Get sick, get well
Hang around a ink well
Ring bell, hard to tell
If anything is goin' to sell
-- Bob Dylan

Saturday, October 3, 2015

SUPES IS BACK -- New names on the letterhead. Looking for more no-bid contracts from CPS

Joseph "Joey" Wise
“The primary leaders [Solomon & Vranas] of the former SUPES Academy have begun new endeavors and will not be joining us in this work ahead.” -- Joseph Wise
The federal investigation in Chicago of SUPES has obviously been sandbagged. Federal investigators have refused to comment on the investigation. Now even with Barbara Byrd-Bennett fleeing the scene and a grand jury supposedly in session, SUPES is trying to make a comeback.

After all, UNO did it with the feds on their trail, simply by shifting a few culpable leaders into different positions, changing the names on company letterhead, and relying on political powerhouses like Mike Madigan, Eddie Burke, and Rahm Emanuel to provide cover. So reported new SUPES owner, Joseph Wise figures he can pull it off as well, cashing in on the next round of no-bid deals CPS regularly hands out to connected consulting firms. Wise, whose companies have received at least $5 million in recent business from CPS, claims to have acquired "the best parts of the SUPES Academy."

Wise, who formerly worked for scandalized SUPES leaders Gary Solomon and Thomas Vranas, also wants to get more business from CPS by opening alternative schools under contract with the city school system. He runs a company called Acceleration Academies which hopes to open open eight campuses in Chicago, four of them starting next fall in Belmont-Cragin, Washington Heights, West Englewood and Bronzeville. Acceleration Academies describes itself as being run by Wise and partner David Sundstrom with two investors, Bryan Daniels and Steve King, who “have a deep interest in providing quality educational communities for underserved populations in Chicago.”

Obviously, deep pockets as well.

Wait, things get better. Wise is also "looking at the possibility" of Acceleration Academies working with Distinctive Schools, a Chicago charter school management company that he started with Sundstrom in 2011. Distinctive oversees the operation of four CPS-approved Chicago International Charter Schools campuses.

Actually, Wise is chairman of the board of Distinctive. He was the chief education officer for the company as of June 2014, tax records the company filed show. So I don't think he will have any problem "working with" them.

According to the Sun-Times, Distinctive Schools already gets about $18 million a year in taxpayers’ money to run the four charter schools as part of CICS. The charter network was headed until recently by Beth Purvis, who left after eight years to take a $250,000-a-year job as Gov. Bruce Rauner’s education secretary.

SUPES will now be called the National Superintendent Academy which is “wholly owned” by Atlantic Research Partners, a Florida company founded in 2007 by Wise and David Sundstrom.

According to the Sun-Times:
Wise said he first encountered Solomon in the late 2000s while working for what was then known as Edison Schools, a national operator of private schools that hired PROACT Search to help with hiring. Wise said they spoke by phone and met when he moved to Chicago...
...Solomon mentioned Wise in an August 2009 email to Byrd-Bennett when she was running Detroit’s public school system, where he was then trying to get business.“Joey Wise suggested to try again to connect with you”... Asked about that, Wise said, “I don’t remember that at all.
Wise likes to talk to the press a lot about "transparency". He tells S-T reporter Lauren Fitzpatrick, "You have to be really careful to make sure you’re transparent enough about what you’re doing. And we worked really hard to have that transparency and not misuse that relationship.”

But when asked, he won't say how much his company paid in the deal with Solomon and Vranas. He said the deal included a "confidentiality clause".

Monday, September 21, 2015

Mayoral control of schools? Consider Kevin Johnson.

K.J. with pals Arne Duncan and Arnold Schwarzenegger at a 2009 rally in Sacramento. Photo via AP
The rising star, it seems, set up a fake government—and some people are starting to notice.
If any city is still contemplating turning their schools over to mayoral one-man rule, this portrait of Sacramento Mayor Kevin Johnson should provide the cure.

Dave McKenna writes in Deadspin about K.J.'s attempt to set up "a fake government".

According to McKenna, the mayor is replacing civil servants with cronies funded by the Wal-Mart empire and tasked with "the twin purposes of working to abolish public education and bring in piles of cash for Kevin Johnson".

McKenna writes:
Johnson is husband to Michelle Rhee, the controversial school-privatization activist, and there is considerable evidence that their shared desire to turn public schools into engines of profit for private actors is what has driven much, if not most, of Johnson’s more recent wrongdoing. Despite, or perhaps because of, this, he’s enjoyed the profile and appointments of a national figure on the make: public appearances with President Barack Obama, portrayal as a latter-day Metternich by The New York Times, and the patronage of serious players like Michael Bloomberg and Bill Gates.
 McKenna has been on the trail of K.J. and Rhee for a while. Here's his piece from a year ago.
Kevin Johnson's Grifter Wife Returns To The Scene Of A Scandal

Rhee left her Stand For Children organization a year ago to go to work for a fertilizer company.  No Shit!

Wednesday, September 16, 2015

Wizzards owner Leonsis underwrites D.C. charters. Then gets a new practice arena from taxpayers.

"...we in here talking about practice. I mean, listen, we're talking about practice, not a game, not a game, not a game, we talking about practice." -- Alan Iverson
D.C. billionaire venture capitalist/philanthropist Ted Leonsis helps bankroll all of the district's privately-run charter schools through his Venture Philanthropy Partners. That includes more than $5.5 million to KIPP DC. But there's a catch to his generosity. 

You see, Leonsis has an interesting philosophy. He believes that instead of paying taxes on his investment profits, taxpayers ought to pay him. This year the payment comes in the form of a new $55 million basketball practice arena for his Washington Wizzards. Taxpayers are picking up most of the cost. 

According to CSN:
The project will cost an estimated $55 million... The Wizards' lease with the city is for 19 years and involves a $23 million investment from the government... Events D.C. [the city's official convention and sports authority] is contributing about half of the total cost for construction.
The latest on D.C. charters... The attorney general has filed two lawsuits alleging that D.C. charter school leaders used for-profit companies to divert millions of taxpayer dollars into their own pockets. The D.C. Public Charter School Board, which oversees all city charter schools, has no legal right to examine the books and records of those private companies, and says it therefore has little ability to monitor how those dollars are spent. -- Washington Post

As if KIPP DC needed the $$$... They just received another $4.2 million gift this week, from Joel Smilow, the president and chief executive of Playtex Products. Obvious connection there.

Tuesday, September 8, 2015

Whatever happened to the Zuckerberg's $100M 'gift' to Newark schools?

The Hechinger Report carries an interview today, with journalist Dale Russakoff, author of “The Prize: Who’s in Charge of America’s Schools?” The book tells the story of Facebook billionaire Mark Zuckerberg's $100 million "gift" to Newark Public Schools five years ago.

