Schultz invested in for-profit college, tax shelter

Schultz invested in for-profit college, tax shelter
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Former Starbucks CEO and potential presidential candidate Howard Schultz invested in a controversial for-profit university and a capital gains tax shelter through his venture capital firm, documents show.

The investments, first reported Wednesday by Politico, were done through the venture capital firm Maveron, which Schultz co-founded.

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The firm invested in the for-profit Capella University in 2003 and exited in 2006 when it went public, according to Maveron’s website. Capella, which is located in Minnesota, later admitted to overcharging student lenders.

Politico reports that Schultz remained further invested and held 50,000 shares in a 2008 filing.

“Maveron was attracted to Capella’s passion and vision for higher education,” Schulz said in a press release announcing the $7.5 million investment on online programs run by Capella. “Capella wants to transform education for working adults by making the online experience as compelling and rewarding as possible.

A report by the Office of the Inspector General found that between 2002 and 2005, Capella overcharged student lenders by $588,497. In an official response, the university admitted to overcharging, but said it only improperly retained $278,883.

Maveron also invested in Quellos, an investment firm that sold tax shelters for the wealthy. On its website, Maveron described Quellos as “among the largest fund-of-funds managers in the world” and said it invested in Quellos six years after Quellos’s 1994 founding.

Quellos executive Jeffrey I. Greenstein admitted in a plea agreement that the firm sold shelters that allowed the wealthy to cheat the IRS out of $240 million, according to The New York Times.

“Maveron is a venture capital fund, into which Howard Schultz has invested for nearly two decades” a spokesperson for Schultz said. “In 2000, Maveron invested in Quellos and sold its investment in 2003. In 2003, Maveron invested in Capella and sold its investment in 2006. In both cases, Maveron divested before any issues arose."

Schultz announced in January that he was “seriously considering” a 2020 presidential bid as a “centrist independent.” Democrats fear that his run could take away voters from its eventual nominee and deliver a victory to President TrumpDonald John TrumpTrump calls Sri Lankan prime minister following church bombings Ex-Trump lawyer: Mueller knew Trump had to call investigation a 'witch hunt' for 'political reasons' The biggest challenge from the Mueller Report depends on the vigilance of everyone MORE.

Schultz is viewed unfavorably by Democrats, Republicans and independents, according to a poll released Friday.