Not unlike President Trump, Betsy DeVos started her tenure as Secretary of Education with a significant unresolved conflict of interest. She also received an inadequate and objectionable confirmation process which seemed designed to shield her from questions about her knowledge, qualifications, and potential conflicts of interest.
In her public financial disclosure report and ethics agreement, Secretary DeVos reported assets valued at between $583 million and $1.5 billion, and she committed to divest 102 holdings and resign from approximately 20 outside positions.[i] She continues to have a potential conflict of interest, however, from a controversial investment in Neurocore, a brain performance center company in which she and her husband are the chief investors and that she valued at between $5 million and $25 million.[ii] In addition to her investment in the company, Neurocore is listed with its logo and a link on the website of the DeVos-owned investment management company, Windquest Group. The investment and links raise significant ethical concerns.[iii]
Neurocore claims to have worked with 10,000 children and adults to overcome problems with attention deficit disorder (ADHD), autism, sleeplessness, and stress.[iv] It claims remarkable success rates of 91 percent for patients with depression, 90 percent for patients with attention deficit disorder, and 90 percent for patients with anxiety.[v] Experts consulted by Education Week, however, asserted that current scientific evidence based on American Academy of Pediatrics clinical guidelines does not support the claims made by Neurocore that its technology can “fix” problems such as ADHD or has “proven and long-lasting” positive effects on children with autism.[vi]
In general, allowing the Secretary of Education to hold a significant financial interest in a program targeted at children may result in a conflict of interest.[vii] Secretary DeVos’s continued investment also may produce a more specific conflict of interest as a result of her department’s role in analyzing state and local school improvement plans. Under the Every Student Succeeds Act, the Department of Education reviews accountability plans submitted by the states.[viii] The “question of what kind of evidence companies [such as Neurocore] can use to justify claims of effectiveness will continue to grow in importance” since the law “requires states and districts to provide evidence to support their approaches to school intervention and turnaround.”[ix]
Secretary DeVos also may be improperly endorsing Neurocore. Taken together, the significant backing of the company by Secretary DeVos and her husband, the continued promotion of Neurocore on the DeVos-owned investment company website, the population targeted by the company (e.g., parents of children with ADHD), and the lack of scientific evidence to support the company’s claims, may constitute an improper endorsement in violation of the standards of ethical conduct.[x]
Past administrations likely would have required an incoming Secretary of Education to divest his or her interest in a company like Neurocore.[xi] They would not have considered the recusal required under Secretary DeVos’s ethics agreement sufficient to address the apparent endorsement issues arising from her and her husband’s continued investment in Neurocore.[xii] The Trump administration instead took the opposite approach.
Issues involving Secretary DeVos’s nomination could not be adequately addressed during her confirmation hearing due to the unusual and flawed process the Senate followed. The hearing itself was characterized as a “remarkable affair” because Secretary DeVos seemed “unable to answer basic questions” and because of her “rather startling statements.”[xiii] From an ethics perspective, she made troubling claims that “strain credulity”[xiv] when she denied she had a role with the Edgar and Elsa Prince Foundation, a nonprofit founded by her mother that made controversial donations worth more than $10 million to organizations that supported anti-women and anti-LBGT causes.[xv] Incredibly, after having been listed as the foundation’s vice president for 13 years on its tax forms, she took no responsibility for her role as an officer and attributed the listing to a “clerical error.”[xvi]
Secretary DeVos’s nomination also highlights the challenges and delays faced by the Office of Government Ethics (OGE) in reviewing and addressing conflicts arising from a complex financial portfolio and meeting a compressed hearing schedule.[xvii] In a letter dated January 9, 2017,[xviii] OGE Director Walter Shaub, Jr. noted, in an apparent reference to Secretary DeVos, that some nominees find it “difficult to untangle their complex financial investments and employment arrangements quickly, especially if they wish to do so without incurring otherwise avoidable financial losses.”[xix] In light of these concerns, the ethics reviews process can “take weeks and, in the case of extremely wealthy individuals, sometimes months.”[xx] Following receipt of Director Shaub’s letter, Secretary DeVos’s hearing date was postponed a week in the hope that additional time would allow her to complete the OGE paperwork.[xxi] Despite the delay, Secretary DeVos’s ethics paperwork was not completed until two days after her January 17 hearing.[xxii] As a result, members of the Senate Health, Education, Labor and Pensions Committee considering her nomination had no opportunity to review her 108-page public financial disclosure report and ethics agreement before the hearing, and therefore had no basis to adequately question her about potential conflicts of interest during the hearing itself. This concern was further compounded by the compressed hearing schedule in which questioning was limited to one round, with each member allotted only five minutes to question the witness.[xxiii] Since Secretary DeVos’s confirmation vote had been initially scheduled for January 24, committee members were permitted to follow up with written questions, resulting in more than 800 questions being delivered to Secretary DeVos for response.[xxiv]
The committee vote on Secretary DeVos’s nomination was postponed a week to give members additional time to review her ethics paperwork.[xxv] Her nomination was voted out of Committee on January 31, and she was confirmed as Secretary of Education a week later, on February 7.[xxvi] While she survived confirmation, Secretary DeVos emerged with historically-weak support for a Secretary of Education. She received no Democratic votes and was opposed by two Republican Senators, Lisa Murkowski of Alaska and Susan Collins of Maine.[xxvii] Her lack of support set up a 50-50 tie for a Secretary of Education nominee that was broken by the vote of Vice President Mike Pence.[xxviii]
[i] Letter from Elizabeth Prince DeVos to Marcella Goodridge-Keiller, Designated Agency Ethics Official, U.S. Department of Education (“Ethics Agreement”), Jan. 19, 2017, available at https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/E2461CB47CF5A473852580C1002C7A3B/$FILE/DeVos,%20Elisabeth%20P.%20%20finalAMENDEDEA.pdf; Betsy DeVos, Public Financial Disclosure Report, Jan.19, 2017, available at https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/E554507378A61BDF852580AE002C70E1/$FILE/DeVos,%20Elisabeth%20P.%20%20final278.pdf. See also Matthew Goldstein, Steve Eder, and Sheri Fink, Betsy DeVos Won’t Shed Stake in Biofeedback Company, Filings Show, New York Times, Jan. 20, 2017, available at https://www.nytimes.com/2017/01/20/business/dealbook/betsy-devos-neurocore.html.
