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DeVos Files Financial Disclosure, Ethics Letter Vowing to Divest Education Assets

By guest blogger Mark Walsh

Betsy DeVos vowed in an ethics letter to divest her stakes in more than 100 assets that hold potential conflicts of interest should she be confirmed as U.S. secretary of education.

President Donald Trump's nominee to lead the Education Department said at her Jan. 17 confirmation hearing that she would take such steps, but several Democrats on the Senate education committee were troubled that she had not yet completed her financial disclosure or an ethics agreement for resolving potential conflicts.

But just two days later, on Jan. 19, she completed a lengthy financial disclosure required by the Office of Government Ethics. And she signed an ethics letter addressed to Marcia Goodridge-Keillor, the "designated agency ethics official" at the Education Department.

"The purpose of this letter is to describe the steps that I will take to avoid any actual or apparent conflict of interest in the event that I am confirmed" as secretary, DeVos writes. She says that within 90 days of her confirmation, she will divest stakes in 102 assets that pose potential conflicts. 

DeVos and her husband, Dick DeVos, whose father co-founded Amway, are part of a family whose fortune is estimated by Forbes magazine at $5.2 billion. DeVos's financial disclosure shows her investments to be vast and diverse, including many separate investment and venture funds. 

Her ethics letter identifies the assets that apparently have stakes in education-related companies or might otherwise create conflicts of interest if she were confirmed.

The one clear education stock on the list is Knowledge Universe Education LP, which changed its name to KinderCare Education on Jan. 4 and operates KinderCare Learning Centers. The financial disclosure says DeVos has an investment worth somewhere in the range between $500,001 and $1 million.

Most items on the divestment list, though, are funds with diverse stakes in assets that include an education-related company among others.

Among the entities that DeVos has indirect investments in through such funds are Varsity News Network Inc., which is described in endnotes to the disclosure as a developer of web software for K-12 athletics; U.S. Retirement Partners Inc., a financial services company specializing in public school and government employee benefits plans; and N2Y LLC, which is described as providing cloud-based learning services for special education.

DeVos also has stakes in investment vehicles with stakes in municipal bonds, including those for school districts in Arlington, Texas; Houston; Clark County, Nev.; Moorehead, Minn.; North Little Rock, Ark., and others.

One asset, Albert Co-Investment Holdings LP, is listed as being worth between $1 million and $5 million and has an endnote stating only that it is for something in the area of "education."

The disclosure also states that it is listing assets "not already reported," so it is unclear if specific investments that Democratic senators asked DeVos about at her hearing were part of an earlier disclosure. Those included K12 Inc., Social Finance Inc., and Performance Financial Corp.

DeVos relates in her ethics letter that Goodridge-Keillor, the Education Department ethics official, has "advised me that it is not necessary at this time for me to divest my remaining interests in entities disclosed in my nominee public financial disclosure report, inasmuch as the likelihood that I will need to participate in any particular matter affecting these entities is remote." 

She adds that she will remain vigilant in identifying potential conflicts. But she also states that she will remain as a trustee and beneficiary of three family trusts, one of which appears, based on the disclosure form, to have indirect investments in education-related firms.

The ethics letter also lists 12 entities from which DeVos has resigned her position. These include the Dick and Betsy DeVos Family Foundation, the Alliance for School Choice, the American Federation for Children, and the Great Lakes Education Foundation.

Richard W. Painter, a University of Minnesota law professor who was a White House ethics official under President George W. Bush, said in an interview Friday that DeVos's letter and financial disclosure should settle ethics concerns.

"I think if she sells all these education investments and gets off these boards, I think that's going to solve her conflicts of interests," said Painter, who is the vice chairman of Citizens for Responsibility and Ethics in Washington, or CREW. "She's your run-of-the-mill billionaire, and there are a lot of them in this administration."

Eli Zupnick, a spokesman for Sen. Patty Murray of Washington, the ranking Democrat on the  Health, Education, Labor, and Pensions Committee, said the financial disclosure shows that DeVos and her family "have incredibly complicated and opaque financial entanglements" and that Murray remains concerned that the nomination is being rushed through without allowing committee members to perform due diligence.

"Senator Murray has also not yet received answers to her questions about missing information in Ms. DeVos' committee financial disclosure," Zupnick said via email. "And committee Democrats have sent Ms. DeVos a number of reasonable questions for the record that she committed to answer and that they expect clear and complete responses to."​​​​​​

Sen. Lamar Alexander, R-Tenn., the chairman of the education committee, said this week that if DeVos had her paperwork filed by Jan. 20, the committee would hold a vote on her confirmation on Tuesday, Jan. 24.

Presumably, that vote will proceed.

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