August 16, 2017

Warren Asks DeVos for Information to Determine if Senior Counselor Eitel Broke the Law

While Employed by Bridgepoint and the Department of Education, Eitel May Have Violated Criminal Conflict-of-Interest Statute if He Worked on Borrower Defense Rule

Text of the letter (PDF)

Washington D.C. - United States Senator Elizabeth Warren (D-Mass.) wrote to Secretary of Education Betsy DeVos seeking information to determine whether or not Robert Eitel, a Senior Counselor to the Secretary of Education, may have violated federal conflict-of-interest law by working on the Education Department's Borrower Defense to Repayment rule while simultaneously employed by the Department and by Bridgepoint Education, Inc.

From February to April 2017, Eitel served both as the Vice President of Regulatory Legal Services at Bridgepoint, a company that owns several for-profit colleges, and as a Special Assistant to Secretary DeVos before being appointed Senior Counselor to the Secretary. During his tenure, the Department has delayed the implementation of regulations designed to protect students from fraudulent or poorly performing colleges, including the borrower defense regulations. In March 2017 federal filings, while Eitel was still employed by both Bridgepoint and the Department, the company stated that the borrower defense regulations "could damage our reputation in the industry and have a material adverse effect on enrollments and our revenues."

When Eitel was still an employee at Bridgepoint, federal financial conflict-of-interest law 18 U.S.C. § 208 prohibited Eitel's involvement in any "particular matter" in which a current employer had a financial interest. But correspondence from the Department stated that Eitel was "not subject to disqualification under... the conflict of interest statute in regard to review of and any possible changes to the borrower defense regulations," despite his then-current employer's opposition to the rule.

"I have repeatedly sought information from the Department on the nature of Eitel's involvement with the borrower defense regulation and the timeline of his involvement, but you have so far failed to provide me with this information," wrote Senator Warren. "If Eitel provided any written or verbal advice to the Secretary of Education and Department or Administration Staff on any aspect of the borrower defense rule-a ‘particular matter' that affects the financial interest of Bridgepoint-between February 13, 2017, and April 5, 2017, including on implementation, delay, or rulemaking while employed both at the Department and at Bridgepoint, and did so without receiving any relevant waiver, then it appears that Eitel may have violated the criminal conflict-of-interest statute 18 U.S.C. § 208."

Senator Warren asked Secretary DeVos to clarify a number of points regarding Eitel's role in the Department's decision making on the borrower defense and gainful employment regulations while he was also employed by Bridgepoint, including whether he recused himself from the process or received any waivers that would have exempted him from recusal.

The letter follows a series of prior inquiries to Secretary DeVos questioning Eitel's role and possible conflicts of interest. Throughout this correspondence, the Department has never provided a description of the policy matters Eitel has worked on during his time at the Department, nor has it ever clarified the nature of Eitel's involvement with the borrower defense regulation or the timeline of his involvement.

A PDF copy of the letter is available here.

A PDF copy of the June 21 response letter from the Department of Education regarding Eitel is available here.

Follow the ways Senator Warren is holding Secretary DeVos accountable by visiting DeVos Watch.