An earlier version of this article appears in issue of educational Horizons Winter 2007.
Combatting Educational Corruption:
Applying the Federal False Claims Act to Schooling Organizations
©2006 Edward G. Rozycki, Ed. D.
When the thinking of a people becomes corrupt, the pure silver becomes impure in their hands. --- Muhammed Iqbal (1873 - 1938)
In the days before establishment of Civil Service laws, public school teachers, like other public employees obtained their appointments by paying local politicians. During campaign season, to secure their jobs, they were subject to "macing," the practice of pressuring employees for monetary contributions to political causes.
To reciprocate, politicians let school boards run their districts as they well pleased. Particularly taken advantage of were young females hired as teachers. With few alternatives to socially acceptable employment outside the home, they had to endure appalling working and living conditions and accept pay at about one-third that of a similarly employed male. However, then, as now, blind optimism could salve the consciences of spokespersons who disregarded the exploitation of others in the service of educational "vision."
For example, Catherine Beecher in an 1845 recruitment pamphlet stresses the need and preference for females to serve as badly needed school teachers:
It is WOMAN who is to come in at this emergency and meet the demand. Woman, whom experience and testing have shown to be the best, as well as the cheapest, guardian and teacher of childhood.
So it was that the ancient maxim, "It's who you know, not what you know," filtered down from board to superintendent to principal to teacher to student. Even today this engenders that confusion of sycophancy for collegiality, of servility with civility, that infects education, to some degree, at all levels.
"Corruption is corruption," a pedant might say. But such an attitude is mindlessly simplistic. Even, for example, with written contracts, the boundaries between what is required, what is permissible and what is prohibited are often far from clear. Every relationship involves on-going negotiation, mostly tacit, of power and authority. "Border skirmishes" are common except, perhaps, among the most docile. Do you share a bed? Who hogs the blankets? Who sleeps on the edge? Are you paying to have your lawn cut? Who decides the height of the cut? Who decides what counts as a completed clean up? We often tolerate less than what we consider to be excellent. Nonetheless, we seldom make a "big issue" of "details" and risk crippling an otherwise rewarding relationship.
Teachers, for example, learn early on that their demands for quality work from students have to be leavened with a recognition of immaturity and a concern not to stifle motivation. The perennial controversy over the practice of social promotion derives to a great extent from a consideration of such trade-offs. Is this corruption? I think not. In any case, it is a gray area, in which reasonable persons may disagree.
In the workplace, the importuned contributions of employees are reciprocated by the boss's not challenging "unauthorized" expropriations: those who are willing to "give a little extra" get "perks." In education, especially where money is tight but expectations are high, tradeoffs in the gray area are common. Instructional time may be sacrificed to raise money for school events. Teachers with special skills, in rostering, in conducting assemblies, in coaching, enjoy perquisites such as lightened teaching loads, tolerance of lateness, even personal "eccentricities." Again, trade-offs may be characterized as a kind of corruption; but the "gray" areas of life cannot be cleaned up without generating a host of greater evils: wasted time, coercion and cruelty.
Clearly, there are gray areas, but not everything is permissible, even in a deprived school environment where Robin-Hood-ethics prevail and the minimization of evils must be practiced on an hourly basis. Consider the examples of unalloyed corruption that follow.
The March of Dimes campaign finished, a school teacher has his students continue to shake collection cans at passing motorists. The teacher keeps the money, splitting it with the students on a 90% - 10% basis. When caught, he escapes disciplinary action because his family "has been long associated" with the school district.
A school superintendent uses custodial staff during school hours to repair his vacation home. Despite some public brouhaha, the scandal quiets down. The School Board demonstrates its indignation at his malfeasance by permitting him to name a new school building in honor of his father.