HR wants to know how the money was spent? A question I've been asking since 2011. Despite a lawsuit brought by the ACLU, we still don't even know exactly how that money was spent except that it was used to create a couple of new privately-run charter schools and that about a third of it was used to pay crony political and educational consultants and contractors through a slush fund set up by former mayor Corey Booker and Gov. Christie. We also know that it provided a nice tax break for Zuckerberg.

Most telling part of the interview is when HR asks Russakoff about former superintendent Cami Anderson’s One Newark plan. She responds:
There are tremendous numbers of parents and teachers in Newark who felt that the schools needed radical change, but there was no acknowledgement that those people should be playing a role in this One Newark process. I asked Cami Anderson about the lack of communication and she said the One Newark plan is, as she kept calling it, 16-dimensional chess, which was a way of saying it’s incredibly complicated. She said if you brought families in, of course every family was going to have some issue and if you fixed that issue you would create an issue for someone else. She felt it was important to make the decisions that she thought were the best for the families and the kids. In doing that, she missed a lot of input that was critical.
Anderson's response to Russakoff goes right to the heart of corporate-style, top-down school reform's failure (even by its own standards of success), it's elitism and lack of transparency. The good news is that the very parents and community activists that Anderson held in such disregard, have run her out of Newark. The bad news is that her replacement is Chris Cerf who helped engineer the whole Zuckerberg affair.

Now that Anderson's gone. Booker's gone, Zuckerberg's gone, Oprah's gone, and Christie's off running for president of the United States, we're all left asking: where did the money go?

Friday, September 4, 2015

Noble -- The Billionaire's Charter School Network

Former Exelon CEO John Rowe at his Rowe-Clark Math & Science Academy. 
It was 2006 and Mr. Manderschied was president of the Noble Network of Charter Schools. He met with Mr. Rauner, then chairman of Chicago private-equity firm GTCR LLC, in a living room-like suite at the firm's Sears Tower office. But he was nervous because he had never asked anyone for such a large sum. After an hour's discussion, Mr. Rauner agreed to the $1 million donation that would make his name the first one emblazoned on a Noble school. -- Crain's
While parents and Bronzeville community activists had to go on an 18-day hunger strike to win an open enrollment high school at Dyett, all charter hustler Mike Milkie had to do was walk into billionaire Bruce Rauner's office with his well-connected pal Manderschied and ask him for a million bucks to open another in his chain of privately-run charter schools. Then it's over to CPS to win easy approval for another charter school to compete with underfunded neighborhood schools for area students.

Already the state's biggest charter network, Noble expects to teach 15% of Chicago public high school students by 2017.

How they call them public schools, I will never know.

The Noble Network of Charter Schools founded by Milkie, a former Chicago high school teacher, looks more like an ego-boosting tax haven for local billionaires than it does public, neighborhood charter schools. For a meager $1M "investment", billionaires like Gov. Bruce Rauner, Sec. of Commerce Penny Pritzker, Allan Muchin (founding partner of Katten Muchin Rosenman LLP), former Exelon CEO John Rowe and former ComEd CEO and CPS school board president Frank Clark, had schools named after themselves.

According to Crain's: 
Mr. Rauner, a Republican from Winnetka, has backed a number of charter schools, including the UNO Charter School Network now dogged by questions of cronyism. But he has given the most to Noble, just over $3.5 million.
It was a nice boost for Rauner, who while locked in a tight race for governor,had hundreds of students moving around the city, wearing required school uniforms with polo shirts, jackets, sweats, and sports team jerseys bearing his name.

Now CEO of the Noble Network, Milkie says he understands how to talk to business executives.
“Their dollars are a great investment in terms of return,” he says, citing low administrative costs and the “tremendous impact on students' lives.” He provides dashboards of data to document progress on everything from student testing to detentions to teacher bonuses.
“Businesspeople like to measure things,” says retired Exelon Corp. Chairman and CEO John Rowe, who estimates he's given $4.5 million to Noble and for college scholarships to its graduates since 2007.
In its latest capital campaign, Noble has raised more than half the $50 million it's targeting for expansion. That includes $15 million last year from Glenview-based Illinois Tool Works Inc.'s foundation for the ITW David Speer Academy for a school built across the street from Prosser High School. ITW has already been contacting Prosser freshman and their families to recruit them away from Prosser.

But lately, Milke and his wealthy patrons have run into trouble when they tried to expand into more upscale north-side white communities. Parents rose up in opposition and local pols responded by putting the kibosh on Noble's expansion plans.

Big money talks, but doesn't always win.

Monday, August 17, 2015

The myth of Trump's business acumen. He's a fraud.

I'm surprised the rest of the media hasn't picked up on this story.

It seems that most everything Donald Trump touches, including his business dealings, turns to shit. Born with a silver spoon in his mouth and worth $200M in 1982, Trump would be four to five times richer today is he had just let his money sit in an account instead of getting personally involved.

This, even taking into account that he has been exaggerating his net worth by 100% since he began his presidential campaign. His self-described net worth jumped from that $200M in 1982 to the $8.7 billion he estimated his net worth to be today. Even if you use the lower Forbes 400 estimate of $4.1 billion, it's still pretty impressive. Right?

Wrong...Eric Carter writes in Forbes:
If Trump had merely invested that $200 million in the S&P 500 (500 of the largest companies in the US), he would have averaged an 11.86% annual return and ended up with $20 billion. That’s without starting or managing any companies or employing his famed “Art of the Deal.” He wouldn’t even have had to pick the stocks. What this means is that anyone can beat Trump when it comes to making money.
A blight on the Chicago River.
His gigantic business failures and multiple bankruptcies have not only lessened his potential personal wealth but have hurt the overall economy and cost thousands of workers their jobs and livelihood. For example, he's among the high rollers who promised that his casinos would revitalize Atlantic City. Instead, Trump Atlantic City entities have filed four times for corporate bankruptcy, costing hundreds of layoffs and huge losses for his investors. Today, Atlantic City stands as a monument to corporate greed, concentrated poverty and human misery.

In a separate piece, Forbes contributor Tim Worstall adds that Trump doesn't understand the economics of currency markets.
Then again, I’m not all that sure that Donald Trump understands the economics of anything much other than real estate development. Which isn’t, when you come to think of it, all that much of a recommendation for someone who would become the chief executive of the nation.
To top it off, Trump brags about how little taxes he pays. Too bad for schools, roads, libraries, and social services. If you haven't read, "The America We Deserve" (I'm not recommending it), here's what Trump thinks of schools
"Schools are crime-ridden and they don’t teach."
You can see why he pays as little taxes as possible.

Joshua Engel posts on Quora:
Now he wants an opportunity to do for the country what he's done to many of his various properties and business partners.

