[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
ARE CURRENT SAFEGUARDS PROTECTING TAXPAYERS AGAINST DIPLOMA MILLS?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS
of the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
September 23, 2004
__________
Serial No. 108-72
__________
Printed for the use of the Committee on Education and the Workforce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
Committee address: http://edworkforce.house.gov
______
U.S. GOVERNMENT PRINTING OFFICE
95-958 WASHINGTON : 2004
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN A. BOEHNER, Ohio, Chairman
Thomas E. Petri, Wisconsin, Vice George Miller, California
Chairman Dale E. Kildee, Michigan
Cass Ballenger, North Carolina Major R. Owens, New York
Peter Hoekstra, Michigan Donald M. Payne, New Jersey
Howard P. ``Buck'' McKeon, Robert E. Andrews, New Jersey
California Lynn C. Woolsey, California
Michael N. Castle, Delaware Ruben Hinojosa, Texas
Sam Johnson, Texas Carolyn McCarthy, New York
James C. Greenwood, Pennsylvania John F. Tierney, Massachusetts
Charlie Norwood, Georgia Ron Kind, Wisconsin
Fred Upton, Michigan Dennis J. Kucinich, Ohio
Vernon J. Ehlers, Michigan David Wu, Oregon
Jim DeMint, South Carolina Rush D. Holt, New Jersey
Johnny Isakson, Georgia Susan A. Davis, California
Judy Biggert, Illinois Betty McCollum, Minnesota
Todd Russell Platts, Pennsylvania Danny K. Davis, Illinois
Patrick J. Tiberi, Ohio Ed Case, Hawaii
Ric Keller, Florida Raul M. Grijalva, Arizona
Tom Osborne, Nebraska Denise L. Majette, Georgia
Joe Wilson, South Carolina Chris Van Hollen, Maryland
Tom Cole, Oklahoma Tim Ryan, Ohio
Jon C. Porter, Nevada Timothy H. Bishop, New York
John Kline, Minnesota
John R. Carter, Texas
Marilyn N. Musgrave, Colorado
Marsha Blackburn, Tennessee
Phil Gingrey, Georgia
Max Burns, Georgia
Paula Nowakowski, Staff Director
John Lawrence, Minority Staff Director
------
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS
HOWARD P. ``BUCK'' McKEON, California, Chairman
Johnny Isakson, Georgia, Vice Dale E. Kildee, Michigan
Chairman John F. Tierney, Massachusetts
John A. Boehner, Ohio Ron Kind, Wisconsin
Thomas E. Petri, Wisconsin David Wu, Oregon
Michael N. Castle, Delaware Rush D. Holt, New Jersey
Sam Johnson, Texas Betty McCollum, Minnesota
Fred Upton, Michigan Carolyn McCarthy, New York
Vernon J. Ehlers, Michigan Chris Van Hollen, Maryland
Patrick J. Tiberi, Ohio Tim Ryan, Ohio
Ric Keller, Florida Major R. Owens, New York
Tom Osborne, Nebraska Donald M. Payne, New Jersey
Tom Cole, Oklahoma Robert E. Andrews, New Jersey
Jon C. Porter, Nevada Ruben Hinojosa, Texas
John R. Carter, Texas George Miller, California, ex
Phil Gingrey, Georgia officio
Max Burns, Georgia
------
C O N T E N T S
----------
Page
Hearing held on September 23, 2004............................... 1
Statement of Members:
McKeon, Hon. Howard P. ``Buck'', Chairman, Subcommittee on
21st Century Competitiveness, Committee on Education and
the Workforce.............................................. 2
Prepared statement of.................................... 3
Kildee, Hon. Dale E., Ranking Member, Subcommittee on 21st
Century Competitiveness, Committee on Education and the
Workforce.................................................. 3
Statement of Witnesses:
Cramer, Robert J., Managing Director, Office of Special
Investigations, U.S. Government Accountability Office,
Washington, DC............................................. 21
Prepared statement of.................................... 22
Ezell, Allen, Retired Agent, Federal Bureau of
Investigations, Apollo Beach, FL........................... 5
Prepared statement of.................................... 8
Morse, Jean Avnet, Executive Director, Middle States
Commission on Higher Education, Philadelphia, PA........... 14
Prepared statement of.................................... 16
ARE CURRENT SAFEGUARDS PROTECTING TAXPAYERS AGAINST DIPLOMA MILLS?
----------
Thursday, September 23, 2004
U.S. House of Representatives
Subcommittee on 21st Century Competitiveness
Committee on Education and the Workforce
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 11:05 a.m., in
room 2175, Rayburn House Office Building, Hon. Howard P.
``Buck'' McKeon [Chairman of the Subcommittee] presiding.
Present: Representatives McKeon, Petri, Castle, Ehlers,
Tiberi, Osborne, Gingrey, Burns, Kildee, Tierney, Wu, Holt,
McCarthy, Van Hollen, and Ryan.
Staff present: Kevin Frank, Professional Staff Member;
Sally Lovejoy, Director of Education and Human Resources
Policy; Catharine Meyer, Legislative Assistant; Krisann Pearce,
Deputy Director of Education and Human Resources Policy;
Samantar, Deborah L., Committee Clerk/Intern Coordinator;
Kathleen Smith, Professional Staff Member; Jo-Marie St. Martin,
General Counsel; Ricardo Martinez, Minority Legislative
Associate/Education; Alex Nock, Minority Legislative Associate/
Education; and Joe Novotny, Minority Legislative Assistant/
Education.
Chairman McKeon. A quorum being present, the Subcommittee
on 21st Century Competitiveness of the Committee on Education
and the Workforce will come to order.
We are holding this hearing today to hear testimony
addressing the question, ``Are Current Safeguards Protecting
Americans Against Diploma Mills?'' Under Committee Rule 12(b),
opening statements are limited to the Chairman and the Ranking
Minority Member of the Committee. Therefore, if other members
have statements, they will be included in the hearing record.
With that, I ask unanimous consent for the hearing record
to remain open 14 days to allow members' statements and other
extraneous material referenced during the hearing to be
submitted in the official hearing record.
[No response.]
Chairman McKeon. Without objection, so ordered.
STATEMENT OF HON. HOWARD P. ``BUCK'' McKEON, CHAIRMAN,
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON
EDUCATION AND THE WORKFORCE
Chairman McKeon. Good morning, and thank you today for
joining us for this very important hearing on the issue of
diploma mills. This hearing is intended to examine questions
about what constitutes a diploma mill, and hear more about the
safeguards that currently exist in the law to protect
consumers, taxpayers, and the Federal Government from the
proliferation and tactics of fraudulent institutions claiming
to provide a legitimate higher education.
I want to start by welcoming our witnesses today and
thanking them for joining us.
No formal legal definition exists for a diploma mill, but
they are generally regarded by many as an entity that lacks
accreditation from a state or a professional organization.
Diploma mills are also described as selling college and
graduate degrees that are fraudulent or worthless because of a
lack of standards in curriculum, instruction, and completion.
However, there is more to the definition than that. It is
important to differentiate between non-accredited institutions
of higher education and diploma mills. I hope our witnesses
will be able to draw that distinction for us here today.
Additionally, stories and conversations about diploma mills
tend to turn into conversations about online institutions and
education over the Internet. Although many diploma mills
operate their phony institutions of higher education over the
Internet, it is important to distinguish between these scams
and legitimate, credible online institutions that operate
quality, accredited distance learning programs.
Diploma mills harm students, taxpayers, and both Federal
and state governments. They mislead consumers and employers,
and pose dangers to legitimate institutions of higher
education.
Reliance on phony degrees is not a victimless crime. Take
the deserving story of an individual claiming to be a physician
in North Carolina who treated an 8-year-old girl for
complications with diabetes. The girl's mother trusted the
``doctor,'' based on his M.D. degree, and took her daughter off
of insulin, as instructed. Sadly, her daughter died. The
physician--he earned his degrees from bogus institutions. All
of his diplomas came from diploma mills.
Although the Federal Government has been successful in
keeping phony institutions out of the Federal student aid
programs, in recent years policymakers at both the Federal and
state levels have begun to recognize the need to find ways to
keep diploma mills out of business all together.
I hope our witnesses can talk more about current safeguards
that are in place, as well as offering insight into what more
can be done to keep fraudulent institutions out of the
marketplace.
Thank you again for joining us here today to discuss this
important topic. I want to also thank Congressman Castle for
bringing this to our attention, and asking us to hold this
hearing. He is a great colleague and a great member of this
body.
I look forward to hearing your testimony here today so that
my colleagues and I can learn more about this very serious
issue. I will now yield to Congressman Kildee for his opening
statement.
[The prepared statement of Chairman McKeon follows:]
Statement of Hon. Howard P. ``Buck'' McKeon, Chairman, Subcommittee on
21st Century Competitiveness, Committee on Education and the Workforce
Good morning and thank you for joining us today for this very
important hearing on the issue of diploma mills. This hearing is
intended to examine questions about what constitutes a diploma mill and
hear more about the safeguards that currently exist in the law to
protect consumers, taxpayers, and the federal government from the
proliferation and tactics of fraudulent institutions claiming to
provide a legitimate higher education.
I want to start by welcoming our witnesses and thanking them for
joining us here today.
No formal legal definition exists for a diploma mill, but they are
generally regarded by many as an entity that lacks accreditation from a
state or a professional organization. Diploma mills are also described
as selling college and graduate degrees that are fraudulent or
worthless because of a lack of standards in curriculum, instruction,
and completion.
However, there is more to the definition than that. It is important
to differentiate between non-accredited institutions of higher
education and diploma mills. I hope our witnesses will be able to draw
that distinction for us here today.
Additionally, stories and conversations about diploma mills tend to
turn into conversations about on-line institutions and education over
the Internet. Although many diploma mills operate their phony
institutions of higher education over the Internet, it is important to
distinguish between these scams and legitimate, credible on-line
institutions that operate quality accredited distance learning
programs.
Diploma mills harm students, taxpayers, and both federal and state
governments. They mislead consumers and employers and pose dangers to
legitimate institutions of higher education.
Reliance on phony degrees is not a victimless crime. Take the
disturbing story of an individual claiming to be a physician in North
Carolina who treated an 8-year old girl for complications with
diabetes. The girl's mother trusted the ``doctor'' based on his MD
degree, and took her daughter off of insulin, as instructed. Sadly, her
daughter died. The physician? He earned his ``degrees'' from bogus
institutions; all of his diplomas came from diploma mills.
Although the federal government has been successful in keeping
phony institutions out of the federal student aid programs, in recent
years, policy makers at both the federal and state levels have begun to
recognize the need to find ways to keep diploma mills out of business
altogether. I hope our witnesses can talk more about current safeguards
that are in place, as well as offer insight into what more can be done
to keep fraudulent institutions out of the marketplace.
Thank you again for joining us here to discuss this important
topic. I look forward to hearing your testimony so that my colleagues
and I can learn more about this very serious issue.
______
STATEMENT OF HON. DALE E, KILDEE, RANKING MEMBER, SUBCOMMITTEE
ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE
WORKFORCE
Mr. Kildee. I thank you, Mr. Chairman. I am pleased to join
you at today's hearing on diploma mills. This hearing
represents an important opportunity to learn more about this
increasingly concerning practice. I know that both of us are
looking forward to today's hearing and learning about this
issue from our witnesses.
Higher education in this country is recognized for its
standards and the rigorous education it provides our students.
Accreditation helps assure this rigor, enables us to insure
that we are protecting taxpayer resources that are utilized for
student aid.
The quality of our institutions of higher education enable
businesses to be certain they are hiring employees with the
skills and knowledge they need to compete and remain
profitable. Diploma mills undermine all this.
Diploma mills impact everyday citizens. Consumers can and
have been hurt when they receive care or services from
individuals with false credentials. Doctors and other health
professionals who practice with fraudulent degrees have
inflicted irreparable harm upon their customers.
Diploma mills also harm the integrity and perception that
the public and employers have about higher education in this
country. Individuals who purposefully or unknowingly buy
degrees and other certificates from diploma mills are helping
to perpetuate this fraud.
Very simply, diploma mills need to be shut down. States
need to be more forceful in their prosecution in monitoring
suspect institutions. But the Federal Government also has an
important role. The Department of Education needs to be
vigilant in ensuring that accreditors are maintaining high
standards when they review their institutions of higher
education.
But the Department of Education cannot and should not be
expected to do this on their own. We need additional focus from
the FBI and other agencies that can prosecute individuals who
commit mail or wire fraud. Collectively, the efforts of states
and the Federal Government can and should end this practice.
I look forward to learning more today about what can be
done to combat these fraudulent operations. And again, Mr.
Chairman, I thank you and Mr. Castle for your deep interest in
this matter. And I yield back the balance of my time.
Chairman McKeon. Thank you. I will now introduce our
witnesses. First, we will hear from Mr. Allen Ezell. From 1960
to 1991, Mr. Ezell served as an agent for the Federal Bureau of
Investigation. During his tenure, Mr. Ezell directed the FBI
investigation of DIPSCAM, a task force that worked to expose
and shut down fraudulent degree programs.
Mr. Ezell currently serves as vice president of corporate
fraud investigative service for the Wachovia Corporation.
Then we will hear from Ms. Jean Avnet Morse. Ms. Morse
currently serves as executive director for the Middle States
Commission on Higher Education, an association that seeks to
promote and ensure quality assurance and improvement in higher
education. The Middle States Commission is a regional
accrediting agency recognized by the U.S. Department of
Education.
And finally, we will hear from Mr. Robert Cramer. Mr.
Cramer currently serves as the managing director of the Office
of Special Investigations at the U.S. Government Accountability
Office, which is commonly known as the investigative arm of
Congress.
Prior to his current position, Mr. Cramer served as the
assistant United States attorney in the southern district of
New York.
Before you begin, I would like to explain the light system
we have there. You have 5 minutes to summarize your testimony.
The green light means start. The yellow light means you have a
minute left, and the red light means you're done.
We appreciate your being here, and we're looking forward
to, as I said, hearing from you. We will begin with Mr. Ezell.
STATEMENT OF OTHO ALLEN EZELL, JR., RETIRED AGENT, FEDERAL
BUREAU OF INVESTIGATIONS, APOLLO BEACH, FL
Mr. Ezell. Good morning. Can you hear me, sir? Thank you.
Mr. Chairman, Committee members, it is a pleasure for me to
appear before the Committee today. Let me commend you for
recognizing that diploma mills are a problem, and for holding
these hearings.
As you know, I am a retired FBI agent. For 11 years I
conducted DIPSCAM, Operation DIPSCAM. I purchased 10
bachelor's, 19 master's, 4 Ph.D.s, 2 M.D.s, and I assisted
other FBI agents in the purchase of their degrees. We executed
16 Federal search warrants, we obtained 19 grand jury
indictments, and we convicted 21 people. So as you can see, it
can be done.
Our defendants were male and female, black and white, young
and old. Several had legitimate bachelor's, master's, and
doctorate degrees. We lost no cases on appeal. The one case
that went through the fourth circuit to the Supreme Court, the
Supreme Court refused to hear it, so therefore the lower
court's affirmation stood.
In those days, 1980 to 1991, degree mills were less
sophisticated than they are today. Our largest degree mills
sold about 2,500 degrees and grossed about $2 million. That is
nothing compared to today's degree mills.
As you know, Senator Collins held hearings earlier this
year and exposed 460 Federal employees, GS-15 and above, with
these types of degrees, and determined that the government had
spent $150,387.80 on some of these degrees. And this was just
from six agencies and the Pentagon. She described this as the
tip of the iceberg, and I agree.
I wonder what we would uncover in the other 98 percent of
the Federal agencies, and what action, if any, has been taken
against those who were exposed? What word has gotten out?
Degree mills are well over a $500 million a year business.
Probably one million Americans have purchased and probably used
fictitious credentials.
Upon my retirement in 1991, the FBI no longer had a
concerted effort in the area of education fraud. Thereafter, no
Federal law enforcement agency considered this an investigative
priority. Thus, no one investigated cases except on a catch as
catch can basis.
Yes, in recent years, we have seen successful cases
involving James Kirk, LaSalle University in Louisiana, and
Ronald Pellar in Louisiana and California, Columbia State
University.
Ironically, Kirk has a degree from Southeastern University,
Greenville, South Carolina--one of my alma maters--my first
case in DIPSCAM, and probably operated two schools while
serving time in a Federal prison camp. LaSalle grossed $36.5
million and the FBI seized about $11 million in 8 bank
accounts, after which Kirk was indicted and convicted.
