording to the US Department of Education seeks to protect students and taxpayers. The NHCSL has claimed minority students would be harmed if they were prevented from taking on student loan debt for programs that do not lead to gainful employment and provide graduates with a means of repaying their debt.
Check on the special investments (read: lobbying ) EDMC has done in order to keep the tax payer funded gravy train running:
In 2010, Education Management Corporation spent $410,000 on lobbying in the first nine months, an increase from $50,000 a year earlier. In addition to documented lobbying expenditures and EDMC-EDU PAC contributions, corporate officers of EDMC and its subsidiaries have given money to members of Congress including Congressman Jason Altmire (D-PA). Jason Altmire (PA-04) is a member of the House Committee on Education and Labor. Altmire assisted in passing legislation which has increased Federal Funding to for-profit institutions such as those owned by EDMC.
How this is all completely legal is completely fucked up. If I were to fart in court the judge would probably hold me in contempt. I get screamed at when my firm has trouble serving a defendant that continues to shine service. Yet these crooks can sit on boards of major corporations AND serve in government departments that ensure the survival and profitability of the same company! Bullshit!
The squid, via EDMC, has made a killing off of students and the loans they take out to attend these putrid cesspools. Art Institutes is by far one of the biggest scams out there, charging as much as many TTT's do for degrees in cooking, media, video game production, or whatever else they "teach" their students. Check out EDMC's revenue for the past few years:
2008 $1.6 billion
2009 $2.0 billion
2010 $2.5 billion
Those are incredible numbers for a company. The 2 year growth from 2008 to 2010 is a astounding 56%. All these poor saps going "to school" to ride out the recession are getting obliterated by their nondischargeable student loans. Fucking A, anything the squid touches, it sucks the blood out of.