Wednesday, August 12, 2015

Amplify in the dumper. Another Joel Klein/Chris Cerf loser.

Rupert Murdoch and Joel Klein
"A lot of poor quality work passed off as final products, most everything is worked out in production leading to many hot fixes and more long hours. Little respect for teachers or end-users in many within the company.... No, I would not recommend this company to a friend."
-- A 2013 Review from a former Wireless Generation employee
What happened to Amplify? It's a bust. School districts who bought in are screwed. Thanks Joel Klein and Chris Cerf.

Rupert Murcoch's News Corp spent nearly $1 billion on its digital education business, In 2010, they paid $360 million for a 90% stake in Wireless Generation, a company based in Brooklyn that specializes in education software, data systems and assessment tools which was supposed to help teachers analyze student performance and customize lessons.

Once the Murdoch criminal scandal in Europe died down, former N.Y. schools Chancellor Joel Klein led the company’s aggressive push into the U.S. education market and New Jersey schools chief Chris Cerf left his job to become chief executive of Murdoch's Amplify Insight ed tech firm.

Murdoch, Klein and Cerf became the darlings of U.S. corporate school reformers and international criminal Murdoch, whose company is an ALEC supporter, even keynoted Jeb Bush's 2011 Education Summit.

Hundreds of cash-strapped public school districts (including Chicago) were encouraged to fork over hundreds of millions of dollars in no-bid contracts and handed Murdoch's people control of all student records and family information. Amplify, became a top industry seller.

But News Corp. announced today that it would cease actively marketing Amplify’s Access products to new customers. It claims it will continue to provide service and support to its existing customers. But the Company is reviewing strategic alternatives with respect to Amplify’s remaining digital education businesses.

According to The Street:
Known as Amplify, the digital-education unit within Murdoch's News Corp (NWSA - Get Report)  has been hampered by the slow adoption of its mobile device known as the Tablet computer. 
The tablet's future was said to be riding on Amplify's ability to sell the device into districts for the 2015-2016 school year. That effort appears to have fallen short of expectations made five years ago after News Corp, with great fanfare, hired former New York City education commissioner Joel Klein and then paid $360 million for a 90% stake in Amplify's predecessor, Wireless Generation. 
The $1 billion Amplify tablet.
In May, Amplify Chief of Staff Justin Hamilton hinted that such plans might be in the offing when he said that "we will always be responsive to the marketplace."

You might remember Hamilton as Arne Duncan's former press secretary in charge of selling Duncan's Race To The Top. It seems he didn't do any better hustling Amplify.

Says Klein to school districts that bought in -- "Tough luck, suckers."

Sunday, August 2, 2015

Short-selling hedge-fund billionaire throws millions more at Moskowitz charters

Charter hustler Moskowitz & her billionaire hedge-funder Paulson
Clout-heavy Eva Moskowitz runs N.Y.'s Success Academy which is already one of the richest charter school networks in the city. Tax documents show the non-profit took in a whopping $34.6 million for the financial year ending June 2013.

Now John Paulson, the infamous scam-artist, hedge-fund billionaire from Queens, is throwing $8.5 million more her way. Moskowitz pays herself more than an half-million a year to run her network of charters.

Paulson's connection with privatization of public schools began with the notorious Boston Consulting Group in 1980. But he made his real fortune during the global financial collapse (which he helped cause, according to these economists), by betting against subprime mortgages using derivatives. His shady deals, including involvement in the Abacus scandal resulted in Goldman Sachs paying a $550 million penalty, the largest ever paid by a Wall Street firm.

This from Deep Capture:
It is not clear which banks ultimately participated in Paulson’s scam, but Fiderer quotes Bear Stearns trader Scott Eichel as saying that his bank refused. “It didn’t pass the ethics standards;” Eichel said, “it was a reputation issue and it didn’t pass our moral compass. We didn’t think we could sell deals that someone was shorting on the other side.” Bear Stearns’ moral compass was usually pointed towards the darker regions, but perhaps this is why Paulson subsequently became one of the more eager short sellers of Bear Stearns’ stock.
Paulson and Moskowitz make a great pair. Don't they?

Friday, July 31, 2015

McGraw-Hill folds it cards. Can't compete in current high-stakes testing market.

McGraw-Hill/CBT is pulling out of the $1.1 billion high-stakes testing market. The reason? Too much volatility. It seems that the wave of political protests and the parent opt-out movement have forced McGraw to move to greener more peaceful pastures. And, as the common-core tests have rolled out, the overall market for state assessments has largely flatlined

According to EdWeek:
The market has also proved volatile, fraught with legal protests, mounting opposition from parents and politicians to testing, and major disruptions in online assessments for which vendors, including McGraw-Hill Education/CTB, have been blamed.
“Let’s be clear—people in the assessment industry are not living in poverty,” said Scott Marion, the associate director of the National Center for the Improvement of Educational Assessment, which consults with states and districts on testing. Yet the profit margins, he said, are “thinner than a lot of people want to believe.”
McGraw-Hill apologized in 2013 for interruptions after its digital testing service disrupted exams in Indiana and Oklahoma. About 3,000 students in Oklahoma lost their connections to the testing provider’s servers. And nearly 80,000 out of a half million Indiana students who took the company’s tests in the spring had their testing postponed and about 30,000 were kicked off of the testing platform on a single day of testing. One Indiana charter school has said the errors are to blame for its F grade from the state.

Twenty years ago, McGraw-Hill Education, Harcourt, and Riverside Publishing controlled large portions of the summative-testing market. Today, all of those companies have either largely abandoned that market or been absorbed by other testing entities.

Saturday, July 25, 2015

Svigos buys another closed Chicago school

Svigos Assets bought Peabody. Put a charter in it. 
After they sat as empty blights on the community for nearly three years, the sell-off of closed CPS neighborhood schools has begun in earnest. Board members on Wednesday approved the sale of three vacant schools that were shuttered in 2013, providing "a small windfall of cash for its struggling budget".

Liza Balistreri is in charge of real estate at Chicago Public Schools and is running the sales of Near North Elementary in Noble Square, Overton Elementary in Bronzeville, and Von Humboldt Elementary in Humboldt Park.

Among the developers looking to make a profit on CPS real estate is Svigos Asset Management Corp. based in suburban Buffalo Grove. Svigos specializes in developing and managing commercial and residential properties, and owns apartment buildings in Lakeview, Logan Square and Albany Park.

Svigos is buying Near North for $5.1 million and plans to turn the school into "residential and commercial development". His company previously purchased the old Peabody Elementary for $3.5 million in 2014 only to turn around and sell space back to Rowe Charter School. Previously, district officials had said no closed school would be used as a charter school. The former Peabody was also developed as market-rate housing.

Paul Svigos has been a regular campaign contributor to Rahm Emanuel. The well-connected Svigos family has also made big contributions to the Daley's and other Democratic Party candidates.

