Monsees' Millions: Matt Blunt's $15 Million MOHELA Slush Fund
Governor Matt Blunt has billed the sale of assets from MOHELA --the state's student loan authority-- as a plan to enhance education through new capital projects on college campuses, but the political motivations underlying the initiative are inescapable.
Consider, for example, that the MOHELA appropriation legislation reveals that fifteen million of the dollars generated by the sale would go into a small, loosely overseen non-profit corporation controlled by Blunt's GOP crony Rob Monsees --the same man who brought the MOHELA sale to the Governor to begin with while employed as a deputy chief of staff in his office.
Those $15 million are being directed into sixteen "projects" controlled by the Missouri Technology Corporation --of which Rob Monsees serves as executive director-- most or all of which are reportedly unknown to at least some members of the Missouri Technology Corporation's board of directors. Given that the legislation also provides for "100% flexibility" between projects for the appropriated funds, Monsees would have broad latitude to reapportion the funds into projects he favors.
With carte blanche to use millions of dollars on projects to "commercialize research" at state schools, the potential is manifest for Monsees or Blunt to engage in inappropriate self-dealing or kickback schemes with moneyed business interests who seek to profit from the projects. There is a very real risk that, beyond "commercializing research," Monsees might commercialize his own position and plenary power.
The current version of House Bill 16 is the vehicle for the appropriation of funds that would be raised via the passage of Senate Bill 389, which sells off portions of MOHELA's assets. The bill includes the following appropriation line items at the end of its text:
Section 16.190. To the Department of Economic Development
For the Missouri Technology Corporation for the attraction and retention of high technology companies and commercialization of existing research being conducted in Missouri. This appropriation may be used for the following projects:Missouri Power Resource Center ($200,000),
High Tech Small Business Development Incentive Program ($1,250,000), Animal Health & Nutrition Center ($200,000),
Animal Health Workforce Development Initiative ($175,000),
MTC Entrepreneur Pipeline Program ($1,500,000),
Plant and Ag Biotech Seed Capital Co-Investment Fund ($1,500,000),
Intellectual Property Management Fund ($1,100,000),
Medical Device Innovation Program ($350,000),
St. Louis Information Technology Initiatives ($1,000,000),
Opportunity Fund for Bioenergy Research Center/National Bio and Agro-defense Facility ($3,250,000),
AgBio Outreach Program ($125,000),
High Tech Marketing Promotion Fund ($350,000),
Emerging Firms Mapping Project ($50,000),
Missouri Open Innovation Network ($250,000),
Collaborations and Inter-disciplinary Degree Programs for Masters and PhDs Students ($350,000)
AgBiotech Company Recruitment Fund ($3,350,000)provided that a hundred percent (100%) flexibility is allowed between each project
From Lewis and Clark Discovery Fund. . .. . . .$15,000,000
Try to find data and information on any or all of these projects and programs if you'd like, but don't waste your entire evening. Few if any None of them exist. They are programs that Rob Monsees at the Missouri Technology Corporation (perhaps with some helpful guidance from policy geniuses at the Department of Economic Development like Spence Jackson) will presumably create from whole cloth.
So exactly how, I wonder, will Monsees' Missouri Technology Corporation choose to spend its $3.3-plus million appropriated for recruiting "AgBiotech" companies? However he decides, I'm sure it will be fun. And pricey. And Monsees may even get a cush post-MTC gig out of the deal.
And the "Missouri Power Resource Center"? Ten dollars gets you a nickel that Andy Blunt's Mid-Missouri Biofuels and Show Me Ethanol buddies are among the "power resources" that the center winds up touting.
But all cheekiness aside, this appropriation represents a gross capitulation of oversight on the part of the legislature. Whereas each of the other appropriations in the bill --whatever you think of the silliness of jeopardizing college affordability to make it-- is at least specifically tailored to a particular use on a particular campus, minimizing the opportunity for misuse, the Missouri Technology Corporation appropriations are just tossed out to vaguely named projects untethered to anything tangible or real or accountable.
The implication is that we should simply expect that an actor with proven political motivations will make rational and broadly beneficial judgments on how to pass the dollars out. Add in the 100% flexibility allowed among the projects, which makes the line item appropriation amounts essentially meaningless, and you've got a recipe for gross abuse.
It also represents another unseemly and politically motivated power grab on the part of Matt Blunt, who has yet to pass up the chance to fatten any vehicle with patronage lard. Missourians have been given not one hint of a reason in any act Governor Blunt has ever taken to make them think that this appropriation is anything but what it appears on every level to be: a gift to political allies and big-business patrons paid for out of the pockets of students who need loans to go to college.
Governor Blunt undoubtedly feels the need to make good on some of the millions of dollars that contributors have pumped into his campaign by doling out state goodies. Selling MOHELA and giving some of the proceeds to Rob Monsees so that he may parcel them out to benefactors is a particularly horrendous means of doing so, even by this administration's nonexistent standards.
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Fraud and self-interest
First, the howling Dems in Missouri don't have to look back too far to see those words labeling their own ... second, the victors are quite enjoying their spoils ... third, I am shocked and ashamed that "Christians" could see any of this and think their votes for a straight Republican ticket was a wise choice. Finally, keep voting for Dems and Rethugs and enjoy your ride on the merry-go-round.
