President Obama used his executive powers to attack industries to lower the value of certain companies, allowing his friends in the private sector to swoop in and buy them up at reduced prices, according to Peter Schweizer’s new book Secret Empires: How Our Politicians Hide Corruption and Enrich Their Families and Friends.
The book, released Tuesday, said Obama and his administration would deem industries either destructive to the environment or exploitative for the financial and professional gain of his friends, including industries such as coal mining, offshore drilling, cash advance companies, and for-profit colleges.
The book highlighted Marty Nesbitt and Harreld Kirkpatrick III, both former basketball players and close friends of the Obamas, who launched their private equity investment firm Vistria in sync with Obama’s re-election in 2012.
Unlike other investment funds that avoid highly regulated industries, Vistria was specifically focused on the fields that Obama was busy regulating.
“A curious pattern began to emerge,” Schweizer said in his book. “Obama and his administration would attack industries with government power, which led to substantially lower valuations for these companies. Nesbitt and Vistria, or others close to Obama, could then acquire those assets for pennies on the dollar.”
The book said one of the most visible targets of this scheme was the for-profit higher education industry. Obama concluded in 2013 that for-profit schools such as University of Phoenix, ITT Technical Institute, and DeVry University victimized students.
“They’ve been preyed upon very badly by some of these for-profit institutions,” Obama said in 2013 about students who attended these schools. “Their credit is ruined, and the for-profit institution is making out like a bandit.”
The University of Phoenix was hit hard by Obama’s action when he ordered the Federal Trade Commission, among other government agencies, to crack down on for-profit schools.
After being suspended in 2015 following an investigation by the FTC, Phoenix’s parent company, Apollo Education Group, was bought out by three companies in 2016, including Vistria, for nine times less than its value before the suspension.
Schweizer’s book also said there were close links between Vistria and the Department of Education, and said some department officials later went to work for the investment firm.
For example, Deputy Secretary of Education Tony Miller left the department in 2013 to join Vistria, and deputy assistant to Obama for legislative affairs Jon Samuels was also an early hire at the investment firm.
Department meetings in which for-profit schools were discussed included people who now work with Vistria. Miller participated in those meetings, and so did Arne Duncan, the secretary of education who would also end up working for the company.
Schweizer described emails that he said show department officials were talking to Wall Street investors and leaking information about regulations.