Svigos was a former top Merrill Lynch stockbroker who the firm fired in October 1992. He hasn't been allowed to practice brokering since. But he recently won a huge settlement in his court battle with Lynch over the firing.

Svigos also runs the Fresh Farms grocery chain.

Friday, July 10, 2015

Wall St. public school strategy: Loot, pillage, burn...

Sen. Mark Warner (D-Va). - Reuters
The Senate has passed an amendment to new proposed federal legislation, which would steer hundreds of millions of dollars intended for impoverished school districts and classrooms, into the pockets of Wall Street consultants. The legislation, authored by Sen. Mark Warner (D-VA) was tucked into the Senate version of a massive K-12 education funding bill currently up for congressional reauthorization.

Among the chief proponents of the congressional bill was the Center for American Progress (CAP), a Washington, D.C., think tank that is closely associated with Bill and Hillary Clinton.

Bank of America, which made fees off of school district swap deals made in Chicago and Denver, has donated at least $50,000 to the Center for American Progress. Other major donors to the Center for American Progress include the Bill and Melinda Gates Foundation, which has given at least $500,000, and the Walton Family Foundation (of the Walmart fortune), which has also given at least $500,000 to the think tank. Both the Walton and Gates foundations have partnered with the Boston Consulting Group.

David Sirota at IBT is hot on the trail. He writes;
As budget-strapped Chicago follows a mass school closure with a new plan to layoff more than 1,400 teachers, one set of transactions sticks out: the city’s moves to refinance $1 billion in debt through complex financial instruments called swaps. The deals were spearheaded over the last few years by financial advisory firms brought in by the city to help find money saving efficiencies. Instead of saving money, though, the Windy City took a big hit: The school system has lost more than $100 million on the transactions and has paid millions in fees to its financial consultants.
 Chicago is not alone. School districts across the country have been increasingly relying on high-priced consultants and Wall Street firms for financial and management advice. While proponents say many of the ensuing consultant-driven initiatives have resulted in cost savings, critics note that other initiatives have resulted in investment losses, layoffs and school closures. What is clear is that school districts’ reliance on outside advisers has created business opportunities for the financial industry. And now, thanks to an amendment to federal education legislation moving through Congress, that lucrative market for financial and consulting could become even more flush with cash -- specifically, with federal money meant for impoverished school districts.
The amounts that consulting firms can earn for work on public school policy can be eye-popping. In Philadelphia, the Boston Consulting Group was reportedly paid $230,000 per week for its work pushing for privatized education services and closures of up to 88 schools in the city. 

Friday, July 3, 2015

No wall left between corporate world and venture philanthropy

“There’s a reason why corporate America exists, and there’s a reason why philanthropic organizations exist,” said David Cornfield, a professor of pediatric pulmonary medicine at Stanford University. “When that distinction becomes invisible, it becomes very difficult to know where philanthropy ends and venture capital begins.” -- Washington Post

Cornfield was responding to the rise of venture philanthropy in the field of medicine and pharmaceuticals where non-profits like the Cystic Fibrosis Foundation have earned billions through their investments in drug companies. While such investments have sometimes led to research breakthroughs, the trade-offs raise serious question about the power and politics of big philanthropic organizations.

Robert Beall, now in his fourth decade at the CF Foundation and one of the top-earning chief executives in the nonprofit world (Beal makes more than $1 million/year), says he is aware of the concerns and criticism prompted by his $3.3 billion Kalydeco deal last fall. Among them: that such a financial bonanza might discourage future contributions from supporters; that the foundation should be sharing its billions more directly with patients; that the group should have pushed harder to lower the price of Kalydeco and subsequent drugs.

There's no bigger player in the field of venture philanthropy that the Bill and Melinda Gates Foundation which has used its public investments to unduly influence public education policies. But it's the foundation's' profitable private investments in giant global corporations, many of which have done great harm in the world, that have drawn the greatest scrutiny.

HERE'S THE LATEST... The Gates Foundation is under investigation in a 2014 India Supreme Court case for funding Merck’s HPV vaccine trials of Gardasil, despite knowing the serious adverse reactions, injuries and deaths caused by treatment. According to a report by published by Narayana Kumar in The Economic Times of India, several tests had been conducted in 2009 on 16,000 school girls between the ages of 9 and 15 in Andhra Radish, India. Through the vaccine trials, 120 girls became seriously ill and seven died. Those who fell ill suffered from adverse reactions to the vaccination and experienced symptoms including seizures, severe stomachaches, headaches and mood swings. Consent forms to oversee the HPV vaccination were illegally signed by wardens from the hostels where the young girls resided or by illiterate parents via their thumbprint. Many young girls and their parents did not understand the tests or the risks entailed until they were significantly involved in the trial.

Wednesday, June 24, 2015

CPS is "broke" but money keeps flowing to Chicago tech consultants

LEAP CEO Phyllis Lockett chats with Gov. Rauner, venture capitalist Howard Tullman, and French Ambassador Gerard Araud.

Chicago is having trouble meeting next month's teachers payroll but that doesn't mean there aren't big profits to be made and consulting contracts to be handed out to company's with CPS ties.

THE LATEST...The Gates Foundation just awarded $5 million more to Phyllis Lockett's tech consulting group, Leap Innovations. I know, $5 million is a small piece of change for the world's richest man. But don't worry about Leap. They are getting plenty more from CPS contracts and from the likes of The Chicago Public Education Fund, Northern Trust, and the Joyce Foundation.

Leap is another of those education tech start-ups bellying up to the CPS trough. This one is run by Lockett, the former President and CEO of New Schools for Chicago, the group running charter school expansion is the city. While in the employ of CPS, Lockett was mainly a pitch woman for ed-tech companies.

Even though Leap just got started a year ago, Mayor Rahm Emanuel is already crediting the company with Chicago's miraculous school turnaround.
“In 1987, then Secretary of Education Bill Bennett called Chicago’s public schools the worst in the nation,” said Rahm. “Today, I am proud to say we are leading the country in education innovation. Thanks in large part to LEAP Innovations.”
But the last we saw of Lockett, she was standing with a group of so-called  “Democrats and Independents for Rauner”.

Sitting on Leap's board as you might have guessed, some of Chicago's richest and most powerful of the LaSalle St. crowd including, Michael Alter, president of the Alter Group; Leo Melamed, chairman emeritus of CME Group; John Rowe, chairman emeritus of Exelon; and Timothy Schwertfeger, chairman emeritus of Nuveen Investments.

Former LEAP Board Chair Mark Furlong, retired CEO of BMO Harris Bank was just appointed by the mayor to sit on the school board. And so it goes.

A year ago, when LEAP was started, Melamed, whose CME Group runs the Chicago Mercantile Exchange, noted that it only took his organization 4 minutes to commit the $1 million to support LEAP.

