Hillary, Greece Bailout, Son in Law

Posted on July 1, 2016July 1, 2016 by Denise Simon

Clinton Son-in-Law’s Firm Is Said to Close Greece Hedge Fund

Clinton sought secret info on EU bailout plans as son-in-law’s doomed hedge fund gambled on Greece

FNC: Hedge fund manager Marc Mezvinsky had friends in high places when he bet big on a Greek economic recovery, but even the keen interest of his mother-in-law, then-Secretary of State Hillary Clinton, wasn’t enough to spare him and his investors from financial tragedy.

In 2012, Mezvinski, the husband of Chelsea Clinton, created a $325 million basket of offshore funds under the Eaglevale Partners banner through a special arrangement with investment bank Goldman Sachs. The funds have lost tens of millions of dollars predicting that bailouts of the Greek banking system would pump up the value of the country’s distressed bonds. One fund, exclusively dedicated to Greek debt, suffered near-total losses.

Clinton stepped down as secretary of state in 2013 to run for president. But newly released emails from 2012 show that she and Clinton Foundation consultant, Sidney Blumenthal, shared classified information about how German leadership viewed the prospects for a Greek bailout. Clinton also shared “protected” State Department information about Greek bonds with her husband at the same time that her son-in-law aimed his hedge fund at Greece.

That America’s top diplomat kept a sharp eye on intelligence assessing the chances of a bailout of the Greek central bank is not a problem. However, sharing such sensitive information with friends and family would have been highly improper. Federal regulations prohibit the use of nonpublic information to further private interests or the interests of others. The mere perception of a conflict of interest is unacceptable.

Through its press representative, Eaglevale declined to comment for this story. Clinton’s campaign press office did not respond to a request for comment.

A former Goldman Sachs broker himself, Mezvinsky formed Eaglevale Management with two ex-Goldman Sachs partners in October 2011. As a “global macro” firm, Eaglevale’s strategy is to seek profit opportunities in politically volatile situations. Mezvinsky set up several funds in the Cayman Islands, a secretive tax haven, with Goldman Sachs serving as Eaglevale’s prime broker and banker. The giant brokerage firm has a checkered history of manipulating the value of Greek debt to the detriment of Greece.

The same month that Eaglevale incorporated its offshore arm, Gary Gensler, the head of the United States Commodity Futures Trading Commission, which polices hedge funds, emailed Clinton that a bailout by the European Central Bank could “turn market sentiment” in favor of Greek bonds.

Gensler had previously worked as co-head of finance at Goldman Sachs; he is now the financial director of Clinton’s election campaign. Goldman Sachs has donated up to $5 million to the Clinton Foundation and $860,000 to Hillary Clinton’s political campaigns. Shortly after Clinton resigned, Goldman Sachs paid her $675,000 in speaking fees.

Clinton’s deputy in charge of economic policy was Robert Hormats, a former vice chairman of Goldman Sachs. Hormats and Clinton shared an extensive email trail about the possibility of bailing out Greece, including classified materials, and internal state department memos about the debt from the U.S. ambassador to Greece.

Again, monitoring Greece was part of Clinton’s job description, but, ethically, that does not mean that a family member should make bets that depend upon the actions of another family member—leaving aside the question of whether “insider” information was divulged to Mezvinsky by Blumenthal or his parents-in-law.

During 2011, Secretary of State Clinton lobbied the leaders of European governments to bail out the Greek financial system. She advocated imposing austerity measures on Greece—raising taxes, cutting public employee salaries and eliminating social welfare programs—to make the investors holding the debt happy.

Driven by investor’s belief that Greece would be bailed out, the speculative value of its debt climbed into the stratosphere in late 2011 and early 2012. The bonds gradually sank to 2008 levels by the end of the year, with temporary spikes, as investors alternately gained and loss confidence in the prospect of a bailout. In other words, there were multiple opportunities for Greek-bond hedge funds to buy cheap and sell dear.

At a February 2012 summit meeting about the Eurozone debt crisis in Munich, Clinton urged leaders of the European Union to commit to a Greek bailout.

In April, Eaglevale booked $19 million from a dozen investors. California’s public employee pension fund, CalPERS, reportedly invested $13 million. Goldman Sach’s CEO, Lloyd Blankfein, jumped in with his own money, as did Chelsea Clinton’s former boss, Marc Lasry, who specializes in buying distressed debt.

