Life isn’t always fair. It certainly isn’t online and this is a story that explains just that:
This is a story about how words published on the internet tend to ‘live on forever’; about hardball Washington politics and how smear campaigns against an individual are pursued with a robust zeal by parties with vested interests; how false allegations, when repeated ad infinitum, ad nauseam, start to appear to resemble the truth.
This is the story of Robert Shireman and his decade-long struggle against false and entirely groundless allegations of being in cahoots with big investors looking to make big bucks via the practice of short-selling.
And the crucial thing to note here is that an article published in the Wall Street Journal in 2013 has played a pivotal role during this whole time in pretty much perpetuating the false allegations brought against Shireman. What is equally noteworthy is the timing of the publication of the article. Although the incidents in question took place back in 2010 and two formal federal investigations had already debunked the allegations by 2012, the reputable news outlet went on with their article all the same.
It was true that they did not directly accuse Shireman of any wrongdoing (probably because they could not and would likely have faced a defamation suit if they did). Yet the article was full of innuendos and the context in which they were placed left little room for doubt as to who it was that they were aiming at.
That this was so has been proven time and again in these last eight years since every time someone wanted to smear Shireman’s name—and almost always someone who was at odds with Shireman’s stance and his work regarding the issue of higher education and student debt—has invariably cited this 2013 article in order to justify his claims.
The Backstory
Back in early 2009, Shireman was appointed as a deputy undersecretary of the U.S. Education Department. He worked on crafting an agenda on higher education financing—an agenda that was strongly aimed at reforming the policies around for-profit colleges.
Coming from Shireman, there was nothing unexpected about this to anybody who knew the man. Shireman had already had the reputation of having labored for decades with an eye to protect students from hefty and altogether untenable college debts. He tried to do all he could to make it difficult for for-profit schools looking to enroll students with federally financed loans. His argument was that these hefty fees were never at par with the programs students enrolled into and that those programs will not enable the students land jobs that will make them pay off those debts within any reasonable period.
In fact, Shireman was so devoted to this task that many have termed him as a ‘zealot’ and a ‘true believer’ on this matter.
Now, it so happened that at around the same time, Steve Eisman, a big investor who made a fortune for himself by betting on the housing bubble collapse, started betting big against the for-profit schools.
At the time, many in the know had surmised that the Obama administration was planning to set new regulations that will prove more restrictive for for-profit colleges than ever before. Eventually, however, the proposed new regulations, to the great relief of for-profit schools, turned out to be much less restrictive than was previously anticipated.
So, What Exactly Did Shireman Do?
Well, during the preparation of the proposed regulations, officials from the Education Department had a hearing with Eisman. The latter was also made to testify before a Senate committee and in addition, he also gave a public speech on the matter. Now, having listened to Eisman’s presentation by phone, all Shireman did was email Eisman pointing out a small statistical mistake that he recognized in the presentation. The same was performed by a colleague of Shireman.
Shireman’s initial tenure for the job was 18 months and he left right after the completion of the period. Now, significantly enough, Shireman actually left several weeks before the proposed new regulations were made public.
Was Shireman Made a Scapegoat?
By all evidences, yes. Right after the administration went public with the proposed regulations, Shireman was pounced upon and the attacks came from many quarters. Subsequently, it will come to light that many of the early as well as late attackers of Shireman had ties to various for-profit colleges (but we’ll come to that soon).
At first, however, Shireman was put to task on the ground of ethics. So for example, Melanie Sloan, the first to question Shireman’s integrity, voiced her outrage over the fact that short-sellers having a say on drafting federal policies. Sloan, then working for a non-profit anti-corruption outfit, squarely blamed Shireman of insider trading. In other words, she accused Shireman of having revealed ‘sensitive’ government documents to investors like Eisman.
Accordingly, she called for a formal investigation on Shireman. And so did two Republican senators with enough clout—Tom Coburn of OK and Richard Burr of NC. Given all these pressures, two federal investigations were initiated.
In June 2012, the inspector general in charge of the investigations returned his report. And the latter claimed, without any ambiguity whatsoever, that neither Shireman nor any of his colleagues were guilty of disclosing any key or ‘sensitive’ information to interested parties.
Further, SEC looked into Shireman’s financial stakes and found no investments that could potentially be aided by the policy. The only thing found in the report was that Shireman had shared six emails with people from the student-debt policy institute, The Institute for College Access and Success, founded by Shireman before he entered his job at 2009. This was a breach according to an ethics pledge for Obama administration executive officials who were prohibited from discussing with their previous employers anything that had any direct relation with the said employers’ activities.However, those emails by Shireman were closely scrutinized by the investigation and they found nothing in them that was not already public knowledge.
The Detractor’s Questionable Ties
An NPR investigation reveals that Sloan, one of the most voracious critics against Shireman, and her organization had received a total of $150,000 in donation in 2010 and 2011 from a not-for-profit funded by John Sperling, the founder and owner of the University of Pheonix. The latter, as many of us may already know, happens to be a giant for-profit university. What is more, it has been subsequently found that many other liberal groups that had attacked Shireman received large sums in donation from Sperling.
Apart from that, many other critics, including various corporate groups and at least two Republican senators, are found to have considerable financial stakes in the for-profit college industry. And the fact stands that a majority of these critics have invoked the Wall Street Journal’s 2013 report to inspire credibility and they continue to do so until this day.
The Journal Refuses Apology or Corrections
Now living in Berkley, California and having a job at Century Foundation, Shireman claims that he doesn’t think that the Journal article has been able to ruin his life. At the same time, however, he claims that he still feels dogged by these repeated accusations, even after having been exonerated of all possible wrongdoings years before.
For the reader’s information, Shireman had last sent an email to the news outlet requesting them to take corrective measures last year. However, as of now, the Wall Street Journal continues to doggedly refuse to do anything of the kind.
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