Given his strong condemnations of Wall Street generally and of investor-backed higher education companies in particular, the idea that Sen. Tom Harkin would sit down with a bunch of investors to talk about for-profit higher education -- and that the host investment firm would charge a whopping $10,000 a head for the privilege of meeting the Iowa Democrat -- was more than a little startling.
Yet that was exactly the tantalizing possibility that one Wall Street firm was dangling in front of its clients last week. "JNK Securities will host Senator Tom Harkin, Chairman of the Health, Education, Labor and Pensions Committee on September 20th at 2:30pm in NYC for a roundtable discussion," one of the firm's managing directors wrote to a group of investors last Friday. "Discussion topics to include for profit higher education institutions and finance."
When one potential participant wrote to sign up for the event at a French bistro, the JNK official, Don Hood, said in a followup e-mail: "I can confirm you but for our DC Access events such as this we are charging $10k for attendance."
The suggestion that Harkin would share his thoughts on the for-profit higher education sector with a group of mostly short selling investors -- who benefit when the stocks of the higher education companies go down -- troubled advocates for for-profit colleges. That's especially true given that the senator, by Sept. 20, will have collected much of the mountain of information he has asked the companies to provide as part of his continuing investigation into the colleges' practices -- information that could prove damaging to the colleges.
"By September 20, Senator Harkin will have all of the internal memos and emails from the top 30 for-profit schools in the country and at that time will be in a unique position to share his thoughts in a manner that could prove actionable for specific JNK clients," Trace Urdan, an analyst at Signal Hill who has strongly criticized Harkin's approach, wrote in a report for clients. "Leaving aside why Senator Harkin would choose to join such an event in the first place and what, in his role as protector of America's student citizens and taxpayers, he believes he can accomplish by dining with a collection of hedge fund managers, we believe the timing is questionable."
The apparent invitation to join Harkin at Brasserie 8 1/2 seemed to catch the senator's aides by surprise when it was shared with them over the weekend. Tuesday, though, a Harkin spokeswoman told Inside Higher Ed that the senator had never committed to doing such an event -- and that at this point, it was definitely off.
"The Senator had not -- and would never -- agree to an event as described in emails leaked to the media. That has been made clear to the organization in question," Kate Cyrul, Harkin's communications director, said in a prepared statement. "The first we heard of this kind of event with JNK Securities was through media inquiries. Senator Harkin’s campaign office is planning a fund raising trip to NYC, but at no point had a direct conversation with anyone at JNK Securities."
A Harkin fund raiser had been approached about the possibility of doing a fund-raising event with some Harkin supporters on Wall Street, Cyrul continued, but "at no point was there discussion of the senator participating in an event focused on any single issue.”
Hood, of JNK Securities, did not respond to repeated e-mail and telephone messages seeking comment.