Romanoff fires ‘Westwood bullet’ at Bennet, but record suggests it’s a dud

By Ernest Luning
THE COLORADO STATESMAN

Former state House Speaker Andrew Romanoff came out swinging April 23 at the second Democratic Senate primary debate with U.S. Sen. Michael Bennet at Colorado College in Colorado Springs.

“You complain about special interests and backroom deals,” Romanoff said to Bennet in his opening remarks, “but when push comes to shove, you don’t push, and you don’t shove.”

Throughout the hour-long debate, Romanoff hammered away at his primary campaign theme, that “corporate cash” and PAC contributions have corrupted a political system “that sells Senate seats to the highest bidder.” The same influences have encouraged Bennet to pull his punches when it comes to critical legislation, Romanoff said.

U.S. Sen. Michael Bennet, right, speaks during the Colorado Senate Democratic primary debate while his challenger, former Colorado House Speaker Andrew Romanoff, left, listens April 23 at Colorado College in Colorado Springs. Debate moderator Eric Singer, center, is a news anchor for NEWSCHANNEL 13, one of the debate’s sponsors.
Photo by Ernest Luning/The Colorado Statesman

“I resent the fact that my integrity is being impugned,” Bennet said, “but I believe at the end of the day, Coloradans will see through this, and I will stand on my record and stand by my votes.”

Romanoff launched his primary challenge against Bennet in September, nine months after the Denver Public Schools superintendent was appointed by Gov. Bill Ritter to fill the term of Ken Salazar, who gave up the seat to head the Department of Interior. Republicans seeking the nomination include former Lieutenant Gov. Jane Norton, Weld County District Attorney Ken Buck and former state Sen. Tom Wiens. The primary election is August 10.

The two Democrats clashed on a few issues — Romanoff said he supports a carbon tax on energy use, while Bennet said he’s willing to consider other approaches, including cap-and-trade — but were in accord on most questions, including agreement that gays and lesbians should be able to serve openly in the military and to marry, that trade policy with China needs fixing, and that nuclear power might not be the cure-all some think.

“Whatever policy distinctions we have are vanishingly small compared with the people that are running for this seat in the other party,” Bennet said, echoing a theme he stressed at the candidates’ first debate two months ago in Denver.

Romanoff saved his most pointed attack for the debate’s last few minutes. During the final exchange of the night, Romanoff questioned whether a campaign contribution from a private, for-profit college had influenced Bennet’s actions on a Senate committee last month when, Romanoff charged, Bennet “did nothing” to protect students from being harmed by “predatory loans.”

Romanoff’s shot raised eyebrows at the debate — it’s his most specific charge yet that Bennet’s campaign contributions are weighing him down — but under closer scrutiny, it appears Bennet did the opposite of what Romanoff charged.

Bennet brushed aside Romanoff’s accusation and instead listed steps Congress has taken to move student borrowing away from private lenders. He added that he’s working with federal officials to steer public money away from “fly-by-night operations.”

Denver-based Westwood College — singled out by Romanoff as the purveyor of predatory loans and influence peddler to the senator — denounced Romanoff’s attack on the school and invited the candidate to visit the school’s campuses to “speak to our students and see how we are committed to teaching our diverse student population the skills needed to succeed in the changing workforce.” Romanoff, a Westwood official pointed out, didn’t need directions to the school because he’s given the commencement address at its main campus twice in the last two years.

“We understand that political campaigns can get aggressive,” said Westwood spokeswoman Kristina Yarrington “In this case, however, we feel it necessary to defend our 40,000 graduates and 20,000 students who are working hard to be a part of the American workforce.”

Westwood College, founded in Denver in 1953, has 17 campuses in Colorado and five other states, as well as an online college that enrolls 5,000 students. The company employs more than 1,400 Colorado residents and had a $50 million in-state payroll in 2008. It’s added 400 new Colorado employees in the last year, a company spokesman said.

Here’s how Romanoff unveiled his attack — amplified later by his campaign — how Bennet responded, and how the charges stack up:

“Michael,” Romanoff began when given the opportunity to ask his opponent a question, “you know, proprietary colleges are gouging students with predatory loans. One of those colleges, Westwood, is even facing, now, two class-action lawsuits for fraud. Your committee, the Senate Banking Committee, had a chance to protect students from that kind of financial abuse, and you did nothing. You did take $2,400 from Westwood College three days before that bill came to a committee. My question is, is that just the way Washington works?”

“I don’t know,” Bennet responded. “I’ll tell you one thing, the only time I’m reminded of Washington is when you and I are debating.”

Bennet continued: “We just voted to take the business of doing loans away from private lenders who were not adding any value to our kids, and give it to the Department of Education, so that 65 billion more dollars are going to Pell Grants instead of being sucked up by the private (loan industry). I had a conversation with the secretary of education this week about the work they’re doing to distinguish between private universities that are doing a good job for our kids and these fly-by-night operations that are doing a terrible job. I would expect to be a very strong advocate for making sure people who are doing a terrible job stop getting public money to do that.”