In May, Blumenthal, emailed two “confidential” memos about the Greek debt situation to Clinton. Hormats was included in the email loop.

The first memo, Blumenthal told Clinton, is “based on conversations with German Finance Minister Wolfgang Schauble and those close to him … the information comes from an extremely sensitive source and should be handled with care. This information must not be shared with anyone associated with the German government.”

The unnamed spy reported that in secret meetings with German Chancellor Angela Merkel, Schauble had searched for a politically acceptable way to bail out the Greek debt in order to avoid collapsing the economies of Greece, Italy, Spain and Ireland.

The second memo was classified and blacked out by State Department censors when Clinton’s emails were released. No doubt, it was informative.

In June, Clinton’s deputy, Jake Sullivan emailed her “a depressing snapshot” of reports that Greek banks were failing and that Merkel was against a Greek bailout. The next day, he reported “re: Greece” that Ambassador Dan Smith “just spoke to the Central Bank Governor and assessed that the economic situation was “ok for now” provided that “small depositors put money back into the banks.”

A few days later, Clinton asked Sullivan for a confidential state department report, “Solidarity Bonds Greece Revised.” He sent it to her adding, “If you like, send it on [to] WJC,” presumably a reference to William Jefferson Clinton.

Clinton ordered an aide, “Pls print two copies” of the Greek bond report. The report was blacked out as a “protected” document when the emails were made public.

Did Mezvinsky benefit from his family connection?

The emails show that Clinton did at least one official favor for her son-in-law. In August 2012, she forwarded Deputy Secretary Thomas Nides an email from Mezvinsky lobbying on behalf of his former Goldman Sachs colleague, Harry Siklas.

Siklas and Goldman Sachs were invested in a deep sea mining venture called Neptune Minerals. Siklas asked Mezvinsky to broker a talk with Clinton about “current legal issues and regulations” on deep sea mining. Clinton ordered Nides to “follow up on this request.”

Nides replied, “I’ll get on it.”

Save the Iran Deal: Navy Sailors Kidnapped by Iran

Posted on July 1, 2016July 1, 2016 by Denise Simon

Navy commander surrendered to Iran to protect Obama’s nuclear deal

WashingtonTimes: The Navy commander in charge of a pair of patrol boats captured by Iranian forces in January opted to surrender rather than fight back, citing later fears that a confrontation could endanger the Obama administration’s efforts to lock in a deal with Tehran on its nuclear program.

In an interview with investigators looking into the January incident, the commander said he surrendered the vessels after calculating that his sailors would not be in danger because Iran “wants this nuke deal to go through.”

The interview was one of several stunning revelations in the often scathing 170-page report compiled by Navy investigators, chronicling the chain of events that led to the apprehension and detention of the 10 American sailors by the Iranian military after a pair of U.S. patrol boats drifted into the country’s sovereign waters in the Persian Gulf.

SEE ALSO: U.S. sailors violated Navy codes of conduct while detained by Iranian forces

The incident, which played out as President Obama was preparing his State of the Union address, proved deeply embarrassing to the U.S. military and roiled diplomatic relations between Tehran and Washington as they were trying to implement key measures in the deal to curb Iran’s suspect nuclear programs.

Adm. John Richardson, chief of naval operations, said Thursday that the mishandling of the incident resulted from “the accumulation of a number of small problems” created by the U.S. sailors who strayed into Iranian waters all the way up to the senior commanders who led the Navy squadron and task force under which the unit served.

While contending Iran also violated international law with rough handling of its American captives, “this incident did not live up to our expectations of our Navy,” Adm. Richardson said.

Nine Navy officers have been fired for their involvement in the incident, in which the two Navy patrol boats, running late on their assigned mission, drifted into the costal waters near Farsi Island, home to an Iranian naval base.

The Navy officers fired included squadron chief Cmdr. Greg Meyer and Capt. Kyle Moses, head of Combined Task Force 56, the unit in charge of the boat crews.

Heavily outgunned and outnumbered by members of Iran’s Revolutionary Guard Corps, the Navy commander — whose name was redacted from the report — told investigators he calculated that Tehran’s desire to keep the nuclear deal with the U.S. alive would also protect the 10 American sailors if they surrendered.

