EXCLUSIVE: Bill Weld’s Kentucky Accusers

A pair of former executives from a for-profit trade school in Kentucky that is under federal investigation are accusing Republican gubernatorial candidate William Weld of playing larger a role in the school’s collapse than the candidate has acknowledged. Weld was the chief executive at the school, Decker College, until last month, when he officially stepped down to launch a bid for governor of New York.

Sherrie Moore, a payroll supervisor, and Steve Johnson, an admissions director who said he’d worn a wire and provided documentary evidence for the ongoing investigation into allegations that the school bilked the government out of student aid money, posted their accusations on a political blog and repeated them on Tuesday to The Observer. Both employees wrote messages suggesting that Weld’s involvement with Decker College ran deeper than the campaigning candidate has acknowledged.

“William Weld does not need to lead one citizen of the United States,” Johnson told The Observer on Tuesday.

He also confirmed that he was the source of a Nov. 8th posting, which claimed Weld was aware of illegal activity during his tenure at Decker College. On a political blog called The Next Hurrah, Johnson wrote:

“William Weld knew all about the fraud, he sent a e-mail to all Decker employees saying if fraud was going on the people will leave in handcuffs. I brought files proving fraud to Weld and his Decker Leadership. The result was me being promptly moved to baby sitting duties in Decker College. Yes, Weld’s Decker College paid me in a attempt to be quiet almost 50,000 a year to do nothing more that wake students up at the local hotel. [sic]”

On Nov. 3rd, Moore, the payroll supervisor, had posted her own account of Weld’s role at the school. “He was at the company and very involved until the heat was turned up by the investigators of the various proprietary boards and FBI,” she wrote. When she spoke with The Observer on Tuesday, Moore added that Weld’s annual salary from the cash-strapped college had been $750,000.

Weld would not comment on the claims that he’d been aware of fraud at Decker and fled the institution amid the mounting pressure of investigations.

“Bill doesn’t really have any connection to Decker anymore,” said campaign spokesman Dominick Ianno, who referred The Observer to Weld’s attorney in Louisville, R. James Straus.

“Governor Weld’s role at Decker was to develop strategy,” Straus said on Tuesday evening. “I can’t imagine that he would have had any information or ready access to information about the admissions, or payroll, or anything like that. To my knowledge, he was totally unaware of any fraud, assuming it was fraud, which is in dispute.”

It’s unclear whether Weld’s relationship with Decker College could affect his electoral prospects. Since 2000, Weld has been a principal at Leeds Weld & Co., a Park Avenue investment firm that specializes in for-profit educational ventures and which, according to Straus, owns a 20 percent stake in Decker College. The chairman of Leeds Weld is Rudy Giuliani.

Weld served as the school’s chief executive officer from January to October of this year.

Decker College, now closed and declaring bankruptcy, was raided by federal education officials and FBI agents in mid-October amid complaints including student loan fraud. On September 30th, the U.S. Department of Education revoked the school’s access to federal financial aid in a scathing, nine-page letter to Weld that said Decker College owed taxpayers and lenders approximately $7 million.

“Decker’s conduct constitutes a severe breach of its fiduciary duty to the Department and demonstrates Decker’s lack of administrative capability,” read the letter, a copy of which was obtained by The Observer.

On Nov. 4, Kentucky Attorney General Greg Stumbo, who has been conducting the state investigation, petitioned to revoke the school’s corporate charter.

As state and federal investigators continue their work in Louisville, Weld has been ramping up his campaign. Moore and Johnson, the former Decker employees, are furious.

“We’re talking millions of dollars that were literally stolen out of taxpayer’s mouths that went into Weld and the Woodcoxes’ pockets,” said Johnson, referring also to Decker College’s primary owners. He said that it was routine practice for college officials to transfer digital forgeries of students’ signatures from one document to another, in an effort to expedite the admissions process.

– Jessica Bruder