Billionaire hedge-funder and charter supporter Cohen tops Forbes 2013 scandal list

Cohen tops Forbes Scandal List

Net Worth: $9.4 billion

Nationality: American

Source of Wealth: SAC Capital Advisors (hedge fund)

What happened:  Cohen’s SAC Capital Advisors in November pleaded guilty to insider trading violations while agreeing to pay a $1.2 billion penalty and to stop managing money for outside investors. The U.S. attorney in Manhattan, Preet Bharara, described insider trading at SAC as “substantial, pervasive and on a scale without precedent in the history of hedge funds.” 

Back in July, I posted about scandal-ridden billionaire hedge-funder Stephen Cohen and revealed his ties to corporate reform and charter schools. I wrote then that Cohen and his wife Alexandria, turn out to be big players in the charter school world.

Through their tax-sheltered family foundation, they have given $35 million to "school choice" projects and more than $10 million over the last six years to Achievement First, Charter Network,as a way of pushing the development of  charter schools across Connecticut. Cohen, who strikes me as anything but a Robin Hood, is also on the board of the Robin Hood Foundation, which helped spawn Achievement First. He has also given $40 million to support his six charter schools operating in the Bronx.

Today, Cohen tops Forbes list of the biggest billionaire scandals of 2013. At least he's tops in his field, even if that field is fraud and insider trading.

As the old saying goes, “Where wealth accumulates, men decay.” Events of the past year bear this out. Never more so than in the case of Steven A. Cohen, the billionaire hedge fund chief who has been reduced to running nothing more than a family office. Cohen’s SAC Capital Advisors pleaded guilty to insider trading violations in November while agreeing to pay a $1.2 billion penalty and to stop managing money for outside investors. The U.S. attorney in Manhattan, Preet Bharara, described insider trading at SAC as “substantial, pervasive and on a scale without precedent in the history of hedge funds.”

Common Core has turned into a testing fiasco

The education world is scrambling to avoid its own version of a full-scale HealthCare.gov meltdown when millions of students pilot new digital Common Core tests this spring, writes Caitlin Emma at Politico. 

The tests will be given on a massive scale: Roughly 4.2 million third through eighth graders will test the exams in math and English this spring, and 29 million students nationwide will use them starting next school year.

CTB/McGraw-Hill apologized last spring 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.

“There will be bumps in the first couple years,” said Jeff Livingston, senior vice president of education policy and strategic alliances at McGraw-Hill. “There’s no question in my mind about that … It’s an engineering problem and a policy problem.”

Yes, "bumps". But as Emma points out, those bumps will influence teachers’ and principals’ evaluations and other decisions about their jobs. Schools will be rated on the results. Students’ promotion to the next grade or graduation from high school may hinge on their scores.

Inner-city schools, students being bypassed by college recruiters

Colleges and universities are systematically avoiding recruitment of black, Latino and poor students and telling their recruiters to bypass urban public schools. This according to a report in the L.A. Times, "College recruiters give low-income public campuses fewer visits."

A Times survey of public and private high schools across Southern California found that campuses with a high proportion of low-income and minority students had far fewer visits from college recruiters.

Big bucks to be made in K-12 ed

There's big money to be made in K-12 education, especially in the technology area. So says the New Schools Venture Fund which bankrolls much of what passes for school reform these days. According to the NSVF blog,

"Venture investment in K12 education technology was up 6% in 2013 totaling $452 million." 

But not everyone's playing the game, says WSJ. The main party-pooper is newly-elected N.Y. Mayor Bill de Blasio who has the privateers and charter operators worried sick. BdB is even threatening to make them pay rent.

Operators of New York City's publicly financed, privately run charter schools are bracing for changes promised by Mayor-elect Bill de Blasio — including the possibility of having to pay rent — that they worry could reverse 12 years of growth enjoyed under Mayor 

Moskowitz makes $475,244/year

Michael Bloomberg.

Bloomberg's charter patronage has meant windfalls for the operators including huge salaries. According to the Journal:

Critics note that more than a dozen New York City charter school executives are paid more than current New York City Schools Chancellor Dennis Walcott's $212,614. Harlem Village Academies chief Deborah Kenny earns $499,146. Eva Moskowitz, a former City Council member and founder of Success Academies, earns $475,244.

Pearson caught in the act. Says they're sorry.

Pearson, the textbook/testing publishing giant, was caught misusing its non-profit arm to bribe N.Y. and other state educators with international junkets. The British-based conglomerate which has made billions in profits as a result of its dominant role in Common Core testing, was fined a paltry $7.7 million and let off the hook for its misdeeds.

According to WSJ:

State Attorney General Eric Schneiderman opened the investigation in 2011 into whether the company mixed business with foundation work. The foundation put on conferences in countries from Brazil to Singapore, flying in state education officials for trips described by the foundation as educational.

 According to Schneiderman, Pearson executives believed the Common Core work performed by their nonprofit arm could later be sold by the for-profit organization and generate “tens of millions of dollars” for the company.