“I didn’t want to start a war with Iran. … I didn’t want to start a war that would get people killed,” the commander said.

“I guess this was a gamble on my part. … I made the gamble that they were not going to kill us. I made the gamble they were not going to parade us around like prisoners of war because they want this nuke deal to go through.”

Mr. Obama, the unidentified commander said, would not want me to start a war over a mistake, over a misunderstanding.”

‘Adverse to U.S. interests’

The partially redacted report was also critical of the behavior of the U.S. sailors once in Iranian custody.

One sailor reportedly made “statements adverse to U.S. interests” during interrogation. As the Iranians videotaped their captives for later display on state television, another sailor encouraged the U.S. crew members to accept food offered to them.

One unidentified sailor was said to have violated the code of conduct standards when he “acquiesced” in making an Iranian-scripted statement on camera in exchange for the crew’s release.

“It was a mistake that was our fault and we apologize for our mistake,” a U.S. sailor, identified as the commander of one of the patrol boats, said during the videotaped apology. “It was a misunderstanding. We did not mean to go into Iranian territorial water. The Iranian behavior was fantastic while we were here. We thank you very much for your hospitality and your assistance.”

In the end, after frantic diplomacy that included Secretary of State John F. Kerry and Iranian counterpart Mohammad Javad Zarif, the American sailors were released unharmed after 15 hours.

While the Navy, Pentagon and White House maintain that the apprehension and detention of the U.S. sailors were unjustified, the incident as it played out exposed top-to-bottom failures within the Navy’s chain of command, Adm. Richardson told reporters Thursday.

Navy leaders are also weighing whether to fire several other sailors and officers tied to the January incident, including members of the boat crews who reportedly broke code of conduct rules, said Vice Adm. Chris Aquilino, deputy for operations, plans and strategy.

The ongoing inquiries into the code of conduct violations are centered on a public apology given by one of the detained sailors, which was televised by Iranian state news outlets.

Other U.S. sailors reportedly disclosed technical information about the patrol boats to Iranian interrogators, and one sailor handed over the password to a personal laptop confiscated by Iranian forces.

Aside from further disciplinary action against the sailors involved, Navy leaders have mandated that all sailors undergo survival, evasion, resistance and escape training to better prepare for rigors of imprisonment by enemy forces, Adm. Richardson said.

The investigation revealed details over how the U.S. seamen unwittingly found themselves in hostile hands. From the beginning, mistakes by the boat crews, squadron commanders and task force leaders set the stage for the embarrassing incident, Navy officials said.

The two patrol boats — dubbed “Demon Lead” and “Demon Two” — set off for their mission to travel from the U.S. naval base in Kuwait to 5th Fleet headquarters in Bahrain four hours behind schedule, according to a timeline of events compiled by Navy investigators.

In an attempt to make up for lost time, commanders on both patrol boats plotted a different course without notifying task force commanders.

The boat crews did radio in their location to the task force’s operation center every 30 minutes, which is Navy protocol for such operations. However, even though sailors and Navy officers manning the operation center were aware that both boats were taking a different route, no one from the center notified senior staff that the boats were off course near sensitive Iranian territorial waters.

The last-minute change to the travel route skirted Iranian waters, but the plotted course did not traverse directly through those areas. During the voyage, one of the boats sustained a catastrophic engine failure, leaving the vessel listing in quickly moving seas, according to the Navy’s account.

The second boat stopped to help the crew of the distressed boat when two Iranian-flagged armed patrol boats approached the U.S. ships and brought them to port.

“There were no good choices” for the crews after that, Adm. Richardson said.

Senate Armed Service Committee Chairman John McCain, Arizona Republican, said in a statement Thursday that the investigation should focus on Iran’s “flagrant violations of international law” in seizing and holding the U.S. sailors, and on the failure of the Obama administration to take a tough line with Tehran.

“Five months later, the administration has shamefully failed to retract its craven statements of gratitude and praise for Iran’s illegal behavior,” Mr. McCain said.

Rep. Adam Smith of Washington state, the ranking Democrat on the House Foreign Affairs Committee, criticized Iran but said the Navy was right to review its own performance and systems.

“It can be easy to point fingers, but military operations are complex and dangerous, and things do go wrong,” Mr. Smith said in a statement. “When that happens, you have to take the proper corrective actions and learn the appropriate lessons.”

