A4 EZ RE THE WASHINGTON POST.WEDNESDAY, DECEMBER 2 , 2020
BY DANIELLE
DOUGLAS-GABRIELWith her days in office wan-
ing, Education Secretary Betsy
DeVos is taking shots at student
debt cancellation and tuition-
free college proposals, hallmarks
of President-elect Joe Biden’s
agenda for higher education.
Speaking at an Education De-
partment financial aid confer-
ence on Tuesday, DeVos criti-
cized politicians — none by name
— for advancing “the truly insidi-
ous notion of government gift
giving.”
Biden has said that canceling
at least a portion of the $1.6 tril-
lion in student debt held by
44 million Americans is part of
his economic recovery plan. He
has supported at least $10,000 in
federal loan forgiveness, while
other leaders in the Democratic
Party, including Sens. Charles E.
Schumer (N.Y.) and Elizabeth
Warren (Mass.), are calling for
the cancellation of up to
$50,000.
“We’ve heard shrill calls to
cancel, to forgive, to make it all
free,” DeVos said in her speech.
“Any innocuous label out there
can’t obfuscate what it really is:
Wrong.”
Since taking office, DeVos has
been accused by liberal lawmak-
ers and consumer groups of
going out of her way to limit loan
forgiveness through existing fed-
eral programs.
The secretary imposed a
methodology that curbed debt
cancellation under a federal pro-
gram known as “borrower de-
fense to repayment.” That pro-
gram, which dates to 1994, pro-
vides federal loan relief to stu-
dents whose colleges lied to get
them to enroll. DeVos scrapped
an Obama-era overhaul of the
law that made it easier to seek
forgiveness and accused oppos-
ing lawmakers of wanting “blan-
ket forgiveness for anyone who
raised their hand.”
The Trump administration’s
refusal to process applications
for months, delay of the Obama
rule, subsequent partial relief
formula and widespread denials
have resulted in lawsuits.
Biden campaign national pol-
icy director Stef Feldman said in
October that the Obama-era up-
date of the borrower defense rule
would be revived. That would
require lengthy rulemaking at
the Education Department. But
in the meantime, a Biden admin-
istration could clear out the
backlog of borrower defense
claims using a more generous
methodology for approval and
loan forgiveness.
On Tuesday, DeVos took aim at
another popular policy backed
by Biden: Tuition-free college.
She called the policy “a matter of
total government control” and “a
socialist takeover of higher edu-
cation,” with ominous predic-
tions about how it will reshape
the sector.
“None of you would like the
way it will work,” DeVos told
financial aid professionals on
Tuesday. “You won’t like being
forced to tell students they
aren’t eligible to attend your
school, or that they aren’t al-
lowed to choose the degree pro-
gram they want, or that your
quota for ‘free college’ students
is full and that they now have to
pay full price.”
DeVos warned financial aid
officers that they will be “forced
to merely oversee rationing of
state-approved higher-education
options.” Colleges and univer-
sities, she said, will “begin to
resemble a failing K-12 school,
with the customer service of the
DMV to boot.”
It is a striking position on a
policy that has garnered biparti-
san support in recent decades.
There are 30 states that cover
tuition at community colleges or
universities, part of a national
movement to use higher educa-
tion to strengthen local econo-
mies.
Biden has pledged to make
such programs universal by cov-
ering tuition at public colleges
and universities for all students
whose family incomes are below
$125,000. He has proposed that
the federal government cover
75 percent of the cost and states
contribute the rest, a policy that
could be a heavy lift in Congress.
[email protected]DeVos says
college aid
ideas could
be ruinous
Outgoing education chief
criticizes free classes
and student debt reliefdisclose internal numbers. The
Trump campaign declined to
comment.
The surge of contributions has
come largely from small-dollar
donors, campaign officials say,
tapping into the president’s base
of loyal and fervent financial
supporters, who tend to contrib-
ute the most when they feel the
president is under siege or facing
unfair political attacks. The cam-
paign has sent nearly 500 post-
election fundraising pitches to
donors, often with hyperbolic
language about voter fraud and
the like.
“I need you now more than
ever,” says one recent email that
claims to be from the president.
“The Recount Results were BO-
GUS,” another email subject line
reads.
“Our democracy and freedom
is at risk like never before, which
is why I’m reaching out to you
now with an URGENT request,”
reads an email to donors from
Vice President Pence. “President
Trump and I need our STRON-
GEST supporters, like YOU, to
join the Election Defense Task
Force. This group will be respon-
sible for DEFENDING the Elec-
tion from voter fraud, and we
really need you to step up to the
front lines of this battle.”
The donations are purportedly
being solicited for the Official
Election Defense Fund, whose
name is featured prominently
atop the Trump campaign’s web-
site.
There is no such account, how-
ever. The fundraising requests
are being made by the Trump
Make America Great Again Com-
mittee, a joint fundraising effort
of the Trump campaign and the
Republican National Committee.