The Washington Post reports:

The adoption of the Common Core has created a lucrative opportunity for educational publishers, as states and schools rush to buy products “aligned” to the new standards.According to the settlement, Pearson used its nonprofit foundation to develop Common Core products in order to win an endorsement from a “prominent foundation.” The latter entity is the Bill and Melinda Gates Foundation, which helped fund the creation of the Common Core standards and announced in 2011 that it would work with the Pearson Foundation to create reading and math courses aligned with the new standards.

Behind the big money flowing into Common Core

The Common Core market is booming, especially for the tech companies and textbook and testing companies. Perhaps that is why self-interested and connected companies as well as power philanthropists like Bill Gates, are investing so heavily in it.

In the Dec. 10th Answer Sheet column in the Washington Post, ("Millions in private money poured into Common Core promotion") award-winning Principal Carol Burris of South Side High School in New York, documents the flow of private funding being used to promote Common Core Standards.

Among its biggest financial backers is The Committee for Economic Development (CED), a business-led, non-profit think tank that has education reform as a project. According to its website, CED exists to deliver “well researched analysis and reasoned solutions to our nation’s most critical issues.”

OED CEO Steve Odland

The CEO of CED is Steve Odland. Odland committed the organization to a two-year pledge to make sure that everyone understands the Common Core standards and to ensure that business leaders have what they need to support their implementation.

Writes Burris:

Mr. Odland, the former CEO of Auto Zone (2001-2005) and Office Depot (2005-2010), resigned from Office Depot in 2010, a week after the company announced it settled a U.S. Securities and Exchange Commission investigation for more than a million dollars. Odland himself agreed to pay a $50,000 fine without admitting or denying the findings. As the CEO of the Committee on Economic Development he now advises the nation on issues like the Common Core and teacher quality. Odland also blogs for Forbes about what to do on a “staycation,” and to express his concern for the people he sees who do not look healthy when walking around the malls.

As for Gates,

...The Bill and Melinda Gates Foundation gave the CED $865,593 to promote the Common Core. To put this donation in perspective, in 2012, the Committee for Economic Development received a little more than $3.5 million in total contributions for their work. For this think tank, this contribution from Gates (and it is not the first that they have received) is a substantial infusion of cash. The CED is hardly alone.  The Gates Foundation has given in excess of $173.5 million to promote the Common Core standards to an astounding number of organizations.  In New York, the Gates Foundation has contributed $3.3 million to the Regents Research Fund to support a think tank known as the Regents Fellows. 

Chancellor Merryl Tisch

Other contributors to the fund include the foundation of Regents Chancellor Merryl Tisch ($1 million), Regent Charles Bendit ($100,000) as well as millions from the General Electric, Tortora Sillicox Family and Ford Foundations.  Others donors to the Regents Research fund that supports the Fellows are New York City charities, The Robin Hood Foundation and the Tiger Foundation. Robin Hood and Tiger generously give to charter schools, including Uncommon Charters, the chain formerly led by New York State Education Commissioner John King.  The National Charter School Authorizers made a $135,000 contribution to the Regents Research Fund as well.

Mother Jones: Less crime, immigration reform and legalization of drugs could hurt Gates' bottom line

With an endowment larger than all but four of the world's largest hedge funds, the Bill & Melinda Gates Foundation is easily one of the most powerful charities in the world. According to its website, the organization "works to help all people lead healthy, productive lives." 

For those who still believe that the world's largest foundation, run by the world's richest plutocrat, is all about helping people, Mother Jones has news for you. Most of the investments made by the Bill & Melinda Gates Fund have nothing to do with curing disease or educating the poor but are directed to some of the worlds greatest polluters, war makers and jailers.

Perhaps the most odious of these investments are in a prison/industrial complex that depends constantly expanding mass incarceration of it's (mostly black and Latino) citizens for those profits. For example, the Gates Fund has $2.2 million invested in GEO Corporation, a private prison company.

In its most recent annual report to investors, private prison company GEO group listed some risks to its bottom line, including "reductions in crime rates" that "could lead to reductions in arrests, convictions and sentences," along with immigration reform and the decriminalization of drugs. 

Gates has put another $2.4 million into G4S, a UK-based private security company and operator of juvenile detention facilities in the U.S.

Other Gates investments include global polluters Exxon, BP, Shell, Peabody Coal and a host of companies involved in the production of nukes.

Military contractor DynCorp, meanwhile, has faced allegations of fraud, mismanagement, and even slavery from the Middle East to Eastern Europe.

Sen. Warren warns Duncan: Don't be a 'lapdog' to the banks

The U.S. Department of Education risks becoming a “lapdog” as a result of recent actions toward financial companies such as Sallie Mae, Sen. Elizabeth Warren charged Thursday.

“The Department of Education needs to be aggressive in watching out for students, not for profit-making loan servicers,” Warren said. “They’re there for our students, not to help loan servicers make a profit.”

Run, Elizabeth run!

Why doesn't Moskowitz pay rent?

From deutsch29, Mercedes Schneider's EduBlog:

Since 2006, Eva Moskowitz has been running a small charter empire that has at least $50 million in government per-pupil funding, at least $30.9 million in total, end-of-year assets, and the support of hedge fund millionaires. Why is it, then, that her Success Academies have never paid a dime in rent for the public school space occupied by her charter schools?