Nearly 1 Million Immigrants Ignoring Deportation

Posted on July 1, 2016July 1, 2016 by Denise Simon

It is quite interesting that the Obama administration can release proven known terrorists from the Guantanamo Detention Center to either home countries or any other country that the administration colludes with to accept them.

We have a former detainee that was released to Uruguay that has fled alleged to Brazil.

MiamiHerald

But…..this policy does not seem to apply to the Department of Homeland Security or ICE.

Specifically, the law states:

On being notified by the [DHS Secretary] that the government of a foreign country denies or unreasonably delays accepting an alien who is a citizen, subject, national, or resident of that country after the [DHS Secretary] asks whether the government will accept the alien under this section, the Secretary of State shall order consular officers in that foreign country to discontinue granting immigrant visas or nonimmigrant visas, or both, to citizens, subjects, nationals, and residents of that country until the [DHS Secretary] notifies the Secretary that the country has accepted the alien. (8 U.S.C. § 1253(d); Emphasis added.)

Nearly 1 million immigrants — including more than 170K convicts — ignoring deportation

WashingtonTimes: Nearly 1 million immigrants are ignoring deportation orders to remain in the U.S. — including more than 170,000 convicted criminals, according to a new report Thursday that suggests the government’s deportation efforts are still falling short.

Only a small fraction of the immigrants are even being detained by Immigration and Customs Enforcement (ICE), meaning most of them remain free on the streets, where they can commit crimes and continue living in the shadows, according to the study by Jessica Vaughan, policy studies director at the Center for Immigration Studies.

“The fact that almost 10 percent of the illegal resident population has already been ordered removed and is still here illustrates just how dysfunctional our immigration enforcement system is. It also should be of great concern that 20 percent of them are conviction criminals, and that most of these are at large in our communities,” Ms. Vaughan said.

She said the 925,193 aliens who were still here despite a deportation order break down into three categories. In some cases their home countries refuse to take them back, and U.S. officials feel constrained by law to release them; other times they are released by sanctuary cities, who help thwart deportations; and still others abscond on their own.

Mexicans account for the most aliens, with nearly 200,000 ignoring deportation orders. About a third of those are convicted criminals, Ms. Vaughan said. El Salvador accounts for more than 150,000 of the aliens, but just 10,000 of them are convicted criminals.

Perhaps most troubling is that the population is steadily growing, with the Obama administration tracking down fewer than 10,000 fugitives a year on the streets. Even when criminals snagged by checking local prisons and jails are included, the number of those deported from the interior of the U.S. is far less than 100,000.

But some 179,040 new criminal aliens were given final orders or removal in 2015 yet remained in the country, Ms. Vaughan said, citing data obtained by the Senate Judiciary Committee.

Related reading: The law requires the State Department to impose visa sanctions on countries that won’t take their own citizens back, a requirement Secretaries Clinton and Kerry have simply ignored. NRO

DoJ Files for 27 Month Delay on Clinton Records

Posted on June 30, 2016June 30, 2016 by Denise Simon

Can you feel the outrage building yet? Imagine if this DoJ was investigating and prosecuting the mafia…oh wait….

From The Daily Caller:

Department of Justice officials filed a motion in federal court late Wednesday seeking a 27-month delay in producing correspondence between former Secretary of State Hillary Clinton’s four top aides and officials with the Clinton Foundation and Teneo Holdings, a closely allied public relations firm that Bill Clinton helped launch.

If the court permits the delay, the public won’t be able to read the communications until October 2018, about 22 months into her prospective first term as President. The four senior Clinton aides involved were Deputy Assistant Secretary of State Michael Fuchs, Ambassador-At-Large Melanne Verveer, Chief of Staff Cheryl Mills, and Deputy Chief of Staff Huma Abedin.

The State Department originally estimated that 6,000 emails and other documents were exchanged by the aides with the Clinton Foundation. But a series of “errors” the department told the court about Wednesday evening now mean the total has grown to “34,116 potentially responsive documents.”

U.S. District Court Judge Rudolph Contreras, a President Obama-appointed judge, had previously ordered the State Department to release the requested documents by July 21. But Department of Justice lawyers informed Contreras Wednesday night that “the [State] department discovered errors in the manner in which the searches had been conducted in order to capture documents potentially responsive to plaintiff’s request.” The motion was filed by Justice Department attorney Joseph Borson on behalf of the State Department.