Less than an hour after the debate ended, the Romanoff campaign sent an e-mail fleshing out its attack. Titled “Bennet dodges Westwood bullet,” the release went on to charge: “Sen. Bennet continued to dodge questions and duck responsibility tonight. He refused to explain his decision to accept a contribution from Westwood College on March 19 — three days before his committee failed to protect students from Westwood’s predatory lending practices.”

But the legislative record tells a different story.

Former Colorado House Speaker Andrew Romanoff, center, talks with reporters after the debate.
Photo by Ernest Luning/The Colorado Statesman

The Romanoff campaign also muddled the timeline in an attempt to link Westwood’s contribution with what Bennet did or didn’t do on the Senate Banking Committee.

And Romanoff’s condemnation of Westwood College came as a surprise to the school, where Romanoff delivered the commencement address to graduating classes on two separate occasions during his last year in the Legislature.

“It’s unfortunate that when Speaker Romanoff had the opportunity to address issues that matter to Coloradans, he chose to launch a false attack,” said Bennet campaign spokesman Trevor Kincaid. “These types of political ploys, which have become a theme for Speaker Romanoff’s campaign, are the same type of Washington style political games that held up health care reform and are now slowing real Wall Street reform.”

Romanoff tied Bennet’s “inaction” in the Senate to a vote taken in a House committee last October, when Rep. Maxine Waters, a California Democrat, proposed an amendment to financial reform legislation aimed at bringing loans made by schools like Westwood under the regulatory wing of a new Consumer Financial Protection Agency.

Waters explained at the time why she thought it necessary to close a loophole in the House legislation that would exempt so-called “gap loans” — offered by private, for-profit colleges like Westwood to cover expenses beyond whatever traditional educational loans students qualify for — from oversight by the new agency. The amendment failed on a 33-35 committee vote.

Next, according to the Romanoff campaign’s “Westwood bullet” release, the Bennet campaign “[r]eceived a contribution from Westwood College on 3/19/10 for $2,400,” followed by the Banking Committee’s consideration of its consumer protection bill three days later, where “Sen. Bennet had the opportunity to stop these predatory lending practices but did nothing.”

Sound like a damning sequence of events? Except that’s not exactly how it happened.

According to congressional records, rather than “[do] nothing,” Bennet voted to bring “gap loans” — and most other consumer loans, for that matter — under the authority of a newly created Consumer Financial Protection Board, charged with regulating any loan “offered or provided for use by consumers primarily for personal, family, or household purposes.” In other words, Bennet voted for the legislation Romanoff said he failed to introduce.

In addition, the Senate bill Bennet voted for in March was an entirely different bill than the one Waters unsuccessfully tried to amend in October. Where the House bill included extensive loopholes that allowed educational “gap loans” to escape rigorous oversight, the Senate bill didn’t. The Senate’s bill — in the headlines this week as Republicans eventually agreed to allow it to come up for debate after voting to filibuster it three days in a row — establishes more sweeping powers for its Consumer Financial Protection Board than the House does in its version, which would create a stand-alone agency.

U.S. Sen. Michael Bennet talks with reporters after the debate at Colorado College.
Photo by Ernest Luning/The Colorado Statesman

Reached by The Colorado Statesman after the debate, Romanoff spokesman Roy Teicher adjusted the campaign’s charges somewhat. “Considering the performance of regulatory agencies in the past, who knows what effect this will have,” Teicher said.

The Senate bill still falls short, Teicher said, reiterating the argument Bennet hadn’t done enough to protect students. “The question is, in the sphere of consumer loans, which these colleges classify these loans as, what is proposed in the Senate bill that will force colleges like Westwood to adhere to the same disclosure requirements as education loans? That’s the core issue there,” Teicher said.

Disclosure rules won’t be the same as those required for federally guaranteed student loans, to be sure, but the Waters amendment wouldn’t have accomplished that either.

But something else happened between the October vote in the House committee and Bennet’s vote in March — another federal law went into effect to tighten restrictions on loans like those offered by Westwood. In February, private student loans became subject to the federal Truth in Lending Act, which establishes strict reporting and disclosure requirements on the loans. In addition, federal student loan reform was signed into law as part of the health care reform bill Congress passed in March. While the effects won’t be immediate, students taking out loans starting in a few years will have more lenient repayment requirements and could see loans forgiven sooner than under current rules.

But what about Westwood’s $2,400 campaign contribution?

A spokeswoman for Westwood College roundly rejected Romanoff’s charge that the donation to Bennet was an attempt to sway the senator’s position. On top of that, Bennet’s vote was the opposite of what Westwood would have wanted anyway.