Recently-elected New York Mayor Bill de Blasio wants to put an end to the rent-free usage of public school space by charter schools.

Moskowitz’s response? Read the rest here

From Walmart to the White House

Sylvia Mathews Burwell

As Wal-Mart workers are engaging in protests and Black Friday job actions nationwide, to shine another spotlight on the company's anti-worker policies and unlivable wages, the Obama White House is building a new, cozy relationship with the company.

Remember back in 2007, when candidate Barack Obama told union voters, "I won't shop at Wal-Mart" and when 8 days later, Michelle Obama resigned from the board of the anti-union company's supplier? My, how times have changed.

Since April, Sylvia Mathews Burwell, the former president of the Walmart Foundation, has been serving as Pres. Obama's Director of the White House Office of Management and Budget. Before her stint at Walmart, Burwell held various top-level positions at the Bill and Melinda Gates Foundation,

Burwell's appointment marked a thaw in the relationship between the Obama's and the Walton family and Walmart has become one of their biggest business supporters. The Walton Family Foundation is the largest single funder of non-union, privately-managed charter schools, which lie at the very heart of Obama's education policies.

"Obviously Wal-Mart has a lot of interests in, say, labor rights that are not in alignment with the best interests of the country. If she shares those views that would be an issue," said Dean Baker of the Center for Economic Policy & Research, reported The Daily Kos shortly after her nomination.

After being on the job for only six months, Burwell, became notable as the bureaucrat who wrote the memo that initiated the government shutdown.

I guess you could say, the circle is complete.

The wild expansion of privately-managed charters

NEWS RELEASE 

NATIONAL EDUCATION POLICY CENTER

For Immediate Release November 26, 2013

Contact:  Jamie Horwitz, 202-549-4921, jhdcpr@starpower.net

Private Education Management Organizations Running Public Schools Expand –

44 Percent of Charter School Students in 2011-12 Attended Schools Operated by EMOs

New report shows 908,000 students in 2011-2012 attended privately-managed schools in 35 states plus D.C. – a major increase from 733,000 enrolled a year earlier. Michigan (204 schools) Florida (177), Ohio (110) and Arizona (108) have the most privately-managed schools.

An increasing number of for-profit education management organizations are expanding into online teaching.

BOULDER, CO – Across the nation, schools managed by for-profit firms such as K12 Inc, National Heritage Academies and Charter Schools USA, as well as nonprofit education management organizations (EMOs) such as KIPP, continue to increase the number of students they enroll, despite a scarcity of evidence showing positive results. Students across 35 states and the District of Columbia now attend schools managed by these non-government entities. Oklahoma and Tennessee have added schools run by EMOs since the last edition of this report.

The report, Profiles of For-Profit and Nonprofit Education Management Organizations: Fourteenth Edition – 2011-2012, was released today by the National Education Policy Center (NEPC), which is housed at the University of Colorado Boulder.

“There is growth in number of schools and students served in both for-profit and nonprofit sectors, although growth among schools operated by nonprofit EMOs continues to outpace the for-profit sector. Growth has slowed for for-profits in brick-and-mortar school settings. The real growth in the for-profit sector is with companies that operate virtual schools,” said the report’s lead author Dr. Gary Miron, a professor of evaluation, measurement and research at Western Michigan University. “The growth of virtual schools, which is fueled by millions in advertising dollars, is astounding because of the sketchy academic results reported by the schools that operate online.”

The report is the NEPC’s latest edition in its series of profiles of EMOs, companies that are contracted to manage charter schools and other public schools. The EMO sector emerged in the 1990s as part of an effort to use market forces and private entities to reform public education.

For-Profit Operators

Since the 1995-1996 school year, the number of for-profit EMOs has increased from 5 to 97, and the number of schools operating has increased from 6 to 840. Enrollment has grown from approximately 1,000 students in 1995-1996 to 462,926 in 2011-2012.

While the actual number of for-profit companies has grown very little over the past few years, many of the large and medium-sized EMOs are expanding into new service areas, such as supplemental education services and virtual schooling.

Imagine Schools was the largest for-profit EMO in 2011-2012 in terms of the number of schools it manages. The company managed 89 schools during the 2011-2012 school year, but it has lost a number of contracts since then. The next largest for-profit operators in

2011-2012, in terms of numbers of schools, are Academica (76) and National Heritage Academies (68).

However, in terms of enrolled students, the largest EMO is K12 Inc., which operates virtual schools. Because of the large enrollments in its schools, the total enrollment of K12 Inc.’s schools exceeded that of any other for-profit -- or nonprofit -- EMO, with 57 schools enrolling 87,091 students.

Nonprofit Operators

Nonprofit operators have shown more robust growth in brick-and-mortar school settings than for-profit operators, both in terms of new nonprofit EMOs and new managed

schools. A total of 201 nonprofit EMOs were identified and profiled in this year’s report, including 31 large nonprofit EMOs, 68 medium-sized and 102 small nonprofit EMOs.

The overall number of students in nonprofit EMO-managed schools has increased dramatically in recent years, from 237,591 in 2009-10 to 445,052 during the 2011-2012 school year. KIPP, the Knowledge is Power Program -a national charter school network -- remained the largest nonprofit EMO, with 98 schools and just over 35,045 students in 2011-2012.