Ronald Pellar, however, holds another distinction. He
operated his college scam while he was a Federal fugitive in
another case. Pellar grossed between $20 million to $72
million, depending on who you believe.
Still, these revenues are nothing compared with the
behemoth operation university degree program. I am sure you
have received one of their millions of spam e-mails which state
``No required tests, classes, books, or interviews, and
everyone is approved.'' That's my type of school.
This operation run by several Americans from boiler rooms
in Jerusalem and Bucharest, sold degrees, transcripts with
verifications on at least 18 schools, probably with 20 spin-
offs or clones, from 1998 to 2003, and in my opinion, grossed
$435 million.
The registrars brag that the United States residents
account for the majority of their sales. Since I have a degree
in accounting, imagine the cost of goods sold when you have no
facility, no faculty, no depreciation, no salaries, and no
pensions. You sell bachelor's, master's, and doctorates in
everything from aviation to zoology, and 26 in the medical
field.
The backbone of UDP is their degree verification service
and recommendation letters from the professors. Where do you
think these people with degrees in medical majors are doing
with their degrees? Where do you think they are employed? And
while no one in Federal law enforcement is doing anything about
it, these operators have nothing to fear.
While I was working on my testimony for today, I received a
return call on a spam that I had responded. I was offered my
M.D. degree this Tuesday for $1,995 from Somerset University.
Several hours later, he called me at the end of his shift and
his price had gone down to $995. Now he was calling me from New
York, although they have an address in London, England.
Degree mills have blossomed with the worldwide use of the
Internet. They have made it possible for legitimate distance
education, and that's where the degree mills also hide.
Fictitious credentials are a worldwide problem. Our crooks sell
our wares to foreign students, and the foreign crooks sell
their paper to our citizens. The Internet knows no borders, and
anything is available for a price.
As you said, degree mills are a problem, because they
damage by misunderstanding in the public mind, the legitimate
educational institutions. They devalue earned degrees with
lookalikes and soundalikes. They confuse the public. They
defraud students who believe the school is real. They deceive
employers, customers, clients, and patients. They lower the
prestige abroad by defrauding foreign students.
Dr. John Bear and I testified in United States District
Court in Charlotte on a physician whose degrees came from three
of my alma maters. He was a ringer. He was convicted and he is
in Federal prison.
You, along with employers and real educational institutions
must not only be aware of the degree mill institutions and
names of schools you don't recognize. Then you have got
counterfeit degrees and transcripts on our legitimate colleges
and universities, because also available on Internet are those
loss replacement diploma services selling fake degrees and
transcripts from legitimate, accredited traditional colleges
and universities.
I have purchased counterfeit degrees of both universities
that I have sent my daughters to. Today I can buy a counterfeit
degree and transcript from George Washington University,
University of Maryland, and hundreds of others for less than
$100 with no impunity. It should not be this easy.
In my opinion, degree mills can be stopped. It is basic
supply and demand. Have the FBI dedicate one FBI agent to work
education fraud exclusively, purchase some diplomas, execute
some search warrants, make some arrests. The word will get out.
I guarantee it. These people pay attention to the market place.
At the same time, prosecute and publicize those egregious
instances where diploma mill paper was used to obtain
employment, get raises, or where government funds were used, to
buy the paper to begin with. This will decrease the demand,
which in turn will dry up the supply side. This can be done if
you have the desire.
Encourage the Department of Education to develop their web-
based list of legitimate schools. Encourage states, just like
you were saying, to adopt legislation similar to that of
Oregon, and establish an office of degree authorization and to
maintain a website which indicates which school degrees can be
used for educational credentials in that state, or the user
faces arrest.
At the same time, the Federal Government needs to be
consistent in all of its handling of Federal employees using
degree mill degrees. I was appalled that Laura Callahan, the
official at the Department of Homeland Security, was hung out
to dry after a 19 year career for her possession of degrees
from Hamilton University, especially when you consider that the
position she held held no educational qualifications. She is
not street-wise. She had heard of degree mills, but not
accreditation mills, and did not know it was a degree mill.
She obtained these degrees over a several-year period with
her own funds, no Federal money involved. In my opinion, her
agency--then, the new Department of Homeland Security--was gun
shy as a result of all the publicity they received here in
Washington. They took the easy way by rescinding her security
clearance, showing her the door, resulting in her later
resignation.
Possession of a degree mill diploma is not itself grounds
for revocation of a security clearance. With all the degrees
that I bought, nobody ever came to me and questioned revoking
my security clearance as an FBI agent.
What has happened to Charlie Abell, Deputy Under Secretary
of Defense, with a degree from Columbus University; Jimmy Shirl
Parker, Federal Technology Service, GSA, California Coast
University; Daniel P. Matthews, Transportation Department, Kipp
College; and many, many others?
In our effort to get this message out, Dr. John Bear and I
have written a new book titled, ``Degree Mills,'' which will be
available in January. Additionally, we have a website under
construction, degreemills.com, which will be operational
shortly, where we can post up-to-date information on who is
selling who to what for how much on a daily basis, because
diploma mills change their names as fast as you and I change
our socks.
Further, Dr. Bear and I have associated ourselves with the
commercial services division of U.S. Investigation Service in
order to maintain and update their comprehensive degree mill
data base.
I know I have gone quickly to summarize this. The field is
very broad, and you have opened up a can of worms that goes in
many places. I thank you for the opportunity to be here. It is
an honor for me. And any questions that I can answer, I will be
glad to. Thank you.
[The prepared statement of Mr. Ezell follows:]
Statement of Otho Allen Ezell, Jr., Retired Agent, Federal Bureau of
Investigation, Apollo Beach, FL
Mr. Chairman and Members of the Committee:
It is my pleasure to be here today. Let me commend your for
recognizing Degree Mills as a problem and for holding these hearings.
Although I was not present during the January and March, 1924
Congressional Degree Mill hearings, I was present for Congressman
Claude Pepper's hearing in December, 1985, and Senator Susan Collins''
hearing in May, 2004. Although there was a lot of talk during these
hearings, there were no lasting actions taken. Now here we are again.
In fact, the entire matter has just blossomed with the advent of the
internet.
For background, staff members for Congressman Pepper were able to
purchase a Ph.D. for the Congressman from Union University, Los
Angeles, Ca., and staff for Senator Collins were able to purchase both
Bachelor and Masters degrees in Biology and Medical Technology
respectively for her from Lexington University, based in Middleton, New
York (via www.Degrees-R-Us.com). I find it odd these entities were
never ``raided'' by federal or state law enforcement in execution of a
federal search warrants, and their operator's were never prosecuted. I
have previously arrested Degree Mill operators with less probable
cause. As high profile as these schools were, and nothing happened, I
find this unbelievable.
I agree with Senator Collins that what her committee uncovered is
just the ``tip of the iceberg''. They found 1,200 resumes as contained
in a government-sponsored data base, listed degrees from 14 different
Degree Mills. After a degree audit of six federal agencies, including
the Pentagon, for GS-15 and above positions, they determined at least
463 federal employees (at these agencies) had obtained degrees from
unaccredited schools. The United States Government paid $150,387.80 to
several of these schools for those federal employees who requested
reimbursement. Keep in mind these schools do not have a dollar charge
per credit hour (only X dollars per degree), thus they created a
fictitious billing statements for a per course/hour charge, which was
then sent to their agency for payment.
Thus, if only two percent (2%) of federal agencies were audited at
which they found 463 employees at a cost of $150,387.80 to the
government, I wonder what the results would be if a degree audit would
be conducted at the remaining 98% of federal agencies. Further, Senator
Collins committee found the five Degree Mills they encountered with the
above employees had, from 1995-2003, grossed $111,000,000. I also
wonder what the entire universe of Degree Mills looks like. Senator
Collins committee estimates Degree Mills gross at least $500,000,000
each year (and this may even be understand).
I am a second generation FBI Agent having retired in December,
1991. For an eleven year period I investigated Degree Mills throughout
the United States and abroad. Collectively, these many investigations
were called Operation Diploma Scam (DIPSCAM). During this time, I
responded to advertisements as a potential buyer, received the school's
literature via the United States Mails, made and recorded interstate
telephone calls to and from my schools, all resulting in my purchasing
various degrees which were accompanied by transcripts.
In all those years, the most new work I did were several papers
(not more than 5 pages it length) for Masters Degrees. In some
instances, I negotiated with the school representative relative on my
Grade Point Average (GPA). All of my schools offered degree
verification for employment purposes and some even had alumni
association, class rings, school decals, sweat shirts, hats, decals,
etc., all indicia of legitimacy. However, most did not have a campus
nor an educational facility, faculty, any meaningful academic
instruction, nor educational motivations, etc. Since their
advertisements/brochures/literature looked good, thus they must be
``real''. [Put 1,000 or 2,000 miles between a students mail box and his
school, anything is possible. The student never knows the school only
exists at a mail drop/answering service in a distant city].
During our first investigation, after we had purchased our
Bachelor, Master, and Ph.D. degrees from Southeastern University,
Greenville, S.C., all based on life experience (with no new work
submitted), officials of then North Carolina National Bank (now Nations
Bank), Charlotte, North Carolina, (in cooperation with the FBI),
corresponded with officials of Southeastern University and indicated
two young men had applied for positions with the bank, thus they sought
verification of their degrees. The President of the Southeastern
University then verified to bank officers, our degrees (and
transcripts) via the U.S. Mails, and made glowing remarks about his two
graduates. When we took a tour of our alma matter, we were recruited to
raise funds for the university and keep one third for ourselves. During
our tour, the President of the university showed us where our student
files were kept along with the files of their many other graduates.
Later, the Assistant United States Attorney, Western District of North
Carolina, wanted to be able to prove in U.S. District Court that
Southeastern Seminary was as crooked as the university, thus a third
FBI Agent negotiated for a Masters degree in Divinity and agreed on a
price of $5,000. On 5/4/81, at the appointed time for the Agent to pay
for, and pick up his degree, we three arrived as FBI Agents with a
federal search warrant. We took all documents and other items described
in the search warrant, including a cabinet full of student files. We
then left for Charlotte, which is about 90 miles North of Greenville,
S.C. The seized items were then entered into evidence and the
appropriate paperwork completed--none of the records had yet been
reviewed.
The next morning we received a telephone call from local
authorities in Greenville, South Carolina, who advised that Dr. Alfred
Q. Jarrett, President and founder, Southeastern University, had
committed suicide during the evening, after we left his university
which had been operated from several rooms in his personal residence.
When we reviewed the records of Southeastern University, we
determined during its eleven year existence, they had 620 ``graduates''
of which 171 were employed by federal, state, and local governments
employees. Some ``graduates'' held Senior Executive Service (SES)
positions in Washington, D.C.
As result of the above, we created a computerized date base of all
our ``graduates'', then and on an on going basis, we furnished these
names to the Office of Personnel Management, Inspectors General of the
Respective agencies, and to the various State Attorneys General. As
each DIPSCAM case was adjudicated, we entered a list of the schools
``graduates'' into evidence, thus making it a ``public record'' which
then became available to universities and the media. At the time of my
retirement in December, 1991 the DIPSCAM data base contained the names
and all pertinent information on over 12,000 ``graduates''. Some worked
in private industry, education, law enforcement, medicine, military,
and numerous state and federal agencies.
During DIPSCAM, from 1980-1991, we purchased 40 degrees, executed
16 federal search warrants, had 19 indictments returned by the Federal
Grand Jury, convicted 21 persons, and over 40 schools were dismantled.
We never lost a case and won the only two convictions which were
appealed. Only one case (with multiple convictions) went to the U.S.
Supreme Court, which the court declined to hear thus sustaining the
opinion of the Fourth Circuit Court of Appeals affirming the
conviction. During DIPSCAM, the highest gross revenues we found were
$2,000,000 for our Degree Mills. [Details for many of the schools we
visited are contained in the attached listing and articles].
Degree Mills are not just recent problems. We have had them in the
United States since about 1835. As long as we have a credential
conscious society, where the degree/transcript you possess gets you the
interview/promotion/salary increase (instead of the requisite
knowledge/job skills), then we will always have Degree Mills. I say
this because Degree Mills are nothing but criminal enterprises operated
for profit. This is Education Fraud and no different from any other
fraud (and in some instances similar to counterfeiting), only here the
crooks are selling either fictional or worthless academic credentials
(and again, sometimes counterfeit documents).
These crooks are like chameleons, they will change their criminal
enterprise to adapt to their surroundings and conditions, thus their
scheme will always ``blend in''. This is what has happened in the last
decade with the acceptance of the concept of credit for life
experience, non-traditional education, distance learning, etc. The
Degree Mill operators due their best to blend in with legitimate
colleges and universities offering real distance learning. In fact,
many have copied materials for their web sites from legitimate colleges
and universities, and in some instances, even named their entity one
letter or word different from the real school, intentionally wanting
its victims to confuse it with the real school which has name
recognition and reputation. These Degree Mill operators know how to
expertly adapt to current conditions and how to exploit gaps in federal
and state law, law enforcements priorities, prosecutive guidelines,
etc.
I know of one instance where an individual who operates numerous
Degree Mills, after the horror of 9/11 and resulting creation of the
Department of Homeland Security, he then created the International
College of Homeland Security where he offers certificates/diplomas in
homeland security, in addition to Bachelor, Master, and Ph.D. degrees
in public administration/homeland security and public safety, along
with certificates and diplomas in human reliability/beyond crisis
prevention. He even has a ``Homeland Security Specialist Program''
where he discusses our vulnerability to terrorism in his sales pitch.
If this is not enough, this college states ``all of our course
designers, developers, and professors are experts in their particular
field of homeland security and the public safety. Most are former or
present FBI Agents, criminal investigators, emergency and disaster
panning professionals, lawyers, U.S. Border Patrol personnel, U.S.
Customs professionals and homeland security personnel.'' [I highly
doubt this].
They also operate Homeland Security University whose motto is
``Protecting Your Country Through Knowledge'' (www.homeland-security-
college.org). This university also has an on line ``University Store''
where various items are for sale bearing the school logo.
Today, this college indicates it is located in Moscow, Russia;
yesterday, it was in Washington, D.C.; Rochester, New York; Mariastein,
Switzerland; Liberia and Canada, even though it is operated by Richard
J. Hoyer, Rochester, New York, with assistance from Dixie Randock,
Spokane, Washington, and can be contracted through
www.4acollegedegree.com. They also operate St. Regis University of
Monrovia, Liberia and various related entities. St. Regis University,
(and its related entities), is probably on of the largest Degree Mills
operating today. These universities are highly mobile, and their
purported addresses change frequently.
Degrees from St. Regis University have appeared all over the United
States. Recently, eleven school teachers in Georgia were found to have
graduate degrees from St. Regis University and these teachers had been
paid increased salaries for several years because of these graduate
level degrees. Once the $36,000 has since been repaid by the teachers,
whose teaching credentials were later revoked, they all resigned. State
officials are considering if they will also prosecute these teachers.
If just one state has 11 ``graduates'' of St. Regis University for
which they were paid increased salaries for these graduate, I wonder
how many graduates are employed in the remaining 49 states, and how
many tax dollars are being paid. Under the No Child Will Be Left Behind
Act, most teachers have until 2005-2006 to meet federal standards for
being ``highly qualified,'' which can include holding an advanced
degree in the subject they teach. This increased pressure on the
teachers, in conjunction with teachers busy schedules, may be turning
them to Degree Mills.
In San Antonio, Texas, many firemen were recently found to have
degrees from St. Regis University, thus they received increased
salaries. This too made its way into the press. Again, I wonder where
else, and in other professions, where this is happening.
The Chrysler Foundry in Indianapolis, Indiana, will be closing in
2007, thus many of these displaced employees feel the need to obtain a
college degree before they reenter the job market. Chrysler offers it
employees up to $4,600 each year in tuition assistance, with the
requirement that the courses are from an accredited institution.
Chrysler, with the help of the local UAW, promoted and paid for the St.
Regis program. More than 76 employees enrolled in St. Regis University.
That's at least $42,000. Now that this scam has been exposed by WTHR TV
in Indianapolis, may Chrysler workers are embarrassed and outraged. A
Bachelor's Degree at St. Regis University is just $895. (A listing of
all Hoyer/Randock's schools is attached). Fictitious or worthless
accreditation is another integral building block of these Degree Mills.
These and other Degree Mills do not operate in a vacuum. These are
professional operations, which take planning, preparation, and
organization in order to run smoothly and maximize profits. [Note the
education of its students is not mentioned because this is not their
goal]. Their window dressing (camouflage) may include:
A. A 3rd party academic consultant or referral entity
B. An independent accreditation entity to accredit the Degree Mill
C. The Degree Mill itself- can be a store front, mail drop, or
rented office (or just ``virtual'')
D. A transcript/records storage/verification service--provides
certified transcripts to graduates and verification of degrees to
employers
E. A 3rd party academic credential evaluation service...degrees
from _ are equivalent to _. [Many employers have been fooled by this].
