June 7, 2019
Documents obtained by CREW appear to show that Secretary of Education Betsy DeVos did not take steps to recuse herself from any matters that could impact her financial interest in a controversial brain performance company that has programs targeted at children, despite being required to do so. Although the company, Neurocore, does not seem to be currently taking advantage of any Department of Education programs, Secretary DeVos still should have issued a recusal statement to warn employees to keep her separated from any matters involving the company.
Neurocore operates brain performance centers that offer treatment for children and adults with anxiety, depression, and attention-deficit hyperactivity disorder (ADHD). The company uses unproven “brain training” techniques to address these conditions without the use of medication.
At the time she was appointed, Secretary DeVos and her spouse valued their investment in Neurocore as between $5,000,001 and $25,000,000. Since then, the DeVoses have increased their investment in the company by up to $10.5 million, and financial disclosure documents filed this month suggest that her ties to the company are deepening.
Secretary DeVos’ stake in Neurocore presents potential conflicts of interest that stem largely from the possibility that the company could begin to partner with schools, as other similar companies have, and then benefit from programs that she can influence.
One way Neurocore could benefit is through the Department of Education’s reviews of state accountability plans submitted under the Every Student Succeeds Act in which “states and districts…provide evidence to support their approaches to school intervention and turnaround.”
In this context, the types of evidence that are sufficient for companies to show effectiveness is an important question, and Neurocore’s claims about its own effectiveness have been disputed. The company has been been called out by the National Advertising Review Board (NARB) for misleading claims about its success in helping its clients address ADHD and autism without medication. Education Week also questioned the scientific evidence behind Neurocore’s claims, citing the American Academy of Pediatrics’ clinical guidelines and consulting three leading experts. If the Department of Education were to accept state accountability plans that relied on interventions for children with conditions such as ADHD and autism that lacked a sufficient scientific basis, it could possibly open the door for Neurocore and companies like it to work with schools in the future.
Neurocore said in 2017 that it did not have plans to establish partnerships with schools, but similar companies that market “brain training” services have done so, and according to the New York Times, Neurocore has “expressed hope that it could expand and help improve performance for students in schools.”
Because of the apparent potential conflict of interest, and consistent with federal conflict of interest laws, Secretary DeVos expressly committed in her ethics agreement to recuse from participation in particular matters that could directly and predictably affect her financial interest in Neurocore, as well as several other entities in which she retained a financial interest.
For a Senate-confirmed, presidential appointee like Secretary DeVos, an ethics agreement is an important part of the ethics review and confirmation process since it establishes “clear expectations” regarding the appointee’s obligation to avoid conflicts of interest, and identifies the “steps the official will take to remain conflict-free, including recusal, resignation and divestiture.”
For this reason, ethics laws and implementing regulations require that any presidentially-appointed, Senate-confirmed official write a statement identifying the subject and process for any recusal mentioned in his or her ethics agreement and to submit evidence of compliance within three months of Senate confirmation. Consistent with OGE guidance, Secretary DeVos should have provided the Department of Education’s Designated Agency Ethics Official (DAEO) a memorandum establishing the screening process she uses to identify and recuse from matters that would affect her financial interests in Neurocore.
Based on responses to FOIA requests CREW filed, neither the Office of Government Ethics (OGE) nor Department of Education appears to have any record of Secretary DeVos’ screening arrangement for matters involving Neurocore or any of the financial interests she has retained, despite recusal obligations in her ethics agreement that she would not participate in any particular matters, which include program and policy matters, that would affect Neurocore’s financial interests.
The only record either agency apparently has regarding Secretary DeVos’ compliance with her ethics agreement is a brief email that Secretary DeVos sent to the Department of Education’s DAEO that attests that she complied with her ethics agreement and divested her interests in certain entities, but does not mention her recusal obligations with regard to Neurocore or the other financial holdings she retained. In the absence of the screening arrangement, it is unclear how agency staff monitors and effectuates Secretary DeVos’ recusal obligation for Neurocore.
While it is possible that the Department of Education’s DAEO subsequently determined that Neurocore does not pose a present conflict of interest, and therefore deemed a recusal statement unnecessary, such a determination seems imprudent and inappropriate under the circumstances. Neurocore is listed in Secretary DeVos’ ethics agreement as an asset for which she agreed to implement a recusal, similar companies that market “brain training” services have partnered with schools, and significantly, nothing prevents Neurocore, now or in the future, from seeking similar partnership arrangements. If Neurocore were to engage in these types of school partnerships, her continued investment in Neurocore would give rise to additional ethics issues, including the appearance that Secretary DeVos endorses the services of Neurocore over companies that provide similar “brain training” services to children and teens with ADHD and similar disorders.
CREW recently obtained Secretary DeVos’ public financial disclosure (PFD) covering 2018, which confirms that she has retained her up to $25 million investment in the company for another year. One difference in Secretary DeVos’ latest PFD suggests her financial ties to the company are deepening. The amount of money that Neurocore owes her through her family partnership, a loan that first appeared in her PFD covering 2017, has increased from between $1,000,001 and $5,000,000 to between $5,000,001 and $25,000,000.
Secretary DeVos’ financial interest in a company that appears to target children and teens with certain neurological disorders, and her role in overseeing accountability plans that aim to help the same group of children, creates a potential conflict of interest. It’s disturbing that she has not taken the steps required to address it.