Past performance

Section 487(a)(16) (20 U.S.C. 1094(a)(16)) is amended by inserting at the end the following: (C) The institution will not knowingly employ an individual who was an owner, director, officer, or employee who exercised substantial control over an institution that owes a liability. (D) The institution will not knowingly— (i) employ an individual who was— (I) an owner, director, officer, or employee of an institution that has— (aa) been found to have engaged in fraud, misuse of funds, or any material violation of law; or (bb) had its participation in programs under this title terminated, its certification revoked, or its application for certification or recertification for participation in such programs denied; or (II) a 10 percent-or-higher equity owner, director, officer, principal, or executive of, or contractor affiliated with, another institution in any year in which the other institution incurred a loss of Federal funds, as determined by the Secretary, in excess of 5 percent of the other institution’s annual funds under this title; or (ii) contract with any institution, third-party servicer, individual, agency, or organization that has, or whose owners, officers, or employees have— (I) been found to have engaged in fraud, misuse of funds, or any material violation of law; (II) had its participation in programs under this title terminated, its certification revoked, or its application for certification or recertification for participation in such programs denied; or (III) been a 10 percent-or-higher equity owner, director, officer, principal, executive of, or contractor affiliated with, another institution in any year in which the other institution incurred a loss of Federal funds, as determined by the Secretary, in excess of 5 percent of the other institution’s annual funds under this title..