I write often on the subject of America's for-profit colleges, which train high school grads for first jobs and downsized workers for new careers. Examples include Apollo (NASDAQ:APOL), Career Education (NASDAQ:CECO), ITT (NYSE:ESI), and Motley Fool Hidden Gems Watch List stock Strayer (NASDAQ:STRA). Since I've been paying such close attention, I was shocked to see Viacom's (NYSE:VIA) CBS flub the facts on this industry in a recent news report.
Last Sunday, during the little-watched summer doldrums, CBS's 60 Minutes reran a story that originally aired in January 2005. The initial piece was a passable work of investigative journalism, detailing federal investigations into recent allegations of administrative improprieties at ITT, Apollo, and Career Education.
60 Minutes focused on Career Education, which remains under investigation by the Department of Education for allegedly misrepresenting the job placement rates of its graduates, among other things. In that respect, 60 Minutes' piece was accurate -- but the rest of the story implied that other players in this space also remain in federal prosecutors' sights.
For instance, CBS asserted that the Department of Education fined Apollo; the company actually settled the case, most likely for less money than it would have paid to go to court. CBS also implied that Apollo remains "in trouble with the federal government," when its case is actually closed. And while CBS regaled viewers with stories of federal agents raiding ITT's offices, it failed to mention that the government closed that particular investigation, too. Finally, CBS totally missed the story of Corinthian Colleges' (NASDAQ:COCO) SEC investigation and subsequent exoneration.
All of which might be forgivable if CBS had framed its story as a simple "rerun." Instead, the network made a token effort to update the story by tacking on a couple of "where they are now" lines. CBS could have used this opportunity to explain that three of the four for-profit educators are now out of the regulatory woods, with only Career Education still under investigation. In failing to do so, CBS did its viewers, and particularly investors in Apollo and ITT, a real disservice.
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Fool contributor Rich Smith does not own shares in any company named above.
