Iraq War veteran David Rodriguez steps into a softly lit classroom at the Institute for Advanced Study of Human Sexuality in San Francisco, crosses his legs and sits on a pillow in front of an altar decorated with a rope, a model of a penis and a statue of a Hindu god.

Rodriguez, a retired Navy lieutenant commander who led an engineering battalion that dismantled roadside bombs, is here for a class on “sexual bodywork.” When instruction begins, he will join his classmates in practicing different forms of masturbation.

“They do vulva massage and penis massage and anal massage,” said instructor Ariadne H. Luya, who holds a Ph.D. from the institute, an unaccredited graduate school founded in 1976 by an iconoclastic Methodist minister who amassed a large collection of erotic art and pornographic films, including child pornography, that is kept at the school.

“We want to get people out of their ruts. Have you been masturbating the same way for 20 years?” she asked rhetorically. “How’s that going for you? Would you like to try something new?”

Rodriguez is funding his studies with the GI Bill, which means taxpayers are covering his tuition to pursue a doctorate in human sexuality – more than $20,000 over the past two years. He says he wants to counsel veterans with sexual problems.

Opinions may differ about whether Rodriguez’s degree is more or less valuable than other academic pursuits. But one thing is clear: His school does not meet the minimum standards that the U.S. Department of Education requires for receipt of other federal funds.

The institute is eligible to receive money directly from the U.S. Treasury because the GI Bill does not require schools to be accredited – a formal process that typically includes extensive site visits and audits by an independent organization charged with upholding academic standards.

The loophole was created to allow veterans to attend trade schools as they transition from military to civilian life. These include places that offer training in welding and construction, for instance.

But in the absence of strong government oversight, Reveal has found a gold rush of 2,000 schools cashing in on the exemption. The list includes schools set up to make a profit by teaching blackjack, scuba diving, dog grooming, taxidermy and yoga. Many are owned by individuals who’ve gone bankrupt or failed to pay their taxes. A handful are owned by convicted felons.

The cost to taxpayers: more than $260 million from the time the new GI Bill took effect in 2009 until the end of 2014.

Defending unaccredited schools

Dozens of unaccredited Bible colleges benefit from the loophole, including one, the Oklahoma Baptist College and Institute, that is part of a church that was placed on the Southern Poverty Law Center’s list of hate groups. Its president, the Rev. Tom Vineyard, once declared that “50 to 60 percent of homosexuals are infected with intestinal parasites” and that “homosexuals account for half of the murders in large cities.” In December, Vineyard shot and killed a 14-year-old boy during what police said was an attempted burglary at his home. No charges were filed.

Faculty at the Oklahoma college are required to proselytize. Drinking, smoking, dancing, playing cards and going to movies are banned. Vineyard did not return seven phone messages left at his school and church seeking comment.

In Dallas, the Christ for the Nations Institute has received $310,000 to educate Iraq and Afghanistan veterans. The school runs a museum dedicated to the premise that dinosaurs and humans co-existed on Earth. Its president, Dennis Lindsay, has published 17 books “on the subject of Creation Science,” according to the institute’s website.

“Satan can undermine the word of God, and he does so at the beginning of Scripture, within the whole creation account,” Lindsay said in a 2012 YouTube interview. “So his whole idea is to change the Christian worldview to the humanistic, evolutionary worldview.”

Veterans who go to unaccredited schools defend the use of taxpayer money to fund their studies, which some described as higher quality than education at America’s elite universities.

“The science education I’m getting is more legitimate than what you would find at Harvard (University),” said Marvin Van Buren, 48, an Army veteran of the Afghanistan War who attended and now works for the Christ for the Nations Institute. “Harvard has quite a reputation, and it’s not very good ethically and morally.”

Van Buren and Rodriguez both argue that they should be able to spend their GI Bill funds wherever they like.