Thus, the public/business/government must not only beware of the
Degree Mills which change their names almost daily, then we have the
Accreditation Mills, Academic Consultants/Referral Entities,
Transcripts Verification/Records Storage entities, and Credential
Evaluation services--which support the Mills and are all tied in to the
Degree Mills. When an organizational chart is prepared for a large
Degree Mill, it probably resembles an octopus with it numerous
tentacles.
Years ago, if a criminal had prayed for a way to reach the public
without spending a fortune on postage; prayed for a means to get their
catalogues into peoples hands without incurring great printing costs;
prayed for an alternative to buying expensive advertising in newspapers
and magazines; and prayed for a way to run a business anonymously along
with banking off-shore, electronically and privately, his prayers would
be answered shortly.
Along came THE INTERNET. At no other time in the past 25 years have
I observed such a boon to this type of white collar crime. The internet
know no borders--our crooks are selling their worthless degrees to
persons in other countries; conversely, their crooks are selling their
worthless degrees to our citizens. Several times, our crooks have
established their base of operation for their Degree Mills in foreign
countries as a means of thwarting U.S. law enforcement agencies and
regulators. The reverse is also true--last year I observed a Degree
Mill whose web site showed the skylines of Jacksonville and Tampa,
Florida, and they had a local Florida address (a mail drop). When I
checked to determine where its operators were located, it was Hong
Kong, China.
If the above (in conjunction with desk top publishing, cut and
paste, etc.) is not enough to make you question all academic documents,
then we have ``lost replacement degree services'' or ``novelty
documents'' or ``fake diplomas and transcripts'' in the names of
legitimate, accredited, traditional colleges and universities which are
available via many web sites today for less than $100. Anything and
everything is available for sale on the internet today. Some of these
sites are:
www.diplomamasters.com, www.diplomaservices.com,
www.diplomasforless.com, and www.diplomaville.com (copies
of these web sites are attached to this statement).
For the past ten years, detection and prosecution of Degree Mills
has been on a catch-as-catch-can basis. There has been no concerted
effort by any federal or state law enforcement agency to ferret out
Degree Mills, prosecute their operators, and prosecute those persons
who knowingly purchase and use these fictitious credentials. Yes, there
were isolated instances where Degree Mills were investigated by the FBI
and USPO and prosecuted [La Salle University in Louisiana-operated by
James Kirk, and Columbia State University in Louisiana/California as
operated by Ronald Pellar], only after numerous complaints had been
filed by victims. Both LaSalle University and Columbia State
University, due to their advertisements in national publication, they
were highly visible to all, (including law enforcement) especially with
some of their advertised claims (a degree in 27 days, etc.).
Ironically, Kirk (a ``graduate'' of one of my alma maters, Southeastern
University) later operated two schools from his cell at a federal
prison camp, whereas Pellar operated Columbia State University while he
was a federal fugitive resulting from another court action. Kirk/
LaSalle University grossed $36.5 million and Pellar/Columbia State
University grossed somewhere between $20-72 million. But this is still
pocket change when considered in the shadow of the ``University Degree
Program''.
By far, the largest and most sophisticated Degree Mill operation
ever conducted ``University Degree Program'' probably grossed about
$435 million from 1998 though early 2003, when the Federal Trade
Commission filed restraining orders in order to stop another smaller
fraud (International Driving Permits) which were being sold by the same
criminals, from the same boiler rooms, via the same computer addresses.
This operation, run by Yacov Abraham, and relatives, of Boston, New
York City, and Los Angeles, through two ``boiler rooms'' (telephone
call centers) in Jerusalem and Bucharest, employed 45 people per shift
(two shifts daily) in order to primarily call residents of the United
States and Canada. This is the operation which caused millions of spam
mails to be sent daily all over our country. The FTC had over 90,000
different spams from this operation. Generally, initial cost for the
degree was $2,400, less then $500 ``instant scholarship'', and then the
bargaining began. The ``graduation kit'' included the diploma,
transcript (with life long verification service), a sheet containing
the appropriate telephone numbers for verification services, and two
letters of recommendation from Professors you have never met nor spoken
to. You could pay be check, credit card, wire transfer to their
``accountant'' in London or Cypress. They even accepted American
Express, Master Card, Visa, etc. [Imagine, getting frequent flyer miles
at the same time as your degree]. University Degree Program schools
utilized accommodation addresses in Scotland, United Kingdom (London),
The Netherlands, Switzerland, etc., with degrees drop shipped abroad
and re-mailed in the Los Angeles area. This was a very sophisticated
name/telephone number, knowing exactly where they were in the pitch
when you were last contacted.
During this six year period, UDP sold degrees/transcripts on
eighteen schools, then its employees began their own spin offs, which
probably total about fifteen more and continue to this day. Many UDP
employees probably thought, now that they had been trained on the
operation, and it was so profitable (very little overhead since there
is no campus, buildings, faculty, retirement accounts, etc.), and I can
steal the boiler room scripts, why not start my own school-which they
did. (Details regarding all UDP schools and spin offs, is attached.
Also attached is a listing of the degrees sold by UDP schools in the
medical field). Where do you think these ``graduates'' who purchased
degrees in medical fields are employed? Imagine a business which has
two telephone marketing rooms, 45 employees each, two shifts per day--
all selling degrees, transcripts, with verifications.
Ironically, since I still respond to spams, as I write this
document, at 11:51AM on 9/21/04, I received a call from one Charles
Baker, in New York State, telephone (917) 254-4102, who introduced
himself as a Registrar representing Somerset University whose web site
is located at www.somersetuniversity.org. He stated they are an
``international correspondence diploma program'' which has been around
since the 1980's. In less than one minute, he found me qualified for my
MBA degree (comes with a student identification number, certified
transcripts, professor letters of recommendation, verification of
degree details, and we agreed on a modest GPA of between 3.5--3.8
(magna cum laude). The date of the degree is of my choice. The entire
package will be sent to me within 10-15 days via Federal Express--all
for the modest cost of $1,995. He pointed out I can not use this degree
for transfer purposes (although many have tried), but this is designed
for ``professional purposes, to get pay raises, and promotions''. He is
sending me an e mail to confirm what I will get for my money and will
call back in 30 minutes to see which credit card I want to use. [This
sounds like a UDP clone to me].
There are 2,567 unrecognized schools (many of which are Degree
Mills) and 202 unrecognized accreditors (some are operated by the same
persons as the Degree Mills). Thus it is easy for the operators of
Degree mills to ``blend in''.
Staff has asked what I have done to ensure Degree Mills do not
proliferate.
As an FBI Agent, for an eleven year period, I identified as many
Degree Mills as possible, thereafter ``making cases'' on these entities
and their operators, resulting in their indictment, arrest, and
conviction. The side benefit was the closure of the Degree Mill. In not
a single instance did the Degree Mill survive the arrest and convection
of its principals. Education Fraud was never an investigative priority
of the FBI, In fact, the Charlotte FBI office took some heat from FBI
Headquarters for all its work on Degree Mills. After my retirement and
the ending of DIPSCAM, the FBI made no organized effort in this arena.
As if this was not bad enough, The Internet was now world wide and the
Degree Mill operators quickly realized its potential and its world wide
market.
After retiring from the FBI, I have continued to stay abreast of
Degree Mill comings and goings by responding to advertisements and
spams, like I mentioned above. It is only in this way one will know--
what is being sold, by whom, and for how much.'' I have written several
articles on the subject, and have made presentations to both government
agencies, educational groups, and to law enforcement. I have consulted
with prosecuting and defense attorneys, and have consulted with federal
prosecutors in the area, and attended Senator Collins two day hearings
in May, 2004.
Dr. John Bear and I have written a reference book on this subject,
titled ``Degree Mills'' which is being published by Prometheus Books.
This book will be available in January, 2005. We have also established
a web site, www.DegreeMills.com which will be operational shortly as a
means to keeping people up to date on what's happening in the world of
Degree Mills. Additionally, we are part of a network of like minded
professions in this area. Further, Dr. Bear and I have associated
ourselves with the Commercial Services Division of U.S. Investigations
service in order to maintain and update their comprehensive Degree Mill
data base.
Staff has also asked what can be done to identify why Degree Mills are
a problem.
In my opinion, Degree Mills are a problem because they:
Damage by misunderstanding--similar to counterfeit
currency, if I can no longer trust the currency I am give, then its
value diminishes. If I can't rust the educational credentials I am
presented, then they are worthless.
Devalue earned degree (look-a-likes and sound-a-likes). I
have previously purchased counterfeit diplomas from both of my
daughter's alma maters (University of North Carolina and University of
Florida). These were exact replicas, except the signatures were
incorrect for my graduation date. Agreed, I did not have transcripts,
but those were available to me elsewhere. I realize you will never be
able to take away the education my daughter's received, however, when
counterfeit degrees of our legitimate, regionally accredited,
traditional universities are available for sale via the internet, this
can do nothing but take some of the glitter off the real earned degree.
I have also seen instances where the criminal
deliberately established his internet based school in the exact name as
a legitimate university two thousand miles away. I recall the Western
Washington State University which was being operated from Norcross,
Georgia, and designed for students to believe this was the legitimate
Western Washington State University in Wellingham, Washington.
Confuse the public--I recall the United States University
of America, ostensibly located at an address on Wisconsin Avenue in
Washington, D.C. In reality, the addresses it used was the physical
address of the United States Post Office building on Wisconsin Avenue,
where its post office box was located. They also used the address of
the Sincerely Yours Answering Service. Needless to say, the school
colors were red, white, and blue. This school targeted foreign students
who mistakenly presumed this university tot be government approved/
sponsored based on its name and address in Washington, D.C. [In
reality, its operator was located in Palatka, Florida, before he later
fled the United Sates to avoid arrest].
Defraud ``students''--Many Degree Mills have excellent
web sites, quality multi colored publications, use all the right buzz
words, portray a distinguished faculty, pictures of grand buildings
(some are in reality national historic sties, public buildings, etc.),
and some even offer a ``virtual tour''. All this, in addition to its
``accreditation''. Many even pirate their text from the web sites of
legitimate colleges and universities. These are criminal operations,
run by slick folds and are designed to deceive its potential students.
Depending on the sophistication of the Degree Mill, it can be easy to
fall victim, without truly knowing it is in fact a Degree Mill.
Deceive employers, customers, clients, patients--Remember
the Degree Mill is established to sell you the diploma with the backup
verification of the degree awarded. The heart of its hustle is the
verification it provides you later for the new job, promotion, etc. Not
only will they provide you verification, they will provide you with
letters of recommendation from several professors. [You would have had
a hard time meeting these Professors in view they did not exist.].
Sometimes, we find the same professors at numerous schools.
Lower prestige abroad--see all the above
Staff has also asked what safeguards and strategies can be developed to
ensure that consumers, state governments, and the federal
government are protected against fraudulent degrees and
institutions.
Encourage the Department of Education (which held its
``Diploma Mill Summit'' on 1/15/04) to develop and publish on the
internet, a web based listing of legitimate (accredited) colleges and
universities in the United States. Once published, publicize The fact
this list exists. In this manner, a potential student will not have to
dig for the information, but can immediately locate this list.
Encourage all states to develop educational statutes
similar to or identical to the State of Oregon and the resulting State
of Oregon, Office of Degree Authorization (www.osac.state.or.us/oda).
The ODA maintains a web site on which all aspects of the Oregon
education statues are detailed, along with a list of illegal degrees in
Oregon for which persons using same as academic credentials in Oregon
can be arrested. Also listed are unaccredited colleges whose degrees
are approved by ODA for use in Oregon (mainly Bible schools). (A copy
of the Oregon statutes and the ODA web site along with its illegal
schools list is attached).
We do not need any new federal statutes. The Fraud by
Wire, Mail Fraud, Computer Fraud, Conspiracy, Money Laundering, and
Aiding and Abetting statutes will do the job if someone applies them.
Degree Mills can be stopped, if only someone wants to. Request the FBI
or U.S. Postal Service to assign one investigator to work on
Educational Fraud exclusively. Let them respond to some advertisements,
purchase some degrees and transcripts, do some undercover work, execute
several search warrants, seize assets, obtain indictments and make some
arrests. I guarantee you the word will get out immediately in this
small tightly knit community of Degree Mill operators. Normally, they
all keep up with their competition.
Remember the basics of Supply and Demand. If we decrease
the value of the bought degree and transcript, then correspondingly, we
will dry up the production (supply) side. If both state and federal
authorities prosecute the most egregious users of the Degree Mill
paper, and at the same time arrest and close down the Degree Mill
operators, we will thus achieve our desired objective. If no one wants
the papers, then no one will want to produce the paper, since it won't
sell.
The Federal Government needs to be consistent in all its
handling of federal employees using Degree Mill degrees. I was appalled
that the official at the Department of Homeland Security was hung out
to dry after a 19+ year career for her possession of degrees from
Hamilton University, especially when you consider the position she held
had no education qualification. She is not ``street wise'', had heard
of Degree Mills bur not accreditation mills, and did not know it was a
degree mill. She obtained these degrees over a several year period with
her own funds-no federal money involved. In my opinion, her agency (the
then new Department of Homeland Security) was gun shy after all the
publicity this received in the Washington, D.C. press, then took the
easy way out by rescinding her security clearance, and showing her the
door, resulting in her later resignation. Possession of a Degree Mill
diploma is not itself grounds for revocation of a security clearance.
When I was employed by the FBI, no one came to me to rescind my
clearance because I was purchasing various degrees. Thus, she became
the ``poster child'' for government employees with Degree Mill paper,
even though many, many, more federal employee have been exposed with
the same type degrees (and some even used federal funds and their jobs
had an education requirement), and they are still employed. I see no
consistency in this application.
What has happened to: Charlie Abell, Deputy Under
Secretary of Defense--Procurement and Readiness (Columbus University);
Jimmy Shirl Parker, Chief Information Officer, Federal Technology
Service, General Services Administration (California Coast University);
Daniel P. Matthews, Chief Information Officer, Transportation
Department (Kent College) and many, many others.
As in the private sector, you lead by example, you must have one
set of rules, consistently and evenly applied to everyone. From my
point of view as an outsider, I do not see this happening in
Washington, D.C. I do wonder why these other high ranking government
officials are still in their positions, why their security clearances
were not revoked, and them not shown the door within days of their
degrees coming to light. If there is a double standard being applied,
then this is unjust and our government can do better. This is not the
example we want to set for the rest of the nation.
The U.S. Senate (and GAO investigators) should finish what they
started. The other 98% of the federal government should have degree
audits also conducted by the GAO to determine the use of Degree Mill
paper by federal employees and exactly how much the federal government
has paid for these degrees. We all know they have not yet even
scratched the surface.
I attended both days of the Degree Mill hearings chaired by Senator
Collins and Congressman Tom Davis. I applaud them for these hearings,
the first since 1984. What was missing both days, was anyone from
federal law enforcement. Not only were they not there as witnesses, nor
appeared to be in the audience, but no Senator/Congressman/witness,
even asked the question, Why did law enforcement let the problem get
this big? and What are they going to do about it? There was not even
talk of turning over the results of their investigation to the FBI,
USPO, etc., nor of having a Federal Grand Jury impaneled to force those
schools which refused to cooperate with the Committee to identify their
federal employee ``graduates''. It was obvious to me this main piece of
the puzzle was missing.
Further, since these hearings, and the expose of all these federal
employees, we outside of Washington, have neither seen nor heard of any
action being taken by the Inspector General on all these federal
employees. It makes one wonder if anything is really happening?
Be alert, because we are watching, and we do care.
Thank you for allowing me to appear today and I will answer any
questions you may have.
______
[Attachments to Mr. Ezell's statement have been retained in
the Committee's official files.]
Chairman McKeon. Thank you very much. Ms. Morse?
STATEMENT OF JEAN AVNET MORSE, EXECUTIVE DIRECTOR, MIDDLE
STATES COMMISSION ON HIGHER EDUCATION, PHILADELPHIA, PA
Ms. Morse. Mr. Chairman, members of the Committee, thank
you very much for the opportunity to testify about the role of
regional accreditors in protecting the public against degree
mills.
I am the executive director of the Middle States Commission
on Higher Education. I am here testifying on behalf of CRAC,
which is the national organization of all regional accreditors.
