By Hilbert Haar
GREAT BAY – Milo Pinckney, CEO of the company that operates the American University of Integrated Sciences (AUIS) in Cole Bay has about had it with St. Maarten. “We are ready to pick up and go to another island,” he says. Pinckney has already shelved a $12 million investment in a campus his company planned to build in Indigo Bay.
What is the problem? Pinckney requested to change the name on the charter that gives the company permission to run a university in St. Maarten and to issue diplomas to its graduates. Efforts since August 16 of last year to get a face-to-face meeting with Minister of Education Silveria Jacobs to iron out this seemingly simple matter have all been in vain.
Pinckney says that his competitor, the American University of the Caribbean, a subsidiary of DeVry Education Group Inc. is behind the obstacles AUIS encounters and he points the finger furthermore straight at Minister Jacobs.
Camiel Koster, the attorney for AUIS has obtained all relevant documentation about the stalemate between AUIS and the government with a request for information under the Landsverordening Openbaarheid van Bestuur – the ordinance open government.
Frustration about bribery at American University of Integrated Sciences
“The AUC has provided incentives to people in government to create obstacles for us moving forward. These obstacles are in fields like immigration and taxation. We are paying for work permits that we are not supposed to be paying for. Americans do not need a work permit here. The minister is clearly involved in this with a personal agenda,” Pinckney says.The ‘incentives’ Pinckney mentions are commonly called bribes.
The AUIS previously operated in Statia as the University of St. Eustatius School of Medicine (USESOM). In July 2013 the school, then run by Michael Knopf and his daughter Irene Weinstein, ran into trouble in Statia due to accreditation issues. The school moved into the former Montessori School in Cole Bay in September 2013, where it later went bankrupt, leaving behind a debt of $700,000.
Pinckney’s company IEMC LLC (International Educational Management Corporation) took over. On January 8, IEMC transferred 51 percent of the shares to a locally established company IEMR N.V. (International Educational Management Resources). The shares of IEMR LLC this company are in the hands of two family trusts: Milo Pinckney and Renu Agnihotra.
Pinckney settled the debts of the previous owner for twelve cents on the dollar.
On February 10, 2014, the school signed a charter agreement with the government of St. Maarten. The charter allows USESOM to do business on the island and to issue diplomas to graduates. Pinckney and Agnihotri are the managing directors of the university.
Initially IEMR kept the name University of St. Eustatius School of Medicine, but when the ministry of education (with Minister Patricia Lourens at the helm) required the company to create a local entity, it became AUIS.
“We agreed to assume the students and associated files on the condition that the government would issue an uninterrupted charter,” Pinckney says.
The charter agreement of February 2014 required that the school would apply for accreditation with the Accreditation Commission on Colleges of Medicine (ACCM) an Irish non-profit accreditation organization.
“We complied with this requirement,” Pinckney says. He acquired a business license for IEMR on July 14, 2014 and a director’s license. The accreditation request had to be made within one year of signing the February 2014 charter. Pinckney filed the request three months before the deadline, on October 21, 2014.
But when Pinckney sent the government an addendum to the charter, basically a request to replace the name USESOM with its newly established name AUIS, trouble started.
On January 7, 2015, Renu Agnihotri wrote to Education Minister Rita Bourne-Gumbs that the school had complied with all the requirements from the charter and asked for a revision to reflect the new name.
On April 21, Bourne-Gumbs replied that “this process will take some time” and said that the amendments cannot be considered until there is a notarized letter from the director of IEMR LLC that IEMR NV is authorized to enter into agreements with the government.
Furthermore, the minister was of the opinion that “IEMR is not a name but an abbreviation” and claimed that “a company is required to use its full name with the abbreviation between brackets.” In this sense the articles of incorporation have to be amended, the minister wrote.
Bourne-Gumbs also considered a letter that stated that AUIS had requested accreditation from ACCM as “insufficient”. She demanded “an official accreditation request and a status update.”
On May 5, Pinckney submitted the notarized letter the minister demanded.
On December 1, 2014, Caroline Burrell had already sent an email from ACCM in Wicklow, Ireland stating that the AUIS accreditation request had been processed.
On May 25, 2015, ACCM notified AUIS that the accreditation process has been deferred. “The school did not achieve some of the standards required by the ACCM Elements of Accreditation.” ACCM also notes that it does not accredit Bachelor’s pre-med programs.
A day later the head of the department of education, Sidonia Hodge-Lacorbiniere, wrote to Renu Agnihotra. It is a warning letter, stating that AUIS has started a pre-med program and asking whether a request for it has been submitted to the minister and whether the program is accredited. “Executing programs without the minister’s approval is at the risk of AUIS,” the letter states.
On June 8 Hodge-Lacorbiniere informs Agnihotri that the ministry is “in the process of reviewing the request for a revision of the February 2014 charter.” She demands “the outcome of the request for accreditation” and a copy of the articles of incorporation of IEMR LLC.
