Doug Becker, Laureate Education’s founding CEO who recruited former President Bill Clinton as honorary chairman and enmeshed his company with the Clinton Foundation, announced Thursday that he is stepping down, The Daily Caller News Foundation Investigative Group has learned.
Laureate was considered a poster child for the Clinton Foundation’s “pay-to-play” image problems. Laureate donated between $1 to $5 million to Clinton’s family charity in addition to paying him $17.6 million for part-time work as honorary chairman.
Becker headed a separate nonprofit organization, the International Youth Foundation (IYF), which received at least $17 million from the Department of State’s Agency for International Development while Hillary Clinton was secretary of state. After Hillary left the State Department in 2013, aid to the IYF plummeted to $6 million in 2014 and dwindled to $3.8 million in 2015.
The IYF has received nearly $2 million in 2017, but those funds were originally allocated in 2012 and 2013, according to USAspending.gov, a government website that tracks federal expenditures.
Becker’s announcement came only seven months after his company’s rocky IPO launch in February. The company failed to meet its original target price of $17 to $20 per share on opening day, and tanked 13.4% on its first day of trading, to $14 per share. The share price briefly inched higher, hitting $18.48 June 27, but declined steadily since then, closing Thursday at $14.65, a drop of 1.08%.
While Hillary was at the State Department, the International Finance Corporation (IFC), a part of the World Bank, made its largest single financial investment in Laureate, totaling $200 million.
After the IFC investment, Laureate lured former World Bank President Robert Zoellick to join the company’s board of directors in December 2013. Zoelick had left the bank six months earlier.
Kathleen Smith, a manager at Renaissance Capital, which specializes in IPOs, told TheDCNF earlier this year Laureate faced “the deepest discount of any IPO so far this year. The minus 11 percent drop from its IPO price, makes it the second-worst performing IPO this year. By our numbers, Laureate is trading below its peer group of US-based for-profit education peers.”
Laureate was saddled with $4.2 billion in debt by its previous private equity owners, and the company had hoped a public offering could relieve it of its debt burden. But the lackluster market response continued to raise only a fraction of the funds needed.
The Clintons’ many links with Laureate — which runs a string of for-profit schools in the U.S. and abroad — appeared to put Hillary flatly against the 2016 Democratic Party platform, which said the party opposes “predatory for-profit schools” at the post-high school level.
Unlike other for-profit schools, which largely operate in the U.S., Laureate has a different business model that emphasizes for-profit education programs overseas in developing countries. It operates 71 universities in 25 countries. About three-quarters of those schools operate outside of the U.S.
The companies have previously been entangled in legal and regulatory problems in Chile, Brazil and Portugal. In Turkey, the company faced charges it violated the U.S. Foreign Corrupt Practices Act.
The company also faced protests by students of the Santa Fe University of Art and Design, a part of New Mexico’s oldest chartered colleges. The company’s executives sharply cutback on faculty and courses after the company deemed it unprofitable, according to a lawsuit filed by several students. That case was settled.
Laureate said Becker’s transition plan had nothing to do with the poor stock price, but had been in the works for several years, according to the Baltimore Sun.
This report, by Will Richard Pollock, was cross posted by arrangement with the Daily Caller News Foundation.