“Westwood College’s employee PAC did indeed give a donation to Bennet’s campaign,” Yarrington told The Statesman, “and did so as is its right to freely participate in the American political process, and without any expectation that it would curry favor for our schools.

“Neither Westwood nor its PAC has spoken to Bennet about the bill mentioned in the Romanoff release,” Yarrington continued, “and if we had, we would have supported the bill being killed.”

As PACs go, Westwood College’s is rather modest. Assembled from contributions totaling just over $10,000 from five directors and officers of the company, the fund has paid out $3,900 this year, including the $2,400 contribution to Bennet and a $1,500 check to Rep. George Miller, a California Democrat, written two weeks before the Bennet contribution.

FEC records don’t show any donations to Bennet from the Westwood officers and directors who chipped in to fund the school’s PAC. The college and its corporate parent, Alta Colleges, have contributed $250 in each of the last five years to the Colorado Private School Association Political Committee, state records show.

But isn’t there something fishy about Bennet’s campaign receiving a hefty donation just days before he votes on the financial reform bill? Hard to say, since that isn’t what happened.

While it’s true the check from Westwood’s PAC was dated March 19, Bennet staffers say it didn’t find its way to Bennet campaign headquarters until a week later — four days after the committee vote the Romanoff campaign charged it hoped to influence — and FEC records show the Bennet campaign didn’t actually process the donation until three days after that, on March 29, a full week after the Senate Banking Committee approved the financial reform bill.

The donation from Westwood hardly stands out among the $71,975 in contributions processed that day by the Bennet campaign. Of 49 itemized contributions deposited on March 29 — a Monday just days before the deadline to post 1st Quarter contributions — the $2,400 Westwood check was just one of seven checks for roughly the same amount (including two checks for $2,500).

That same day, the Bennet campaign also deposited $1,000 from the League of Conservation Voters PAC and $1,000 from the International Brotherhood of Electrical Workers Committee on Public Education fund, along with a dozen other checks from PACs in amounts ranging from $1,000 to $5,000.

Romanoff’s fundraising trails Bennet’s by a substantial margin. Through March, the incumbent reported taking in more than $6 million, including roughly a quarter of that from PACs and other committees. Romanoff, who has sworn off PAC contributions, has raised just over $1 million for his campaign.

Teicher had harsh words for Westwood College and the entire for-profit college sector when asked by The Statesman why Romanoff had singled out the institution.

“It’s a shady industry, but I’m sure some schools are more reputable than others,” Teicher said after blasting “Westwood’s practices” and cautioning that “one has to recognize the amount of pure bad will on display here.”

Westwood has its share of controversy and detractors. The company settled a 2005 federal False Claims Act lawsuit a year ago, agreeing to pay the federal government $7 million. Westwood’s CEO told faculty the school acted within the law but settled to avoid protracted legal costs. The lawsuit alleged the company’s Texas colleges fraudulently obtained a state license — and access to federal student loans for those students — by misstating job placement statistics.

A class action lawsuit filed in Denver alleges the schools deceive students about the cost of a degree and what it’s worth after graduation. Last fall, following an investigation by CBS4 reporter Rick Sallinger, the school cut the interest rate it charges on “gap loans” nearly in half.

The school defended its practices in a statement to The Statesman. “Westwood College makes every effort to be completely open with our potential and current students,” Yarrington said. “This includes numerous layers of transparency — from our in-person discussions, to our Web site, to our catalogues to our forms the students sign. We want to be sure that when a student steps in the classroom, they know exactly what they are getting by attending Westwood. This covers cost, quality of education, job prospects, and possible transfer of credits. These transparences are readily available for Mr. Romanoff and his campaign staff to review.”

Romanoff is no stranger to Colorado colleges, including institutions that cater to students who don’t fit the traditional role of undergraduates attending college full-time right out of high school. Appointed last year as a scholar in residence at the University of Colorado Denver School of Public Affairs, Romanoff worked as a college instructor at the Community College of Aurora, Red Rocks Community College and Metropolitan State College of Denver during his years in the Legislature.

He’s no stranger to Westwood College, either. In fact, Romanoff gave the commencement address to Westwood graduates in May and again in December 2008, the college’s records show. What’s more, prominent Romanoff ally, State Treasurer Cary Kennedy, delivered the commencement address at Westwood’s Denver campus just four months ago.

“Andrew Romanoff has been the keynote speaker twice at Westwood College Denver campus graduations,” Yarrington said, “so he has seen first-hand how our institution of higher education helps our students change their lives.”

And despite Romanoff’s recent attack on the school, Westwood would be glad to have him return to speak to graduates.

“He would be invited back,” Yarrington added. “We typically like to get people who are doing well. He’s very much a self-starter and embodies things we would like to teach our Westwood students.”

Teicher said Wednesday he didn’t know whether Romanoff would accept Westwood’s invitation to visit or speak to graduates. “All I can do is pass along the invitation,” he said.

Ernest@coloradostatesman.com