We accredit over 3,000 colleges and universities, everything
ranging from community colleges through large research
universities, and those colleges are attended by over 16
million students.
There are other kinds of accreditors that are recognized by
the U.S. Department of Education. Specialized accreditors, they
look at programs like law or medicine. And national creditors
tend to be specialized.
The three points that I would like to cover from my written
testimony are how difficult it would be for a degree mill to
become regionally accredited, what we do to protect the public,
and what more could be done.
With respect to the quality of regional accreditation, we
review every school individually. You need only ask our
institutions, and they will tell you how very intrusive we can
be. We have very high standards, and they include standards on
things such as integrity and student learning.
It is not easy to become accredited in the first place.
It's usually a 5-year process with multiple visits and reports.
We have a very high drop-out rate of institutions that have
invested years in the process, and finally decide that they are
just not going to make it.
Once you become accredited, it is not, contrary to popular
belief, a matter of being looked at every 10 years. Whenever
something comes up, we look into it immediately. Whenever there
is what we call a substantive change--which includes, for
example, new distance learning programs--we review those in
advance.
In Middle States, we have 50 percent rate of asking for
follow-up when we take an accreditation action. That means more
reports, more visits. And in addition to that, we have normal
requirements that apply to everybody: annual reports; 5-year
reports; 10-year reports. And we have a very large range of
actions that we can take. We like to say that we are in the
business of saving souls and not punishing sinners.
We, ourselves, are very highly regulated by the Department
of Education. At least every 5 years we are reviewed, we submit
extensive documentation. We are reviewed by staff, we appear
before a committee, and we must comply with very extensive
regulations from the Department of Education that include not
only our processes, but also--and our resources--but also the
substance of what our standards must be.
I would like to address the gray area that you referred to.
There--I think that one of the things that regional
accreditation can do very well is look at the institutions that
really are providing open access to a part of our population
which wants access to higher education. And that access tends
to be offered through the innovative kinds of delivery methods
such as distance learning, accelerated programs, continuing
education.
And because we can look at those institutions on a one-by-
one basis over a period of several years with lots of experts--
we have thousands of experts--we really are able to separate
the wheat from the chaff.
In terms of what we do to protect the public, we do a lot
of disclosure of which institutions are accredited. It is true
that there are some very fine institutions that are not
accredited, so this doesn't cover everything. But the ones that
are accredited usually have been through a very complicated
process.
We have a website that posts not only the institutions that
we accredit, but it links to other websites and it gives a lot
of information. It shows information about the institution, its
accreditation history, problems that it has had in the past,
what has happened about those problems.
We also respond to all complaints that we receive from
students, faculty, anyone from the public. More could be done.
There is a list of 6,000 accredited institutions that was
prepared by ACE and submitted to the Department of Education.
That could be broadly publicized. Those are the accredited
institutions by all sorts of accreditors that are recognized by
the Department of Education.
It would be wonderful for regional accreditation if the
state licensing requirements were strengthened. We do require
that an institution must be operating legally, but that covers
a wide range of states, some of whom have very low requirements
of what it takes to operate legally.
Existing laws on the books could be enforced, not only
federally, but also state, local. And the new laws could be
passed. Oregon has passed a law making the use of fake degrees
illegal.
There could be a list of degree mills. I would think that
the people who are doing the finger pointing would want to have
some sort of protection against being sued for libel by degree
mills with deep pockets.
And finally, the FTC has the ability to regulate the term
``accredited.'' Thank you again for the opportunity to testify.
[The prepared statement of Ms. Morse follows:]
Statement of Jean Avnet Morse, Executive Director, Middle States
Commission on Higher Education on behalf of the Council of Regional
Accrediting Commissions (CRAC)
Mr. Chairman and Members of the Committee, I appreciate the
opportunity to be here today to discuss the role of regional
institutional accreditation in protecting the public against ``diploma
mills.''
THE ROLE OF REGIONAL AND OTHER ACCREDITORS
I head the Middle States Commission on Higher Education of the
Middle States Association. The Commission has a membership of
approximately 500 colleges and universities located in Delaware,
Maryland, New Jersey, New York, Pennsylvania, the District of Columbia,
Puerto Rico, and the U.S. Virgin Islands.
I am testifying on behalf of the Council of Regional Accrediting
Commissions, known as CRAC. It includes the seven U.S. regional
accreditors that accredit over 3,000 institutions enrolling over
16,000,000 students. Regional accrediting agencies have assured the
quality of higher education in the United States for over 100 years,
providing self-regulation and shared assistance for improving
education. For the past 50 years, these agencies have also served a
unique role: when an agency is ``recognized'' by the U.S. Department of
Education, the students of institutions accredited by that agency are
eligible for federal grants and loans under Title IV of the Higher
Education Act.
There are other types of accreditors. Regional accreditors accredit
entire institutions of all types, from community colleges through large
research universities that are in their region. Specialized accreditors
accredit specific programs, such as law or medicine. National
accreditors usually accredit institutions of certain types. All three
can be ``recognized'' by the U.S. Department of Education as Title IV
``gatekeepers'' and by the Council on Higher Education Accreditation, a
private organization. There are also accreditors that are not
recognized, either because they do not apply or do not meet the
applicable requirements.
Regional accreditors are concerned about this issue and would
support the efforts of the Congress, the U.S. Department of Education,
state and federal enforcement agencies and others in addressing the
problem.
DIPLOMA MILLS: WHAT ARE THEY AND WHOM DO THEY AFFECT?
Diploma mills are a growing problem. They affect students and
employers in the U.S. and abroad. Setting up attractive websites is an
easy lure. A 2002 study by the GAO documented that the federal
government had hired applicants from degree mills and had paid for
courses at degree mills for its employees.
According to some estimates, there are over 300 unaccredited
universities operating, selling degrees for thousands of dollars,
awarding as many as 500 Ph.D.s every month, and earning in the
aggregate $200,000,000 per year. [John Bear, ``Diploma Mills''
University Business, March 2000]
Holders of fake degrees most frequently serve as teachers, police
officers, counselors, medical administrators, expert witnesses and
business managers. [Alan Contreras, testimony to Senate Committee on
Governmental Affairs, May 2004]
It is helpful to consider the different types of diploma mills,
because they can be dealt with differently. The term has been applied
to:
- Diplomas granted with no work by the student
- Diplomas granted without sufficient college-level course work
that is normally required for a degree
- Good quality diplomas granted by institutions that are not
accredited by a legitimate accreditor, so that it is difficult for the
public to determine their quality. They may or may not be diploma
mills.
- All on-line or other non-traditional degrees, regardless of
whether they are granted by institutions accredited by legitimate
accreditors, are sometimes labeled ``diploma mills.'' As discussed
later, this is unfair to excellent institutions that deliver quality
education through non-traditional means.
REGIONAL ACCREDITORS HAVE ASSURED THE QUALITY OF ACCREDITED
INSTITUTIONS OF ALL TYPES
Regional accreditors can bring to the problem over 100 years''
experience in defining quality education, applying standards by using
qualified peer reviewers, and changing as higher education has changed.
Regional accreditors have succeeded in assuring quality:
- We are experienced in applying standards to distance education,
accelerated learning, proprietary institutions, and other ``non-
traditional'' types of higher education. This is important because a
few ``bad apple'' distance learning and other non-traditional providers
may create the impression that none are good. In fact, many of the most
innovative, practical, accessible, and effective providers are non-
traditional, and it is important to use a quality control system that
recognizes them. For example, Middle States accredits an institution
that offers distance education to our troops here and abroad.
- I think it is fair to say that no diploma mills are accredited
by one of the seven U.S. regional accreditors because of our high
standards and careful processes. This is recognized by employers such
as the federal government and others that require a degree from an
accredited institution as a condition of employment. It is safe to say
that diploma mills arise from that subset of institutions that are not
accredited by a U.S. Department of Education-recognized accrediting
agency, but it is not accurate to say that all unaccredited
institutions are diploma mills. To identify which institutions are
diploma mills, each unaccredited institution would need to be examined
individually.
HOW REGIONAL ACCREDITORS HAVE ADDRESSED DIPLOMA MILLS
Some of the ways that regional accreditation helps to prevent
diploma mills include:
- Requiring all institutions to meet the high standards described
later that would not be satisfied by a degree mill. This applies
whether an institution is a community college or a large research
university, whether its students are adults in continuing education
programs or eighteen year-olds living on campus, and whether it
delivers courses on-line or in accelerated format.
- Granting initial accreditation only to institutions that have
been reviewed and visited multiple times by staff, by peers such as
professors and presidents, and by consultants. Eligibility requirements
include a legal charter to operate and grant degrees; approval of
profiles and academic qualifications of all full-time, part-time and
adjunct instructional staff; and review of all educational programs.
- Monitoring already accredited institutions regularly and
following up on any problem areas.
- Publicizing the list of which institutions are accredited by
regional accreditors, including on-line listings that are linked to
other sources.
- Providing information to the general public about each
accredited institution, including its history of accreditation actions.
These actions may have required it to submit special reports or take
other actions in specified areas such as finances or assessment of
student learning.
- Considering all complaints about accredited institutions
received from students, faculty, or others.
- Answering inquiries (which are frequent) about whether a
specific institution is accredited, and by whom.
- Writing articles and giving presentations.
General ``warning signs'' of possible diploma mills have been
published by the Council of Higher Education Accreditation. CHEA has
also suggested general warning signs to identify the fake accreditors
(``accreditation mills'') which allow an institution to say that it is
accredited, even though its accreditor may not be reputable.
STANDARDS THAT ACCREDITED INSTITUTIONS MUST MEET
All regionally accredited institutions must prove that they meet
all of an accreditor's standards. These standards include:
- integrity: this is a separate and very important accreditation
standard; any violation can lead to disciplinary action
- education for all students in oral and written communication,
scientific and quantitative reasoning, critical analysis and reasoning,
technological competency, and information literacy
- assessment of the institution's effectiveness and efficiency in
light of its own mission
- assessment of student learning
- student support services
- admissions policies with full disclosure and appropriate
standards
- a curriculum with appropriate levels and coordination
- long term planning linked to budgeting
- financial data showing capacity to continue operations at an
appropriate level
- resources for learning appropriate to that institution, such as
information technology, library, and buildings
- appropriate governance structure
- qualified faculty and administrators, and
- evidence of long term strategic planning linked to assessment
and budgeting.
CONTINUOUS MONITORING OF INSTITUTIONS
These standards are applied at many times. Accreditation is not
just periodic reporting for compliance. It is a continuous process that
emphasizes the institution's capacity and plans for growth and
improvement. This allows each institution to develop its own areas of
expertise with help from the expert academics who consult with the
institution about its processes and plans.
APPLICANT/CANDIDATE
It is extremely difficult to become accredited. This is one reason
why institutions that are finally accredited do not lose accreditation
immediately--they are already excellent institutions.
In order for a new institution to be accredited, it usually spends
five years in pre-accreditation status. During this time, it is visited
by consultants, staff, and teams of professional educators. The
Commission must vote first to allow the institution to become a
candidate, and then to grant it accreditation.
It is common for institutions to decide not to apply for
accreditation once they understand the standards, or to withdraw from
the process in order to avoid what they expect will be a negative
decision. Even after it is accredited, the institution must submit its
first full self-study within a shorter time period than accredited
institutions.
SUBSTANTIVE CHANGES
The Commission reviews in advance certain ``substantive changes''
introduced by an institution, such as the introduction of a new degree
level, offering new programs in distance learning, or opening branch
campuses. Institutions are required to have prior approval before
implementing these changes. Changes that are implemented but are not
approved may endanger the accreditation of the entire institution.
FOLLOW-UP REPORTING AND VISITS
The accreditors monitor quality on an ongoing basis, using annual
reports, news accounts, information provided by other accreditors or
the U.S. Department of Education, complaints from students or other
information to assure that an institution continues to meet
accreditation standards. At any time, the Commission may impose on an
institution requirements that it submit reports, have teams visit the
institution, or even show cause why its accreditation should not be
removed.
In Middle States, approximately 50% of institutions reviewed are
asked for some type of follow-up. This means that institutions with
problems are continuously monitored until the problem is solved.
ANNUAL REPORTING
All accredited institutions submit information annually. Such
information includes financial data, as well as information on
enrollment, graduation rates, faculty, and other areas.
FIVE YEAR COMPREHENSIVE REVIEW
In Middle States, an extensive report is submitted every five
years. It must cover deficiencies noted during the previous
comprehensive team evaluation, student learning, planning, and other
areas. It is reviewed by the Commission, and the Commission votes on
whether to continue accreditation, with or without conditions. Other
regional accreditors require a similar review at the midterm of the
comprehensive accreditation cycle.
COMPREHENSIVE REVIEW AND TEAM VISIT
Every 10 years in the Middle States Commission's region
(commissions vary in the periodicity of their comprehensive review from
six to 10 years), an accredited institution spends two years gathering
together all of its constituents to review itself in light of the
Commission's accreditation standards, and to determine what it should
do to grow and improve, in addition to simply complying or minimally
meeting accreditation standards. This process of self-review is called
``self study.''
A team of peers such as professors and college presidents visits
the campus to review the self-study, to comment on the institution's
plans, and to determine compliance with accreditation standards.
DISCIPLINARY ACTIONS
Institutions with serious problems may be placed on warning,
probation, or ``show cause.'' Failure to cure the problems can result
in removal of accreditation. Most commonly, problems are caught early
and are corrected before this is necessary.
FEDERAL REGULATION OF REGIONAL ACCREDITORS
Under the Higher Education Act and regulations promulgated by the
U.S. Department of Education to implement the Act, accrediting agencies
must be recognized by the U.S. Secretary of Education of the Department
after review by the National Advisory Committee on Institutional
Quality and Integrity (NACIQI) in order to qualify as ``gatekeepers''
for funding under Title IV. Such recognition enables the students of
institutions accredited by the gatekeeping accreditor to receive
certain federal loans and grants.
The Department reviews regional accreditors at least every five
years. The accreditor submits a petition that is reviewed by an
assigned member of the U.S. Department of Education. The accreditor has
an opportunity to respond to the Department's analysis, and also to
present its case at a NACIQI hearing. The NACIQI recommendation to the
Secretary is based on the agency's petition, its interview, the staff
analysis, and any third party comments and agency rebuttals.
In order to be recognized, the regional accreditor must demonstrate
compliance with federal regulations, a few of which are that the
accreditor:
- has standards that are widely accepted in the U.S. by educators,
licensing bodies, employers, practitioners, and others
- has accreditation as its principal purpose
- has voluntary members
- is not controlled by another body
- has the administrative and fiscal capability to carry out its
activities
- uses qualified persons, including public members
- has controls against conflicts of interest
- maintains records
- has standards for accreditation that address the areas described
earlier, including ``success with respect to student achievement''
- has effective mechanisms to evaluate whether an institution
complies with its standards, including requiring the institution to
undergo the ``self-study'' process described earlier
- conducts on-site reviews
- demonstrates consistency in its decisions
- reviews its standards periodically
- maintains appropriate operating procedures
- monitors substantive changes such as branch campuses, changes in
ownership, and teach-out agreements
- gives appropriate notification of its decisions, and
- does not accredit institutions that lack legal authority or is
in disciplinary proceedings by a state or another accreditor.
POSSIBLE APPROACHES TO CONTROLLING DIPLOMA MILLS
Past attempts to prevent diploma mills, additional suggestions made
to the Senate Committee on Governmental Affairs in May 2004, and
suggestions from C-RAC offer possible approaches:
A national listing of all institutions that have been approved by
an accrediting agency recognized by the U.S. Department of Education on
a public website would provide a simple, straightforward way for the
public to determine whether or not an institution has been the subject
of a comprehensive outside review of its academic programs. Usually
only serious legitimate institutions will go through the trouble of
being accredited by an agency approved by the U.S. Secretary of
Education.
As noted earlier, each regional accreditor publishes on-line a list
of all of the institutions that it accredits, together with information
about the institution and its accreditation history. These sites are
linked to each other, and through the Council of Higher Education
Accreditation's listings. The websites of the regional accreditors
receive frequent ``hits'' on the directory listings.
A national list of all of the 6,200 schools that are accredited by
one of the approximately 40 regional, specialized, and national
accrediting agencies that the Secretary recognizes was recently given
by The American Council on Education to the Department of Education to
enable federal agencies to identify legitimate colleges, universities
and trade schools when federal employees seek to enroll in taxpayer
funded education and training.
Such a national list might have a much broader use if it were
publicized widely and accessibly. It might link to the websites of
regional accreditors for additional information on the accreditation
history of the institution. Congress and the Department might look into
ways to make such a list widely available.
