Westerdals faces more legal claims

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UPDATED: Education Minister Torbjørn Røe Isaksen isn’t ruling out the possibility that the state will be filing more charges against the private Westerdals communications school in Oslo and its owners, who include members of one of Norway’s most prominent families, the Løvenskiolds. Isaksen filed serious state claims on Tuesday against the school, which also faces compensation claims from students who were overcharged tuition fees during a 10-year period.

Education Minister Torbjørn Røe Isaksen is demanding repayment of state support granted to the Westerdals private communications school in Oslo, and has report the school's leaders to the police. PHOTO: Kunnskapsdepartementet

Education Minister Torbjørn Røe Isaksen is demanding repayment of state support granted to the Westerdals private communications school in Oslo, and has reported the school’s leadership to the police. PHOTO: Kunnskapsdepartementet

Isaksen, on behalf of the state education ministry, is demanding reimbursement of NOK 28 million in state support paid out to Westerdals. He claims, citing a series of reports in newspaper Dagens Næringsliv (DN) on Westerdals’ owners’ financing schemes, that the school received state funding to which it was not entitled between 2002 and 2012. The school’s new administrators have admitted to financing irregularities after its owners initially refused to comment on DN’s lengthy, detailed and well-documented reports.

“The school has provided incorrect information to both the ministry, the state department of education and Lånekassen (Norway’s state student loan program),” said Isaksen, who returned from Norway’s lengthy Easter holiday weekend to also report Westerdals’ leaders to the state police’s economic crimes unit Økokrim.

“We are viewing this case very seriously,” Isaksen told reporters, adding that Westerdals’ owners had illegally obtained state support for students in the school’s film and TV divisions.

‘Very seldom’ such steps are taken
Isaksen told DN that it was “very seldom that the ministry resorts to filing a complaint with the police in this type of case,” but he now thinks it’s “correct to ask Økokrim to look closely at this serious case.” He noted that Westerdals “has incorrectly received state subsidy for a long time, based on wrong information.”

Isaksen also expects Westerdals to reimburse its students who were charged tuition well over the limits set by the state for private schools that also receive state support. Included in the charges filed with Økokrim over the allegedly incorrect grounds for state subsidy are complaints over Westerdals’ practice of also demanding too much money from the students themselves. Many of the students have already banded together to file a class-action lawsuit to demand compensation, and Isaksen said he thinks the students should be reimbursed.

On Wednesday afternoon, the new rector and director of studies at Westerdals held a press conference at which they stated that both they and Westerdals’ board were “incredibly sorry” about the “situation” the “new high school” had landed in. Rector Tine Widerøe claimed they, like the ministry, wanted to gather “all the facts” and “restore confidence in the school, both internally and externally.”

Total claims against Westerdals and its owners can amount to well over NOK 100 million, just months after the owners themselves took out more than NOK 100 million in dividends from school operations, following some controversial school mergers that they organized. Isaksen told DN on Wednesday that he couldn’t rule out more charges and legal claims being filed against Westerdals and its owners: “All possibilities are open, but it’s too early to say. Økokrim has been and will continue to be oriented on developments in the case.”

Widerøe stopped short of promising any reimbursement or compensation, however, because the problems “occurred during another management and before” the controversial mergers took place. They involved “the old Westerdals” and two other schools (controlled by the same owners) that together became today’s “Westerdals Oslo ACT.”

Dynasty now faces disgrace
Westerdals is part of the private firm Anthon B Nilsen, which is owned by brothers Peder and Nicolai Løvenskiold and the Gunnar Holst foundation. DN reported that Nicolai Løvenskiold was also the managing director of Westerdals from 2001 to 2006, and chairman until 2007. Since then he’s been chairman of the owning company ABN Utdanning, part of Anthon B Nilsen.