Lockett claims Leap will "analyze education software and pair it with the needs of educators". Translation -- LEAP will be a conduit for tech companies competing for public school business.

According the Crain's:
 “The grant will go toward Leap advising other cities to replicate and scale our model and will allow us to serve more schools in the Chicago area.” The organization operates in 15 Chicago schools, and Locket hopes to see that grow to 100 schools in the next five years.
Note to all you grant writers: replicate and scale are the magic words to Bill Gates' ears. Oh, did I mention, 21st Century learning?

Friday, June 19, 2015

Gov. Haley: 'No CEO's complained' about Confederate flag. But how many black CEOs were surveyed?

“I can honestly say I have not had one conversation with a single CEO about the Confederate flag.” -- Gov. Haley
Following the racist, terrorist attack by Dylann Roof which left 9 African-Americans dead in a Charleston Church, S.C. Gov. Nikki Haley (R) defended the flying of the Confederate battle flag over the Statehouse. In response to the growing demand that the flag be taken down, Haley responded that the Confederate flag was a “sensitive issue.”

“What I can tell you is over the last three and a half years, I spent a lot of my days on the phones with CEOs and recruiting jobs to this state,” the governor noted. “I can honestly say I have not had one conversation with a single CEO about the Confederate flag.”

Her comment was revealing, not only about Haley's gross insensitivity to the victims and their families, but also about who the governor considers to be her constituents.

It also left me wondering just how many CEOs had Haley actually surveyed and if any of them were African-American. Or to put it differently, just how many black CEOs are there in the state? No, no make that the nation?

The retirement of McDonald's CEO Don Thompson last January left just just two CEOs who are African-American in the elite Dow 30. A broader sample shows an even more dismal diversity picture within the ownership society. A mere five CEOs are black at the nation's 500 largest companies.

None in South Carolina. This in a state with a population of over 4 million, 30% of them African-American. It has a rising rate of children under 18 living in poverty.  S.C. now stands in 45th place in the nation in the well-being of its children in the annual Kids Count report, with poverty and education being the main factors that kept the state five spots from the bottom for the second year in a row.

That's not too say there aren't some successful black-owned businesses in S.C. There are. But I doubt that Gov. Haley surveyed any of their owners about the flying of the Confederate flag.

Tuesday, June 16, 2015

Gates $2.3B driving Common Core as a 'de facto and de jure national school curriculum'

The new curriculum driven into law by Secretary of Education Arne Duncan, the Common Core Standards, is a product of massive spending on an unprecedented historical level by Bill Gates.

Guerin Lee Green at the North Denver News reports that Gates has spent $2.3 billion pushing the Common Core. More than 1800 grants to organizations running from  teachers unions to state departments of education to political groups like the National Governor’s Association have pushed the Common Core into 45 states, with little transparency and next to no public review.
The Common Core now represents a de facto and de jure national school curriculum, something theoretically prohibited by federal law. But the Common Core comes with common high-stakes tests and common textbooks, making the standards far more than standards.
The Gates involvement, profiteering by testing publishers like Pearson and the heavy-hand of federal coercion in the Common Core has aroused political opposition from right and left, as well as from education experts who have called the standards inappropriate developmentally, pushing young children into material they aren’t ready for.
According to NDN, private groups like the Aspen Institute, the Colorado Legacy Foundation, Colorado Children’s Campaign, and Stand for Children received millions in Gates grants at a time when Colorado schools were facing massive budget cuts.

The Colorado Department of Education is one of the largest Gates recipients in the nation, receiving more than $22 million to push the new standards, text books, PARCC testing and charter schools.

*Also see Lyndsey Layton's Washington Post piece: How Bill Gates pulled off the swift Common Core revolution

Thursday, June 4, 2015

The Man from Gates navigates across the edu-corporate complex.

One of the key players in the Gates Foundation's Common Core drive was Jim Shelton. It was Bill Gates who placed Shelton as Arne Duncan's deputy at the D.O.E. in 2009. He followed a well-trod path from the foundation to the Obama administration.

Duncan’s first chief of staff, Margot Rogers, came from Gates; her replacement as of June 2010, Joanne Weiss, came from a major Gates grantee, the New Schools Venture Fund; Assistant Secretary for Civil Rights Russlynn Ali worked at Broad, LA Unified School District and the Gates-funded Education Trust; and general counsel Charles P. Rose was a founding board member of another major Gates grantee

But now Shelton's off to the corporate world, using his connections to sell technology to higher ed. He's been hired as 2U, Inc's (NASDAQ: TWOU) "chief impact officer" (whatever that is).

Pres.Obama had pledged to prohibit government employees from doing business with former employers. However, Shelton was granted a waiver to deal with the Bill and Melinda Gates Foundation, for which he worked for more than five years prior to joining the Obama administration.

At the D.O.E., Shelton led the Investing in Innovation Fund and a number of other grant programs. Before that, he was education program director at the Gates Foundation where he oversaw a portfolio worth between $2 billion and $3 billion. He also previously worked for the NewSchools Venture Fund and co-founded LearnNow, a school management company that later was acquired by Edison Schools. Before entering the education world, he worked at McKinsey & Company advising corporate CEOs.

Shelton's departure is just the latest in a wave of high-profile exits from the department as the Obama administration takes its final lap. Weiss, Ann Whalen, Carmel Martin, all of whom had a significant impact on the administration's education agenda, have moved in within the last year.

Whalen is off to join another Duncan deputy, Peter Cunningham at the Broad-funded Education Post. Weiss, who also came out of the NewSchools Venture Fund, was Duncan's Chief of Staff and directed his Race to the Top program. Now she calls herself, "an independent consultant". And Martin now serves as Executive Vice President for Policy at American Progress.

Saturday, May 30, 2015

How Wall St. billionaires built charter movement in Conn. Bought a governor.

Gov. Malloy speaks at charter rally paid for by hedge-funders
The recent pro-charter school rally in Hartford was organized by ConnCAN and Families for Excellent Schools — two of the top lobbying spenders this year. Tax filings and donor reports reveal that both groups receive funding from people who spent on Connecticut Democratic campaigns in the past election cycle. Also, Democrats for Education Reform, a pro-charter school political action committee primarily funded by hedge fund managers contributed heavily to the campaigns. 

Gov. Malloy’s insistence on increasing funding for charter schools has more than a dozen Democratic legislators questioning whether they can support the next state budget if it means their neighborhood public schools are flat-funded or cut.

Malloy's campaign is already under state investigation for misuse of campaign funds. The State Elections Enforcement Commission has issued subpoenas to the Democratic State Central Committee as it investigates the committee using money from a federal fund to pay for a mailer benefiting Gov. Dannel Malloy’s re-election race.