Virtual Schools

The number of virtual schools operated by EMOs increased from 60 in 2009-2010 to 91 in 2011-2012. This represents 10.8 percent of all schools managed by for-profit operators.

As noted, the largest for-profit operator is K-12 Inc., which operates full-time virtual schools. It should be noted that some of the largest for-profit EMOs are beginning to lose contracts with brick-and-mortar schools and are shifting attention into virtual education.   "Most virtual schools are charters, are full-time, and are statewide in their scope,” said the report’s coauthor, Charisse Gulosino of the University of Memphis. “As it stands, research, policy and practice have not kept pace with virtual schooling’s growth --reflecting the need for deliberation about its impact and implications for public K-12 education.”

Full Report is Available on the Web

Profiles of For-Profit and Nonprofit Education Management Organizations: Fourteenth Edition - 2011-2012 can be found on the web at: http://nepc.colorado.edu/publication/EMO-profiles-11-12

The report is the nation’s most comprehensive examination of the private entities that operate public schools.

Helen Gym -- The New 'Pay for Play'

Helen Gym

Helen Gym, a Philadelphia public school parent and founder of Parents United for Public Education asks: "Is the ‘right to know’ the new ‘pay for play’"? Gym says that  throughout most of the decision-making process regarding the school closings, the public was kept in the dark.

“Pay to play” is a widely reviled practice in government, but that’s effectively what the District’s legal argument would establish through its challenge of an open records case in state court.

For more than 10 months, Parents United for Public Education and our lawyers at the Public Interest Law Center of  Philadelphia have been fighting to make public the Boston Consulting Group’s list of 60 schools recommended for closure and the criteria it used for developing the list. In 2012, BCG contracted with the William Penn Foundation to provide “contract deliverables,” one of which was identifying 60 public schools for closure. William Penn Foundation solicited donations for this contract, including some from real estate developers and those promoting charter expansion. The “BCG list” was referred to by former Chief Recovery Officer Thomas Knudsen in public statements. But District officials refused to release the list, saying that it was an internal document and therefore protected from public review.

Read the entire article at the Washington Post Answer Sheet.

An easy slide from Gates to Pearson

Kate James

A week ago I gave the example of Bruce Reed, the assistant to President Barack Obama and chief of staff to Vice President Joe Biden, being named president of the Broad Foundation, to illustrate the easy movement between government, corporate reform and power philanthropy. Another earlier example would be Joel Klein's transition from N.Y.C. schools chancellor to a power position within Rupert Murdoch's publishing empire.

This is a hallmark of current corporate-style school reform. It's similar in many ways, to the movement between government and the war industry, usually referred to as the military/industrial complex.

The latest example of the ed/corporate complex is PR exec Kate James, who is leaving the Gates Foundation to be chief corporate affairs officer at Pearson. Gates, funded by Microsoft founder Bill Gates, and U.K.-based Pearson, are under fire in educational quarters and the media in a number of areas.

According to PR industry analyst Jack O'Dwyer:

Pearson is portrayed by PR Watch and others as a for-profit octopus that has its tentacles around practically aspect of U.S. education, reaping billions of dollars in revenues. PRW cites instances of Pearson working with elements of the American Legislative Exchange Council, which PRW says is an organization of 2,000 mostly Republican state legislators and 300 corporate representatives that has an undue influence on state lawmaking.

Pearson, with revenues of $8.29 billion, is called “the largest education company in the world” and the “largest book publisher in the world” while the Gates Foundation is easily the world's largest foundation.

Pearson's properties include the Financial Times Group; 47% of Penguin Random House; 50% of the Economics Group which includes The Economist magazine; Prentice-Hall; University of Phoenix (largest for-profit online university system); Connections Academy, which operates online classes in many states, and numerous education-related entities. O'Dwyer's excellent blog also plugs Diane Ravitch's latest book, Rein of Error and cites WaPo's fine ed columnist Valerie Strauss. 

Valerie Strauss, writing in the July 15, 2013 Washington Post, says “Gates has exercised extraordinary influence in shaping modern K-12 school reform to his liking, leveraging cash from his vast Microsoft fortune to drive the public agenda—and taxpayer funds—toward standardized test-based accountability.” His vision includes “ways to measure everything, largely through testing,” writes Strauss.

Enron's "King of Natural Gas" turns to power philanthropy. Goes after "lavish" pensions.

John and Laura Arnold

Power philanthropist and billionaire hedge-funder John Arnold comes out of Enron's criminal enterprise. Arnold made millions trading natural gas derivatives at Enron and then billions from his hedge fund. He was known on Wall Street as the  "king of natural gas."  But when natural gas prices slumped, he turned full-time to running his foundation along with wife, Laura. According to the John and Laura Arnold Foundation, the fund has assets of $1.2 billion. They probably figured, if Bill and Emily could make the jump from Microsoft...

The pair have tried and reinvent themselves and escape further Enron tarring by setting up their own foundation "which seeks to effect transformative change in some of our nation’s most pressing and complex policy areas, including education, criminal justice, research integrity, public accountability and health care."

What is this "transformative change" they wish to bring to public education?

