Today, CREW sent a letter to Sen. Tom Harkin (D-IA), Chairman of the Committee on Health, Education, Labor and Pensions (HELP), asking the committee to consider the financial motives of critics of the for-profit education industry.

In a July 9th report by ProPublica, Sharona Coutts details the connections between industry critics and financial investment firms who may be benefiting from greater scrutiny or regulation.

Melanie Sloan, CREW’s executive director, said today:

The evidence suggests individuals who stand to gain financially are making a concerted effort to drive down the stock price of for-profit schools. They are trying to manipulate the federal regulatory process for personal financial gain. While the for-profit education industry certainly merits congressional scrutiny, Congress must also examine the tactics and motives of the industry’s critics. Americans need to have confidence that legislative and regulatory processes are not being manipulated for private financial gain.

Previously CREW had written to Sen. Harkin criticizing the testimony of Steven Eisman, a well-known short seller, during June 24th Committee hearings on the industry.

Click here to read the full letter. 

Read the full press release here.

CREW today sent a letter to the Senate Committee on Health, Education, Labor and Pensions, calling for changes in rules and practices regarding witnesses brought in to offer testimony. CREW’s letter comes after the Committee heard the June 24th testimony of Steven Eisman – a portfolio manager of a hedge fund known to short-sale stocks in for-profit education companies.

Mr. Eisman has in the past offered public comments bashing the for-profit education industry – to his great financial benefit. For example, after a May 26, 2010 speech at the Ira Sohn Research Conference, the share values of the companies he criticized plummeted. Through short-sales in those companies, Mr. Eisman reaped huge profit.

CREW is calling on the Committee to put safeguards in place to ensure future witnesses cannot use their testimonies for their private financial gain.

Melanie Sloan, CREW’s executive director, said today:

While many who testify before Congress have a financial interest at stake, few profit directly from their testimony alone. Congress should not be in the business of helping hedge fund managers like Mr. Eisman make even more money. Congressional hearings are intended to air issues of national significance – not line witnesses’ pockets.

Click here to read CREW’s letter.