[ii] Goldstein, Eder and Fink, New York Times, Jan. 20, 2017; Sheri Fink, Steve Eder, and Matthew Goldstein, Betsy DeVos Invests in a Therapy Under Scrutiny, New York Times, Jan. 30, 2017, available at https://www.nytimes.com/2017/01/30/us/politics/betsy-devos-neurocore-brain-centers.html.
[iii] Norman Eisen and Richard Painter, The Ethics Case Against Betsy DeVos, The Hill, Feb. 6, 2017, available at http://thehill.com/blogs/pundits-blog/the-administration/317975-the-ethics-case-against-betsy-devos.
[iv] Goldstein, Eder, and Fink, New York Times, Jan. 20, 2017.
[vi] Benjamin Herold, DeVos-Backed Company Questioned on ADHD, Autism, Education Week, Feb. 7, 2017, available at http://www.edweek.org/ew/articles/2017/02/08/devos-backed-company-questioned-on-adhd-autism.html. (Ken Koedinger, a professor of psychology and human-computer interaction at Carnegie Mellon University in Pittsburgh, in an interview with Education Week, stated that “it’s worrisome that the country’s new education secretary nominee would remain closely tied to a company that has apparently made exaggerated and misleading claims about its service.”)
[vii] Eisen and Painter, The Hill, Feb. 6, 2017 (Allowing the Secretary of Education to continue to hold an investment in “a science and research brain-based program” that produces “life-changing results” targeted to children is “a departure from precedent and common sense.”).
[viii] Every Student Succeeds Act, 20 U.S.C. § 6301, et seq.; Herold, Education Week, Feb. 7, 2017.
[x] 5 C.F.R. § 2635.702.
[xi] Eisen and Painter, The Hill, Feb. 6, 2017.
[xii] Under 18 U.S.C. § 208, Secretary DeVos is required to recuse from participating in any particular matter that would have a direct and predictable effect on Neurocore.
[xiii] Valerie Strauss, From Start to Finish, the DeVos Education Confirmation Hearing was Rather Remarkable, Washington Post, Jan. 19, 2017, available at https://www.washingtonpost.com/news/answer-sheet/wp/2017/01/19/from-start-to-finish-the-devos-education-confirmation-hearing-was-rather-remarkable/?utm_term=.a91257430554.
[xiv] Eisen and Painter, The Hill, Feb. 6, 2017.
[xv] Danielle Douglas-Gabriel, Betsy DeVos’s 13-Year ‘Clerical Error’, Washington Post, Jan. 18, 2017, available at https://www.washingtonpost.com/news/grade-point/wp/2017/01/18/betsy-devoss-13-year-clerical-error/?tid=a_inl&utm_term=.b6defba17123.
[xvii] Goldstein, Eder, and Fink, New York Times, Jan. 20, 2017.
[xviii] Letter from Walter M. Shaub, Jr., Director, Office of Government Ethics to Sen. Patty Murray, Senate Committee on Health, Education, Labor and Pensions, Jan. 9, 2017, available at .https://www.scribd.com/document/336195301/OGE-Response-to-Letter-From-Ranking-Member-Patty-Murray#from_embed.
[xx] Id.; Emma Brown, Ethics Office Director Says Proper Vetting of Ultrawealthy Cabinet Nominees Can Take Weeks, Months, Washington Post, Jan. 10, 2017, available at https://www.washingtonpost.com/news/education/wp/2017/01/10/ethics-office-director-says-proper-vetting-of-ultrawealthy-cabinet-nominees-can-take-weeks-sometimes-months/?utm_term=.be4103caf5d4.
[xxi] Emily Wilkins, DeVos Hearing Postponed Until Next Week, Roll Call, Jan. 10, 2017, available at http://www.rollcall.com/news/politics/devos-hearing-delayed.
[xxii] Ethics Agreement and Public Financial Disclosure Report.
[xxiii] Emily Wilkins, Senate Democrats Want More Time to Question Trump’s Education Nominee, Roll Call, Jan. 13, 2017, available at http://www.rollcall.com/news/policy/senate-democrats-want-time-question-trumps-education-nominee.
[xxiv] Valerie Strauss, Here are Betsy’s DeVos’s Answers to 139+ Questions from Democratic Sen. Murray, Washington Post, Jan. 30, 2017, available at https://www.washingtonpost.com/news/answer-sheet/wp/2017/01/30/here-are-betsys-devoss-answers-to-139-questions-from-democratic-sen-murray/?utm_term=.b206859e3186.
[xxv] Brian McVicar, Betsy DeVos Committee Vote Postponed to Give Senators More Time to Review Ethics Report, MLive, Jan. 22, 2017, available at http://www.mlive.com/news/index.ssf/2017/01/betsy_devos_committee_vote_pos.html.
[xxvi] Emma Brown, With Historic Tiebreaker from Pence, DeVos Confirmed as Education Secretary, Washington Post, Feb. 7, 2017, available at https://www.washingtonpost.com/local/education/senate-to-vote-today-on-confirmation-of-betsy-devos/2017/02/06/fd4b7e9c-ec85-11e6-9662-6eedf1627882_story.html?utm_term=.e75d124bf034.