They have been one of the largest benefactors behind Paul Vallas' post-Katrina charter-ization of New Orleans two-tier school system. They have also been a force behind Michelle Rhee's Student First group and Teach for America. But their greatest passion seems to be so called "pension reform" The Arnolds have given millions to groups supporting ballot initiatives that would scale back what critics regard as "overly lavish public employee pension deals."

Anne Milgram, the former New Jersey attorney general hired to tackle the criminal-justice issue, has a name for all this: She calls it the "Moneyball" approach to giving, a reference to the book and movie about how the Oakland A's used smart statistical analysis to upend some of baseball's conventional wisdom.

Billy Bean, what hast thou wrought upon us and our "lavish" pensions?

But when Diane Ravitch and others called them out on this, they feigned hurt.You know -- "Don't hate us because we're rich" -- that kind of thing. They even copped to being liberals and Obama supporters, as if that would knock Ravitch off their trail.

I have been referred to as everything from a “young right-wing kingmaker with clear designs on becoming the next generation’s Koch brothers” (despite my very vocal support of President Obama and my numerous contributions to left-of-center causes) to a “lipless, eager little jerk.”

Whoever made the "lipless" remark ought to apologize. As you can see from the picture above, John has two lips.

 Ravitch admitted she was a little rough on them, and apologized for slightly overestimating how much money they made at Enron and even offered some suggestions about how the Arnolds could better spend their billions.

Funny.

Look who's running the Broad Foundation

Bruce Reed

One of the characteristics of the Ownership Society is the fluid movement of key personnel back and forth between government and corporations. Carry this over into the world of ed reform and what's been called the education/industrial complex and you find similar movement between government, and power philanthropy.

The latest example has Bruce Reed, assistant to President Barack Obama and chief of staff to Vice President Joe Biden, being named president of the Broad Foundation, one of the big 3 in power philanthropy, along with Gates and Walton. According to a Broad Foundation release:

As the foundation's first president, Reed, 53, will oversee the activities and investments of The Broad Foundation's work to improve America's public schools. Founder Eli Broad will become chairman of the foundation.

Reed also has strong ties to Chicago Mayor Rahm Emanuel and co-authored with then-U.S. Rep. Emanuel, "The Plan: Big Ideas for Change in America."

Since 1999, The Broad Foundation has "invested" more than $580 million in corporate-style school reform, focusing on the spread of privately-run charter schools and the training and insertion of many big urban district school superintendents.

Eli Broad is a powerful, politically-connected Los Angeles-based billionaire who was recently exposed for secretly funding a right-wing, anti-union group connected with the Koch Bros. He formerly helped run the failed giant AIG Corp., once the world's biggest insurer, into the ground.

How the D.C. charter hustlers play the game

Charter school hustlers in D.C. have come up with an innovative way to funnel public funds into their own pockets. In this case they  used the services of a local news personality, J.C. Hayward. to divert millions from Options Public Charter School

As the school’s board chairwoman, Hayward allegedly signed contracts and approved bonuses for the former managers. He was also a paid consultant” for Exceptional Education Services, one of the two for-profit companies involved in the case

D.C. officials have alleged in a lawsuit that three former managers at the Northeast Washington school diverted at least $3 million of that money to enrich themselves, engaging in a “pattern of self-dealing” that was part of an elaborate contracting scam. The civil case alleges that the managers created two for-profit companies to provide services to Options at high prices, sometimes with the help of a senior official at the D.C. Public Charter School Board.

Moody's -- Charters are expanding at the expense of public schools

A new Moody's report finds that charter schools have expanded at the expense of urban public schools, especially on those districts confronted with a shrinking tax base and government funding cuts.

Municipal finance analysts at Moody’s recently took a look at the impact of charter school growth on public finances, finding “while the vast majority of traditional public districts are managing through the rise of charter schools without a negative credit impact, a small but growing number face financial stress due to the movement of students to charters.”

The report found that cutting costs to match declines in funding can be difficult, as decisions to close schools—even if they are half-empty—can result in fierce political fights. And decisions to cut academic programs can actually exacerbate funding problems further by spurring still more students to leave for charter schools.

You can read more about the Moody's study in the latest issue of The Atlantic.

Investigators reveal Eli Broad's under-the-table support for right-wing groups

New York Times

Well-known corporate chiefs, including power philanthropist Eli Broad, funded illegal "dark money" contributions to groups in the Koch brothers' political network that were involved in Thursday's record campaign finance settlement in California, according to settlement documents. 

A report in the L.A. Times shows that Broad posed as a liberal supporter of Gov. Brown's tax initiative to support public education by making the wealthy pay their fair share. All the while, Broad was secretly pouring more than a million dollars into the right-wing, anti-union fund set up to oppose that same initiative. 

Duplicitous Broad

A Huffington report shows that Charles Schwab, founder of Charles Schwab Corp., donated $6.4 million through Americans for Job Security. Broad, who publicly backed Brown's tax increase proposition, made a $500,000 contribution, according to the documents. Las Vegas Sands Corp. CEO Sheldon Adelson and his wife gave a combined $500,000. Crossroads GPS, the dark money nonprofit founded by Karl Rove, chipped in $2 million.

