A story from the “Wall Street Journal” haunted his career. Now he wants this fixed: NPR



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A story often records a moment in time, like a screenshot, but the repercussions endure. You’re about to hear from a man who asked The Wall Street Journal to review an article from eight years ago, an article critics used to sully his reputation. NPR’s David Folkenflik tells us what happened next.

DAVID FOLKENFLIK, BYLINE: For decades Robert Shireman has focused on protecting students from the unaffordable levels of university debt, especially on for-profit campuses. Shireman helped shape new policies as a senior education department official during the early years of the Obama administration. Yet for our purposes, Shireman is of less interest as a policy maker than as a punching bag.

ROBERT SHIREMAN: Every six or 12 months someone – usually someone probably in the for-profit college industry – decides to resurrect those tired old claims.

FOLKENFLIK: Colleges and their allies have used a Wall Street Journal article to shred Shireman’s reputation for years. He says it caused deep stress and wasted time. Shireman has been accused of bribery by pro-industry websites, conservative Wall Street Journal opinion pages, even liberal groups with financial ties to an industry leader.

SHIREMAN: And they’re looking for ways to try to get me dirty. And they find this article, and they quote it as proof of something, even though there’s nothing in it.

FOLKENFLIK: In 2013, the Wall Street Journal reported that the Justice Department was investigating Shireman for violating a policy prohibiting communications with his former employer. And it was true. The article went further, however. The Journal hinted that he could have been involved in insider trading, giving secret information to an investor who could have made money from it. A federal inspector general’s report had already determined that he had not done so. The Journal did not report this. The Inspector General had found his emails with his former employer to be trivial. The Journal did not mention it either. The Justice Department’s investigation came to nothing, but attacks continued, including one in April by Sen. Richard Burr, a Republican from North Carolina who warned a former colleague of Shireman’s.

(EXTRACT FROM THE ARCHIVED RECORD)

RICHARD BURR: Finally, I want to carefully emphasize your closeness to potentially unethical conduct within the department under the Obama administration.

FOLKENFLIK: Burr didn’t use Shireman’s name but accused him of …

(EXTRACT FROM THE ARCHIVED RECORD)

BURR: Provide deliberative and confidential regulatory information to short sellers on Wall Street.

FOLKENFLIK: The problem is, that’s just not true.

JUSTIN HAMILTON: That’s absurd. It is absolutely absurd.

FOLKENFLIK: Justin Hamilton worked with Shireman in the US Department of Education. He was the spokesperson for the department in 2010. It was at this point that Shireman overheard a Wall Street investor named Steve Eisman give a presentation over the phone. Eisman warned that for-profit college student loans could collapse. Having said that, Eisman was a short seller. He was there to make money if the price of their shares went down. Shireman then emailed Eisman to tell him he had the wrong statistic. That’s it. Again, Justin Hamilton.

HAMILTON: There was no conspiracy to auction short sellers in order to make a quick buck. I think you had a guy here who has devoted his entire career to this issue.

MELANIE SLOAN: For me, the goal was never Shireman. It was Eisman.

FOLKENFLIK: Melanie Sloan is the founder of a liberal watch group called CREW. His group had been a key source for the Wall Street Journal.

SLOAN: I just don’t think we want short sellers to set a policy on the issues in which they sell companies short. I think it’s dangerous for everyone.

FOLKENFLIK: Something to know about Sloan’s outfit and a lot of Shireman reviews – they have some connections to for-profit colleges. Senator Burr received $ 47,000 in campaign contributions. What about Melanie Sloan’s group? He received $ 150,000 in 2010 and 2011 from the founder of the University of Phoenix. Sloan says she doesn’t regret what Shireman went through.

SLOAN: In Washington, do people get hurt all the time, all the time?

FOLKENFLIK: This spring the attacks continued to happen, with some still citing this story from the Wall Street Journal from 2013. Shireman went to the Journal. He hoped he would reconsider his reports, perhaps with a correction or even an update. A political editor replied that the newspaper concluded that no action was warranted.

SHIREMAN: I thought they would at least take some sort of corrective action. And I’m, you know, frankly, pretty surprised that they did less than nothing.

FOLKENFLIK: The Journal told NPR that it had given Shireman’s request serious consideration, despite the age of the article in question.

David Folkenflik, NPR News.

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Katy F. Molnar