As of Nov. 18, that committee also
shares its funds with Save Ameri-
ca, a new leadership PAC that
Trump set up in early November
and that he can use to fund his
TRUMP FROM A1 activities after the presidency.
The money raised since Nov. 3
is a massive haul for such a short
period, especially after the elec-
tion, when losing campaigns typ-
ically ramp down their fundrais-
ing operations. By comparison,
the Trump Make America Great
Again Committee raised
$125 million in the second quar-
ter of 2020, according to federal
records. The campaign account’s
best single month was Septem-
ber, when it raised $81 million,
according to available data.
The contributions, from thou-
sands of grass-roots donors
across the country, are split into
several accounts, including the
leadership PAC, an entity that is
loosely regulated and could be
used to personally benefit the
president after he leaves the
White House.
According to the fine print in
the latest fundraising appeals,
75 percent of each contribution
to the joint fundraising commit-
tee would first go toward the
Save America leadership PAC
and the rest would be shared
with the party committee to help
with the party’s operating ex-
penses. This effectively means
that the vast majority of low-dol-
lar donations under the agree-
ment would go toward financing
the president’s new leadership
PAC, instead of buttressing ef-
forts to support the party or to
finance voting lawsuits.
“Small donors who give to
Trump thinking they are financ-
ing an ‘official election defense
fund’ are in fact helping pay
down the Trump campaign’s debt
or funding his post-presidential
political operation,” said Bren-
dan Fischer, who directs federal
regulatory work at the Campaign
Legal Center, which supports
greater restrictions on m oney in
politics. “The average donor who
gives in response to Trump’s
appeal for funds to ‘stop the
fraud’ likely doesn’t realize that
their money is actually retiring
Trump’s debt or funding his lead-
ership PAC.”
Fischer said that “only bigger
donors who’ve maxed out to
Trump’s campaign or the RNC
will see any portion of their
contribution go to dedicated re-
count or legal funds.”
“The RNC has spent tens of
millions of dollars over the last
two years funding legal efforts in
multiple states, and we continue
the fight for election integrity
across the country,” RNC spokes-
man Mike Reed said.
For some of the president’s
die-hard supporters, the fact that
most of the money goes toward
the leadership PAC is not a con-
cern.
Harold Burnham, a 78-year-
old retiree in Maine who has
given to Trump’s campaign mul-
tiple times in small amounts,
said he gave about half a dozen
times to the “Election Defense
Fund” in response to recent ap-
peals that have come since the
election. In fact, all 12 members
of his family who support Trump
have given money to support
Trump’s post-election efforts, he
said.
Burnham said he is concerned
about potentially fraudulent bal-
lots being counted in the election
and wants to donate so that those
ballots can be investigated. He
said he is aware that the majority
of the donation goes toward the
leadership PAC, which he thinks
will be used to help Trump run
again in 2024 or help finance a
Trump-aligned candidate.
“I’m fine with that, because I’m
hoping that if he doesn’t run for
election, that somebody that he
would support with conservative
values would be running for
president in ’24,” Burnham said.
“It’s not big money, certainly. But
every little bit helps if a million
people are doing it.”
The money collected by the
leadership PAC cannot be used
directly for Trump’s own cam-
paign purposes, but there are fewother restrictions on how the
money can be spent. For exam-
ple, donations could be used to
pay for events at Trump’s proper-
ties or to finance his travel or
personal expenses.
Leadership PACs were estab-
lished to allow members of Con-
gress to raise money for their
allies on Capitol Hill through
fundraising vehicles separate
from their campaign commit-
tees. The money is often used for
what is called donor cultivation
— feting wealthy supporters in
the hope that they will write big
checks back to the leadership
PAC and other committees.
Over the years, leadership
PACs have become must-have
accessories on Capitol Hill, as
well as among former elected
officials who want to retain their
political influence by helping
other candidates raise money or
by raising money on their behalf.
“It’s just such an area of lax
restrictions — it’s really kind of
breathtaking,” said Jessica Levin-
son, a campaign finance and
ethics expert at Loyola Law
School in Los Angeles.
Good-government advocates
have been pushing for greater
restrictions on leadership PAC
spending, saying that without
such rules, there is room for
abuse. But the Federal Election
Commission has not taken up the
petition.
Without restrictions, Trump
could push the envelope quite far
in how he spends the money for
personal gain, Levinson said.
“What concerns me is that
President Trump has been a
stress test on all of our legal
systems, and here’s a legal system
where it’s not even that rigid,” she
said. “Whereas in other areas he
really ran right up to the legal
line or he just ran right past it, in
this case, it’s more of like a very
light groove rather than a line.”
On Nov. 18, the Trump Make
America Great Again Committee
struck a formal agreement withSave America, the Trump cam-
paign and the RNC to raise
money together through the joint
fundraising committee and share
the funds, according to federal
records. By Nov. 19, the contribu-
tion share to Save America PAC
had changed to 75 percent from
the 60 percent it had been for
more than a week, according to a
review of the fundraising ap-
peals.
