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Dems Question $250,000 in Bonuses for Gov Official

May 17, 2007 2:48 PM

Lawmakers_slam__mn The White House appointee in charge of the Education Department's troubled financial aid office took home $250,000 in bonuses, leading Democratic lawmakers to question what she did to deserve such lavish rewards.

"Given that the student loan programs became increasingly rife with conflicts of interest and unethical practices" during the four years Theresa Shaw served as chief operating officer of the Federal Student Aid office, "it is questionable whether these bonuses were justified," House Education Committee Chairman George Miller, D.-Calif., told ABC News. The bonuses were first reported by Government Executive magazine.

From 2003 to 2006, the department awarded Shaw with annual bonuses ranging from $60,000 to $71,250, the magazine reported Tuesday.

Shaw stepped down from her post last week after her office was rocked by several scandals and investigators began to scrutinize its operations.

The Department said her departure was "absolutely" unrelated to the inquiries; Shaw told her subordinates she was leaving because "I had accomplished all that had been asked of me."

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The FSA office oversees all publicly-underwritten student lending. 

In January, the department belatedly closed a loophole that allowed private education lenders to improperly collect hundreds of millions of dollars from the government.  A department whistleblower had alerted his superiors to the problem in 2003, but they reportedly chose to ignore it and reassigned him to another position.

The Justice Department is currently mulling an audit of the biggest beneficiary of the loophole, Nelnet. The lending firm improperly billed the government for $278 million, according to a review by the Education Department's inspector general. The company said the conclusions were "incorrect," and the Education department declined to pursue repayment.

In April, one of Shaw's subordinates was suspended after it was disclosed he had held $100,000 worth of stock in a private student lender, a conflict of interest. The employee, Matteo Fontana, had worked with Shaw at the student loan giant Sallie Mae before joining her at the Education Department.

The department's inspector general is now reviewing Shaw's office for other potential conflicts of interest between employees and lenders.

The lender recently settled with New York Attorney General Andrew Cuomo after his growing investigation into the student loan industry unearthed allegations the company was giving financial incentives to school financial aid officials, who steered student borrowers to use the company. The company did not admit wrongdoing but paid millions to an educational fund and agreed to reform their practices.

Also last month, it was revealed that private education lending companies were abusing a database in Shaw's office that contained personal information on millions of students. The department did not dispute the breaches, but insisted it had been "vigilant" in watching for unauthorized access to the system.

Before the recent scandals, Shaw enjoyed a positive reputation. The Government Accountability Office (GAO) found her office had improved under Shaw's watch, and in October 2005 she was invited to testify before Congress on her management accomplishments.

Sen. Edward Kennedy, D-Mass., chair of the Senate committee which oversees the Education Department, said Shaw did not deserve her bonuses, and the fact they were awarded was "troubling."

"Such performance should not be awarded with generous bonuses," the senior lawmaker said.

May 17, 2007 | Permalink | User Comments (22)

User Comments

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What a load of crap. No wonder our freakin taxes are so high. Government employees should not get any bonuses. I mean where is there anyway to guage thier performance?

Posted by: ribeye | May 17, 2007 3:31:47 PM

"A department whistleblower had alerted his superiors to the problem in 2003, but they reportedly chose to ignore it and reassigned him to another position." Hummm if you don't play you don't get paid. Apearently Ms. Shaw got her pay.

Posted by: skidog | May 17, 2007 3:36:01 PM

It is SICKENING how this administration reward the Bushies. Voting is too far away. Wolfie, Rep Duke Cunningham, .....

Posted by: SICK! administration | May 17, 2007 4:16:27 PM

All Department heads who have government jobs get bonuses. I remember working for the V.A. and that was the talk, we always knew when it was getting time for the end of the fiscal year, our departeent head would cut back on everything drastically so she would get her $10,000.00 bonus, then when the new fiscal year started, everything would be back to normal. This is nothing knew to government employees, I am glad that it is finally becoming public knowledge and I hope that some kind of bill is passed that no government employee can get bonuses.

Posted by: Chacooe | May 17, 2007 11:33:52 PM

As most of us know this type of government looting has been going on for years. The difference now is in the way the Bush administration has managed to run the looting numbers up into the stratosphere. Even Ronald Regan took advantage our government gold mine when took part in an old enrichment scam. Mr. Regan made his first million by purchasing a piece of worthless desert for 15 thousand dollars and then turned around and sold it to the U.S government for 1 million. Nice mark up!
From what I understand that was one of the ways the good old boys would help their buddies gain wealth. The land was purchased to be used as a state or national park.

