#performant

Among those concerned were several Senators, who sent DeVos a formal letter back in January of 2017 raising their ethical concerns:

“You also noted in your ethics agreement that you will continue to hold financial interests in eight entities, including an investment worth millions in RDV Corporation. This investment vehicle appears to be connected to Performant Financial Corp. — a debt collector that is currently seeking a new contract with the Education Department after the Department declined to renew its previous contract last year. While you have agreed to divest from financial interests linked to Performant, we remain concerned by your continued financial interests in RDV Corporation, which appears to be connected to Performant through MCF CLO IV, LMF WF Portfolio II, LMF WF Portfolio III, and/or other funds managed by Madison Capital Funding.”

To clarify: RDV Corporation is the DeVos family investment management company. ("RDV” stands for Richard DeVos, her husband.) As the Senators noted, RDV is a substantial investor in a hedge fund called LMF WF Portfolio. LMF was one of the companies that loaned $147 million to Performant Financial Corp. LMF--and, by extension, RDV--thus has a vested interest in ensuring Performant’s financial health.

Under DeVos, the Department of Education has cracked down on collecting student loans, first ignoring and then eliminating some federal rules designed to protect students from predatory lenders. Naturally, the Department has to pay someone to collect these loans, “contracts valued at up to $400 million.” Historically, “the department has used as many as 17 companies to recoup past-due student loans.” Which is why eyebrows were raised last week when the Department selected only two firms.

One is Windham Professionals, one of seven firms the Obama administration selected two years ago: “Windham’s management was rated satisfactory and its past performance deemed ‘exceptional.’”

The other is the aforementioned Performant Financial Corp., who was not selected two years ago because its ratings are significantly poorer: “Performant’s management was rated ‘marginal,’ while its past performance as a contractor was deemed ‘satisfactory.’”

So the Department selected an underqualified firm that just happens to owe rather a lot of money to a company in which the DeVos family has a substantial financial interest. And as one of only two collection firms, it stands to make hundreds of millions of dollars. Pure coincidence, no doubt.

The Education Department insists that DeVos had “no knowledge, let alone involvement,” in the new debt-collection contract. If that sounds familiar, you might be thinking of that time the State Department verified that Hillary Clinton “never intervened ... in any CFIUS [Committee on Foreign Investment in the United States] matter,” including when the nine agencies comprising CFIUS did not object to the proposed sale of a majority stake in Uranium One to Rosatom, Russia’s nuclear agency.