Duncan Asked to Investigate Education Dept.'s Ties to Short Sellers

A watchdog group whose executive director has accepted a job with a firm that lobbies on behalf of for-profit colleges is asking Secretary of Education Arne Duncan to investigate the role that short sellers—investors who bet against for-profit colleges’ stock—are said to have played in crafting the Education Department’s proposed “gainful employment” rule. In a letter sent today, the watchdog group, Citizens for Responsibility and Ethics in Washington, says documents it obtained from the department “reveal the extraordinary degree to which Education has been captivated by outside groups in the development of its regulations.” The group filed a Freedom of Information Act request seeking the documents last spring, after one short seller, Steven Eisman, testified before the Senate education committee, and recently sued the department after a delay in releasing them.