Borson also provided new details about how few resources the State Department has devoted to answering 106 separate Freedom of Information Act requests that are pending before it, many of them ordered by federal judges. Only 71 “part-time” retired foreign service officers are being used to review all of the pending FOIA requests.

Combine this with Loretta Lynch’s absurd “coincidental” meeting with Bill Clinton at the Phoenix Airport and you have shenanigans going on that would make Richard Nixon blush.

This is where I tend to get frustrated with GOP leadership. This is a situation where every prominent Republican, particularly GOP leaders, should be on every network and cable news show and quoted in every newspaper outlet clamoring for an independent prosecutor to look into Hillary Clinton’s emails. It is obvious, now that Hillary Clinton has secured the delegates needed to win the Democratic nomination, the Obama administration will do all it can to shield her from scrutiny and especially, prosecution. Full article from RedState.

**** Meanwhile if you would like more on the deposition of Patrick Kennedy:

(Washington, DC) – Judicial Watch today released the deposition transcript of Patrick Kennedy, State Department under secretary for management, regarding Hillary Clinton’s and Huma Abedin’s use of the clintonemail.com system to conduct official government business.

The deposition transcript is available here.

Kennedy testified that the significance did not “register” with him that Clinton was using a non-state.gov email account even though he communicated with her by email; and though he is under secretary for management of three of the four offices charged with ensuring State Department policies practices and procedures are followed, he had no opinion as to whether policies were violated except to say that State Department records-management policy encourages employees to use state.gov addresses for official business.

Kennedy is among seven depositions of former Clinton top aides and State Department officials that Judicial Watch has questioned under oath.

This discovery arises in a Judicial Watch FOIA lawsuit that seeks records about the controversial employment status of Huma Abedin, former deputy chief of staff to Clinton. The lawsuit was reopened because of revelations about the clintonemail.com system. (Judicial Watch v. U.S. Department of State (No. 1:13-cv-01363)). Judge Sullivan ordered that all deposition transcripts be made publicly available.

Univ. of Phoenix, Obama’s Post Presidency Career?

Posted on June 30, 2016June 30, 2016 by Denise Simon

Okay, let the investigations begin…..the collusion, the government subsidies and partners….hummm

Bid to buy for-profit college by former Obama insiders raises questions

‘There is at least a taste of unseemliness involved in this,’ a former top education official said.

Longtime Obama friend Marty Nesbitt’s private equity firm Vistria Group has mounted a charm offensive on Capitol Hill to talk up the proposed sale of the for-profit University of Phoenix. | Getty

Politico: As the Obama administration cracks down on for-profit colleges, three former officials working on behalf of an investment firm run by President Barack Obama’s best friend have staged a behind-the-scenes campaign to get the Education Department to green-light a purchase of the biggest for-profit of them all — the University of Phoenix.

The investors include a private equity firm founded and run by longtime Obama friend Marty Nesbitt and former Deputy Education Secretary Tony Miller. The firm, Chicago-based Vistria Group, has mounted a charm offensive on Capitol Hill to talk up the proposed sale of the troubled for-profit education giant, which receives more than $2 billion a year in taxpayer money but is under investigation by three state attorneys general and the FTC.

What stands out about the proposed deal is that several key players are either close to top administration officials, including the president himself, or are former administration insiders — especially Miller, who was part of the effort to more tightly regulate for-profit colleges at the very agency now charged with approving the ownership change. For-profit college officials have likened those rules to a war on the industry, and blame the administration for contributing to their declining enrollments and share prices.

The proposed sale carries high stakes for taxpayers, students and investors: The University of Phoenix’s financial stability may depend on the $1.1 billion acquisition. If the company were to fail, more than 160,000 students could be displaced and the government would be on the hook for hundreds of millions in student loans.

But the investors’ effort to seek Education Department approval of the school’s ownership change also raises questions about potential conflicts of interest.

“There is at least a taste of unseemliness involved in this,” said Mark Schneider, a former top education official under President George W. Bush. “They regulate it. They drive the price down. …They are buying it for pennies on the dollar.”

Vistria Group said it isn’t seeking special treatment. “We expect the Department to evaluate this proposed transaction on the merits,” the company said in a statement.

