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Running Weld


That was on paper. Almost immediately after announcing his intentions, Weld found himself waging a multifront war with New York conservatives, who seemed offended by his very existence. Conservative Party chairman Michael Long quickly declared that Weld’s pro-choice, pro-gay-rights positions were anathema to his followers and stopped just short of saying there was no possible way he would consider Weld for his party (no Republican has won statewide in New York without the Conservative Party line in more than 30 years). In October, Tom Golisano announced he was registering as a Republican and considering a run (he promptly found an unlikely supporter in Majority Leader Joseph Bruno, who saw Golisano’s billions as a handy potential tool in maintaining control of the State Senate). It’s an extreme long shot, but rumors circulated last week that Nassau County Executive Tom Suozzi, previously seen as a potential Democratic challenger to Spitzer, might consider switching parties to take on the A.G.

Meanwhile, Weld found himself entangled in the briar patch of Decker College. Leeds Weld had long specialized in buying for-profit schools, upgrading them, and flipping them. The firm was a major shareholder, for instance, in the purchase of Ross University, a medical-assistant training school, which was bought in 2000 and sold in 2003 for a $170 million profit. The previous year, Leeds Weld had purchased a 20 percent interest in Decker, a Louisville-based electrician-and-construction school. Decker had 3,700 students, mostly enrolled in programs that began with four weeks of classwork on campus, with the rest of the yearlong program to be completed online.

Early last year, when Weld was named the school’s CEO, he started commuting to Louisville to hire a new management team. The first sign of trouble came in June, when the Department of Education froze student-loan payments. During a routine program review, the DOE was told by the Atlanta-based accreditors of the school that they had been unaware that the school was primarily distance-based. The issue the DOE was raising by freezing the student loans was basically this: Is a for-profit distance-based institution purporting to teach hands-on skills like construction and the electrical trade a legitimate school or a bogus business?

In August and September, Weld commuted between Kentucky and Washington, D.C., meeting with DOE officials in an effort to restore the college’s loan eligibility. But on September 30, the DOE cut off all aid, claiming Decker owed the federal government nearly $7 million in improperly obtained loans. In October, Decker declared bankruptcy and the Louisville Courier-Journal began publishing a series of articles on Decker in which students alleged that instructors were incompetent and often absent, and that the training left them unqualified for the jobs recruiters promised awaited them. The paper also reported allegations that to keep students eligible for loans, answers to tests were provided in advance, attendance sheets were manipulated, and a student in jail was counted as attending on-campus classes. Decker stories started circulating in New York political circles and exploded when the Sunday Times ran a 3,200-word, above-the-fold investigation on December 18, followed by two more stories before the New Year.

Weld has not been accused of any wrongdoing, merely gross, career-torpedoing negligence. But he maintains that Decker was legitimate. He says that no one ever concealed the fact that the program was distance-based. He can’t understand why, he says, the Atlanta accreditors claimed not to know that it was. “I sat through a three-hour meeting with the very regulators from the Atlanta operation who went on to say they had no idea we’re a distance education program,” he says. “There is a PowerPoint presentation including the exact amount that was distance education and the exact amount that was residential.” Weld notes that he didn’t gain personally from his involvement with the school. The $430,000 in salary he drew during his eight months as CEO (his annual salary was $700,000) was more than offset, he says, by the $530,000 he personally invested. “No one feels worse about Decker closing than I do,” Weld says. “But I don’t know what I could have done differently.” He paused and half-grimaced. “Except not take the job.”

Weld’s detractors say he’s covering up a bogus business scheme or, at best, was asleep at the wheel. Either way, Weld handed his opponents a ready weapon. Golisano aides have been whispering that their man would carpet-bomb Weld over the issue. Spitzer? “Any mileage Governor Weld was going to get out of saying, ‘Hey, I was a prosecutor, too,’ is lost with Decker,” says a Democratic consultant with ties to the attorney general. “It just fits perfect for Eliot: He built his record on putting away rich people cutting corners and screwing the poor, and that’s exactly what Weld did.” Weld himself concedes, “I’d turn that into a 30-second negative ad if I was running against me.”

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