This agreement allows Trump
to raise money for multiple ac-
counts at once, including the
leadership PAC.
Leadership PAC funds can’t be
used to finance the campaign
activity of the officeholder or
former official who leads the
PAC. Any contributing from the
PAC to support other candidates
for office must be done within
federal contribution limits, and
that money must come from legal
sources.
But beyond that, there are no
restrictions on how the official
can spend leadership PAC money,
said Kate Belinski, a campaign
finance legal expert who former-
ly served as a lawyer at the FEC’s
Enforcement Division.
“There’s not really a legal
mechanism that would prevent
somebody from enriching them-
selves with the contributions
that they receive into their lead-
ership PAC in the same way that
personal-use restrictions would
prohibit that for a campaign
committee,” she said.
In November, the Trump oper-
ation sent 498 emails asking for
donations — setting a record for
monthly fundraising requests
from the campaign, according to
a tally by @TrumpEmail, a Twit-
ter account that has tracked the
president’s fundraising requests
since January 2018. By far the
most common theme in the
emails was an appeal for contri-
butions to the “Election Defense
Fund,” according to the account.
[email protected]
[email protected]Trump to be top beneficiary of fundraising pact
JABIN BOTSFORD/THE WASHINGTON POSTPresident Trump, seen with f irst lady Melania Trump at the White House on Nov. 24, could gain personally from money that d onors think is going to fight electoral fraud.
BY SHAYNA JACOBSnew york — A lawyer for
President Trump and three of his
adult children argued to an ap-
pellate court Tuesday that a fraud
case brought against his clients
for endorsing ACN — a market-
ing organization selling telecom-
munications products — should
be sent to arbitration and not go
forward in open court.
The argument, previously
made in court filings, was pre-
sented to a panel of three judges
on the U.S. Court of Appeals for
the 2nd Circuit more than two
years after the case was filed on
behalf of four anonymous plain-
tiffs who say they were duped
into paying to join ACN as inde-
pendent sales representatives be-
cause the Trumps presented it as
a promising business opportu-
nity.
If Trump is successful, the
matter would be forwarded to an
arbitrator, a common way for
business disputes to be resolved
more efficiently and with more
privacy than they are through
lawsuit proceedings. Arbitration
would take place in North Caro-
lina, where ACN is based.
However, the arbitration proc-
ess is seen as less friendly to
plaintiffs like the individuals
who said they were deceived by
the famous family plugging ACN,
which was featured prominently
years ago on “Celebrity Appren-
tice,” Trump’s nationally tele-
vised reality show. The registra-
tion fee alone was $499, andparticipants often paid other fees
with little or no profit in return,
the plaintiffs said.
One plaintiff — listed as Jane
Doe in the case — is a California
hospice caregiver who joined in
2014 and paid thousands of dol-
lars in costs and expenses to ACN,
according to the lawsuit.
Trump’s attorneys argued that
the plaintiffs should be held to
the arbitration agreements they
signed on joining ACN, but law-
yers for the plaintiffs say that
ACN is not being sued and there-
fore the arbitration agreements
do not apply. U.S. District Judge
Lorna G. Schofield sided with the
plaintiffs.
It was not clear when the
appellate panel would issue its
decision.
Roberta Kaplan, who repre-
sents the plaintiffs, argued at the
hearing that the case was “really
a very straightforward commer-cial dispute.”
The Trump side has engaged in
“gamesmanship” by waiting
more than eight months even to
make the claim that the arbitra-
tion agreements are applicable —
and only after exhausting other
options and failing to get the case
dismissed, Kaplan said.
She noted that in a letter to the
district court judge, the Trump
legal team conceded it “inten-
tionally” held back the arbitra-
tion claim to see whether Scho-
field would first dismiss the case.
Kaplan also said that any arbi-
tration agreement between the
plaintiffs and ACN was moot.
“This is about what Donald
Trump said, not about what ACN
said,” Kaplan argued. “It’s a fraud
case, not a contract case.”
Trump, before taking office,
was a vocal paid pitchman for
what the plaintiffs say was a
pyramid scheme that sold tele-communications products and
services — offers that were avail-
able directly from cable and
phone companies without the
involvement of a third party such
as ACN.
Trump and his children Ivan-
ka, Donald Jr. and Eric are named
as defendants in the lawsuit.
Attorney Thomas McCarthy,
representing the Trumps, made
the case to the appellate court
that for the purpose of his appeal
request, the Trump family and
ACN were the same. Trump and
his children promoted the com-
pany “through branded ACN me-
dia,” he argued. ACN filed a brief
with the court arguing for arbi-
tration as well.
This lawsuit is one of several
legal matters and investigations
that will follow Trump when he
leaves the presidency early next
year.
[email protected]Trumps ask that suit a ccusing them of fraud go to arbitration
Four in family h ad
endorsed an alleged
pyramid scheme