The FBI initiative of the 1980s by agent Allen Ezell in closing
down several degree mills could be renewed. Evidence from the IRS and
postal service was often useful.
States can prosecute fraud and can pass special legislation.
According to Alan Contreras, Oregon law requires users of fake or
substandard degrees to cease using them. The law applies to any
employment within the state, regardless of the location of the
employer. Both the institution and students who knowingly use a fake
degree may be liable.
State licensing requirements could be raised and coordinated. They
vary enormously, and states with more lax requirements are used by
diploma mills to obtain their charters to grant diplomas.
The FTC is authorized to regulate the use of the word
``accredited.''
Protection against litigation by diploma mills is needed. This is a
serious problem for those who have identified specific institutions as
diploma mills or have refused to accept their degrees as qualifications
for employment, and have been forced to defend themselves in expensive
litigation.
Advertising boycotts by legitimate institutions against media that
advertise degree mills has been suggested by John Bear.
Mr. Contreras has suggested that the U.S. Department of Education
establish standards for use of degrees as credentials for employment
that require degrees to be from: a U.S. institution accredited by a
federally recognized accreditor; a U.S. institution approved by USDE;
or a foreign institution found by USDE to use similar standards. The
Oregon standards address faculty qualifications, program length,
content of curriculum, requirements for the award of credit, and
admissions standards. Additional standards would apply to foreign
providers.
One suggestion discussed has been to require the U.S. Department of
Education to maintain a list of diploma mills.
There are also private websites that list degree mills, but these
are voluntary and informal.
The above suggestions would assist in determining the quality of
alleged diploma mills. Thank you for the opportunity to discuss these
issues. I would be happy to answer any questions you have.
______
Chairman McKeon. Thank you very much. Mr. Cramer?
STATEMENT OF ROBERT CRAMER, MANAGING DIRECTOR, OFFICE OF
SPECIAL INVESTIGATIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE,
WASHINGTON, DC
Mr. Cramer. Mr. Chairman and members of the Subcommittee, I
am pleased to be here today to discuss work that the office of
special investigations at GAO has performed related to issues
from--related to degrees from diploma mills.
For purposes of this overview, we define diploma mills as
non-traditional, unaccredited post-secondary schools that offer
degrees for a relatively low flat fee, promote the award of
academic credits based on life experience, and do not require
any classroom instruction.
Over the past 3 years, OSI has purchased degrees from a
diploma mill, through the Internet, created a diploma mill in
the form of a fictitious foreign school, investigated whether
the Federal Government has paid for degrees from diploma mills
for Federal employees, and determined whether high-level
Federal employees at certain agencies have degrees from diploma
mills. My testimony will summarize this work.
First, we purchased two degrees from a diploma mill through
the Internet. After identifying ``Degrees-R-Us'' as a diploma
mill, our investigator held numerous discussions with its
owner.
Posing as a prospective student, the investigator bought a
bachelor of science degree in biology and a master of science
degree in medical technology. The degrees were awarded by
Lexington University, an institution purportedly located in
Middletown, New York, that doesn't exist. We paid Degrees-R-Us
$1,515 for a premium package. The package included two degrees
with honors, and a telephone verification service that could be
used by potential employers verifying the award of the degrees.
We also created a diploma mill. We created a fictitious
graduate-level foreign school purportedly located in London,
England. We created a website and set up a telephone number and
a post office box address for our school. We created a catalog,
and on your right are a couple of pages from the catalog that
we created.
Using counterfeit documents, we obtained certification from
the Department of Education for the school to participate in
the Federal Student Financial Assistance Program. The
Department of Education has since taken steps --it has reported
to us to guard against the vulnerabilities that our
investigation revealed.
We also conducted an investigation to determine whether the
Federal Government has paid for degrees from diploma mills for
Federal employees. Initially purporting to be a prospective
student who works for a Federal agency, our investigator placed
calls to three schools that award academic credits based on
life experience, and required no classroom instruction.
These schools charge, again, a flat fee. For example, one
school charges $2,295 for a bachelor's, $2,395 for a master's,
and $2,595 for a Ph.D.
Representatives of the three schools emphasize that they
are not in the business of providing individual courses or
training, and do not permit students to enroll for individual
courses. Instead, these schools market and require payment for
degrees on a flat fee basis.
However, the representatives of each of these schools told
our investigator that they would structure their charges to
facilitate payment for the degrees by the Federal Government.
Each agreed to divide the degree fee by the required--the
number of required courses, thereby creating a series of
payments, as if a per course fee were being charged.
All of the representatives we spoke to stated that students
at their respective schools had received reimbursement or
payment by the Federal Government.
We requested that four such schools provide information on
the number of students identified in their records as Federal
employees, and we asked three Federal agencies to examine their
records to determine if they had made payments to diploma
mills.
Only two schools gave us the records that we asked for.
Those records, with the records we obtained from just two
Federal agencies, showed total Federal payments of nearly
$170,000 to two unaccredited schools by two Federal agencies.
And a comparison of the data from the schools and the agencies
indicates that that understates the amount of money that the
Federal Government has paid.
For example, one of the schools, Kennedy Western, reported
total payments of $13,500 from the Energy Department for three
students. Energy reported, however, total payments of $14,500
to Kennedy Western for three students, but for three different
students. So, Energy made payments, we know, of at least
$28,000 to Kennedy Western.
I will quickly finish up. We looked into the question of
whether senior level Federal employees have degrees from
diploma mills. The answer is that some do. And we conducted
interviews of some Federal employees who reported receiving
degrees from unaccredited schools. These included three
management level Department of Energy employees who have two-
level security clearances, and emergency operations
responsibilities at the National Nuclear Security
Administration.
In conclusion, diploma mills are easy to create, and the
records we obtained from schools and the agencies likely
understate both the extent to which the Federal Government has
paid for degrees from diploma mills, and the true extent to
which senior Federal level employees have diploma mill degrees.
I will be happy to answer any questions that any of you may
have.
[The prepared statement of Mr. Cramer follows:]
Statement of Robert J. Cramer, Managing Director, Office of Special
Investigations, U.S. Government Accountability Office, Washington,
DCMr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss work performed by GAO's
Office of Special Investigations (OSI) related to degrees from
``diploma mills.'' For purposes of this overview, we defined ``diploma
mills'' as nontraditional, unaccredited, postsecondary schools that
offer degrees for a relatively low flat fee, promote the award of
academic credits based on life experience, and do not require any
classroom instruction. Over the past 3 years, OSI has purchased degrees
from a diploma mill through the Internet, created a diploma mill in the
form of a fictitious foreign school, investigated whether the federal
government has paid for degrees from diploma mills for federal
employees, and determined whether high-level federal employees at
certain agencies have degrees from diploma mills. My testimony today
summarizes our investigative findings.
Purchasing Degrees from a Diploma Mill
In response to a request from the Senate Permanent Subcommittee on
Investigations of the Committee on Governmental Affairs, OSI purchased
two degrees from a diploma mill through the Internet. After identifying
``Degrees-R-Us'' as a diploma mill, our investigator held numerous
discussions in an undercover capacity with its owner. Posing as a
prospective student, the investigator first contacted Degrees-R-Us to
obtain information regarding the steps to follow in purchasing degrees.
Following those instructions, we purchased a Bachelor of Science degree
in Biology and a Master of Science degree in Medical Technology. The
degrees were awarded by Lexington University, a nonexistent institution
purportedly located in Middletown, New York. We provided Degrees-R-Us
with references that were never contacted and paid a $1,515 fee for a
``premium package.'' The package included the two degrees with honors
and a telephone verification service that could be used by potential
employers verifying the award of the degrees.
Creating a Diploma Mill
OSI also created a diploma mill to test vulnerabilities in the
Federal Family Education Loan Program (FFEL). We created Y Hica
Institute for the Visual Arts, a fictitious graduate-level foreign
school purportedly located in London, England. We first created a bogus
consulting firm that posed as Y Hica's U.S. representative and the
principal point of contact with the Department of Education
(Education). In addition, we created a Web site and set up a telephone
number and a post office box address for Y Hica. Using counterfeit
documents, we obtained certification from Education for the school to
participate in the FFEL program. Education has since reported that it
has taken steps to guard against the vulnerabilities that were revealed
by our investigation.
Investigating Whether the Federal Government Has Paid for Degrees from
Diploma Mills
The Homeland Security Act amended section 4107 of title 5, U.S.
Code, by allowing federal reimbursement only for degrees from
accredited institutions. Specifically, section 4107 states that an
agency may ``pay or reimburse the costs of academic degree training--if
such training--is accredited and is provided by a college or university
that is accredited by a nationally recognized body.'' (Emphasis
supplied.) For purposes of this provision, a ``nationally recognized
body'' is a regional, national, or international accrediting
organization recognized by Education.\1\ Because the law governs only
academic degree training, it does not preclude an agency from paying
for the costs of individual training courses offered by unaccredited
institutions. Prior to the enactment of the Homeland Security Act,
federal agencies were not authorized to pay for employee academic
degree training unless the head of the agency determined that it was
necessary to assist in recruitment or retention of employees in
occupations in which the government had a shortage of qualified
personnel.
---------------------------------------------------------------------------
\1\ 5 C.F.R. Sec. 410.308(b).
---------------------------------------------------------------------------
To investigate whether the federal government has paid for degrees
from diploma mills, we requested that four such schools provide
information concerning (1) the number of current and former students
identified in their records as federal employees and (2) the payment of
fees for such employees by the federal government. In addition, posing
as a prospective student who was employed by a federal agency, our
investigator contacted three diploma mills to obtain information on how
he might have a federal agency pay for a degree. We also requested that
eight federal agencies--the Departments of Education, Energy (DOE),
Health and Human Services (HHS), Homeland Security (DHS),
Transportation (DOT), and Veterans Affairs (VA); the Small Business
Administration (SBA), and the Office of Personnel Management (OPM)
provide us with a list of senior employees, level GS-15 (or equivalent)
or higher, and the names of any postsecondary institutions from which
such employees had reported receiving degrees. We compared the names of
the schools on the lists provided by these agencies with those that are
accredited by accrediting bodies recognized by Education. We also
requested that the agencies examine their financial records to
determine if they had paid for degrees from unaccredited schools.
Several factors make it extremely difficult, if not impossible, to
determine the extent of unauthorized federal payments for degrees
issued by diploma mills. First, the data we received from both schools
and federal agencies understate the extent to which the federal
government has made such payments. Additionally, the way some agencies
maintain records of payments for employee education makes such
information inaccessible. For example, HHS responded to our request for
records of employee education payments by informing us that it could
not produce them because it maintains a large volume of such records in
five different accounting systems, has no way to differentiate academic
degree training from other training, and does not know whether payments
for training made through credit cards are captured in its training
payment records.
Moreover, diploma mills and other unaccredited schools modify their
billing practices so students can obtain payments for degrees by the
federal government. Purporting to be a prospective student, our
investigator placed telephone calls to three schools that award
academic credits based on life experience and require no classroom
instruction: Barrington University (Mobile, Alabama); Lacrosse
University (Bay St. Louis, Mississippi); and Pacific Western University
(Los Angeles, California). These schools each charge a flat fee for a
degree. For example, fees for degrees for domestic students at Pacific
Western University are as follows: Bachelor of Science ($2,295);
Master's Degree in Business Administration ($2,395); and PhD ($2,595).
School representatives emphasized to our undercover investigator that
they are not in the business of providing, and do not permit students
to enroll for, individual courses or training. Instead, the schools
market and require payment for degrees on a flat-fee basis.
However, representatives of each school told our undercover
investigator that they would structure their charges in order to
facilitate payment by the federal government. Each agreed to divide the
degree fee by the number of courses a student was required to take,
thereby creating a series of payments as if a per course fee were
charged. All of the school representatives stated that students at
their respective schools had secured payment for their degrees by the
federal government.
Information we obtained from two unaccredited schools confirms that
the federal government has paid for degrees at those schools. We asked
four such schools that charge a flat fee for degrees to provide records
of federal payments for student fees: California Coast University
(Santa Ana, California); Hamilton University (Evanston, Wyoming);
Pacific Western University (Los Angeles, California); and Kennedy-
Western University (Thousand Oaks, California).
Pacific Western University, California Coast University, and
Kennedy-Western University provided data indicating that 463 of their
students were federal employees. Pacific Western University reported
that it could not locate any records indicating that federal payments
were made, although this claim directly contradicts representations
made to our undercover investigator by a school representative that
federal agencies had paid for degrees obtained by Pacific Western
University students. California Coast University and Kennedy-Western
University provided records indicating that they had received
$150,387.80 from federal agencies for 14 California Coast University
students and 50 Kennedy-Western University students. Hamilton
University failed to respond to our request for information.
After identifying from school records the federal agencies that
made payments to California Coast and Kennedy-Western, we requested
that DOE, HHS, and DOT provide records of their education-related
payments to schools for employees during the last 5 years. As
previously discussed, HHS advised us that it could not provide the
data. DOE and DOT provided data that identified additional payments of
$19,082.94 for expenses associated with Kennedy-Western, which Kennedy-
Western had not previously identified for us. Thus, we found a total of
$169,470.74 in federal payments to these two unaccredited schools.
However, a comparison of the data received from the schools with
the information provided by DOE and DOT shows that the schools and the
agencies have likely understated federal payments. For example,
Kennedy-Western reported total payments of $13,505 from DOE for three
students, while DOE reported total payments of $14,532 to Kennedy-
Western for three different students. Thus, DOE made payments of at
least $28,037 to Kennedy-Western. Additionally, DOT reported payments
of $4,550 to Kennedy-Western for one student, but Kennedy-Western did
not report receiving any money from DOT for that student.\2\
---------------------------------------------------------------------------
\2\ Our investigation was limited to direct federal payments to
schools and did not include federal reimbursements of school fees to
employees.
---------------------------------------------------------------------------
Determining Whether High-Level Federal Employees Have Degrees from
Diploma Mills
On the basis of the information we obtained from eight agencies, we
determined that some senior-level employees obtained degrees from
diploma mills. Specifically, we requested that the agencies review the
personnel folders of GS-15 (or equivalent) and above employees and
provide us with the names of the postsecondary institutions from which
such employees reported receiving academic degrees. The eight agencies
were Education, DOE, HHS, DHS, DOT, VA, SBA, and OPM. The agencies
informed us that their examination of personnel records revealed that
28 employees listed degrees from unaccredited schools, and 1 employee
received tuition reimbursement of $1,787.44 in connection with a degree
from such a school.
We interviewed several federal employees who had reported receiving
degrees from unaccredited schools. These employees included three
management-level DOE employees who have emergency operations
responsibilities at the National Nuclear Security Administration and
security clearances. We also found one employee in the Senior Executive
Service at DOT and another at DHS who received degrees from
unaccredited schools for negligible work.
Moreover, we believe that the agencies are not able to accurately
determine the number of their employees who have diploma mill degrees.
The agencies'' ability to identify degrees from unaccredited schools is
limited by a number of factors. First, diploma mills frequently use
names similar to those used by accredited schools, which often allows
the diploma mills to be mistaken for accredited schools. For example,
Hamilton University of Evanston, Wyoming, which is not accredited by an
accrediting body recognized by Education, has a name similar to
Hamilton College, a fully accredited school in Clinton, New York.
Moreover, federal agencies told us that employee records may contain
incomplete or misspelled school names without addresses. Thus, an
employee's records may reflect a bachelor's degree from Hamilton, but
the records do not indicate whether the degree is from Hamilton
University, the unaccredited school, or Hamilton College, the
accredited institution. Further, we learned that there are no uniform
verification practices throughout the government whereby agencies can
obtain information and conduct effective queries on schools and their
accreditation status. Additionally, some agencies provided information
about only the most recent degrees that employees reported receiving.
Concluding Remarks
Our investigations revealed the relative ease with which a diploma
mill can be created and bogus degrees obtained. Furthermore, the
records that we obtained from schools and agencies likely understate
the extent to which the federal government has paid for degrees from
diploma mills and other unaccredited schools. Many agencies have
difficulty in providing reliable data because they do not have systems
in place to properly verify academic degrees or to detect fees for
degrees that are masked as fees for training courses. Additionally, the
agency data we obtained likely do not reflect the true extent to which
senior-level federal employees have diploma mill degrees. This is
because the agencies do not sufficiently verify the degrees that
employees claim to have or the schools that issued the degrees, which
is necessary to avoid confusion caused by the similarity between the
names of accredited schools and the names assumed by diploma mills.
Finally, we found that there are no uniform verification practices
throughout the government whereby agencies can obtain information and
conduct effective queries on schools and their accreditation status.
