Trump/Gillespie – Fool Me Once…

By Michael Dannenberg

There’s a spoken and unspoken education angle to long-time Republican operative and current nominee for Governor of Virginia Ed Gillespie’s warm and fuzzy biographical television campaign ads.

In his positive message, bio campaign ads, Gillespie talks about working his way through college with the help of taxpayer-subsidized student loans. (Ok, to be fair, he doesn’t mention the “taxpayer-subsidized” part.) Good for him.

After college, Gillespie got a job on Capitol Hill that he parlayed into a government relations career in which he lobbied on student loans, among other issues.

Here’s where things get interesting for us.

Look at Quinn-Gillespie’s Senate lobbying reports for 2005, 2006, and 2007. The firm received nearly three-quarters of a million dollars to lobby on behalf of student loan banks at a time Democrats were pushing to make college loans cheaper, including cutting borrower interest rates in half. Gillespie was registered as a lobbyist for those banks.

In other words, what Gillespie doesn’t tell Virginians is that after getting the help of student loans to put himself through college, his firm lobbied for the student loan industry as it fought to keep student loan interest rates high for everyone else.

Yuck. But there’s more, and it’s worse.

Gillespie also doesn’t tell Virginians that Quinn-Gillespie lobbied specifically for the Nelnet education loan corporation at a time it worked separately to keep some $278 million in illegally claimed student loan payments.

You see, in the early 2000s, Nelnet ran a reverse money-laundering scheme whereby it claimed capital it raised to make guaranteed against default, high interest rate federal student loans was entitled to an additional, heightened taxpayer subsidy on top.

I’m very familiar with Nelnet’s so-called “9.5 percent loan” scheme, because at the time I worked as the senior education counsel to Senator Edward M. Kennedy to whom a civil servant reported the improper billing. Kennedy blew the whistle even louder in the New York Times and beyond. I spent many a night and day working on the Nelnet scandal.

What Nelnet did back then is complicated, but basically the company said the capital it used to issue new student loans in the 2000’s came via tax-exempt bonds floated over a decade prior. That wasn’t true and everyone from U.S. Department of Education civil servant whistleblowers to industry watchdogs to independent government auditors, including the U.S. Department of Education’s Inspector General, agreed the billing was improper.

In fact, the Department of Education’s own Inspector General said that Nelnet should have to repay every penny of the wrongly claimed $278 million in taxpayer funds.

But Nelnet lobbied Bush administration political officials to let it keep the $278 million taxpayer subsidy money wrongly claimed (it was really more than that, but that’s all the IG accounted for in a finite window of time study), and the Bush folks agreed as long as Nelnet promised to stop the bilking going forward.

Guess who Nelnet’s highest profile lobbyist was when this sweeter than sweetheart deal was being cut? Ed Gillespie. He personally was listed on Nelnet’s Senate lobbying disclosure forms (see page two).

Now at the time, Gillespie was Chair of the Virginia Republican Party. He wasn’t just an ordinary private citizen. You would think he would’ve cared how much that near $300 million could have helped tens of thousands of Virginians struggling to pay for college, struggling with high interest rate student loans. Apparently, he didn’t. Either way, we’ve done him the service of translating that near $300 million into the impact on Virginia families.

The ill-gotten gains from the Nelnet student loan bank heist could’ve wiped out the student loan debt of every borrower at the University of Virginia, Virginia Commonwealth University, and Virginia Tech. Or it could’ve covered making Northern Virginia community college tuition free for everyone. Or it could’ve paid for any of these other college affordability goals listed below.