Both brothers are part of the Løvenskiold family dynasty, with ties back to Danish nobility and family holidings that long have included Bærums Verk and most of the hills and forests surrounding Oslo’s north side called Nordmarka. Their older brother, Carl Otto Løvenskiold, inherited the Nordmarka and Løvenskiold-Vækerø (Maxbo) holdings, while DN reported that Peder and Nicolai inherited stockholdings and other real estate valued at several hundred million kroner. That provided the capital for the two Løvenskiold brothers to pursue other business interests, like owning and operating private schools such as Westerdals, Treider and Bjørknes in Oslo.

The Løvenskiold brothers have controlled the Anthon B Nilsen firm from this central property adjacent to Oslo's City Hall Plaza. PHOTO: newsinenglish.no

The Løvenskiold brothers have controlled the Anthon B Nilsen firm from this central property adjacent to Oslo’s City Hall Plaza. PHOTO: newsinenglish.no

DN’s initial lengthy story last autumn on the Løvenskiold brothers’ leadership of Anthon B Nilsen and the schools it owns and operates was headlined Skolebaronene (The School Barons) and concentrated on how they obtained state support, charged tuition and ultimately merged various school operations in a way that they felt entitled them to the dividend they withdrew from the firm.

The dividend reportedly was returned after DN continued to publish stories detailing questionable financial practices involving the private schools and the state. The Løvenskiolds have repeatedly declined comment, leaving a spokesman for Anthon B Nilsen, Trond Andresen, to fend off or occasionally answer the questions that arose. Andresen defended the high tuition fees charged students, for example, earlier this month by telling DN that the educational programs were costly. He conceded, though, that the school had never received dispensation from state rules limiting tuition fees at private schools that also receive state support.

This week the Løvenskiold brothers were refusing interview requests and referring all questions to the new administrators at Westerdals. “The case is being handled by the leaders at Westerdals, and Nicolai Løvenskiold has no comment on the (police) charges,” Andresen told reporters.

Few were satisfied by the statements made Wednesday by the “leaders at Westerdals.” Harald Stømstad, an attorney representing students who were overcharged, told Norwegian Broadcasting (NRK) that it was “positive” the new rector Widerøe and her colleagues want “to clean up,” but that it “remains to be seen what that will lead to. We hope there will be a recognition of responsibilty, so we can reach a swift solution through negotiations. If that strands, we will probably go to court to prove our case.”

Former student Bjørn Glestad wasn’t any more optimistic after Wednesday’s statement from Westerdals’ leaders. “It’s fine that the school apologizes for what has happened but we expect an answer from the school about getting our money back. Nothing was said about that today.”

Also called in to parliamentary hearing
Both Nicolai Løvenskiold and the education minister Isaksen, meanwhile, have been summoned to appear at a hearing scheduled by the Parliament’s discplinary committee in late April. Isaksen of the Conservative Party, who took over as education minister in 2013, has said he “looks forward” to answer the committee’s questions, while Andresen said Løvenskiold had “no comment on the committee’s work.” The committee has also called in former Education Minister Kristin Halvorsen of the Socialist Left party (SV) and a former director of Anthon B Nilsen Utdanning, Lars Eric Onarheim.

Isaksen himself has faced questions of former ties with the Løvenskiolds before he became education minister. He initially claimed DN‘s stories were “misleading” regarding how he and his ministry initially responded to questions about the school mergers that led to the dividend payout. Isaksen conceded in a published response to DN‘s articles in November that the ministry “could have posed more questions earlier” itself, but he insisted the ministry had followed its normal routines on granting subsidy.

He quickly claimed that he was demanding “all facts on the table” and just two weeks later, he admitted to “flaws” in the ministry’s monitoring of the mergers of Anthon B Nilsen schools that led to the dividend payout.

Now a full fraud investigation looms and, as Isaksen suggested, the state’s claims may be expanded. Lawyers for several hundred students who paid too much tuition are also expected to put forth claims of as much as NOK 70 million. “We register that we have received a claim from the ministry and we register that the school has received inquiries from students,” Andresen told DN, adding that both will “be evaluated.” It’s up to investigators at Økokrim whether any fraud charges will be filed as well.

newsinenglish.no/Nina Berglund