Mr. Chairman, this concludes my prepared statement. I would be
happy to respond to any questions that you or Members of the
Subcommittee may have.
______
Chairman McKeon. Well, I am certainly glad we are holding
this hearing. I realized we had a problem, I didn't realize the
extent and the severity of the problem.
Mr. Ezell, you said that you, in your time with the FBI,
you investigated and prosecuted and put several people in jail.
Do you think we have sufficient laws on the books now to handle
this problem, or do you see other laws that should be passed?
Mr. Ezell. Mr. Chairman, I think the laws that we have now
will work fine if they are applied. We predominantly use, as
you have said earlier, the fraud by wire, mail fraud,
conspiracy, aiding abetting, money laundering, and on one
instance, obstruction of justice. The laws are there, if
somebody will take time to work it and do the job. It can be
done with what's out there now.
Chairman McKeon. This would be the diploma mills.
Mr. Ezell. Yes, sir.
Chairman McKeon. Is there also law against Federal
employees or other employees using these false degrees for
employment?
Mr. Ezell. Yes, and no. There is not a specific law. We did
not have judicial venue in the western district of North
Carolina against the Federal employees using our diploma mill
paper all over the country. No. 1, we would have to look at the
state law in that area where they were using it.
No. 2, whether they violated title 18 section 1001, the
false statement statute, we would have to look at each of the
forms that they filled out when getting reimbursement for the
degree. Each case stood on its own with the facts in that area.
Chairman McKeon. Now--
Mr. Ezell. Now, every state has different laws, also, so
you have to look at where, what, what are the laws right there.
Chairman McKeon. So it is not a Federal law, it is a
state--
Mr. Ezell. No, sir, it is not, unless you are talking about
the false statement to any agency of the United States
government, except for the 1001 statute. There is not a
specific law, is what I am saying.
Chairman McKeon. But you indicated that the FBI is no
longer working on these?
Mr. Ezell. No, sir. And I will be candid, and it is in my
written statement. The FBI office in Charlotte took some heat
from what we were doing.
We had an individual that came to us and said there is a
college in South Carolina selling degrees and transcripts. We
met with the assistant U.S. attorney, he saw harm to society,
we instituted an investigation, and that led us from school to
school to school for many years. We spent about $25,000 or so
on various degrees. FBI headquarters did not look at that as an
investigative priority, in their mind, nationally. But it was a
priority where we were.
The FBI wanted to do it, the U.S. attorneys office gave us
all the support we needed. And at that time we had Judge Robert
Potter as our chief district judge in the western district,
better known as ``Maximum Bob'' to the defense bar. A graduate
of Duke.
So, when the opportunity presented itself, and one of our
crooks offered us any degree we wanted, we bought Duke, just to
ring the bells when it went through the system.
Chairman McKeon. How can we set this as a priority? Do we
have that ability in Congress?
Mr. Ezell. Use the muscle that you have, request that the
FBI dedicate one person to do nothing--one agent--to do nothing
but education fraud. That will have quite an effect on this.
At the same time, have the FTC do what they can on the
civil side. Have the postal inspectors--these people need the
mail, they need the interstate delivery services, so if you
attack them from a mailing standpoint, getting the documents to
you, from using the telephone standpoint and the computer fraud
statutes at the same time you're using the FTC, you've come at
them like an octopus.
Sooner or later--and at the same time, prosecuting the
egregious use of these degrees if one buys it knowing that it
is a fraud, uses it to obtain a job or to obtain a promotion in
the Federal Government that has an educational requirement, or
uses Federal funds to buy it with, and do all of that
simultaneously, it can be stopped.
This is a very big, lucrative business, and no one is doing
anything about it. I mean, I got a spam while I am typing my
testimony from today. I mean, I had responded to them a couple
of days ago. That is the only way you will know what is being
sold today, is to respond. These are extremely sophisticated
people.
I mean, we had a deep throat in the boiler room in Romania,
and we--initially he wanted $20,000, we got it down to $1,000,
and a bunch of us civilians chipped in $100. We sent him
$1,000. He sent us all their boiler plates that they read, the
list of all their schools, everything, which we gave Senator
Collins staff later.
I mean, if I am grossing $435 million and no one in law
enforcement in the United States is doing anything about it,
telling me to stop isn't going to be enough. And I am an
American running it from abroad.
Chairman McKeon. So the current laws that we have would
apply in that instance, even though you are doing it from
abroad?
Mr. Ezell. They can be, with a little massaging, yes sir.
Chairman McKeon. Thank you very much.
Mr. Ezell. Thank you, sir.
Chairman McKeon. Mr. Kildee?
Mr. Kildee. Thank you, Mr. Chairman. We talked about the
question of need for new Federal laws or enforcement of the
present law. How about greater penalties? There should be
criminal penalties for awarding these phony degrees. How about
increasing, or looking at the question of criminal penalties
for receiving and using these degrees?
In other words, both the buyer and the seller would be
guilty of some type of chargeable crime. Could you--
Mr. Ezell. I agree with what you are saying. When the FBI
worked the case on LaSalle University in Metairie, Louisiana,
there for the first time we saw them seize bank accounts. And
they got somewhere between $85 million and $11 million out of 8
bank accounts of the school. So that was the first time we had
seen the application of seizure of assets from the college.
And of course, in the Pellar case, he agreed to pay a fine
to give up his $1.5 million yacht that he had been sitting on
there in Mexico as a Federal fugitive running this scam.
If we apply the seizure aspects of the laws that are
already on the books, that is one way to go after the
pocketbook. I do not know if increasing the penalties on the
existing statutes will do it. I don't think it will, because
they don't really think they are going to get caught.
I believe that the prosecution and publicizing the
prosecution of the egregious use of diploma mill paper will
also work. I don't know if attaching monetary damages--for
example, all the school teachers in the state of Georgia--there
were about 11 of them that were exposed 2 months ago as having
degrees from St. Regis University.
Now, those 11 school teachers, number 1, have agreed to pay
the $30,000-some back to the Georgia school system. They have
all had their educational credentials retracted by the state,
and resigned. Now the state is deciding, ``Are we going to
prosecute?'' And there has been a good bit of publicity on
that. That's the thing that will get the message out, that you
can't use it, there is a penalty, you will lose your teaching
certificate.
And then you have to wonder how many graduates of that same
school exist in the other 49 states. I don't know that answer.
But there have been laws that you all have passed up here in
the last couple of years increasing the pressure on school
teachers to become more certified, to obtain graduate-level
degrees. And that may be sending them the easy route to diploma
mills.
Mr. Kildee. As a matter of fact, the bill which the other
Subcommittee--No Child Left Behind--
Mr. Ezell. That is the one, yes sir.
Mr. Kildee. OK--
Mr. Ezell. And that may be the impetus for them getting the
graduate level degrees the easy way.
Mr. Kildee. Because we looked at the number of teachers who
needed to increase their certification or the degrees, and this
may have provided the incentive for some to seek out the--
Mr. Ezell. Yes, sir.
Mr. Kildee. That is why, apparently, these teachers in
Georgia only received, so far, some civil penalties. Do you
think it would be prudent to have some Federal penalties for
the--at least for the egregious abuse of this? Any of you on
that.
Because to my mind, the civil penalty kind of restores
things to where they were, but it takes two to commit a crime
in this type of thing, it seems to me. There has got to be the
buyer and the seller.
Ms. Morse. Well, that is what the--did you say any of us?
Mr. Kildee. Yes.
Ms. Morse. That is what they tried to do in Oregon. And
that law, as I understand from Mr. Ezell, is being contested.
But the law was the use of the degree would also be prohibited,
and also the use of the degree--any use of the degree in the
state, even if the employer, for example, was outside the
state.
Mr. Kildee. Well, you know, if someone buys the status of a
Kentucky colonel, that is one thing. But he tries to get in
someone's army with the idea that he really is a colonel, then
there is really the use of that degree, right, or the use of
that title.
And it seems to me that there should at least be the threat
of some criminal penalties for using a fraudulent degree.
Mr. Ezell. I agree. Like the state of Oregon, you can get
arrested for using an educational credential on a school that
is not approved by the Office of the Reauthorization to be used
as such in the state of Oregon. I don't know whether it is
enforced, but it is on the books and you can get locked up for
it. And it is that type of law that if every state had it, then
that is the hammer that you could use.
Mr. Kildee. Thank you very much.
Mr. Ezell. Thank you, sir.
Mr. Kildee. I see I have exhausted my time. Thank you, Mr.
Chairman.
Chairman McKeon. Thank you. Mr. Ehlers?
Mr. Ehlers. Thank you, Mr. Chairman, and I thank my
colleagues to my right, who are letting me go ahead of--or out
of order, because I have a 12 commitment.
But I wanted to say this has become somewhat personal to me
for two reasons. First of all, I worked 80 hours a week with no
vacations for 4 years to get my Ph.D., and I kind of resent
people getting a Ph.D. in 20 minutes for a much smaller sum
than I paid.
But what really made it personal, I received a phone call
last Saturday by coincidence, from a sister-in-law who had
received this e-mail which I will have distributed in a few
moments.
It says, ``A genuine college degree in 2 weeks. Have you
ever thought that the only thing stopping you from a great job
and better pay was a few letters behind your name? Well, now
you can get them. BA, BS, BSE, MA, MSE, MBA, Ph.D. Within 2
weeks, no studying required, 100 percent verifiable. These are
real, genuine degrees that include bachelor's, master's, and
doctorate degrees. They are verifiable, and student records and
transcripts are also available. This little known secret has
been kept quiet for years. The opportunity exists due to a
legal loophole allowing some established colleges to award
degrees at their discretion.''
With all the attention that this news has been generating,
I would not be surprised to see this loophole closed very soon.
[Laughter.]
Mr. Ehlers. ``Order yours today. Just call the number
below. You will thank me later.'' We will hand these out now,
and be sure to give them to members of the media, too.
[The information referred to follows:]
------ Original Message -----
From: 11234201
Sent: Saturday, September 18, 2004 11:46 AM
Subject: A Genuine College Degree Within 2 Weeks! 100% Verifiable!
A Genuine College Degree
in 2 weeks!
Have you ever thought that the only thing stopping you from a great job
and better pay was a few letters behind your name? Well now you can get
them!
BA BSc MA MSc MBA PhD
Within 2 weeks! No study required! 100% Verifiable!
These are real, genuine degrees that include Bachelors, Masters, and
Doctorate degrees. They are verifiable and student records and
transcripts are also available.
This little known secret has been kept quiet for years. The opportunity
exists due to a legal loophole allowing some established colleges to
award degrees at their discretion.
With all of the attention that this news has been generating, I
wouldn't be surprised to see this loophole closed very soon. Order
yours today. Just call the number below. You'll thank me later.
206-309-0904
______
That, to me, was incredible. I spent 22 years in higher
education, and to see this going on is just deplorable. What
especially disturbs me is your comments, Mr. Ezell, basically
we are not--the FBI is no longer pursuing this crime. And I can
understand they have a lot to do with anti-terrorism and
organized crime, and so forth. But someone has to take care of
this.
I am not that keen on going after the victims of this,
although they--the people who do buy the degrees, they
obviously should be punished. But that doesn't stop the
operation. The only way you stop the operation is going to the
source.
That leads me to two questions. And we will start with Mr.
Ezell on this, and go down. The Internet, it seems to me, has
really aided them, has aided the people in propagating this
information. The first question is do we need special
legislation to strengthen the prohibition against the use of
the Internet?
Secondly, how do we stop foreign operations? Do we have
enough agreements with foreign countries that we can, through
our laws, stop the foreign operations? Because with the
Internet, it doesn't matter where you are, you can still run
the scam. So I would appreciate comments on that.
Mr. Ezell. Sir, I honestly do not know how you would stop
the foreign operations. Two years ago I found a new Internet
college that had the skyline of Jacksonville, Florida and
Tampa, Florida on it, and they were using a mailbox address
near Tampa.
When I went to see where they were, they were in Hong Kong,
China. So I do not know how you stop it. I don't know what
legislation, what agreements with other countries would work. I
am not that computer literate.
I do know that when the FTC came down with their temporary
restraining order and their restraining order later against the
university degree program folks, they were able to stop the
host computers, the ISPs, that held the websites for those
schools. So, what did they do? The bad guys set it up in
Israel. I mean, they learned real quick where they were going
with the U.S. law enforcement, and then moved shop.
That is an excellent idea. I think that that would probably
work. I don't know what the mechanics would be. But I would
love to see something that could stop that.
Mr. Ehlers. All right. I do happen to be computer literate,
and I think working through the ISPs would be the best way.
Each time one of these is reported, simply getting the ISP to
take them down, remove their e-mail privileges, their websites.
And again, it is going to take diligent effort on the part
of Federal personnel to accomplish that, because it is not
going to happen just because we totally agree. Any other
comments?
Ms. Morse. With respect to accredited institutions, we
certainly require that their advertising be honest. And I have
traveled abroad and seen advertising on cable TV and so forth
that I felt was not fully disclosing for our institutions, and
they stopped that immediately. So that is one of our
accreditation requirements.
With respect to foreign institutions, there are some which
are accredited. But there is also an initiative to have a
network, an international network of quality assurance
agencies, so that they can publish who it is that they
accredit, and you can at least click through to their websites
and find out is this a reputable agency. Because there are also
accreditation mills, and you can say you're accredited and
you're accredited by an accreditor that is not really an
accreditor.
And finally, I would just raise the point that there is a
gray area that--I think that we might plug one loophole and
then have the problem that you are going to have institutions
saying, ``Well, take a course,'' or, ``We're giving you credit
for life experience,'' and then you are going to really need an
in-depth review of each institution. Is it really certifying
actual knowledge, or is it simply saying that that is what it
is doing?
Mr. Ehlers. Mr. Cramer, do you have anything to add?
Mr. Cramer. I have nothing to add to the comments made by
my colleagues.
Mr. Ehlers. OK. Well, thank you very much. And thank you,
again, to my colleagues for yielding to me.
Chairman McKeon. Thank you, Mr. Ehlers. Ms. McCarthy is
recognized for 5 minutes.
Ms. McCarthy. Thank you, and thank you for holding this
hearing. I am just curious. There is no studying, there is
nothing? No books are sent for the amount of money that you
send in for the course? You know, when you sign up for one of
these courses to get your degree. To anybody, there is no books
sent? The consumer, then, is basically buying their degree?
They are just getting a certificate without doing anything?
Mr. Ezell. In 11 years, I have received books after my
degrees from only one school. Some of the university degree
programs, in your graduate kit--that is, your diploma, two
certified transcripts, your letters of recommendation from
professors you have never met or ever interacted with, along
with a sheet dealing with how you can get your degree verified.
They will then include about a 14-page exam, that if you
care to take it now that you're a graduate, there is a fee for
them to grade it. So they are all strictly a smash and grab.
Certain of these.
Others that are watered down may run you through a couple
of hoops, you may have to do some papers with some Internet
course work so you have--it's a scale, a continuum, from the
totally fraud over here, where you do nothing and you know you
did nothing--I mean, this week, when I talked to this fellow
from this university, it took him less than 40 seconds to
qualify me for an MBA. That is strictly a fraud.
But there are others where it is a gray area, where it may
take a period of time, a couple of courses, some papers. I may
not know that it is just a storefront, that they accredit
themselves. So there is a range of this operation.
Ms. McCarthy. All right, so that is how some consumers or
some students would actually believe they are actually earning
a degree?
Mr. Ezell. Exactly.
Ms. McCarthy. I have been trying to figure this out.
Mr. Ezell. Exactly. And some of them even offer--up until
three or 4 years ago, they were offering a free video. Others,
you can take a virtual tour of the campus. You don't know that
it is all a fraud, because it's 2,000 miles away. You have
never driven to the address. You don't know that it's just a
mail referral service.
Ms. McCarthy. How are we going to--many of us here on this
Committee, we have had hearings, and many of us agree that
because of the technology that is out there, we believe in
distant learning, which is, you know, something coming of the
future. And how are we going to be able to pass laws that we're
going to try and do to clean this up and still not penalize the
legitimate ones out there?
Mr. Ezell. And I agree that distance learning is here to
stay, with the advent of the Internet. If the Department of
Education does, in fact, come out with this web-based list that
they have talked about when they held their summit in January,
then that would be an easy place for both our citizens and
citizens abroad to go look for the school, if they knew this
list was out there, and see is it on one of the approved--and I
may be using the wrong word--is it on one of the good lists put
out by an agency of our government.
