Weld Criticized Over School Funding Scandal

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The New York Sun

ALBANY, N.Y. – A Republican candidate for governor, William Weld, yesterday countered criticism that he is responsible for a failed Kentucky school that he ran and which is now at the center of a federal fraud investigation.


“Nobody feels worse about the school closing than I do,” Mr. Weld said. “I felt a proprietary relationship with the students.”


Mr. Weld also said he gave more than $500,000 of his money in equity and loans to the Decker College trade school this summer because he anticipated U.S. Education Department approvals of the release of millions of dollars in aid. The Education Department, however, in late August said it wouldn’t release the federal financial aid.


“If I had ever known there was a problem, I wouldn’t have put [in] a half-million dollars of my own money in June and July,” Mr. Weld said. He said he is still working to get the 3,700 affected students transferred to other programs to complete their studies.


“I am not aware of any wrongdoing,” he said.


“It’s understandable that Bill Weld feels terrible considering the hundreds of lower-income youth who took out loans and literally gave everything they had – only to be abandoned without degrees while Mr. Weld continues to thrive and pursue his personal whims,” the state Democratic chairman, Herman Farrell, said. “The sad and unfortunate fact is that his mismanagement and incompetence has devastated a lot of people’s lives.”


Mr. Weld had until recently headed the financially troubled construction trade school in Louisville, Ky. The closed school is entering bankruptcy proceedings despite efforts by Mr. Weld’s New York-based management company to correct its finances and keep it open. The private company, until recently called Leeds Weld & Company, specializes in investing in and reviving financially troubled schools. The company is now Leeds Equity Partners.


Decker has been under investigation by the FBI and the U.S. Department of Education’s inspector general for possible federal violations, including student loan and wire fraud, conspiracy to commit fraud, and making false statements to the federal government. The Department of Education said Decker owes $7.2 million.


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