The Hartford Courant's Jenny Wilson reports:
Wall Street billionaires who have invested heavily in the expansion of charter schools contributed more than $200,000 to Democrats in the 2013-14 election cycle, helping Gov. Dannel P. Malloy secure re-election.
The campaign contributors earned their fortunes as hedge fund managers and private equity investors before earning reputations as "education philanthropists." They have helped bankroll charter school movements throughout the country, spending to influence elections and to support advocacy movements.
The campaign contributions last cycle came from board members at and top donors to pro-charter school groups such as the Connecticut Coalition for Achievement Now (ConnCAN), Achievement First, Families for Excellent Schools and others that have spent nearly $800,000 lobbying the legislature this year.

Malloy pushes charter expansion in CN legislature.
They include hedge-funders and Wall Street-ers like:

•Jonathan Sackler, an investment manager from Greenwich, the founding chairman of ConnCAN, and an Achievement First Inc. board member. Sackler, his wife, and his mother and father gave a combined $91,000 to state Democrats last cycle in contributions to various party and political action committees.

•Greenwich hedge fund manager Stephen Mandel, the founder of Lone Pine Capital, and his wife gave a combined $40,000 to the state Democrats' federal account in the past election cycle. Mandel, a Teach for America board member, is a top donor to local and national charter school advocacy groups through his Lone Pine Foundation. The Lone Pine Foundation funds three public policy fellowships in Malloy's office; it also has awarded grants to Families for Excellent Schools.

•Alexandra Cohen gave $20,000 to state Democrats in the past cycle. Cohen is the wife of embattled hedge fund manager Steve Cohen, whose SAC Capital paid $1.2 billion in a security fraud case last year. The couple's Steven and Alexandra Cohen Foundation is a top donor to ConnCAN.

•Arthur Reimers, a former Goldman Sachs partner who is on the ConnCAN board of directors, gave $20,000 to the state Democrats' federal account.

•Another ConnCAN board member, Andrew Boas, gave Democrats $10,000 last year to the state Democratic account.

•Petra Real Estate CEO Andrew Stone, a board member at the Success Academy, a New York-based charter school management company, gave $10,000. The Success Academy has worked closely with Families for Excellent Schools; it closed all of its schools in New York earlier this year to bus students and parents to a rally.

•ConnCAN donor Mariana McCall, a trustee in the McCall-Kulak Foundation, gave Democrats $10,000.

Connecticut is not the only target of these lobbying efforts: Some of the same donors contributed to New York Gov. Andrew Cuomo's campaign prior to a record-expensive charter school lobbying push they helped fund in that state.

Friday, May 22, 2015

Charter billionaires buy L.A. school board election

Charter billionaires Walton, Hastings, Bloomberg & Broad buy school board election in L.A. 
"We've sunk to a level where there is no viable discourse and no moral conscience when it comes to public education and control of the school board." -- LAUSD board member Steve Zimmer
It's happened again. A PAC of billionaire charter patrons spent millions and virtually bought a school board election. This time in L.A. According to the L.A. Times,
Contributors to PACs that took part in the campaigns on behalf of charter supporters included Netflix founder Reed Hastings, $1.5million (to the charter group only); former New York City Mayor Michael Bloomberg, $550,000; Walmart heir Jim Walton, $375,000; and philanthropist Eli Broad, $205,000.
The victory of charter school co-founder Ref Rodriguez over progressive Bennett Kayser, gave charter privateers the seat they needed to open up the district to what they hope will be unfettered charter expansion. Rodriquez also had the backing of anti-union groups like Michelle Rhee's StudentsFirst. His endorsement list includes the operators of charters that L.A. Unified tried to close because of low test scores and other problems. The charters appealed to other agencies and were able to remain open. No district in the nation has more charters, or more students enrolled in them, than L.A.

But despite spending millions on L.A. board campaign, they fell short of a clean sweep. In the west San Fernando Valley, incumbent Tamar Galatzan, who had been a close ally of disgraced former Supt. John Deasy and had the support of charter advocates and other well-funded groups, lost to challenger Scott Schmerelson, an ally of the teachers union.

Wednesday, May 13, 2015

In L.A., Deasy gone but leaves in his wake, feds, grand juries, and litigation

This is getting to sound repetitive. Post-Deasy L.A. is sounding a lot like post-Byrd-Bennett Chicago. 

Former LAUSD Supt. John Deasy is gone. They've provided a soft landing for him at the Broad Leadership Academy. That's where school superintendents like Barbara Byrd-Bennett learned how to dole out no-bid contracts to companies like SUPES and Pearson. It's also where public education and democracy go to die. 

But look at Deasy left behind when he got out of Dodge.

Governing reports:
Today, LAUSD is exploring possible litigation against Apple and Pearson, the world’s largest education publishing company, to recoup millions of dollars; a criminal grand jury is investigating possible ethics violations by district officials; the Federal Bureau of Investigation and the Securities and Exchange Commission have launched their own inquiries into possible wrong-doing; and Deasy resigned... 
...The SEC in April also launched an inquiry into whether L.A. school officials complied with legal guidelines in the use of bond funds to finance the iPad deal. Using construction bonds to purchase Internet infrastructure is common, but the LAUSD also used money from the bonds to purchase the iPads, which break down after a few years. Some critics of the plan have said LAUSD should have set aside a sum from its operating budget to purchase the tablets...
...Meanwhile, LAUSD took action of its own in April, announcing it would seek to recoup millions of dollars from Apple because it was “dissatisfied with their product.” The district’s demands for a refund stem from materials that didn't adapt well for students who weren't proficient in English and a lack of software tools to analyze how well the curriculum functions.
How many more urban districts will be stuck with the tab of corporate reform after the Broad superintendents flee the scene?

Friday, April 24, 2015

The real Common Core curriculum decision makers

Houghton Mifflin Harcourt (NASDAQ:HMHC) is a global learning company dedicated to changing people’s lives by fostering passionate, curious learners. -- Business Wire
If you are wondering about how Common Core curriculum decisions are made and how agendas are set, this news might interest you.

From Edweek:
A major portion of Scholastic Corp.'s educational technology and services business will be purchased by Houghton Mifflin Harcourt for $575 million in cash, in an agreement Scholastic announced today.
Scholastic's ed-tech business has been operating at a loss. In the last quarter reported, the company's ed-tech revenue declined 4 percent, to $34.3 million, while Scholastic's overall sales increased 2 percent in that quarter, according to results announced by the company on March 26. The ed-tech segment's operating loss increased by $1.7 million to a loss of $12.4 million, compared to an operating loss of $10.7 million in the prior year. 
The company attributed the decline mostly to lower math product sales and lower consulting revenues in its International Center for Leadership in Education unit. Sales of core literacy publishing product were essentially flat compared to the prior year; however, both new business and expansion sales of READ 180® stages, along with technology support services, were higher in the current quarter as compared to the prior year period, the company said.
Boston-based Houghton Mifflin Harcourt is buying up- everything in sight related to Common Core. They've already acquired Channel One and Curiosityville. HMH is one of the biggest text/testing publishers cashing in on the booming Common Core market, along with Pearson and McGraw-Hill.

