A close friend of President Barack Obama who has launched a stealth campaign to get the Department of Education to green light the sale of the for-profit University of Phoenix to his firm has invoked the aid of a group that employs former close aides to the president.
Obama’s proximity to the players involved has caused concern, Politico reported this week. Of particular interest is Marty Nesbitt, the founder of the Chicago-based private equity firm Vistria Group that focuses on education, healthcare deals, and financial services.
Recent Stories in Issues
Nesbitt is considered Obama’s best friend. He was tasked with spearheading the development of the Obama Foundation, the president’s vehicle to continue public service after he leaves the White House, which is focused on building a presidential center on Chicago’s South Side.
Nesbitt’s Vistria Group announced earlier this year their intent to purchase Apollo Education, the owner of the for-profit University of Phoenix. Vistria would be joined in the purchase by Apollo Global Management (no relation to the Apollo Education) and Najafi Companies.
However, in order for the $1.1 billion acquisition to go through, the Department of Education—which has put a stranglehold on the for-profit industry in recent years—must approve the deal.
Vistria is well positioned with a direct line to the department.
Vistria poached Tony Miller in 2014 to act as the firm’s chief operating officer. Miller previously served as the U.S. Deputy Secretary of Education for the department from 2009 to 2013 and currently sits on the board of directors of the Chicago Public Education Fund with Penny Pritzker, the U.S. secretary of commerce.
Jon Samuels, the former deputy assistant to the President on legislative affairs, was also hired in 2014 by the firm. He had spent the previous six years working with Obama in the White House.
Nesbitt’s firm added more firepower by hiring employees of SKDKnickerbocker, a D.C.-based communications group that employs a number of former aides to the president, in their quest for approval on the contract.
Brundage was one of Obama’s longest serving aides, having joined Obama’s Senate office in 2007 as press secretary and propelling herself to the deputy assistant to president and White House deputy communications director.
Jen Psaki, the current White House communications director, spoke of Brundage’s close relationship with Obama at the time of her departure from the White House.
"The good news is she will remain in the Obama family working on the Foundation from the outside, and won’t be more than a phone call away," Psaki told the Washington Post.
Brundage moved to SKDK in 2015 and was tasked with working on the Obama Foundation—which Nesbitt is overseeing—alongside SKDK’s managing director, Anita Dunn, who is managing the account. Dunn previously served as the White House communications director.
The Obama Foundation paid SKDK $230,000 for marketing and communication services in 2014, according to the group’s most recent Form 990.
The Obama administration has cracked down on the for-profit education industry in recent years by imposing regulations that have pushed the industry to the brink.
Since 2010, enrollment in the for-profit industry has dropped 20 percent. During this time, the University of Phoenix closed 115 campuses and saw its enrollment cut in half. Apollo announced the layoff of 600 workers. Many for-profits have closed up shop.
The Department of Defense also suspended the university from recruiting on military bases and stopped their access to federal education funding for service members in September 2015.
It was later discovered that Democratic lawyer Jamie Gorelick, who chairs regulatory and government affairs at the D.C.-based law firm WilmerHale, had lobbied the Pentagon to end its suspension on the university. She was deputy attorney general in Bill Clinton’s administration and is considered a possibility for attorney general if Hillary Clinton were to be elected.
The actions taken upon the University of Phoenix and the for-profit industry has caused Apollo Education’s shares to plummet from $87 at the time of Obama’s inauguration to $10 current day, Free Beacon editor-in-chief Matthew Continetti noted earlier today.
The deal, if approved by the Department of Education, would run counter to Obama’s policies of recent years.
Nesbitt did not return a request for comment by press time.