MOHELA
Here again, ALL our politicians have shown their REAL COLORS (yellow - for cowards). This house bill is full of more pork than a pig sty - our politicians thinking of themselves as usual.
And blunt, don't get me started on this self-serving little, tiny asshole!!!!!!!!!!!!!!!!!!!!!
Still watching in amazement!!!!!!!!!!!!!!!
An informed reader...
...wrote in to let me know that there do indeed exist programs called "National Bio and Agro Defense Facility" and the "Missouri Open Innovation Network." The original post has been changed to reflect that most, not all, of the projects appropriated for have yet to be created.
Nevertheless, the "100% flexibility" afforded the MTC means that, if it so desired, it could funnel all of the $15 million into whichever projects/items it chose whether or not they'd been created.
Student Loan Scam is Nation Wide! Now MO joins in!!!
Amazing indepth story HB. Our State Senators need to take a deep breath and then 10 steps backward! This screams fraud and self interest. How can we do this while the rest of the country is investgating this whole scammy system? The LA Times ran this story April 10th!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.latimes.com/news/opinion/la-oe-burd10apr10,0,1732640.story?co...
From the Los Angeles Times
The student-loan scam
Under a Republican Congress, for-profit lenders pursued their own interests -- often with the help of colleges.
By Stephen Burd
STEPHEN BURD, a fellow at the New America Foundation, was a reporter for the Chronicle of Higher Education.
April 10, 2007
AFTER 15 YEARS of reporting on the student-loan industry, I didn't think much could surprise me. But even I was shocked last week when I discovered Securities and Exchange Commission documents revealing that financial aid directors at three prominent universities — as well as a senior official at the U.S. Education Department — each had significant personal investments in a private student-loan company
What possibly could have motivated these officials to take tens of thousands of dollars in stock options from Student Loan Xpress? Has the whole student-loan business become so corrupt that they failed to see the conflict of interest?
If so, Washington is most to blame. For the last seven years, federal officials have turned a blind eye to problems with the companies that participate in the government's student-loan programs.
When it came to power, the Bush administration — with its reverence for the private sector — rewarded loan industry officials and lobbyists with prominent positions throughout the Education Department. Meanwhile, lenders such as Sallie Mae have showered Republican congressional leaders with hundreds of thousands of dollars in contributions each campaign cycle. "Know that I have all of you in my two trusted hands," Rep. John A. Boehner (R-Ohio), a top recipient of that campaign cash, once famously told a gathering of student-loan providers.
The cozy relations that developed among the Bush administration, the Republican-led Congress and the lenders have left the loan industry essentially unregulated. Some observers liken it to the Wild West: Lenders and colleges pursue their own self-interest with little regard for students or taxpayers.
Every company wants to be a college's "preferred lender," competing fiercely to get on such lists. But the dirty little secret of the guaranteed student-loan market is how concentrated it is: Only 32 lenders hold 90% of the loan volume. What's more, the Education Department has found that at about 300 colleges, one lender controls 99% of the loan volume — essentially holding a monopoly on those campuses.
Any company trying to break into the market has to rely on unconventional means. Some upstarts have promoted revenue-sharing arrangements, in which colleges get a cut of each loan that their students take out. Established lenders, worried about losing market share, have taken up similar kickback practices. One of the most egregious schemes is called an "opportunity pool," which was pioneered by loan giant Sallie Mae. Here's how it works: A lender hands a college a fixed amount of private loan money that the institution then can lend to students who otherwise wouldn't qualify for loans because of credit problems. These are private loans — ones that typically come with higher interest rates and fewer consumer protections. In return for the "opportunity pool," the college makes that company its exclusive provider of federally backed loans.
Soon after Sallie Mae started its Opportunity Loan Program in 2000, some of its competitors questioned whether it violated the provision of the Higher Education Act that bars lenders from offering inducements to colleges "to secure applicants" for federal loans. They brought their complaints to the Education Department's inspector general, who wrote a memo to department leaders urging them to examine "opportunity pools." Department officials, however, refused to take action, insisting that the loan industry should regulate itself. Many lenders took that to be tacit approval of the deals. As a result, other companies, such as Citibank, started offering similar arrangements.
Giving credit-unworthy students high-interest private loans is a recipe for disaster — a disaster that the department could have stopped. Loan industry officials acknowledge that these deals are "loss leaders," meaning the companies are willing to absorb some defaults in exchange for a greater presence on a campus.
Recently, as outrage over these types of deals has grown and the Democrats have gained control of Congress, the Education Department has had a change of heart. Officials are considering more heavily regulating how colleges choose lenders to recommend to their students. For example, the agency may require financial aid administrators to include at least three choices on their "preferred lender" lists.
The department's proposals, which are being contested by lenders and aid administrators, are welcome but unlikely to go far enough. Instead, policymakers should consider a complete overhaul of the federal student-loan programs so that college aid administrators are no longer in the business of recommending favored lenders.
If there can be a lendingtree.com for home mortgages, there can be one for student loans too. Lenders should bid for student-loan business. Students would get cheaper loans. And there would be fewer incentives for the kind of unseemly activity that has been coming to light.