Vistria is part of a consortium of investors involved in the proposed acquisition, which has already won over shareholders of the school’s parent company, Apollo Education Group. But now the investors need the Education Department and the school’s accreditors to sign off on the ownership change to keep the federal money flowing — most of it in the form of student loans and Pell Grants.

Related reading: Apollo Education

Related reading: Vistria Money

With those decisions looming, Miller and at least one other former Obama insider have met with staff to Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.) and Dick Durbin (D-Ill.), looking to reassure some of the loudest critics of for-profit colleges in the president’s own party, several Senate aides confirmed to POLITICO. Those lawmakers have pushed Obama’s Education Department to be even tougher on for-profit colleges.

Miller has also met with staff members working for other committee members, including Sens. Michael Bennet (D-Colo.), and Bob Casey (D-Pa.), as well as with Sen. Lamar Alexander, the Tennessee Republican who chairs the Senate education committee. Nesbitt was not part of those Capitol Hill meetings, according to the aides.

The investors’ pitch is that they will turn around the beleaguered education company company and boost student outcomes. In announcing the sale, Miller said in a statement that the investors are committed to running the University of Phoenix “in a manner consistent with the highest ethical standards.”

But the specter of former insiders pushing the sale of a company in an industry that has long been in the administration’s crosshairs is not lost on critics. For seven years, the Obama administration has waged a crackdown on poor quality and predatory practices at many for-profit colleges, with the president himself excoriating some schools for “making out like a bandit” with federal money, but saddling students with big debts and leaving them unprepared for good jobs. He did not name the schools.

“It’s ironic that a former senior official at the Department of Education — an agency that has intentionally targeted and sought to dismantle the for-profit college industry — would now take the reins at the country’s largest for-profit college,” said Rep. Virginia Foxx, a North Carolina Republican who leads the House Committee on Education and the Workforce’s higher education subcommittee.

“Mr. Miller will soon learn firsthand how the harmful regulations he helped develop will limit the choices of students and create burdensome red tape for his institution,” she added.

Sen. John McCain (R-Ariz.) — a longtime defender of the University of Phoenix — told POLITICO he blames the administration’s hard-charging regulatory approach for helping to drive down the company’s stock price and contributing to its decision to sell.

“I know it was the attacks that drove the stock price down,” McCain said. “It’s very clear.”

The sale price, which shareholders approved last month after initially balking at a lower price, is considered a bargain by some industry observers. The day Obama was sworn into office on Jan. 20, 2009, the company’s stock closed at $86.54 per share. Today, it’s trading at around $9, although a recovering economy, unfavorable media coverage and the for-profit industry’s general slump have also contributed to that drop.

Some Senate Democrats said they are also uneasy with the investors’ plan to take the university private, which means it would no longer have to publicly disclose information such as executive compensation, lawsuits or when it’s a target of investigations. Those details are useful to prospective students, they say, at a time when the school faces inquiries from both state and federal authorities.

“Essentially, a company that receives more than $2 billion annually from federal taxpayers — nearly 80 percent of its revenue — is going dark, and it’s happening at a time when the University of Phoenix has come under increased scrutiny from state and federal regulators,” Durbin wrote in a March letter to the Education Department.

Sen. Sherrod Brown (D-Ohio) said the university’s “questionable track record is already a point of concern, and there are many questions as to whether the sale of its parent company is in the best interests of both students and taxpayers.”

Who’s who

Several players in the deal have close ties to the Obama administration they’re now attempting to influence.

Former Deputy Education Secretary Tony Miller was part of the effort to more tightly regulate for-profit colleges at the very agency now charged with approving the ownership change. | AP Photo

First among them is Miller— the former No. 2 in Obama’s Education Department until he left in 2013 and who is now a partner and chief operating officer of Vistria Group. He would become chairman of the university’s parent company if the sale goes through.

Miller, who spent more than four years as a top Education Department official, represented the administration during nearly a dozen meetings with for-profit education companies — including the very company his firm is now seeking to buy, department records show. The meetings centered on controversial “gainful employment” proposals to cut off financial aid from programs where students leave with high debt and poor job prospects.

Other players in the Capitol Hill effort include Jonathan Samuels, who was responsible for pushing Obama’s agenda through Congress during his nearly six years working in legislative affairs at the White House. Samuels, who now works for Vistria Group, has joined Miller in at least some of his meetings on the Hill, according to a Senate aide. Vistria has also enlisted former White House Deputy Communications Director Amy Brundage, who is working at the Washington public affairs firm SKDKnickerbocker.

