Arizona student loan group’s business deals up for review - East Valley Tribune: East Valley Education News

Arizona student loan group’s business deals up for review

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Posted: Thursday, November 23, 2006 6:11 am | Updated: 2:35 pm, Fri Oct 7, 2011.

The governor’s office has asked for a review to determine whether the nonprofit company designated as Arizona’s college loan authority improperly did business with for-profit corporations owned by one of its directors.

The Arizona Department of Commerce also was asked Wednesday to determine whether the procedure followed by Gov. Janet Napolitano in making the designation is the best approach for the state.

The Commerce Department reports to the governor.

The request from Darcy Renfro, Napolitano’s policy adviser on higher education and economic development, comes in response to a story published Sunday in the Tribune. Napolitano designated the Arizona Higher Education Loan Authority, or AHELA, as the state’s entity to issue taxexempt bonds to raise money for low-interest college loans in December 2004, two weeks after the company was created.

AHELA is headed by two of Napolitano’s closest political allies, Billy Shields and Pat Cantelme, the current and former presidents of the United Phoenix Firefighters Association, a union that has long been among Napolitano’s most active backers.

Napolitano said she did not know Shields and Cantelme were involved in the company when she signed her executive order, or when she vetoed legislation in 2005 that would have allowed competition from local industrial development authorities.

Renfro asked commerce officials to determine whether other companies owned by Cantelme improperly benefited from their relationship with AHELA. The request was made by Renfro because Napolitano is out of town.

Grupo N Advertising, one of Cantelme’s companies, was listed on the AHELA Web site as a partner. Cantelme said AHELA traded rent-free space at its Tempe offices for work done by Grupo.

Also on the AHELA Web site was a loan program designated for another of Cantelme’s companies, Professional Medical Transport. The program offered to reimburse PMT employees who obtained their paramedic’s license through Phoenix College.

The Grupo reference and details of the PMT program were removed from the AHELA Web site after Cantelme was questioned about them by the Tribune.

State Sen. Dean Martin, RPhoenix, said the Commerce Department is the wrong agency to look into AHELA and the procedures Napolitano used in issuing her designation, because the department reports to the governor.

“That’s like asking the fox if he thinks the henhouse is wellguarded,” said Martin, who was just elected state treasurer.

To ensure an independent review, the matter should have been sent to the Auditor General, the nonpartisan investigative arm of the state Legislature, said Martin, sponsor of the bill Napolitano vetoed last year. The Auditor General already has expertise in investigating the finances of state agencies and also regularly does performance reviews to ensure agencies are operating effectively, Martin said.

Jeanine L’Ecuyer, Napolitano’s spokeswoman, acknowledged the issue of the Commerce Department’s independence is “a fair question.” Sending the issue to the agency will get the review going quickly, she said.

“It’s a place to start,” L’Ecuyer said.

Renfro asked for a response within 30 days.

Jason Rose, a public relations specialist hired by AHELA to deal with the fallout from the Tribune’s story, said company officials welcome any review.

AHELA is fulfilling its mission of providing low-interest loans to college students and company officials have done nothing wrong, he said.

“I think it’s a terrific opportunity to shine a light on the finest student loan program that has ever been done in the state of Arizona,” he said.

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