Iowa Republican Sen. Charles Grassley is investigating whether Education Department officials, including Arne Ducan himself, disclosed confidential government information to hedge fund managers. Whether or not the investigation is in part an attempt by Grassley to protect friends in the notorious for-profit student loan industry, remains to be seen. But there are indications that someone in the top-levels of the DOE was leaking info to hedge-fund short-sellers like Steve Eisman about which of the student-loan profiteers was going to be targeteEid by Duncan's agency.
NYT Deal B%k writer Ben Protess says:
Expecting tough new rules in the wake of the controversy, Mr. Eisman and other hedge fund traders placed huge bets against the industry. In a letter this week, Mr. Grassley questioned the education secretary, Arne Duncan, about the agency’s ties to the hedge fund world and the lack of policies restricting contact with Wall Street playersI'm amazed that Whitney Tilson's name hasn't popped up yet. Tilson, who operates the T2 hedge fund, bankrolls the corporate school reform group DFER and has a direct pipeline to Duncan.