“The irony is not lost on us,” said one Republican congressional aide, who asked for anonymity to speak freely. “It’s quite rich, when you have former Obama administration officials who used to denigrate for-profit education now profiting off it.”

Nesbitt, meanwhile, is a co-founder and co-CEO of Vistria Group and widely considered the president’s closest friend. He is Obama’s frequent golf and basketball partner, while his wife, Anita Blanchard, is an obstetrician who delivered Malia and Sasha Obama. Nesbitt acted as treasurer for both of the president’s campaigns and heads the Obama Foundation, which is planning his presidential library.

Nesbitt is also a former business associate of Commerce Secretary Penny Pritzker; he set up Vistria Group in 2013, more than a year after the sale of The Parking Spot, an airport parking company he started with Pritzker’s backing. One of Vistria’s investors has been a charitable foundation called The Pritzker Traubert Foundation, started by Pritzker, federal tax records show. Pritzker resigned from her position at the foundation when she became a cabinet member in 2013. A Commerce Department official said she has not been involved with discussions about the University of Phoenix sale.

Nesbitt, Miller, Samuels and Brundage all declined to comment to POLITICO about the nature of Vistria’s meetings with lawmakers or whether they had reached out to Education Department officials to discuss the potential sale. At the request of the company’s public relations firm, reporters submitted written questions about the meetings, allegations of possible conflicts of interest and how the company plans to turn around the University of Phoenix. Vistria responded with a four-sentence statement.

“We believe that the University of Phoenix, with our support, is poised to be a leader serving the adult learner, by graduating students with the knowledge and skills that employers value, at a cost to the student that ensures a compelling return on her or his educational investment,” the statement said.

“We believe that high-quality outcomes, whether from nonprofit or for-profit institutions, is what is needed in the sector and what matters most. We expect the Department to evaluate this proposed transaction on the merits. The parties have engaged in the formal acquisition review process through regular order.”

The Education Department also declined to answer POLITICO’s questions about whether Nesbitt, Miller or Samuels had discussed the proposed sale with department officials. It refused to provide a copy of the paperwork the investors submitted to kick off the regulatory approval process.

Vistria is one of three investment groups involved in the deal — the others are Wall Street giant Apollo Global Management (no connection to Apollo Education) and Najafi Companies. A spokeswoman for a firm representing Apollo Education declined to say how much each investor had agreed to contribute. But in addition to capital, Vistria brings Obama administration connections that could help pave the way for a smooth approval process and working relationship with government regulators afterward.

It’s quite common for for-profit education companies to hire people who were former regulators, accreditors, politicians or established higher education officials, said Kevin Kinser, an education professor at the State University of New York at Albany who has studied for-profit colleges.

Kinser said it gives the schools a “sense of legitimacy” and understanding of how systems work “for them to do what they need to do.”

Durbin, a reliable Obama ally in the Senate, said he’s not close enough to Nesbitt to know why he got involved with the acquisition.

“He’s an investor, and I’ll just say he thinks this is a good investment,” Durbin said. “I hope that Marty will bring to this endeavor a sense of reform and will create a new for-profit school that truly does serve its students.”

The holding company set up by the investors to buy the University of Phoenix has also paid $80,000 to lobbyists. The lobbying team includes Marc Lampkin — a longtime counsel to former House Speaker John Boehner — at the high-powered D.C. firm Brownstein Hyatt Farber Schreck.

Trace Urdan, a for-profit college analyst who heard Miller describe Vistria’s plans at a recent conference, said Miller appeared “quite earnest.” Miller emphasized that the prospective owners plan to use data to monitor student performance and to make improvements, Urdan said.

“He thinks the size of the university is a real strength to be exploited and the implication is there is a lot of data, so you can analyze the data and figure out what works and doesn’t work,” Urdan said.

The potential sale offers a potential lifeline for the university. But there’s pressure to get the government’s approval quickly since the parent company has warned in regulatory filings that if the sale isn’t completed by October, its worsening financials might sink the deal. Either way, the company says that a further decline in its stock price could lead to regulatory problems that “severely stress” its liquidity.