Perarson, a British conglomerate, continues to tout itself on its website as the world’s leading education company that operates in 80 countries, employs 40,000 people and generates 60 percent of its sales in North America.

Scholastic Inc., which bought the Weekly Reader from Readers Digest in 2012 only to end its publication a short time later, has been on the ropes the past few years. 

Tuesday, April 21, 2015

Billions at stake as testing profiteers collide

Pearson is the "800-pound gorilla" in state testing. -- Barry Topol, the managing partner for the Assessment Solutions Group,
EdWeek reports:
Two of the biggest names in testing are locked in a dispute over one of the most coveted jewels in the K-12 market: the right to oversee a suite of assessments in California, a state with about one-eighth of the country's students.
$1.2 Billion Market

California is one of 18 states giving tests created by the Smarter Balanced Assessment Consortium, a group of states that has designed exams aligned with the common-core standards.

Smarter Balanced is leaving the administration of those tests to individual states. California asked vendors to bid to administer its common-core exams in English/language arts and math, and for testing work in science and other subjects over the next three academic years, starting in 2015-16.

The overall market for summative assessment—typically defined as tests designed to measure student academic progress at the end of a school year or a course—stands at about $1.2 billion a year, said  a Danville, Calif.-based company that consults with states on testing. So a California contract potentially worth up to $80 million a year represents a big piece of that pie.

Monday, April 20, 2015

Feds looking for big fish in mother-of-all Chicago schools scandal

Rolling Over: Rauner claims it was Rahm, not his foundation, that brought SUPES into town and gave them a $20.5 million no-bid contract.

I told you...Once the feds start turning over rocks, there's a lot of things crawling around down there.

OK, BBB is toast. She's grabbed the money and ran. Left without a trace. Spending more time with the fam? Maybe she joined some secret underground group. No one seems to know. But she was small potatoes anyway.

Rahm is also MIA. He's become quiet as a mouse. Yes, he bought the election, but what did he really win? The city's credit rating is plummeting once more, making it almost impossible for him to continue borrowing against a gigantic mountain of debt, doing more debt-swaps, or solving the city's pension crisis.

Seems like every time there's a crisis, he ducks out of town and lets his underlings dangle in the wind. But Rahm is definitely scarred by all of this.

Now the feds seem to have set sights on the big boys in the world of power philanthropy, the Chicago Public Education Fund (CPEF). They're naming names. Subpoenas are flying and if they need a part-time server, I happen to be available.

The result has been exactly the one the feds wanted. Apply a little pressure and even Napa Valley Wine Club members like Rahm and Rauner will roll over on one another. Now Gov. Rauner, the Fund's biggest player and its former board president, is telling media, it was Rahm, not us (CPEF) that brought Solomon and SUPES into town.
"My experience with the public education fund has been mostly good. Although I will say this, the fund didn't make many of its own decisions as much as it was a facilitator for what the mayor or the schools or the leadership wanted to do," the governor said. 
No-bid contracts with kickbacks are no big deal in this town. It's like everyone has just discovered pay-to-play (the motto engraved over the mayor's office door on the 5th floor of City Hall. What's really behind the feds' invasion of Rahmville? Nobody I ask seems to know for sure. Lots of guesses though.

Rahm & Holder.
Is this Eric Holder's last hurrah, or what? Is revenge really a meal best served cold? (Think winter in Chicago).  It couldn't be something from way back in Rahm's White House days, could it? Remember Rahm telling him to STFU on gun control? Could it have something to do with being stonewalled by Arne Duncan in Louisiana?

Wasn't Holder just in town this summer, helping to kickstart Rahm Emanuel's re-election campaign, hailing the “amazing” turnaround in school safety? Obviously, he was doing a lot more than that.

Or is this the Obama administration making a preemptive strike on a Republican governor who seems bent on pushing the school system into bankruptcy and rewriting the state constitution? Will Illinois break another record for corruption by sending its fifth governor to prison? Or will Holder be content with naming the names of the entire Chicago ruling class before he backs off?

If you haven't done so already, check out Carol Felsenthal's piece in Chicago Mag. She writes:
Remember all the talk during the April 7 mayoral runoff of the 1 percent vs. the 99 percent? It would be difficult to assemble a board that screams 1 percent louder than CPEF’s—from the schools its members attended to jobs held to marriages made.
Among CPEF’s board members:
Ken Griffin, CEO of Citadel, hedge fund genius, and widely reported to be “the richest man in Illinois.”
Penny Pritzker, billionaire heir to the Pritizker fortune, former member of the CPS board, now an emeritus member of the CPEF board, which she once headed as chair.
Susan Crown, principal of the family business Henry Crown and Company and chairman of the Susan Crown Exchange, “a social investment organization” with a focus on education.
Mellody Hobson, president, Ariel Investments and wife of billionaire George Lucas.
Helen Zell, philanthropist, executive director, Zell Family Foundation, and wife of real estate billionaire Sam Zell.
Jana R. Schreuder, Northern Trust Company COO—the first woman in that position—and a past Teach for American advisory board member.
There are educators on CPEF’s board. They include:
Tony Smith, Rauner’s just-appointed superintendent of Illinois schools, formerly head of the school district in Oakland, California, although never a classroom teacher and a long-time advocate of charter schools.
Timothy Knowles, Director of the University of Chicago’s Urban Labs, chairman of the Urban Education Institute. Knowles is also a former deputy superintendent of the Boston Public Schools and the “founding director of Teach for America in New York City.
Laura Bilicic, former classroom teacher, the co-founder and former head of a New York City private school for children with “significant learning challenges.”
Penny Bender Sebring, a former high school teacher and current senior Research Associate at the University of Chicago and co-director of the Consortium on Chicago School Research.
But there's still some big names missing from this Rogue's Gallery of power philanthropists and corporate-style school reformers. For some reason, none in the press will dare say his name. But I'll give you a hint. He's Gary Solomon's old partner. He just ran a losing campaign for Lt. Governor on Pat Quinn's ticket. He recently was run out of Bridgeport, CT. And his initials are PV.

More to come on him. I promise.

Sunday, March 8, 2015

It's Magic: Big profits to be made in Chicago's alternative schools

Magic: Panning for gold
Magic Johnson has joined up with Edison Inc., school board member Deborah Quazzo and other profiteers who are panning for gold in the growing dropout market.

