Corinthian Colleges filled for Chapter 11 bankruptcy protection in Delaware on Monday. The move followed its abrupt announcement last week that it was shutting its doors for good, a decision that will affect the 16,000 students enrolled in the schools around the US.
The bankruptcy filling provided a glimpse into the creditors of the for-profit behemoth and showed that many of them were lobbying firms, political consultants, and think tanks.
The disclosure of this information seems to support opponents’ claims that the for-profit college industry engaged in heavy lobbying practices.
“Unfortunately the institutions became so wealthy that they basically lobbied to eliminate the kinds of rules to hold them accountable so instead they had every incentive to abuse students,” attorney David Halperin explained to Business Insider. “Washington basically created a monster.”
Two such lobbying firms, Akin Gump Strauss Hauer & Feld LLP and Akerman LLP, were on the creditors list, and came as no surprise as they were were publically disclosed by Corinthian under the Lobbying Disclosure Act.
APCO refutes allegations that is lobbied on behalf of Corinthian, and says that it only provided communication support to Corinthian Colleges and counsel to their board of directors.
The list also included Karl Rove’s nonprofit Crossroads GPS, which is known to support GOP candidates.
Sen. Marco Rubio, a Republican presidential candidate, has some ties to Crossroads and Corinthian. He received over $US700,000 in campaign spending from Crossroads in to help elect him senator in his 2010 election, according to the Center for Responsive Politics (CRP).
And Corinthian Colleges gave $US5,000 to Rubio’s Reclaim America PAC, CRP notes.
That support may have paid off. Rubio wrote to the Department of Education in 2014 asking for “leniency” in dealing with Corinthian by letting it access federal financial aid dollars while it was being investigated by the US government, according to a letter obtained by Bloomberg.
Corinthian must now navigate bankruptcy. The filing shows that it has totals assets of $US19.2 million and total debts of $US143.1 million.
We reached out to Corinthian for comment and will update this post if we hear back.
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