“It boils down to this,” Van Buren said. “Your tax money paid me to fight a war and to sacrifice my family. For the rest of my life, I’ll be feeling the weight of that war. The education benefit I receive is part of that package, that I have the liberty to go where I want to go.”

Rodriguez adds that after raising two children, completing a 23-year career in the military and going through two divorces, he wanted to do something for himself.

“I have gone through my life wondering but not really knowing about sex,” he said. “I came here because I want to know the facts. Not ‘I heard this story from one guy one time.’ I want to know the truth.”

Both men acknowledge that it’s unlikely that the government or a large private company would hire someone with a degree from an unaccredited school, but they are nonetheless optimistic about the future.

Van Buren said he’s not sure what he will do now that he’s obtained an “advanced study diploma” in theology. Perhaps he’ll become a pastor, he said, or maybe a social worker.

“I’ve met a lot of educated idiots,” he said. “You don’t need accreditation; you just need to know what you’re talking about.”

But some veterans advocates say such choices run counter to the purpose of the GI Bill, which is designed to help veterans succeed in civilian life.

“I don’t think it’s too much to require them to attend legitimate schools to help them further that goal,” said Robert Muth, a former judge advocate in the Marine Corps who runs a legal clinic at the University of San Diego for veterans exploited by for-profit colleges.

“Nobody’s saying they can’t go to that school,” Muth said, “just that we shouldn’t be paying for it.”

Requirements for GI Bill funds

Before a school can receive federal funds under the GI Bill, it must be approved by the U.S. Department of Veterans Affairs.

Colleges that are accredited and eligible to receive Department of Education funds, such as Pell Grants and Stafford Loans, automatically are allowed because they have been vetted by an independent academic review.

Unaccredited ones are supposed to be included only if they meet a long list of criteria, which the federal VA works with the states to enforce.

By law, they must prove that “the courses, curriculum, and instruction are consistent in quality, content, and length” with recognized academic standards. They also must avoid deceptive advertising practices, show they are financially sound and demonstrate that their “administrators, directors, owners, and instructors are of good reputation and character.”

Curtis Coy, the VA’s deputy undersecretary for economic opportunity, said his agency takes its oversight responsibility seriously, conducting 13,500 compliance reviews over the past five years.

“We’re out there in large numbers, looking at all these schools,” he said. “We do the best we can.”

But it’s clear that many schools that fall short of the VA’s standards are not getting caught.

Reveal conducted extensive background checks on 100 unaccredited schools in 10 states that receive GI Bill money, including all of the top recipients and a sampling of others. More than a third were owned or run by individuals who had declared bankruptcy or failed to pay their taxes.

In Georgia, GI Bill funds flowed to a construction academy whose president has declared bankruptcy twice and been arrested for assault. In New Jersey, they funded a for-profit nursing program whose president has faced five liens for unpaid taxes. In Pennsylvania, taxpayers paid for Iraq and Afghanistan veterans to attend a commercial trucking program whose president has lodged eight guilty pleas in traffic court, including driving an unregistered vehicle, driving a vehicle without proper inspection and speeding in a school zone.

A handful of unaccredited schools are owned by convicted felons, including Royal Image Barber College, a Chicago-area beauty school whose founder, Corey Lewis, served four years in prison on charges of vehicular invasion and aggravated robbery. He also has declared bankruptcy twice in the past four years.

Lewis did not return a series of messages left for him at the beauty school.

The VA declined to discuss specific problems with any school, but in a statement, the agency argued that the “law sets no specific prohibitions against approving a program due to a school’s owner having declared bankruptcy, owed back taxes, or having been convicted of a crime in the past.”

In the statement, the agency also said the authority to approve unaccredited schools rests with the states.

Reached by phone, Joseph Wescott, president of the National Association of State Approving Agencies, said the VA is not giving states enough money to conduct thorough inspections.

“We can’t always go as deeply as we would like,” Wescott said, adding that he thinks a federally sponsored commission might be necessary to clarify the rules.

