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College Watchdog Hosts Training Session On Avoiding Government Lawsuits

"Lawyers for the attorneys general have no idea about your industry," college administrators were told at the annual conference of a controversial industry watchdog.

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A college watchdog whose lax oversight has outraged a number of state attorneys general hosted a conference session this month where college administrators learned how to evade attorney general lawsuits.

"The lawyers for the attorneys general have no idea about your industry," a lawyer participating in the session told a crowd of college administrators gathered in Fort Worth for accreditor's annual conference, according to session notes viewed by BuzzFeed News. "The judges know nothing. Oftentimes, they know less than nothing."

The Accrediting Council for Independent Colleges and Schools invited two lawyers for a troubled for-profit university, Daymar College, to give the presentation. Last year Daymar reached a $12.4 million settlement with the Kentucky attorney general — one of the largest settlements between a state and a for-profit college — over allegations of misrepresentations, admitting unqualified students, denying financial aid to students, and hiring unqualified faculty.

ACICS — a private organization recognized by the federal government to provide its stamp of approval to colleges — is facing a serious potential threat later this summer, when the Education Department will decide whether to renew its federal recognition. Its critics, including a group of twelve state attorneys general, have called on it to be cut off in light of "spectacular failures" to oversee for-profit colleges.

On Friday, Sen. Richard Blumenthal called for the federal government and crack down on failing college accreditors, saying "immediate action" is required to "protect the integrity of higher education in America." His comments came in response to a BuzzFeed News investigation that showed serious and systemic problems at a California college accredited by ACICS.

In the past two months, ahead of its renewal hearing, ACICS has tried to clean up its act: its director, Albert Gray, resigned, and it issued limited sanctions against a major for-profit college, ITT Technical Institute. It used its annual conference, in part, to adopt some stricter rules for vetting colleges.

But the session about attorneys general struck a different tone.

On stage, the two lawyers described state attorneys general as being 9-to-5 workers who were "into declaring victory and moving onto the next thing," focusing only on proclaiming a large dollar amount for a settlement.

They advised colleges to minimize state-mandated oversight of their schools by limiting what outside compliance monitors, appointed by attorneys general, can look at. Compliance monitors "aren't bad if they don't have the power to look at much," said one lawyer, Kenyon Meyer, adding that compliance monitors were often "buddies" of the attorneys general.

In a statement, ACICS executive Anthony Bieda said the session, titled “Strategies to Defend and/or Resolve Attorney General and Class Action Litigation,” was one of many educational sessions at the conference. "ACICS’ member institutions confront many issues and our conference provides an opportunity for a diverse group of presenters to share their experiences and insights," Bieda said.

Meyer told BuzzFeed News that the focus of the session "was the issues that for-profit colleges in the industry have with attorneys general," not ACICS' own challenges with the state regulators.

The session told members to use an ACICS stamp of approval to persuade judges of a school's legitimacy in the face of attorney generals' claims of wrongdoing. ACICS provided accreditation to campuses owned by Corinthian Colleges, which was ordered to pay $550 million to the Consumer Financial Protection Bureau for predatory practices, until day the for-profit school collapsed.

The attorneys also advised members on how to kill class action lawsuits filed by students by sending students to arbitration, a controversial practice that limits students' rights to band together against an institution or use the discovery process, and prevents them from going in front of a jury.

"The first thing I try to do is get a case sent to arbitration," Meyer said. Daymar College, he said, had tried four arbitrations — and won all of them.

The session also had advice for institutions that had accepted settlements with attorneys general in the wake of alleged wrongdoing. It's "a great time for a new branding campaign," another presenter said. "You need a new narrative for the organization."

UPDATE

This story has been updated with a statement from ACICS.

Molly Hensley-Clancy is a business reporter for BuzzFeed News and is based in New York. She covers the intersection of business and education.

Contact Molly Hensley-Clancy at molly.hensley-clancy@buzzfeed.com.

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