If the company were to fail, either before or after the proposed sale, current students would be entitled to have their loans forgiven. Taxpayers have already spent more than $90 million on student loan forgiveness resulting from last year’s collapse of the Corinthian Colleges chain.

The Phoenix juggernaut

Founded in 1976, with a class of just eight students, the University of Phoenix became a pioneer in the burgeoning field of career education for adults ― providing flexibility for busy working adults looking for vocational education, especially after the advent of online programs in the late 1980s.

But as the school grew larger, hitting more than half a million students in 2010, critics say it lost its way in terms of the quality of its programs, high costs and aggressive recruiting tactics.

In recent years, scrutiny from state and federal authorities, a flurry of negative media stories and an improving economy combined to send enrollment plunging by more than two-thirds. In April, the university announced it would lay off 470 employees, or nearly 8 percent of its workforce.

The university currently faces investigation by the attorneys general of California, Massachusetts and Florida, according to regulatory filings. Its parent company disclosed last year that the FTC had requested information on a “broad spectrum” of its business practices, including “marketing, recruiting, enrollment, financial aid, tuition and fees, academic programs, academic advising, student retention, billing and debt collection, complaints, accreditation, training, military recruitment, and other compliance matters.”

Early in the Obama administration, in 2009, the Justice Department announced the University of Phoenix had agreed to pay $78.5 million to settle allegations the school had been fraudulently collecting taxpayer money. Two former recruiters had alleged the school created fake employee personnel files to hide the fact it was illegally giving recruiters gifts and free trips based on the number of students they brought in. The university did not acknowledge any wrongdoing in the settlement.

Last fall, the Pentagon took the unusual step of temporarily prohibiting the University of Phoenix from recruiting on military bases. The alleged violations included the misuse of military seals and trademarks, and conducting activities on military bases without proper permission. The ban was reversed three months later.

Many of the university’s students struggle with debt: Data released by the Obama administration’s College Scorecard last year shows that a majority of students who took out federal loans to attend the University of Phoenix did not end up making even a dollar’s worth of progress in paying down their debt after five years ― a sign their debts may not be manageable.

Yet the school continues to be popular, especially with veterans. Last year, about 45,000 GI Bill recipients enrolled at the University of Phoenix, at a cost of $290 million to taxpayers.

The university’s parent company is also seeing big international growth: Its global division serves more than 150,000 learners worldwide, with online and campus-based programs in countries such as Australia, India, Mexico and Chile, according to a company filing. While the international schools are a small share of total revenue, the footprint of its global division has been expanding.

‘Black box’ approval process

The process by which the Education Department will make a decision on the ownership change — and who will make that decision — has been shrouded in secrecy, say some for-profit college critics.

Bob Shireman, a former Obama Education Department official who was one of the architects of the for-profit college crackdown, called the approval process for college ownership changes a “black box.”

While the White House keeps logs to document who comes and goes to speak to executive branch officials, no one knows who is lobbying the Education Department on the sale, said Ben Miller, a former Obama Education Department staffer who is now senior director for postsecondary education at the Center for American Progress.

Asked about its decision-making process, a department official said the approval of the ownership change will be handled by the Office of Federal Student Aid, the department’s business operations arm, “in consultation with a variety of other offices,” which they declined to name.

“As we have said in the past, what’s good for students is at the heart of our review of this sale,” Dorie Nolt, the department’s press secretary, said in a statement. “We will work with Apollo to ensure that the new owner is focused on improving student outcomes.”

Shireman and Ben Miller say they want the department to use its leverage to impose conditions on the approval of the ownership change, such as requiring the university to rely less heavily on federal Pell Grants and other taxpayer programs, and to seek out more students who are willing or able to pay out of pocket.

Even if those conditions happen, Durbin said he’s skeptical the investors can pull off a turnaround, which he said previous owners failed to accomplish.

“I have met with the Apollo [Education Group] people over the years,” Durbin said. “Every meeting was preceded by ‘we’re different,’ and then it would turn out … they weren’t so different.”

Miller insists this ownership team will turn things around. In a letter to The Wall Street Journal in February, he said his company is committed to making the University of Phoenix “the most trusted provider of career-relevant higher education for working adults in the country.”

The new owners will prevail on the merits, he said.

“Success in today’s environment,” he wrote, “isn’t predicated on special treatment from regulators or legislators.”