According to the N.Y. Times, AJS is nothing more than a conservative Republican Party front, run by former Bush political director, David Carney, with ties to Rove, Bachmann, and  Boehner.

Diane Ravitch blogs that she spoke in Sacramento two years ago, she spent two hours with Governor Brown and he told her he had to be diplomatic and nice to Michelle Rhee to keep Eli Broad’s support for his tax increase. "He was fooled" says Ravitch.

Testing companies hit the jackpot on Common Core

The market for testing products and services is booming and could continue to surge over the next few years, according to industry analysts and company officials, who say that growth is being fueled by the shift toward common-core tests.

Federal education policy since No Child Left Behind has fueled the testing boom which in turn has driven even more testing down to lower and lower grades. Many states and districts have approved policies tying teachers’ and administrators’ evaluations to students’ academic progress, as measured in part by state tests—policies supported by the Obama administration through its Race to the Top program.

In an article sponsored by the Gates Foundation, Edweek's Sean Sean Cavanagh writes:

Changes in testing policy with nationwide implications are invariably “good for any provider of testing materials,” said Scott Marion, the associate director of the National Center for the Improvement of Educational Assessment, a Dover, N.H.-based nonprofit organization that consults with states on assessments. “You knew the common core was going to be a big change from what [we] had before.”

It is estimated that the current market for technology-based testing and assessment products and services in fiscal 2011 was $1.6 billion. Preliminary results that are still being analyzed show the market grew by at least 20 percent for fiscal 2012. The biggest player in the testing market is London based Pearson Publishing which has close ties to the Obama administration and Ed Secretary Arne Duncan.

Militarism passes for 'school reform' in L.A. charter

The bugler lifts the brass instrument to his mouth and waits. A short delay betrays the illusion, but then a recording of "Reveille" blares out from stereo speakers as the flag moves up the pole.

That's how the day starts at North Valley Military Institute, a Los Angeles Unified School District charter school that this year transformed from a traditional campus into a military-style boot camp for mainly low-income, Latino children. 25% are classified as special ed.

Each morning, four students — one representing each company: Alpha, Bravo, Charlie and Delta — stand watch over the front entrance of the school. They eye the students, searching for flaws in uniforms, for closely cropped hair on the boys and tightly pinned-back hair on the girls. Colored nail polish is prohibited, but makeup is allowed in moderation. Any infraction constitutes a demerit, and each demerit lands a student 15 minutes of detention, which the school calls a "reboot." -- L.A. Times

As for Common Core, students are taught military courtesies — the use of "sir" and "ma'am" when addressing their elders, for instance — operate under a rank structure and wear uniforms. Students lead platoons of their peers, do physical training twice a week and follow a demerit system. According to the Times,

The military influence has led to some confusion in the surrounding neighborhood. Some parents believe the school is a boot camp for troubled teens or is run by the military.

 They're right. The military curriculum is overseen by the California Cadet Corps, the youth program of the California National Guard.

Schools are broke but Rahm rolling in election campaign dough

While he was busy closing public schools, shuttering public health clinics, and reaming the teachers pension fun, Rahm still found time to raise another $1.1 million last month for his election war chest. He hopes to be able to exceed the $14 million he used to buy the election the last time around.

You won't be surprised to learn that the mayor got a $10,000 gift from the group, Stand For Children, which has been promoting anti-union policies nationwide and in Chicago.

Crain's Greg Hinz reports:

Some folks who have obvious issues of importance pending at City Hall also were big donors. Like United Center owner Jerry Reinsdorf, who gave near the maximum $5,300 gift and has been waiting for Mr. Emanuel to sign off on a renewed tax break for the stadium and a proposed shopping complex near it. Or Todd Ricketts, co-owner of the Chicago Cubs, who gave $2,500 and whose family stands to gain from a plan to rebuild Wrigley Field that was pushed through the City Council by Mr. Emanuel. Then there was $3,000 from Arlington Park race track, which would be hurt by Mr. Emanuel's proposal for a downtown casino but perhaps just wants to stay on speaking terms.

Hinz adds that the bulk of Rahm's money is coming from a national network of donors put together by Mr. Emanuel on behalf of Presidents Barack Obama and Bill Clinton, with the aid of Mr. Emanuel's Hollywood agent brother, Ari Emanuel.

With all that money, can Rahm be beat? I think so.

'Vulture-Fund Billionaire' Paul Singer is big charter backer

Mother Jones overturns a rock and shines a light on neo-con "vulture-fund billionaire" Paul Singer, who has become congressional Republicans' most powerful fundraiser. He's been described as a "fundraising terrorist" for his persistence in twisting arms, a skill that has helped drive a major strategic shift among Big Finance donors, who favored Obama in 2008 but now overwhelmingly back the GOP. Recently, Singer has given sizable sums to the billionaire Koch brothers' dark-money projects as well as to the Club for Growth, an anti-tax group that has helped tea partiers oust several mainstream Republicans.