But then they would have to know that that list was there
in order to go look at it. Just like the state of Oregon, if
you want to know if a school is bad, go look at Oregon right
now. It's the only state that actually posts a list of the
schools you can get locked up for. No one is willing to go out
on the plank and call a school bad. That's one of the problems.
They're afraid of being sued.
Ms. McCarthy. Thank you. Just to follow through--and again,
I guess because so many of us are concentrating on the 9/11
Commission and Homeland Security--to be able to get these
degrees I think is a little nerve-racking, when you think about
possibly a terrorist that is sleeping in this country, getting
one of these degrees to prove that they have been here for a
while.
Mr. Ezell. You brought up a good point. We have previously
seen--20 years ago--diploma mills being used as a way of
getting foreign students into the country, and that is also
available today. So we should not--and especially with some of
the mills that can be tracked back to some of the Middle
Eastern countries, who is to say that they are not using this
as a vehicle to get people over here.
Plus, where did this American that set up his shop in
Romania and Jerusalem, what has he done with the $435 million?
Who has he sponsored in what area? And I don't know the answer.
But it is in the universe of possibilities.
Ms. McCarthy. Thank you very much.
Mr. Castle. Thank you, Ms. McCarthy. I will yield to myself
for 5 minutes. And I would just like to say a couple of things
up front.
I helped trigger this hearing. After reading about it, I do
not know what concerned me the most. One of the things that
concerned me was reading about something you mentioned, Mr.
Ezell, was the degrees from Hamilton University. I have a
degree from Hamilton College, thank you, for which I spent 4
years working pretty hard to get, and it bothers me to see that
happening.
But reading what happened over in the Senate, and then
realizing there has not been a lot of follow-up, and realizing
that I am not sure that we, as Members of Congress, understand
the extent or breadth of this problem at all. And I hope this
hearing wakes us up. And frankly, I hope--if this hearing is
the end of it, then I will be vastly disappointed, because I
think a lot of changes have to be made, and I think you have
touched on a few of them.
And quite frankly, I think we have to be more innovative
than ever before, because we are dealing with the Internet, we
are dealing with online legitimate schools at this point. There
are a lot of changes that have gone into place.
And obviously, as you all pointed out with the Internet,
there is all kinds of machinations, and ways of turning this
around to spread the illegality that goes on.
Let me just also say that I don't think there is any
innocence in this. I will be very candid about that. I think
anybody who receives something like Vern Ehlers' daughter
received here, and getting her college degree in 2 weeks, and
just sending away for it, anybody--anybody--who would do that
would absolutely know what they are doing. If they do that, and
they are being--receiving remuneration at a much higher level
because of that, to me they are implicated as much.
And let me also just say that I am a total believer in what
you have said, which is the fact that we need to enforce this.
I have always believed that enforcement and publication is of
tremendous value in cutting these things out. People start
reading about it, be it a few students who are also brought
into the picture here, as well as the names of the colleges or
whatever, it's going to change things dramatically.
Although I must say that with all the rapid changes and use
of the Internet, it may not change as dramatically as I would
like to see it happen. But I think this is outrageous, what has
happened, and I frankly think we need to do a heck of a lot
about it in terms of what we're doing in this country. And it
does need to be addressed.
And I know we can say, ``Well, gee, we have to have all our
FBI agents for terrorists,'' or whatever. Well, that's not
completely true. As we all know, the FBI does a lot of other
things, as well. And one--in this day and age it's always more
than one, probably--but whatever it would take to do it is
something that should happen.
So, my goal is, frankly, to find different ways of doing
this and preventing it from happening, one way or another,
particularly at the Federal Government level. That whole
business of the 2 percent who were looked at and all the false
degrees they had, to think what's happening to the other 98
percent, I think, is completely outrageous and should be gotten
to the bottom to as soon as possible.
Let me start, though, on my questioning, now that I have
gone through my tirade here, with Ms. Morse on the
accreditation end of it. Because you mentioned the gray area--
funny, I had written it down before anybody said it--but you
have mentioned the gray area two or three times yourself, I
think somebody else has mentioned it here.
But I mean, not all schools which are legitimate schools as
I understand it, are accredited. In fact, you have made it--and
I know colleges are very concerned about accreditation,
colleges and universities, and I know it is sometimes
difficult.
And you have indicated that--in fact, I wrote it down--but
good schools sometimes stop in the process and don't bother
getting accredited. So we're not talking about black and white
here, we have got a gray area where there are some schools
which are legitimate, degree-granting good schools which are
not under either your accreditation or any of the other
specialized accreditations which exist out there.
So, if we get a list of all the accredited schools, all
6,000 by all the different entities that you mentioned, in
addition to Middle States and those like it, if we get all
those, we still may have a grouping of schools which are
legitimately granting degrees and are not part of these diploma
mills, and then we can't get a whole list where we could just
absolutely look at it and say, ``These are legitimate schools,
and these are not legitimate schools.'' How do we overcome that
problem?
Ms. Morse. Well, I said that in the interest of full
disclosure. But those schools are not eligible for Federal
funding. So there would be, as a practical matter, very few of
them.
There is another gray area which I think raises a really
interesting philosophical practical problem, which is we are
going, in higher education, to outcomes-based measures. We want
to know what you have learned, as opposed to how many courses
you took.
And therefore, we have institutions such as the Western
Governor's University, which are simply certifying knowledge.
And at what point do we get to an institution where we have to
judge it, is this really a legitimate degree? Did they certify
your knowledge properly?
But the gray area that I was referring to was more the in-
between case, where you are taking a couple of courses online,
but it's not really legitimate, and it's really not that hard
for an accreditor to tell that. We visit, we look at the--you
know, we meet with students, we meet with faculty, we go
online.
One of the benefits of online, by the way, is that we get a
lot of hits on our website of our listed institutions. So
apparently, people from around the world do know that.
Mr. Castle. Well, let me ask you a hypothetical. An this is
hypothetical, and do not be afraid to answer it. And that is do
you believe, with the knowledge that you have, that if you were
assigned by whomever, the Department of Education, or
yourselves, or whatever it may be, the responsibility of not
just accrediting, but of determining those schools which are
indeed falsely holding themselves out to be degree-granting
institutions?
Do you think you have the capability of doing that, setting
aside all the legal objections, and all that kind of thing?
Ms. Morse. We certainly have the expertise. We don't have
the resources.
Mr. Castle. Right. But you think you have the expertise,
and you feel that, given the resources, that that is a doable
objective?
Ms. Morse. If you spend 5 years visiting a school, getting
reports from them, sending them consultants, you have a pretty
good idea of whether they are legitimate, yes.
Mr. Castle. My time is sort of up, but I am going to go on
here for a little bit. And let me ask you, Mr. Cramer, why--I
do not know what the Office of Special Investigations at GAO
has done or not done here. I mean, I have read your testimony,
I listened to what you said here today, but is there more that
you could be doing?
I mean, we obviously have a problem right here at the
Federal Government level, you know, with people using diploma
mill degrees to probably receive more--to maybe even get a job,
and to receive higher income, and that kind of thing. Is there
more that we should be doing? Should we be helping the GAO
more? Is there more that should be happening there?
My impression is that we have let a problem just go along,
and we ought to be doing a heck of a lot more about it, is
where I am coming from.
Mr. Cramer. Well, I think that the work we have done to
date is really just the tip of the iceberg. It is a small
snapshot of what is out there.
As I mentioned before, records that we got from just two of
these diploma mills and two agencies indicated $150,000 in
payments to just those two schools by those agencies. So this
is just a very small part of a much larger--
Mr. Castle. So do you think, with greater resources, that
you all could be doing more? And I have a lot of respect for
what you and your group does. I mean, if we gave you greater
resources, could you--to me, there is a whole world out there
that we have not been into sufficiently.
Mr. Cramer. We would be happy to talk to you about doing
additional work in this area. We are certainly open to that
possibility, and we would be happy to talk about projects. We
have some ideas for things that we could do, and we would be
happy to talk to your staff about that.
Mr. Castle. OK. Mr. Ezell--and this will be my final
question--the counterfeit--and you mentioned something else
that I think was also in your written testimony--but you
mentioned the counterfeit degrees from legitimate universities,
which is very different. That is just a forgery, as I would
understand it.
And I guess it relates somewhat. Have you had a--much
experience with that, in that area, when you were in the FBI or
since then in the work you are doing now?
Mr. Ezell. Yes, sir, I have. When I visited one place in
Grants Pass, Oregon, I seized 32,000 diplomas on 320
universities. Once you design the printing plates, you print
100. You don't print anything less.
Today, on the Internet, you can buy just about anything you
want on any school. I can buy a degree, a transcript, envelopes
with the return address of the registrar's office. I can buy
rubber stamp seals. If their transcripts are on security paper,
then that's what the bad guys have. It's all out there today.
It should not be this easy. And if in today's society so
many employers don't take the time to check out someone, and to
verify their educational credentials--my daughters have
graduated from the University of North Carolina and the
University of Florida. I have bought counterfeit degrees on
both of those schools for a lot less than what I sent them to
college on.
[Laughter.]
Mr. Ezell. The signatures were wrong for the year of my
graduation. But otherwise, it was a look alike. They are good,
quality work.
Mr. Castle. These are different people than the diploma
mill people, or are they--
Mr. Ezell. Yes, sir.
Mr. Castle.--in some instances the same?
Mr. Ezell. Yes, sir. It is a different operation, totally.
And some of these have transcript verification, sort of like
buying a triple combo at McDonald's, you know. ``I will take
this, this, and this, and hold the honors,'' you know. Whatever
you want. Whatever GPA you want, it's all available.
I brought some items today, just as examples of some of the
quality that is out there. Anything is for sale, sir.
Mr. Castle. I said it would be my final question, but I can
sort of imagine this, but how are they used? I mean, you can
put them on the wall, but you can also present the transcript,
and then show the whole record of it, and say, ``I went to
Harvard, and here is my record. I was tenth in my class,'' or
whatever it may be?
Mr. Ezell. Yes, sir. And I have brought several Harvards
with me today. Yes, sir.
Mr. Castle. Very good.
Mr. Ezell. Wherever my stack is. But there are some
Harvards in it.
Mr. Castle. I should have met you sooner. I could have
saved 7 years of my life.
Mr. Ezell. You can be all you want to be, or be who you
want to be. Think of identity fraud. Think of all of this that
we are talking about today in line with identity fraud, or in
line with terrorism. I mean, just look at it as your back-up
documentation.
Mr. Kildee. Exactly.
Mr. Castle. These are--I am going to distribute these
amongst the members so they can look at them, but these are the
diplomas--
Mr. Ezell. Those are all counterfeits. And to answer a
question that you did not ask me, the state of Oregon, on their
website, even has non-accredited schools--they have come up
with criteria where they have found some non-accredited schools
legitimate to use as educational credentials in the state of
Oregon. When we're talking about accredited versus non-
accredited. So they have come up with criteria and post certain
non-accredited schools that you can use their credentials for
education in Oregon.
Mr. Castle. Thank you. Mr. Tierney is recognized for 5
minutes.
Mr. Tierney. Thank you. Just a couple of questions, because
I have to go. But Mr. Cramer, what do you know about any
efforts on the Department of Education to take action to make
sure that people aren't using the Federal Family Education Loan
Program for places like your institution where you apparently
got them to send some money?
Mr. Cramer. Well, as a result of the investigation that we
did, we know that they revamped their process of verifying
foreign schools.
Our--the school that we set up was--exploited a
vulnerability with respect to the verification of foreign
schools.
Mr. Tierney. What, specifically, did they do? Do you know?
Mr. Cramer. Well, prior to our work, there was, in fact, no
process in place for the Department of Education to actually
check with the foreign government, or the foreign government
educational authority to determine whether the school which
sought to be a part of the student assistance program here was,
in fact, licensed to operate and was fully accredited according
to the foreign government standards.
So, that is a significant piece of--that is a significant
change that has occurred. They now do that. They make sure that
they consult with the foreign authorities and determine whether
or not it is a licensed school within that country.
Mr. Tierney. What if one of the foreign countries contacted
our Department of Education and asked about one of these mills
that you're talking about? What would the answer be, that they
just don't know because they don't keep track of them all, or--
Mr. Cramer. See, the Department of Education here doesn't
do accreditation itself.
Mr. Tierney. Right.
Mr. Cramer. It recognizes accrediting bodies, such as
Middle States.
Mr. Tierney. But I guess that is my point is, you know, if
I were another government and I say, ``Look, we want to know
whether or not this institution, Lexington College,'' for
instance, or whatever it is, you know, is a legitimate school
or whatever, ``What can you tell me?'' Our Department of
Education would not be able to give them an answer, right?
Mr. Cramer. By the end of the year, the Department of
Education has told us that they will have available online a
list of accredited schools.
The problem now is if you want to do a definitive search to
determine whether a particular school is accredited, there is
no one, convenient online place you can go to. You need to go
to the various accrediting--
Mr. Tierney. Right, but is there a difference between a
legitimate school and accredited, or can you also--can you be a
non-accredit school but be a legitimate institution?
Mr. Cramer. Yes, you can.
Mr. Tierney. And would our Department be able to make that
distinction for any foreign government inquiry?
Mr. Cramer. Well, I am not exactly sure how they are going
to organize the information. But I know, for example, that OPM
organizes its information about schools according to whether it
is accredited, non-accredited but pending accreditation,
whether it is another type of school, for example a foreign
school which would not seek accreditation in the United States,
but may be a perfectly fine school accredited in a foreign
country.
And then the fourth category, which are the diploma mill
type businesses. I mean, I don't call them schools or
institutions. They are just businesses that are set up to sell
degrees.
So, there are all different kinds of businesses and schools
and institutions out there, and--
Mr. Tierney. And you think the Department of Education has
a good bet on just which are which?
Mr. Cramer. I really cannot speak to that. I do not know.
Mr. Tierney. With respect to the eight agencies, the
Department of Education, Energy, Homeland Security, Health and
Human Services, Transportation, Veterans, Small Business, and
the Office of Personnel Management, where you found some 28
employees with degrees from unaccredited schools, has any
disciplinary action been taken against those individuals, do
you know?
Mr. Cramer. Well, I know that we referred the results of
our work to the inspector generals' offices at each of the
agencies. At this point, I do not know what, if any,
disciplinary action has been taken with respect to those
people.
Mr. Tierney. OK. I mean, some of them had some fairly
significant positions, including national security clearances.
Mr. Cramer. Yes.
Mr. Tierney. So it would be important to both those people
who were duped, or if they--it gives us a question on their
intelligence on that, or maybe not--but also whether they would
just be devious themselves, in a position like that.
What advise do you have for those eight agencies and others
about what they must do to avoid that circumstance?
Mr. Cramer. Well, what we found was a surprising lack of
systems to verify educational credentials. What the agencies
need are systems to verify whether someone, in fact, has a
degree, and to verify whether the degree is from a school or a
diploma mill, or an institution. Is this a legitimate school?
It is hard. It is not an easy thing. For example, you
mentioned the example of Hamilton. Hamilton College is a fully
accredited, fine school in Clinton, New York. Hamilton
University is a diploma mill in Wyoming.
But when--if an employee has obtained a degree from
Hamilton, and they simply put on their application, or whatever
they fill out, ``Hamilton,'' without further identifying
information, which happens, without an address or university or
college, that's just one example. And diploma mills frequently
will take names that sound like legitimate schools.
Another one is LaSalle. LaSalle is used by some perfectly
fine schools, and also by diploma mills. So it also depends
upon the employee's own knowledge and culpability, and what
kinds of information they are giving to the agencies.
Mr. Tierney. Were you able to give any advise? I mean, who
is giving these agencies advise on how to set up those systems,
now? Is that your agency, or did you push off--somebody else
has that responsibility now?
Mr. Cramer. We have not been asked to do that at this
point. Certainly we would be happy to see whether GAO could
assist the agencies, if they are interested.
First of all, what Congress has done, I think, is very
helpful in just making the agencies aware of the problem, aware
of the need for attention to the problem, and the need to
determine what the scope of the problem is. That is the start,
and I think that you have gone a long way toward doing that
here.
And now, they need to design some kind of verification
process, and they need assistance in doing so in a way that
works, that doesn't make the process unduly cumbersome.
Mr. Tierney. Thank you. Mr. Chairman, thanks for bringing
this issue to everybody's attention. But perhaps the Committee
wants to do something about notifying these agencies and
offering the General Accountability Office's services if they
need that, or whatever. With that, I yield back. Thank you.
Mr. Castle. Thank you, Mr. Tierney, very much, for your
thoughts and time here. Mr. Petri is recognized for 5 minutes.
