Senator Charles Grassley (R-IA) has written to the heads of the U.S. Department of Veterans Affairs (VA) and the Securities and Exchange Commission seeking information on allegations that a senior VA official named Charmain Bogue may have disclosed inside information useful to Wall Street short-sellers.
Ms. Bogue is married to Barrett Bogue who works for an outside group called Veterans Educational Success (VES), a critic of for-profit colleges. On March 9, the VA issued a press release announcing its intent “to suspend enrollment of new GI Bill students” in certain for-profit schools.
VES beat the VA to the punch on the news, which tanked the stocks of several for-profit education companies. VES issued a press release earlier in the day praising the VA decision before it was actually announced. The VA ultimately backed off its threat to bar certain schools, but the question persists of just who, if anyone, made money off the episode.
Grassley specifically cited NLPC’s previous attempts to draw attention to Ms. Bogue’s possible conflicts, and the appearance that the VA may be more interested is sweeping the whole thing under the rug. Grassley wrote:
After reviewing both witness statements and documents provided to my office, I write to you to express concern over allegations of improper contracting practices, whistleblower reprisal, and VA officials allegedly failing to protect internal deliberative information which may have led to individuals trading on non-public information. I also understand that several whistleblowers have disclosed these concerns to the Office of Special Counsel (OSC), as well as the VA Inspector General (VA OIG). In November 2020, the National Legal and Policy Center (NLPC) reported on some of these very issues.
Grassley’s letter to Acting SEC Chairperson Allison Herren Lee goes to the heart of the matter:
Government employees must adhere to the strictest of ethical standards. The SEC in turn must ensure that the public maintains faith in financial markets, and that government employees with knowledge and insight into potentially market-moving decisions taking, or able to take advantage of that insider information by feeding it to corporate fat cats and cronies, or even worse, using that information to financially benefit themselves.