On June 25 Hodge-Lacorbiniere sends another letter to Agnihotri. It states that “securing accreditation (….) was an integral part of the initial agreement signed on February 10, 2014.”
Agnihotri pointed out in a reply dated July 13, that this is incorrect: the charter states that AUIS had to submit a request for accreditation. She furthermore notes that AUIS has systematically complied with the stipulations of the charter. “Therefore, all the ancillary dialogue seems to either represent a thinly veiled ruse to obstruct the process or a pathway to solicit considerations that were not previously indicated.”
Agnihotri questions the authority of Hodge as the head of the department of education and expresses a preference for direct communication on the level of the minister.
Hodge-Lacorbiniere “repeatedly displays a glaring deficiency in her understanding of the key factors related to our request,” Agnohotri wrote, adding as an example Hodge’s remark that the accreditation process “should have been completed within a few months of the application.”
“That process could take two up to four years,” Milo Pinckney observed in an interview with this newspaper.
The status of the accreditation request has nothing to do with the request for an amendment to the current charter, Agnihotri furthermore points out. And the articles of incorporation of IEMR LLC? They can be obtained from the notary. “Any further discussion regarding the US business entity is blatantly unwarranted and plays no role within the current discussion.”
An undated letter to Pinckney signed by Prime Minister Marcel Gumbs in 2015 contains the following: “Unfortunately, after much debate we would hereby like to inform you that the charter agreement of February 2014 is no longer valid based on the fact that USESOM changed their name and changed shareholdership.”
Gumbs notes that the charter is therefore null and void and proposes to establish a new agreement as soon as possible. “To ensure that it reflects the legal name and ownership of the institution and most importantly to ensure that quality of education is being offered.”
The letter contains an invitation for a meeting on November 2, 2015.
Zip forward to August 16, 2016. That’s when the third Minister of Education that has the AUIS-dossier on her desk, Silveria Jacobs, sent a letter to Agnihotri and Pinckney accompanied by the a new draft agreement that contains “additional changes requested by the Council of Ministers.”
“These new requirements are designed to assure our failure,” Pinckney says.
Pinckney and Agnihotri have made several attempts to set up a meeting with Minister Jacobs to talk things over, but so far – no cigar.
Pinckney says that there is “a systematic pattern of bribery” behind the roadblocks he encounters and he says that the American University of the Caribbean and its owner DeVry are behind it.
For this reason, Pinckney has solicited authorities in three countries to investigate the practices of DeVry under the US Foreign Corrupt Practices Act (FCPA).
The FCPA provides oversight and prosecution of unlawful bribing of foreign government officials. The act specifically makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.”
In an article that appeared in the Huffington Post on December 9, 2016, Pinckney is quoted as saying: “We are disappointed by the wholesale corruption evident in our understanding of what has taken place in St. Maarten with AUC and persons in government positions of public trust. The damage done to our business is overshadowed by the damage done to more than 500 AUIS students who are adversely impacted by these actions. The good people of St. Maarten are denied the associated revenue in favor of some personal gains, realized by a small group of ethically compromised public servants.”
According to the Huffington Post report the investigation against DeVry and the resulting complaint “alleges participation in the scheme and promises to name St. Maarten ministers, parliamentarians, department of education employees, tax office and immigration personnel in addition to members of AUC and DeVry leadership.”
The Huffington Post also quotes Renu Agnihotri: “It’s been very hard to accept that fellow educators could behave like this. What we have come to learn is that these, and other equally deplorable practices, are common to this group. We have been told that All Saint’s University, who has shared a presence with DeVry Educations Ross University in Dominica, experienced similar disruptive practices while co-existing in Dominica.”
Like all American medical schools abroad, DeVry heavily depends on federal student aid. According to an article on the website of the American education ministry, DeVry enrolled in 2014-2015 116,500 Title IV aid recipients. Of those, 66,000 attended DeVry University as undergraduate or graduate students. DeVry received $684 million in student aid that year.
The Federal Trade Commission has sued DeVry for giving false career and earnings numbers to students, but that case was settled in October of last year.
DeVry had claimed in advertisements that 90 percent of its graduates were employed in their field of study within six months of graduation, but Federal Student Aid found that DeVry was unable to substantiate that claim. DeVry also claimed that its graduates earn 15 percent more than graduates from other universities.
Under the settlement agreement, DeVry had to post an irrevocable five-year letter of credit of $68.4 million. The university has to disclose on its website for two years a notice about its failure to substantiate its earlier claims. It also has to take steps to remove these claims from its website and from websites not under its direct control.
Pinckney says that if the investigation concerning bribery goes through, DeVry would lose its access to federal student aid.
While Pinckney says he is ready to go to another island if things don’t change, he is not done yet in St. Maarten where his company is leasing one of the largest buildings in Cole Bay, serving around sixty students and employing a faculty of twenty.
“They are now fighting with a small fish that actually has teeth,” he says, shaking his head over the alleged bribery practices. “All this for a minister and a couple of civil servants who have their car payments made by AUC.”