A for-profit educational corporation that has donated to the Clinton Foundation agreed to pay $95.5 million to the Obama administration as a settlement for a government lawsuit alleging that it was using illegal tactics to lure in prospective students.
The Education Management Corporation was sued by the Department of Justice in 2011 for multiple recruitment violations, including paying its recruiters based on the number of students it enrolled, and exaggerating the career opportunities that were available to graduates. The lawsuit argued that the violations made the corporation ineligible for the $11 billion in state and federal financial aid it has received since 2003.
On top of the $95.5 million settlement, the group also agreed to forgive more than $100 million in loans it made to former students, according to the Associated Press.
The Education Management Corporation contributed between $5,000 and $10,000 to the Clinton Foundation through Brown Mackie College, one of the largest of the group’s four divisions. Goldman Sachs, which owned a 43 percent stake until it sold off much of the company to creditors last summer, has also donated millions to the Clinton Foundation.
The lawsuit was filed based on information brought forth by whistle-blowers. It claimed that the corporation operated a "boiler-room style" sales team that was taught to "exploit applicants' psychological vulnerabilities to convince them to enroll.
Among the applicants targeted by recruiters were individuals "who were unable to write coherently, who appeared to be under the influence of drugs, or who sought to enroll in an online program but had no computer," according to the suit.
Attorney General Loretta Lynch praised whistle-blowers for revealing the group’s "deceptive practices."
"This case not only highlights the abuses in the [Education Management Corporation’s] EDMC’s recruitment system; it also highlights the brave actions of EDMC employees who refused to go along with the institution's deceptive practices," said Lynch at a Monday news conference.
The lawsuit alleged that the group’s aggressive recruitment practices were geared toward raking in as much government aid as possible.
Although the group agreed to the settlement, it admitted no wrongdoing and said it agreed to pay the penalty based on a desire to put "these matters behind us" and focus on educating its students.
The Clinton Foundation did not respond to a request for comment on the settlement, but its ties to the for-profit education industry go beyond the Education Management Corporation.
The Laureate International Universities, a group of for-profit schools partially owned by the liberal billionaire George Soros, has also contributed millions to the Clinton Foundation. Bill Clinton is paid an undisclosed salary to be "honorary chancellor" of the schools, and has been described as the "face" of the massive university group.
Also contributing to the Clinton Foundation is the Apollo Group, which operates the University of Phoenix, and has been criticized for aggressively targeting veterans with G.I. Bill money to spend on education. The University of Phoenix received more than $1 billion through the G.I. Bill between 2009 and 2014, but only 16 percent of its students graduate within six years.
Kaplan, which paid a $1.3 million settlement to the Justice Department in 2014 for using unqualified instructors, also contributes to the Clinton Foundation. It was specifically targeting "African-American women who were raising two children by themselves" in the hope that they would drop out after the federal funding based on their enrollment had already been received.
Despite the Clintons’ extensive ties, Hillary Clinton has spoken out against the for-profit industry on the campaign trail for targeting "service members, veterans, and their families with false promises and deceptive marketing."
The Clinton campaign also did not return a request for comment.