The head of a University Department of Education undertakes a campaign to expand departmental and University Lebensraum. He doctors student transcripts, raising recorded grades to meet licensure requirements. He sets up special, shorter, watered-down "quickie" courses to enable easy acquisition of degrees and certifications. He is rewarded with "consultancy" fees from the schools districts whose teachers and administrators benefit from his ministrations. University staff who defend his "initiatives" against criticism are hired as professors to implement the Blitzprogram. Within the University he is admired for "increasing productivity" and for "enhancing public awareness" of the school. He is ascribed substantial, almost magical "political influence" since neither State nor regional accrediting agencies seem to be aware of or to care about his shenanigans.
A nationally recognized professional association in education, founded purportedly to improve the teaching profession, surreptitiously waives its much vaunted requirements so as to "establish a beachhead" in a particular state and thereby secure the support of the State Legislature in having its standards adopted as normative for licensure.
Until recently, nothing could be done about such situations. Interlocking chains of cronyism from accrediting bodies and from local government through the university and down through K-12 schooling protected such miscreants. Blatant corruption was often excused as "the cost of doing business." However, recent employment of the federal False Claims Act indicates that a remedy may be at hand.
The mechanism of interest is this: if a school receives federal funds because it is accredited, and the conditions for accreditation are or were in fact not met, then those funds have been fraudulently obtained. They must be returned, fines may be levied and the "whistle blowers" who provided information leading to successful prosecution under the act will receive a substantial percentage of funds recovered.
Oakland City University, a private institution in Oakland City, Indiana, paid former admissions director (and later whistle blower) Jeffrey Main, in part based on the number of students he enrolled. This is prohibited by the Higher Education Act, the law that governs federal student aid programs. 
In United States of America v. Chapman University three former instructors at that institution in Orange, California, charged that Chapman had broken promises made to the federal and state governments about certain aspects of the quality of education offered. Chapman regularly provided fewer in-class hours than are required by the Western Association of Schools and Colleges. In addition, the university had fraudulently failed to give students in its marriage and family therapy program the number of hours of clinical training required by California's certification program. Rather than participate in the fraud the instructors resigned and sued under both the federal and California False Claims Acts. Judge Selna of the Seventh Circuit Court rejected Chapman's attempt to have the case dismissed.
Selna accepted their argument that statements the university made during the course of the accrediting process were fraudulent: they were analogous to those Oakland City made to the U.S. Education Department. The Seventh Circuit concluded that those claims triggered the False Claims Act. To be accredited Chapman told the accreditor it would do certain things (e.g. give students a certain amount of class time). Had it not agreed to do those things, Chapman would not have received accreditation. Had it not been accredited by an agency which the Education Department recognized, Chapman would not have qualified for the federal grants and loans — the receipt of which triggers the False Claims Act.
Last year the University of Phoenix, America's largest accredited university, obtained $1.7 billion in federal education funds. Of this it paid the federal government $9.8 million in compensation for violation of incentive compensation rules. A massive False Claims Act lawsuit against the University has been reinstated by the U.S. Court of Appeals for the Ninth Circuit. The whistle blowers, if they win, can look forward to an enormous bounty as compensation. The False Claim Act gives every would be David real ammunition to slay his own Goliath.
Let's review some of the situations described above for their making an educational system or institution vulnerable to False Claims prosecution.
The teacher who used his students to collect money from passersby might be guilty of theft or fraud, but even if the school district he worked for received federal funds, it is unlikely that his being lightly disciplined would run them the risk of False Claims prosecution. This is simple fraud and should have been dealt with by the police. But, as the saying goes, "It doesn't matter what you know, but ..."
The school superintendent who used custodial staff during school hours to repair his vacation home was probably not violating any accreditation requirements whose fulfillment enabled the school district to acquire federal funds. Nor need the School Board's refusal to discipline his misfeasance violate accreditation or federal guidelines: it would depend upon the specifics of the contract with the federal government.
