The White House on Friday backtracked on its decision to install an Education Department official to serve as the agency's acting watchdog after criticism that the designation posed a serious conflict of interest.
On Wednesday evening, the administration unexpectedly appointed Phil Rosenfelt, the Education Department's deputy general counsel, as the agency's acting inspector general, a development first reported by Politico on Thursday morning. The choice immediately sparked an outcry from congressional Democrats who said it would compromise the federal watchdog's independence and the integrity of its investigations, given Rosenfelt's broad-ranging work crafting and defending Education Department policies as the agency's in-house legal counsel.
Inspectors general are supposed to act independently of their agencies' leadership, in order to reduce fraud and abuse on behalf of taxpayers and the public.
The White House referred questions about the decision to the Education Department.
A spokeswoman for the Education Department, Liz Hill, said Friday that the administration reversed course after "the matter came to the attention of new personnel in the White House."
"After they re-evaluated the situation, the decision was made, in an abundance of caution, to rescind the designation," Hill said.
Rosenfelt is a respected career veteran of the Education Department who briefly served as acting secretary while Secretary Betsy DeVos was awaiting confirmation. Congressional Democrats said in a letter to DeVos on Friday that "it would be virtually impossible to resolve these many conflicts" posed by Rosenfelt's work.
"While I appreciate that the White House has reversed its decision, the unprecedented attempt to replace the acting inspector general with an internal department official raises serious concerns," Rep. Bobby Scott, D-Va., chair of the House Committee on Education and Labor, said in a statement. "We will continue to focus on ensuring that the IG is independent and can investigate potential issues without restrictions."
The administration's move to install Rosenfelt as acting inspector general came as a surprise to staffers both inside the agency and on Capitol Hill.
Replacing an inspector general with an agency official like Rosenfelt appears to be unprecedented, according to outside watchdogs as well as two congressional aides serving on committees with oversight responsibilities.
"I certainly can’t remember a precedent when someone represented an agency as their attorney while serving as an acting inspector general for the same agency," said Danielle Brian, executive director of the Project on Government Oversight, a watchdog group.
The appointment raised concerns that Cabinet officials and agency heads would be allowed to handpick the people charged with overseeing their work, the aides said.
“Literally everything they are investigating touches the office of the general counsel,” a congressional aide, who requested anonymity because the aide was not authorized to speak publicly, said of the inspector general's mandate. “You can’t pluck somebody from within the agency to police the agency’s activities.”
Catherine Grant, a spokeswoman for the Office of the Inspector General, also hit back at Rosenfelt's selection.
"The appointment of a senior agency official as acting inspector general is somewhat unprecedented for the inspector general community, as placing any senior agency official who has been involved in agency policies, practices and operations into the role of acting inspector general puts IG independence — in practice or appearance — in jeopardy," Grant said in a statement. "By doing so, the objectivity of any subsequent OIG audit or investigative work can be called into question."
Rosenfelt was appointed to replace Sandra Bruce, who had become the Education Department's acting inspector general in early December. After the outcry over Rosenfelt's selection, the Education Department said Bruce would return to the role.
Neither the agency nor the White House provided an explanation for why Bruce had initially been removed from the job she had held for less than two months.
In mid-December, Bruce had launched an investigation into the agency's decision to reinstate a controversial accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS). Two years earlier, the Obama administration had decertified ACICS, citing “pervasive compliance problems" with the organization that had accredited now-defunct for-profit schools Corinthian Colleges and ITT Tech. The move got tied up in the courts, and last year a federal judge told DeVos to reconsider the Obama administration's decision, because the administration had not reviewed thousands of pages of evidence.
In September, DeVos reinstated ACICS, citing evidence she said had been ignored by the Obama administration.
Bruce started her investigation into the reinstatement of ACICS within weeks of becoming acting inspector general. In January, she was informed that Education Department officials were unhappy with the investigation, according to two sources familiar with the issue, who were not authorized to speak publicly.
Hill, the Education Department spokeswoman, said in a statement that "the department informed the IG that we were disappointed to learn about an IG investigation through Politico and asked that if they investigate ACICS to please consider the entirety of the case, including the fact that a judge found the Obama administration in violation of the administrative procedures act for ignoring 36,000 pages of evidence." Hill added that the investigation "had no bearing" on the process of deciding who would become acting inspector general.
Earlier this week, DeVos told a gathering of the Council for Christian Colleges and Universities that the department needed to pull back its oversight of college accreditation, arguing that it has become "too costly" and that the federal government "has overstepped in areas in trying to do things that really are best left to accreditors," according to Politico.
On Wednesday night, Bruce received a phone call that she was demoted to her previous role as deputy attorney general, according to Grant, the Office of the Inspector General spokeswoman.
"We haven't heard anything from the Department or the White House," Grant said in a statement on Friday when asked about Bruce's reinstatement. "Sandra Bruce is the acting inspector general and has been as we have not received anything from the White House nor anything in writing from the department — only the Wednesday phone call to Acting IG Bruce telling her that Mr. Rosenfelt was replacing her as acting IG effective immediately. "
Congressional Democrats vowed to look into the decision.
"The public deserves to know how this unethical and baffling decision was made in the first place and to be confident that it won’t happen again," said Sen. Patty Murray, D-Wash., the top Democrat on the Senate's Committee on Health, Education, Labor and Pensions, in a statement. "I am going to hold the department accountable until we get those answers."