The Center for Public Integrity

Without proper oversight or enforcement by the Department of Education, the $85 billion student loan industry became tainted in scandal. In 2007, New York Attorney General Andrew Cuomo revealed widespread unethical relationships between schools and lenders, with colleges and universities accepting gifts and other inducements from loan companies. In turn, financial aid officers would steer students toward lenders on their “preferred lender lists,” often at inflated prices at the students’ expense. This gave a few loan companies a substantial advantage. Cuomo launched his investigation after receiving a complaint from a new lender that felt it could not fairly compete. Meanwhile, the Education Department remained conspicuously absent. In testimony before the House Committee on Education and Labor, Cuomo accused the department of being “asleep at the switch” and urged congressional action. Representative George Miller, chairman of the Committee on Education and Labor, called on Education Secretary Margaret Spellings to put an end to lender bribes and require full disclosure of school-lender relationships. Spellings responded that the focus of Cuomo’s investigation pertained to the private loan industry, an area outside her department’s jurisdiction, but she conceded that the practices conducted by the institutions were unacceptable. In the midst of the revelations, Theresa Shaw, head of Education’s student loan office, resigned after five years in the position, but told Spellings, “I had accomplished all that had been asked of me including . . . ensuring that proper financial management and internal controls were in place.” Thousands of students suffered as a result.

A generous tax cut was not the only boon wealthy individuals and large corporations received from the Bush administration’s time in office: In recent years, the Internal Revenue Service (IRS) has given their tax returns less and less scrutiny — even as it has stepped up its audit rates among the poor. In 2007, in what the Syracuse University-based Transactional Records Access Clearinghouse (TRAC) calls a “historic collapse,” only 26 percent of corporations holding at least $250 million in assets were audited (compared to more than 70 percent in 1990). Likewise from 1996 to 2006, audit rates of those earning over $100,000 fell by more than one-half, down to 1.3 percent. One contributing factor behind the trend is a slump in IRS staffing: Over the past decade, the number of agents performing audits has fallen by more than 30 percent. Another factor is a 1998 congressional reform bill directing the IRS to focus its audits on those who apply for the Earned Income Tax Credit (EITC) — a credit designed to assist the working poor. By 2006, audits of EITC recipients had risen to account for 40 percent of all investigations. While EITC fraud is a real concern, at a maximum, such fraud accounts for roughly 3 percent of the estimated $300 billion gap between paid and owed taxes. Meanwhile, lighter scrutiny on large corporations and the wealthy — who have the most non-cash income and leeway to game the system — means that those who owe the most also have the best chance of getting away without paying their due. IRS officials have not disputed TRAC’s numbers, but have said they were focusing harder on where noncompliance occurs, especially in private partnerships corporations use to avoid paying taxes.

Calling them “wildly off mark,” Deputy Secretary of Defense Paul Wolfowitz dismissed the assessments of his own Army chief of staff, General Eric Shinseki, and a 1999 Department of Defense (DOD) war game scenario, both of which predicted the need for hundreds of thousands of troops to secure post-invasion Iraq — far more than the 148,000 who were eventually assigned the job. According to an official U.S. Army history of the conflict in Iraq, “The military means employed were sufficient to destroy the Saddam regime; they were not sufficient to replace it with the type of nation-state the United States wished to see in its place.” A 2005 unclassified study for the Army by the RAND Corporation, which was suppressed until media reports and congressional pressure brought it to light, said that the chaotic security situation after Saddam Hussein’s regime was toppled were “conditions [that] enabled the insurgency to take root, and the Army and Marine Corps have been battling the insurgents ever since.” Though there were some strategies for securing post-invasion Iraq, “few if any made it into the serious planning process,” according to the RAND report. These ideas were “held at bay, in the most general sense, by two mutually reinforcing sets of assumptions that dominated planning . . . at the highest levels” — that few armed forces would be necessary after the invasion and that the military would not be an occupying force. Just days before the war began, Vice President Cheney said, “My belief is we will, in fact, be greeted as liberators.”

An under-the-radar Department of Defense (DOD) office produced highly politicized intelligence assessments and promulgated one of the most inaccurate justifications for U.S. invasion of Iraq: that the Iraqi government under Saddam Hussein had a working relationship with Al Qaeda. The Office of Special Plans, part of the Office of the Under Secretary of Defense for Policy led by Douglas Feith, created and provided these assessments to senior U.S. officials. Though neither illegal nor unauthorized, these assessments were, in the view of the DOD inspector general, “inappropriate” and “did not clearly show the variance with the consensus of the Intelligence Community.” A Senate Intelligence Committee report found not only that the work of other intelligence agencies, such as the Central Intelligence Agency, was ignored, but also suggested that the Office of Special Plans shaped intelligence to fit the desires of policymakers — a cardinal sin in the intelligence world. According to several Democratic senators on the intelligence committee, “[C]riticism of the CIA’s analysis was sent by Under Secretary for Policy Feith to Deputy Secretary Paul Wolfowitz and Secretary [Donald] Rumsfeld.” W. Patrick Lang, the former chief of Middle East intelligence at the Defense Intelligence Agency, told investigative journalist Seymour M. Hersh, “The Pentagon has banded together to dominate the government’s foreign policy, and they’ve pulled it off.” The 9-11 Commission would later conclude that it found "no credible evidence that Iraq and Al Qaeda cooperated on attacks against the United States." A study conducted by a DOD-funded think tank, after a review of captured Iraqi government documents, also found no "direct connection" between Al Qaeda and Iraq under Saddam Hussein. Trumpeted by the White House as a key reason to invade Iraq, the much touted close “relationship” between Al Qaeda and Iraq simply did not exist.