WBEZ reports that Magic keynoted a conference in Arizona to which Chicago school board member Quazzo had flown a small contingent of some of Chicago’s most powerful education officials. Deborah Quazzo's investment firm Global Silicon Valley Advisors paid the freight.

The conference was all about the potential for profits in Chicago's growing alternative schools business.
At a press conference in Chicago in February, Johnson said he was approached by EdisonLearning because the company wanted to draw inner-city students into its schools. “What they needed was a guy like myself to come in to more or less brand it,” he said. When asked how much he makes per school, he told WBEZ and Catalyst: “That is all you need to know.”
One month after Quazzo, Hines, another CPS board member Andrea Zopp, CPS chief Barbara Byrd-Bennett and Mayor Rahm Emanuel’s then-education deputy Beth Swanson attended the conference, the Chicago Board of Education approved another $6 million in startup money for for-profit alternative schools. It was the second round of a multi-year expansion. (Quazzo has also come under fire in recent months after a Chicago Sun-Times investigation found that companies she invests in have tripled the amount of money made through contracts held with CPS schools.)

WBEZ and Catalyst Chicago also found that many of the for-profit companies running alternative schools stand to make millions off the deals. Other findings:
  • On average, some of the companies spend more than half of their budget on consultants, advertising, technology and fees to affiliated companies.
  • Companies can maximize profit by running two or even three sessions a day, serving double the number of kids, yet only hiring the same or fewer staff as a normal school. (One of the for-profit companies, Camelot, is an exception. It operates an eight-hour school day with little online work.) 
  • Since the companies are privately owned, the public has no way of knowing who is making money from investing in them or whether they have any connections to district or city officials. 
  • In at least one case, CPS contracted with a company that was, at the time, under investigation in California.

Monday, February 23, 2015

Bogus 'Parent Trigger' petition rejected by Anaheim board

Last month I wrote about an attempt in Anaheim, CA to privatize the management of another public school, using the so-called Parent Trigger law.

The law, which turns parent against parent in a community, gives a temporary majority, who are willing (often cajoled) to sign a petition, the power to hand their public school over to a private company. That company can then fire the principal and all the teachers as well as abrogate the district's collective bargaining agreement. It doesn't matter if next week, or next year, the majority shifts. The school can be privatized and there's little district parents and taxpayers can do about it.

Well, there is something they can do and they did it Thursday in Anaheim when the school board found that the petition submitted by a group of Palm Lane Elementary School parents failed to collect enough valid signatures to privatize the school.

According to a story in the Orange County Register, about 130 of the Palm Lane Elementary parents' signatures were determined to be invalid or unverified. Some parents signed the petition twice or two parents of one student signed the petition.

The privatization move at Palm Lane was backed by former State Sen. Gloria Romero's consulting group. the California Center for Parent Empowerment. Romero, a Democrat, has become the darling of the right-wing American Legislative Exchange Council (ALEC) and the Koch Bros. and receives funding from Walton, Broad and other powerful anti-union, pro-privatization foundations.

The discredited petition effort was also aided by the Hesperia, Calif.-based privatization consulting firm, Excellent Educational Solutions.

Sunday, February 22, 2015

Reed Hastings drops another $2M on his favorite charter

Netflix billionaire Scott Hastings, the teacher union hater who brought us the Vergara decision, announced he is giving $2M to a privately-run, Palo Alto-based charter school network.

According to
The $2 million will jumpstart a $17 million fundraising campaign that Rocketship is launching in order to open new schools over the next three years to serve thousands more “Rocketeers,” as the non-profit refers to its students.
Rocketship is a low-budget charter operation that relies on young and inexperienced teachers rather than more veteran and expensive faculty, reduces its curriculum to a near-exclusive focus on reading and math, and that replaces teachers with online learning and digital applications for a significant portion of the day. What supposedly set Rocketship apart from other charters was a financial model that allowed it to operate on government payments without continual infusions of cash from private donors. Most charters require additional funds to cover the costs of a longer school day, intensive tutoring and other expenses.

But facing a drop in student enrollment, the company recently announced it had scaled back its ambitions of rapidly enrolling 1 million students in 50 cities and went begging to their billionaire patrons like Hastings. Rocketship has been around for eight years and was celebrated early on for its ability to produce high test scores from a predominantly minority and immigrant student-base, but test scores have fallen in recent years. CEO and Co-Founder Preston Smith indicated that this was one of the reasons for slowed expansion.

Rocketship is organized as a 501C3, with a separate land holder, Launchpad LLC. The company suffered through a leadership transition after the exit last year of co-founder John Danner, who began a firm to supply software to schools. In the business world, it's called vertical integration.

"What happens when you have a relatively secretive organization that has an unelected board and has large growth plans?" asked Brett Bymaster, of San Jose, who organized his Tamien neighborhood to oppose a proposed Rocketship school there, filed a successful land-use lawsuit that has slowed the charter network and now runs a "Stop Rocketship" website that has attracted a local and national following.

Hastings is a powerful philanthropist for charter schools, currently serving on the board of the California Charter Schools Association and KIPP. He has also leveraged his power and money to push anti-immigrant legislation, including more English language testing on non-English-speaking students.

Friday, February 13, 2015

Adding charter schools to their investment portfolios

There's a couple of good Schooling in Ownership Society pieces in the media today. The first comes from my favorite education writer, Valerie Strauss (The Big Business of Charter Schools) in her Answer Sheet column, in today's Washington Post. 

Valerie Strauss
She has a link to one of my favorite headlines of all time at The Motley Fool investment blog. 
From Waterparks to Charter Schools, EPR Properties Has You Covered
 Are you looking to invest in giant water slides or movie theaters? How about charter schools and wineries? EPR Properties (NYSE: EPR  ) owns properties in all of these businesses and more.
Valerie helps make my case that public education has been a profitable business for the charter profiteers at the expense of students, families, communities and taxpayers.

When I first offered up that notion a decade ago, I was ridiculed by the very profiteers themselves.
"Trying to make a killing in the charter school business"?! Yeah, that's right, the charter school business is so profitable that I'm telling all my friends in the hedge fund business that they're in the wrong business. My message: "If you really want to make a lot of money, start a charter school!" LOL! -- Whitney Tilson 
LOL! indeed. In 2007, hedge-funder Tilson chided me for implying that there was a profit to be made in the charter school market while he and his group DFER were pursuing exactly that course.

Then there's the story of former football great, "Neon Deion" Sanders who tried to make a killing in the charter school business with Prime Prep Charter only to fail, fall into disrepute, and disgrace the once viable brand he worked so hard to create. Prime Prep was recently named by non-profit Children at Risk as the worst academic institution in North Texas. Don't miss this excellent piece (The Miseducation Of Deion Sanders) on his fall from grace, by Caleb Hannan at DeadSpin.