The University's Education Department Head's falsification of transcripts and substantial weakening of the program, however, is another thing. These are precisely the kinds of things that accrediting bodies, if they look to find them, are likely to deny accreditation for. What is interesting is that the violation of the False Claims act occurs at the time the funds are received from the Federal Government by the University, not when the original transcript forgeries occurred, nor when the accreditation was given to the University. This extends considerably the time for seeking rectification of the violation from the time that Department head's actions occurred. Because the federal government has given the University hundreds of millions of dollars in aid, the whistle blowers at this University, it seems reasonable to expect, will receive a substantial bounty if prosecution is successful.
Let us consider, finally, the nationally recognized professional association in education -- call it the NRPAE -- ignoring its requirements so as to secure the support of a state's legislature to require its standards for licensure. It is questionable whether any organization can use the NRPAE's accreditation without running the risk of False Claims prosecution. The NRPAE's playing politics in this manner delegitimates itself as an accrediting body. The irony here is that this politically motivated corruption may deprive every institution which previously acquired NRPAE's certification of the support needed to pursue federal assistance.
But what about loyalty? Doesn't such bounty-hunting place us all as school employees in the situation of Hobbes' state of nature -- i.e. in a war of each against the other? Doesn't bounty-hunting attempt an end-run around proper administrative procedure? Perhaps, But the point here is that proper procedure is not a possibility in many educational institutions. Cronyism sees to that.
Any adult having survived the 20th Century, should realize that loyalty to a vague ideal is suspect: too many have been sacrificed in the name of such ideals. But loyalty to a person, like Treue dem Fuehrer, is likely to be downright murderous. The road to Hell, goes the old saying, is paved with good intentions; loyalty is its underlayment.
Plato long ago proposed that in an ideal republic, the rulers would be philosophers. They would be loyal only to the Republic. They would rule by principle and reflection, rendering disinterested judgment, forswearing fame and family, dedicating their lives to the proper balance of interests within the Republic. This was a strange idea for its time, particularly in a society where cronyism was a way of life, and tyrant -- one who rules the State as if it were a family -- an appellation of approval.
Such philosophers as Plato conceived of, if they exist, do not comprise sufficient numbers nor would they appeal to even a minority of voters in this Land of the Free and Home of the Brave. Waiting for altruism to change the world is probably an indicator of moral lethargy. American traditions and family values support cronyism: first, take care of your own.
But bounty-hunting qui tam, representing the interests of the State as one's own, is also an American tradition. And the substantial bounties offered whistle blowers under the False Claims Act may just be sufficient enough to defend against retaliation by the miscreants exposed, and incentive enough to bring about that change to which educators for too long have given only lip service.
TO MAKE AN ANONYMOUS REPORT TO THE OFFICE OF THE INSPECTOR GENERAL, CLICK
 Edward G. Rozycki "Mission, Vision & Delusion in Schooling." http://www.newfoundations.com/EGR/VisionDelusion.html
 Jack Larkin, The Reshaping of Everday Life (New York: Harper & Row, 1988) p. 65
 For an interesting study relating bad governance to corruption see Susan Rose-Ackerman (2004) "The Challenge of Poor Governance and Corruption" http://www.copenhagenconsensus.com/Files/Filer/CC/Papers/Governance_and_Corruption_300404_(0.7MB_version).pdf
 See Title 31. Money And Finance Subtitle Iii. Financial Management Chapter 37. Claims Subchapter Iii. Claims Against The United States Government | 3729.False Claims at http://www.taf.org/theact.html
 See Inside Higher Ed Doug Lederman, The Ever-Expanding False Claims Act. 5/26/06 Insider Higher Ed http://www.uh.edu/ednews/2006/insidehe/200605/20060526falseclaimsact.html. Also see, Van der Werf, Martin "Lawsuit U. The growing reach of the False Claims Act has lawyers fearing trouble everywhere." The Chronicle of Higher Education Aug 4, 2006 A23
 Qui tam is an abbreviation from the Latin "qui tam pro domino rege quam pro sic ipso in hoc parte sequitur" meaning "who as well for the king as for himself sues in this matter." Blackstone's Law Dictionary.