Sunday, December 18, 2005

In New York, the Governor's Race Offers a Parable on Integrity and Leadership

New York State Attorney General Eliot Spitzer, the expected Democratic nominee, has been in the forefront of efforts to root out corporate corruption and mismanagement.
Former Massachusetts governor William Weld, the leading GOP candidate, is being dogged by a scandal at Decker College, where he was CEO. As the New York Times reports, Decker has lost its accreditation, been barred from accessing federal student loans and is now in bankruptcy:
The college spun into crisis after the federal Department of Education restricted its access to student loan funds in June. The department went further and terminated Decker's participation in federal programs on Sept. 30.
In October, the school was raided by 40 federal agents conducting a fraud investigation, and last month it collapsed into bankruptcy, leaving 3,700 students burdened with debts, some as high as $30,000. This week the Education Department said students could apply to have their loans forgiven.
Weld's explanation for this collapse?
Mr. Weld blames the federal government and a regional accreditation council for Decker's fall, and continues to praise the college's programs.
As for the litany of horror stories including a boiler room recruiting operation, illiterate students, students without computers enrolled in Internet classes and falsified attendance records, Weld offered the classic defense of embattled CEOs: He didn't know anything was wrong, despite having signed non-disclosure agreements with departing managers who tried to bring the school's problems to his attention.

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