Mr. Petri. Thank you. I think I would like to just sort of
follow up on the previous line of questions and ask you
particularly, Mr. Cramer, does it really make sense, given all
we have heard, to focus on the ``diploma,'' whether it is from
an accredited or non-accredited, or--I mean, they are so easy
to get and all of this.
Doesn't it make more sense to focus on what the diploma is
supposed to represent, and have what you said, outcome-based--I
mean, when--I happen to have a law degree from what is an
accredited university. But they did not let me practice law. I
had to take a bar exam.
I fly on airplanes all the time, and I assume they take
courses, but they do not get to fly the airplane just because
they have taken the courses. They have to demonstrate, in a
variety of ways, their competence.
And so, we have problems of fraud all the time in our
society. I mean, McDonald's has to deal with it, and Wal-Mart,
and so on, and they worry not just about arresting people, or
checking out their credentials, but setting up systems that
protect them and minimize the fraud.
So, shouldn't we, instead of giving people awards for a pay
increase for a diploma and then running around trying to check
on whether this piece of paper is valid or not, just do it
based on demonstration of increased competence in a particular
area? Wouldn't that be a lot simpler, and more straightforward,
and then we don't have to worry about whether people are
cheating or gaming the system?
I am just asking. I mean, we can spend a lot of time and
money putting more resources into checking into the validity of
paper. Why don't we just look at what the paper is supposed to
represent, and determine whether people know that. Can you
comment on that? Is that wrong?
Mr. Cramer. Not at all. I think it addresses one part of
the problem. But there is still the other part, which is if,
for example, a veteran's hospital is going to hire a doctor,
they have to know that this individual, in fact, has a degree,
a medical degree, from a legitimate medical school. And the
suggestion you made, I think, is a very fine one. But I don't
think it addresses that--
Mr. Petri. Well, wouldn't he have to be certified and take
an exam in order to practice in that state?
Mr. Cramer. Well, I guess the first question is to
determine where the medical degree comes from, and whether the
institution or the school or the business, whatever it is that
grants a medical degree, has had a legitimate medical education
program.
So, we want to make it possible for agencies, private
employers, anyone who has a need to know that--
Mr. Petri. But isn't it true--I mean, I went to college--
there--even though it is certified, and it is a perfectly good
school, there are a lot of courses--kids call them guts.
You can get--I mean, there are a whole mixture of things,
and it just doesn't necessarily mean that--I mean, you don't
want to--empowering people to do things because they have a
piece of paper, rather than checking into what they actually
know, it seems a lot simpler just to require that they
demonstrate a level of competence for real activities.
Or maybe it is better--if you want to empower, make
certification of something important, make that another step.
But that is kind of like you have to have a union card and then
do something. I mean, if you want to do that in order to
organize society, and restrict access, but in education a lot
of states do that. But the private schools don't, so you have
people who teach in parochial school who aren't certified, even
though they both have gone to college.
I mean, there are a lot of ways of doing this. But all I am
asking is should we really be spending that much time on these
systems, or wouldn't it be a lot simpler to just worry about
the basic competence, and if people don't do that, they are
liable, probably? If the people, their customers, are hurt by
someone they placed in that position?
And beyond that, I mean, there are only so many resources
in this world. To spend all kinds of money looking into the
integrity of various diploma mills, as opposed to whether
people, whether they are from the diploma mill or not, know how
to do the job--that's just my question.
Ms. Morse. May I address?
Mr. Petri. Go ahead.
Ms. Morse. That is why accreditation is trying so hard now
to go in that direction. I do not know that we can have
licensing tests for every kind of job that there is. But what
we can do is to preserve the diversity of the different kinds
of colleges that we have, and hold them to the learning goals
that they have, in terms of the students that are graduating.
And we are putting a great deal of resources and effort
into that, as are all of the colleges and universities right
now.
Mr. Ezell. I agree with what you were saying. Some of the
diploma mills, in fact, will caution you about buying a degree
in an area that you have no knowledge. Because as you well
know, you're not going to last long.
The other part of what you said, we are a credential-
conscious society. We have left the age of apprenticeship, and
I don't know how you can go back to an apprenticeship style
society. It's the piece of paper that opens the door, it's the
piece of paper that gets you the interview, the raise, et
cetera. And sometimes, we have met people in life that we said,
``He is just so smart that he is stupid.'' Well, it could be
that he is just stupid.
[Laughter.]
Mr. Ezell. But he has the paper. You know what I am saying?
Mr. Castle. Thank you, Mr. Petri. Mr. Burns is recognized
for 5 minutes.
Mr. Burns. Thank you, Mr. Chairman. You know, patience is a
virtue. I am delighted to be here. I appreciate your input, I
appreciate your knowledge on this subject.
After spending 20 years in higher education and doing what
my colleagues did, which was earn it the hard way, this creates
a real problem. We have forgery, is that correct, Mr. Ezell, a
forgery?
Mr. Ezell. Oh, yes, sir.
Mr. Burns. Absolute, blatant forgery. And then we have
fraud. You know, in Gwinnett County, Georgia, we had a few
teachers who received degrees from St. Regis. And just to give
you the input, they are master's degree in 24 hours. A reporter
from the Gwinnett Daily Post applied for a degree. In 24 hours,
submitted a request online, took an optional test--optional
test--sample question to be used to determine that the
applicant can earn a course credit by taking St. Regis' online
test, ``What two-syllable term means take into custody, or to
apprehend?''
And of course, optional answer A was ``Arrest.'' So, in 24
hours, the next day, the evaluation was completed and the
qualifications for certification of degrees had been approved.
You get a master's degree in arts and education, a master of
education, certificate in organizational management counseling,
educational consultation, student guidance counselor, education
administrative consultant, documents would be prepared for your
approval, and upon acceptance of the payment of appropriate
fees.
The fee was $995. Now, for a teacher in the Georgia system
with a master's degree, that would qualify them for an annual
salary increase of $2,500. That's a pretty good investment. If
I wanted a Ph.D. from St. Regis, it costs me $1,500. But my pay
would increase $4,000. It's blatant fraud.
Mr. Ezell. Even worse, St. Regis is run by two Americans
who--and they probably have 15 to 20 entities. You can even
become a broker and get money for referrals. After 9/11, they
even set up their university of homeland security, where you
can buy everything you want in the field of homeland security.
I have that in the attachments to my written statement.
So, they totally take advantage of the changing winds in
the country. Quite a very sophisticated operation.
Mr. Burns. The frustrating thing that I have is the fact
that they are operating with impunity. And we have, you know--
it is hard to determine how someone could be considered a
victim if they voluntarily participate in fraud.
In Georgia, the authorities are looking at the opportunity
of prosecuting those individuals for theft by deception,
whereby someone who would deceive their employer to quality for
higher pay.
Mr. Ezell. Agreed.
Mr. Burns. Just a couple of quick questions. Is--Mr.
Cramer, is our government paying for these degrees?
Mr. Cramer. Yes, the government has paid for a number of
degrees for a number of people, according to the work that we
have done, yes.
Mr. Burns. These are fraudulent universities, paper mills.
And in some cases we are indeed paying for the degree? So if I
wanted to get a degree from St. Regis, for example, and I could
get my employer to reimburse me, they would pay for the degree.
Is that a possibility? Is that happening?
Mr. Cramer. It did happen in the work that we did. We did
find it happening, yes.
Mr. Burns. And certainly it is occurring where we have
employees at both the Federal Government, and likely our state
governments, who are using these degrees to gain additional
remuneration for their work, as well as promotions and job
opportunities. Is that, again, happening on a fairly routine
basis?
Mr. Cramer. Our look at those Federal employees--we only
looked at high-level Federal employees--but our look at those
situations of those 28 people who were identified as having
diploma mill degrees indicated that those people were hired not
based upon the degree, but based upon their other
qualifications and their experience.
Mr. Burns. Was their degree an entry level requirement? Was
that a part of the requirement for the position?
Mr. Cramer. Not in all cases. Not in all cases.
Mr. Burns. But in some?
Mr. Cramer. In some cases, for example, they may have had a
bachelor's degree from a legitimate institution, but then what
people tried to do at times, we found, is enhance their resume
by acquiring a master's or a Ph.D. in some cases, by simply
paying a diploma mill for a degree.
So, they may have had the minimum educational requirements
for the job from a legitimate institution, but then enhanced
their resume--which, of course, helps you when you're looking
for a job--by getting these bogus degrees.
Mr. Burns. You know, it's amazing. We get on an airplane,
and the first thing we do is we thumb through the local--you
know, the magazine there in the seat in front of us in the seat
pouch, and we see multiple advertisements for various degrees
from questionable, at best, universities.
One of the things I am most concerned about is protecting
legitimate universities, and not allowing them to become
associated--you know, like you suggested various names, LaSalle
for example. A very fine university. If it's the right LaSalle.
Hamilton University, a very fine university if it's the right
Hamilton.
And so, I think part of our challenge is protecting those
who do a great job of helping many of us increase our expertise
and knowledge and ability. So I appreciate your testimony, and
I look forward to working with you as we continue through this
process. Thank you, Mr. Chairman.
Mr. Castle. Thank you, Mr. Burns. Hamilton College, by the
way. It's not that damn Hamilton University we are talking
about.
[Laughter.]
Mr. Ezell. But it is designed to deceive and confuse
people.
Mr. Castle. I understand. Yes.
Mr. Ezell. It has for years, and it hasn't changed.
Mr. Castle. I just wanted to ask two follow-up questions,
and the others might, as well. I won't take much time. But what
are the legitimate universities? And maybe I address this to
you, Ms. Morse.
It seems to me that our legitimate colleges and
universities--frankly, I question how good a job they are doing
in communicating with this Committee to begin with, on a
variety of issues I have seen of late.
But in this particular area, I would think they would be
hot on the path of this. Maybe you do not run into this in the
world of accreditation, or even the accreditors themselves,
because I understand there are perhaps some imitation of
accreditors out there, as well. But I would think all those who
are legitimate would be a heck of a lot more concerned about
this than they have been.
I mean, I--you know, this is not something that has had a
lot of public recognition. Are they not concerned, or is it
just they do not have time to be concerned? Or they are
concerned and I have not seen it, or is there some reason why
they are not concerned?
Ms. Morse. They are concerned, but they do not have
jurisdiction, except--I was wondering when you were talking
about the similar names, if there isn't some copyright lawsuit
that they could bring.
It is very hard for them to rule against these
institutions. Now, someone made the comment before the hearing
that ACRAO, which is the Association of College Registrars and
Admissions Officers, that is also an organization that they
might get together and do something about that.
Accreditors are very concerned, that's why we are concerned
about the accreditation mills. And in fact, parallel to the
Department of Education's Secretary of Education recognizing
certain accreditors, we also have a private organization that
recognizes us. That's the Council of Regional Accrediting
Associations, or whatever it's called, and they also have a
website that publishes these things.
Mr. Castle. It just seems to me that more publicity could
be helpful in that area. Let me just go to one other--
Mr. Burns. If my friend would yield for just a moment, Mr.
Chairman?
Mr. Castle. Absolutely, Mr. Burns.
Mr. Burns. You know, I think that's a good point. I think
why don't legitimate schools take more aggressive steps? And
you know, in 20 years, I think one of the ironies of being in
the university environment that I was in is we tended to ignore
these things as a joke, as a laughable joke, and so we didn't
really look at them as a credible threat to education.
But yet now, as you have pointed out, more and more people
use them as an enhancement to their career without the
associated requisite input and work and development. So I think
often times--Harvard, you know, I think forgery is going to--I
think certainly Harvard would look at forgery and try to
protect its position on forgery, but a Harvard is not going to
look at a St. Regis and say, ``You're a threat to me.''
Ms. Morse. We do have one area where we have jurisdiction,
which is another potential area for abuse, which is that
legitimate universities enter into contracts with providers,
often abroad but sometimes here. And those providers may not be
up to the standards of the university that is granting the
degree.
And we do have accreditation requirements about that, and
we review those operations very carefully, because we don't
want to get a bad name for legitimate universities operating
abroad.
Mr. Castle. Thank you. Let me ask one other question, I
think of Mr. Ezell, but maybe any of you could help with this.
Are there either state--and I'm thinking about Oregon--or
Federal statutes which prevent the recipient of one of--not
prevent--which would make it a crime for just the mere
recipient, that is just the receiving of one of these degrees,
as being a crime?
Now, I understand if you pretend you're a doctor and you're
not, that would be some sort of crime, I'm sure, or some other
profession, or whatever it may be. But here you have a genuine
college degree in 2 weeks, the thing that Mr. Ehlers had, and
you know, there is nobody in their right mind that doesn't
understand this is a fraud. And you send away for it, and you
get it, or you send away and you get that degree from Harvard
on a forgery basis.
I realize that the people issuing these things may be
committing some sort of a crime, but is there any kind of a
direct statute that makes this any kind of a crime in any
state, maybe in terms of either the issuance or the receiving
of such degrees?
Mr. Ezell. Different than counterfeit currency, the sheer
possession of the degree from the institution that you would
buy it from, that spam mail, is not a crime, per se.
Mr. Castle. OK.
Mr. Ezell. It is the use of it.
Mr. Castle. So it only--
Mr. Ezell. However, if we are talking about a counterfeit
degree on a state college, most states have a law, a state law,
that says the production, possession, use of a degree of one of
their state institutions or transcripts is a violation of state
statutes. So no on the Federal, yes on the state.
But it is the use of it, normally. Outside of a state
degree, like the University of North Carolina, I would be
violating a North Carolina general statute. Or the University
of Florida. But there is not a Federal statute. And if I bought
one from this spam mail and hung it up behind the bar of my
home as a joke, if you would, I have not violated the law. But
I am not a lawyer, but that is my opinion.
Mr. Castle. Right. Well, I have no further questions. I do
not know if Mr. Kildee or Mr. Burns has any further. I have,
frankly, a whole lot of questions, but I would need the rest of
the day if I kept asking them, and you have answered a lot of
them in your written testimony, and we appreciate that.
Mr. Kildee. I just want to thank you, Governor Castle, for
really initiating the idea for having this hearing. I have
learned a lot today. I am shocked and somewhat discouraged,
too.
I worked hard for my MA at the University of Michigan. And
the thought that people could fraudulently achieved that--I was
very proud, and my parents were very proud when I got that--it
is kind of discouraging, also, when you see this, really,
violation of the rules of decency in society.
But you, all three, have been very, very helpful. And I
think we will have to try to see what we can do in the Federal
level, maybe parallel some things that they have done in the
state level, like in Oregon on that.
But I would like to see a reinstatement of the DIPSCAM in
the FBI. I mean, you have someone who is really zealous and
recognizes this is fraudulent, and this is discouraging, I
think that might at least limit the fraud here, both by the
person granting--the business granting this phony degree, and
the person receiving it.
Thank you very much. I really appreciate it. Thank you.
Mr. Castle. Thank you. And I would also like to thank Mr.
Burns, who has had a deeper involvement in higher education
than almost any of us, except perhaps Mr. Ehlers, for his
interest in this.
I mean, you know, it is hard to get your arms around this,
but there is absolutely no question in my mind that there are
some very wrong things which are happening here, and who is
actually carrying it out. I am not 100 percent certain.
As you could tell from my questioning, I happen to believe
that those who are receiving these are actually part of the
problem, maybe a smaller part of the problem, but it involves a
substantial amount of money, not just the money they're making,
but the fraud of, say the Federal Government, for example, and
paying people pursuant to degrees which they have received
which they have not properly earned, which we know now exists.
Well, that's just one type of business. There are probably all
other kinds of businesses that are doing this, as well.
So, I think it is a tremendous problem out there, and
something we have to deal with. I think you have made some
excellent recommendations. It is my hope that this hearing will
plant the seed of interest in this Committee and in the
Congress to go beyond where we have been before.
I hope the FBI is listening to what we are saying. Perhaps
we need follow-up hearings on that. The investigative arms of
the congress, GAO, et cetera, and the others who may need the
resources to do something about this, perhaps the schools
themselves, the accreditors, could do more than perhaps the
Department of Education can.
Knowledge can shed a lot of light on this. And as I said
before--and I agree with Mr. Ezell on this--a little bit of law
enforcement, a little bit of publicity on it, can go a long
ways to shutting down some of this, as well.
But I think it has been a good hearing today, and I very
much would like to thank all of you for taking the time to be
here, your interest in it. Hopefully you are going to hear more
from us in the future.
Unless anybody has anything further, we stand adjourned.
Thank you.
Ms. Morse. Thank you.
[Whereupon, at 12:35 p.m., the Subcommittee was adjourned.]