Student sues massage school

Most of the 2,000 unaccredited schools have received small amounts of GI Bill subsidies because only a few veterans have chosen them.

For instance, besides Rodriguez, only a handful of Iraq and Afghanistan veterans have used their GI Bill funds to attend the Institute for Advanced Study of Human Sexuality, according to VA records. One has spent the money on Vineyard’s Bible college.

But taken together, the numbers add up. Nationally, more than 10,000 Iraq and Afghanistan veterans have used the GI Bill to attend unaccredited schools since 2009.

Not all of them are satisfied with their choice.

“It’s pretty clear: They just want the money,” said Marine Corps veteran Terrance O’Neil, who used about $12,500 – about a third of his GI Bill allotment – to attend Vitality College of Healing Arts, an unaccredited massage school outside San Diego.

O’Neil left the military in 2011 after sustaining a brain injury in a rocket attack in Iraq. He speaks slowly and sometimes has difficulty completing a sentence.

“After getting wounded in the war, I wanted to do massage because it could help myself and other veterans relax and feel better,” he said.

He found the school on the VA’s website, he said, in a listing of institutions approved to receive GI Bill money. Its convenient location near Camp Pendleton was attractive because O’Neil lives on the base in a trailer park.

“I thought the VA had given it an endorsement,” he said.

Across the country, hundreds of massage schools have been accredited by nonprofit organizations approved by the Department of Education; Vitality College is not among them.

After O’Neil enrolled in November 2013, he learned that Vitality College’s owner and chief instructor legally was not allowed to practice massage in San Diego County. On its website – and, O’Neil said, to him as well – the school claimed to be certified by the National Certification Board for Therapeutic Massage and Bodywork, an organization that licenses massage schools.

But the school had no such approval and neither did its owner, Laiani Kuspa, board records show. In addition, Kuspa lacks certification from the California Massage Therapy Council. In San Diego County and most jurisdictions in California, certification from that organization is required for someone to accept money for providing a massage, meaning that Vitality College’s owner and primary instructor legally cannot be paid to give massages. A second instructor was certified but never around, O’Neil said, because he owned and ran a martial arts dojo.

When O’Neil complained to Kuspa, Vitality College expelled him. In a letter, Kuspa and the school’s co-director, Daniel Iorga, said O’Neil had sexually harassed another student. O’Neil said the accusation was trumped up.

Reached by phone, Kuspa said she did not have time to talk. When a Reveal reporter and photographer showed up at her massage school in a suburban strip mall, she ordered them to leave the property.

Because the school lacks accreditation, O’Neil’s credits were not transferable. In April, he sued the school, citing “substandard and inferior education services” and “unlawful, deceptive, and discriminatory business practices.”

‘Accreditation is a bunch of crap’

Back at the Institute for Advanced Study of Human Sexuality in San Francisco, the Rev. Ted McIlvenna, the school’s president, walks down a narrow hallway cluttered with erotic paintings and sculptures, pornographic magazines and reel after reel of pornographic films.

“This is where we keep the kiddie porn,” he said, pointing at a 10-foot-long locked cabinet. “You have to have a doctorate to open it.”

McIlvenna offered a parting gift: two etchings of naked women, a promotional poster for the 1978 X-rated film “Hot & Saucy Pizza Girls” and a DVD of “Pretty Peaches 2,” a 1987 pornographic film that the institute digitally restored. It includes a rape.

McIlvenna, who has been in business since 1976, says he will never seek accreditation from an organization approved by the Department of Education.

“Accreditation is a bunch of crap,” he said. “They would never let me keep my library.”

“We don’t take any federal money,” he said, “except for the veterans,” he quickly added – because it comes with no strings attached.

Everyone should have access to the facts. Yes, I want to help!

Former Reveal reporter Rachael Bale contributed to this story. It was edited by Amy Pyle and copy edited by Sheela Kamath and Nikki Frick. Aaron Glantz can be reached at aglantz@revealnews.org. Follow him on Twitter: @Aaron_Glantz.