Investigative Journalist Greg Palast uncovered debt manipulation by Singer, who he deems "Vulture Singer." Palast writes that Singer's "modus operandi" is to find some forgotten tiny debt owed by a very poor nation (Peru and Congo are given as examples). Singer then waits for the US and European taxpayers to forgive the poor nations' debts; as well as offers of food aid, medicine and investment loans. At this point Singer grabs at every resource and all the money going to the desperate country. Palast writes that trade stops, funds freeze and an entire economy is effectively held hostage. Singer then demands aid-giving nations pay monstrous ransoms to let trade resume. Singer demanded $400 million dollars from the Congo for a debt he picked up for less than $10 million. Palast writes that if Singer doesn't get his 4,000% profit, he can effectively starve the nation. In Congo-Brazzaville last year, one-fourth of all deaths of children under five were caused by malnutrition. -- Source Watch

But not mentioned in the MJ piece or by Palast, is Singer's backing of public school privatization schemes, union busting, and privately-operated charter schools, including Eva Moskowitz' Success Academy Charter Network. Singer is also on the board of the right-wing Manhattan Institute which works to undermine and privatize public education. He was one of the big backers of Jeb Bush's, Excellence in Action National Summit on Education Reform, which featured the likes of corporate school "reformers" like Joel Klein, John Podesta, Condoleeza Rice, and Arne Duncan.

In April, the AFT included included Singer and three other billionaires on its “watch list” of money managers that support groups hostile to traditional public pensions. The groups include Michelle Rhee's StudentsFirst. --Bloomberg

Testing the real estate market

Current testing policies which rank schools on the basis of student test scores, contribute to a two-tier school system, including the racial re-segregation of schools, housing, and a widening of the gap between rich a poor. All these factors come together in a real estate market where home buyers pay a big premium to live near top-ranked schools. 

Chicago Tribune real estate writer Mary Ellen Podmolik writes:

How much more do they have to pay for a home that feeds into a top-ranked elementary school as opposed to an average-ranked school? Nationally, try an extra $50 per square foot, on average, according to the data crunchers at Redfin. 

In the Chicago area, the median price of a home near top-tier schools was $257,500, 58.5 percent higher than the median price of $162,500 for a home near an average-ranked school. 

The findings are a jolt of reality for almost 1,000 consumers who plan to buy a home in the next two years and completed a Realtor.com survey in July. More than half of those potential buyers said they'd be willing to pay as much as 20 percent above their budget to buy a home within certain school boundaries. Apparently, that's not enough to get into the best schools.

 Information on schools and test scores came from Onboard Informatics, Maponics LLC and GreatSchools, a national nonprofit. Its assessment of 2012 top-ranked elementary schools was based on test scores.

The high-stakes nature of standardized testing becomes even greater when scores are tied to the value of family homes. But according to the Baltimore Sun,

Agents say they're hesitant to talk about schools to clients for fear of running afoul of the federal fair-housing law, which bans steering based on such factors as race and gender. That increases buyers' reliance on test scores, because for out-of-towners it's one of the few easily available indicators of school quality.

Power philanthropy undermines democracy

Joann Barkan has an excellent piece, "Plutocrats at Work: How Big Philanthropy Undermines Democracy", in the Fall Issue of Dissent.

She Writes:

Because they are mostly free to do what they want, mega-foundations threaten democratic governance and civil society (defined as the associational life of people outside the market and independent of the state). When a foundation project fails—when, say, high-yield seeds end up forcing farmers off the land or privately operated charter schools displace and then underperform traditional public schools—the subjects of the experiment suffer, as does the general public. Yet the do-gooders can simply move on to their next project. Without countervailing forces, wealth in capitalist societies already translates into political power; big philanthropy reinforces this tendency. 

Look who's running the Lab School

I must have conjured her up. No sooner did I post  about the new, private GEMS Academy opening in Chicago with a tuition of about $30K ("Good News Rich People"), than their competition over at Lab School, hires a new director. Guess who?

It's none other than Robin Appleby. Who's that, you ask?

Before coming to Lab,  Appleby lived in Dubai, where she ran four campuses of the Global Education Management Systems American Academies consisting of 5,000 students. In that role, she also served as Superintendent and CEO of GEMS Dubai American Academy, an American and International Baccalaureate school comprising 2,300 students, representing 100 countries. -- Hyde Park Herald

Rahm must be so pleased. Now his kids can get a world-class education. John Dewey must be turning in his grave.

Techies vie with ed conglomerates for a piece of the Common Core market

It's ed tech start-up companies vs. the oligopoly at Stanford conference.

Silicon Valley tech companies, conferencing at Stanford, are trying to become the "Facebook of education," writes Lauren Hepler in the Silicon Valley Business Journal ("Online kindergarten? Tech bets on K-12 disruption"). The potential for superprofits has Valley heads spinning.

Hepler points out that, overall, the market for education is massive. She says the $1.5 trillion US education industry accounts for roughly 10 percent of the U.S. Gross Domestic Product, or the second-biggest sector after healthcare,

After meeting with power philanthropist Bill Gates, tech entrepreneur Mick Hewitt, co-founder and CEO of MasteryConnect, sees the looming implementation of government “Common Core” standards for reading and math in elementary, middle and high schools as an unparalleled opportunity for startups in the field.