Posted by: Van Go | May 18, 2007 11:28:15 AM

Why does this sound more like organized crime rather than a form of government? We need another revoultion.......

Posted by: MItchB | May 18, 2007 12:54:23 PM

This is unreal. What does it take for Bush and his clan to be impeached, fired, fined or sent to jail for everything they’ve done to our country and government? Why doesn't anyone put a stop to this? How powerful are they? Do they control the democrats too? They are bunch of thieves and are robbing our country and making their friends rich and people who are loyal to them, presidents of World Bank. I am ashamed of being a republican; I am voting for Democrats next time around.

Posted by: dave | May 18, 2007 1:50:32 PM

I totally agree mitchB

Posted by: DAVE | May 18, 2007 1:54:47 PM

nice to know the "higher ups" get such rediculous bonuses yet i am a junior in college and my financial aid was lower than normal because of education cuts!!!!!!!!

Posted by: angie | May 18, 2007 3:14:20 PM

What can we say? What else is new? Every one of you is right. Impeach, imprison, insurrection NOW.

Posted by: jade | May 18, 2007 3:44:09 PM

A huge percentage of our elected officials are getting handouts right and left in the name of "bonuses." Must be nice!
Too bad they don't care about the majority, those who work at the ridiculous MINIMUM wage and can't afford health care, yet supposedly earn too much for Medical Assistance.
This is definitely not the government I was proud of in the 1950's.

Posted by: Judith B | May 19, 2007 5:44:27 PM

Unreal! And I can't even afford to fill my gas tank.

Posted by: Bill S | May 19, 2007 7:14:08 PM

What I find interesting is that what seems to have been going on in other administrations, no one complained, is now a crime in the Bush Administration. I am sure that tomorrow MSNBC will be blaming Karl Rove for this too. Considering the low poll numbers for Congress, I think its time for them to get on with the business of solving some of the major problems we sent them there to do.

Posted by: homjett | May 20, 2007 9:06:57 AM

The land deals by the upper eschelons in government are normal, they include Congress and high Gov officials. The Bureau of Prisons is another example. These guys buy up land around the prisons before they are announced, then, after the area builds up, they make a killing. Knowledge of where the gov't is moving gets you in ahead of the rest. These people are rich for a reason. Two generals, and a high up with the highway patrol built Point Blank and DHB industries around cronyism and contracts they push through their connections. It must be nice.

Posted by: Chris | May 20, 2007 1:17:34 PM

It just kills me you are not hearing Feinstein awarding her husband' company SF deals. Or Pelosi making sure the ships can dock in SF increasing the value of her husbands property. No let's just hear about the Rep. problems,that will solve everything. We can then blame Bush. What fools.

Posted by: Patrice Guerra | May 20, 2007 5:43:03 PM

Chris- You seem to take it personally that Republicans are taking the brunt right now. Aren't you outraged by their behavior, too? I don't see you standing up to them by pointing fingers. Rather, your defense of them shows your complicity. You're right in that there is plenty of blame to go around, but stop turning your political blind eye to those that profess to be in your corner. You are getting screwed, and it's not the liberal left. Look to your right from time to time to make sure your folks are doing the right thing.

Posted by: Bill L. | May 22, 2007 1:19:15 PM

Oops- sorry Chris. I meant Patrice.

Posted by: Bill L. | May 22, 2007 1:21:06 PM

This is just what I expect from a corrupt Bourgeoisie run Government. This is what this country has to look forward to a government that rewards the corrupt and punishes the good honest worker. It doesn't take much just look who runs this government a corrupt system witha corrupt head. No wonder we can not get anything done.

Posted by: Free thought | May 22, 2007 7:42:39 PM

This is just what I expect from a corrupt Bourgeoisie run Government. This is what this country has to look forward to a government that rewards the corrupt and punishes the good honest worker. It doesn't take much just look who runs this government a corrupt system witha corrupt head. No wonder we can not get anything done.

Posted by: Free thought | May 22, 2007 7:43:19 PM

Maybe it's time the U.S. stopped handing out all its senior posts to political cronies (either party) and joined the rest of the world by using moderately paid civil servants watched over by politicians who aren't their personal friends.

Like say the UK

Or even, dare-I-say, France

Posted by: Eddie | May 23, 2007 7:48:21 AM

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