“I believe we are truly at an inflection point,” Hewitt said at last weeks K-12 education technology event hosted by the MIT/Stanford Venture Lab, or VLAB. “I would be wrong if I said the Common Core and the dollars around it haven’t driven a lot of the activity for us.”

But these techie startups are up against corporate conglomerates that continue to dominate the K-12 market, writes Hepler.

“There was one word that kept me and my co-founders up at night,” Hewitt said at the VLAB event Thursday as he clicked to a presentation slide emblazoned with a Monopoly-style logo that read “Oligopoly”

He explained that a “marriage to textbooks” sold to schools by companies like Pearson and McGraw-Hill has for years blocked new entrants from providing educational alternatives.

But, Scott Drossos, the senior vice president of one-on-one learning for Pearson, said that although his company “has been accused of being acquisitive” — or buying up promising startups in the field — he sees monetization as a fundamental question not to be ignored.

Yes, monetization -- a keyword in the new lexicon of "public" education.

Difficult students an "outcast group, thrown into an abyss" by New Orleans charters

At many N.O. charter schools, including Sci Academy, plenty of teachers last for less than two years.

Here's the real deal on New Orleans charter schools as documented by Daily Beast/Newsweek writer Andrea Gabor. No, they're definitely not the panacea Arne Duncan claimed they were. For one thing, they were started on a faulty and racist premise -- that  young, white, inexperienced teachers were better for the predominantly-African-American N.O. students, than older, black veteran teachers.

Writes Gabor:

After the storm, the state fired the city’s unionized teachers, who were mostly middle-aged African-Americans, an action that has been challenged in court. While a few schools have hired back teachers who worked in the pre-Katrina schools, the city now relies heavily on inexperienced educators—mostly young, white, and from out of town—who are willing, at least in the short run, to put in grueling hours. But at many schools, including Sci Academy, plenty of teachers last for less than two years. In New Orleans, teachers with certifications from Teach for America number close to 400, five times the level a few years ago. Within the RSD, in 2011, 42 percent of teachers had less than three years of experience; 22 percent have spent just one year or less in the classroom, according to “The State of Public Education in New Orleans,” a 2012 report by the pro-charter Cowen Institute at Tulane University.

Gabor's piece goes on from there to reveal the way N.O. charters, under the pressure of current testing policies,  combined with the broad leeway given to charter schools to suspend and expel students, means the “difficult to teach” kids have been effectively abandoned.

“New ideas on how to teach disruptive and unmotivated students have not emerged from charter schools,” charges Barbara Ferguson, a former superintendent of public schools in New Orleans and a founder of Research on Reforms. “Whether the difficult-to-teach high school students are expelled by charter schools or whether they attended schools closed by the RSD, they are an outcast group, thrown into an abyss ... Neither the RSD nor the state Department of Education tracks these students to determine if they ever enter another high school.”

Tilson short-selling K12Inc.

Hedge-funder Tilson

You would think that the online learning company, K12Inc. would find synergy with hedge-funder Whitney Tilson, the money bags behind DFER and a co-founder of TFA and KIPP board member. But no! Tilson would never let ideological unity get in the way of super-profits. So Tilson is having his T2 Fund short-sell the hell out of K12 stock, hoping the company collapases. In fact, he calls the company “a catastrophe for education” in spite of solid financials.

So why is Tilson shorting K12? In addition to his research alleging that conditions and academic performance at each of K12’s online academies have declined significantly since its IPO, Tilson said he believed companies like K12 undermine the charter school movement in which he is deeply entrenched and that he has spent years fighting for.

“I try and separate my emotion from whether it’s a good investment,” Tilson said.

I could have told him and his investors that months ago. In fact, I did just that, last November. But would they listen? NOOOO. Now writes Buzz Feed,

The king of the privatized virtual learning world, K12Inc. has investors checking to see if they're still wearing their shorts. The problem continues to be extravagant costs stemming from huge salaries paid to top execs, plus K12 students scoring behind kids in brick-and-mortar schools.

So on one rare sunny day, Tilson and I will hopefully both be celebrating ( him with champagne and me with 4-buck Chuck) the death of K12Inc.

Billionaire charter supporter Ty Warner, busted for tax evasion.

Ty Warner

Ty Warner, the Beanie Babies billionaire who's fond of driving his white Rolls-Royce Silver Shadow convertible and arriving for appointments wearing a fur coat, a top hat and carrying a cane, has been busted for tax evasion. Yay!

It seems he tried to hide hundreds of millions in secret Swiss bank accounts to avoid paying taxes. But don't worry about him.  All he had to do was agree to a $53 million settlement which will likely make the whole thing go away.

Duncan and Agassi

While Warner doesn't like to pay any taxes, he does invest millions in privately-run charter schools through the Andre Agassi Foundation. Aggasi, the former tennis pro, has become a big-time charter school entrepreneur and a fav of Ed Sec Arne Duncan. Warner took about $6 million out of his secret Swiss account and gave it to Aggasi to help promote his Rocketship Charters.

Warner already was in trouble with Michelle Obama for marketing a line of black Beanie Babies named "Sweet Sasha” and “Marvelous Malia.”

Forbes piece pounds charters

About the only thing charters do well is limit the influence of teachers’ unions. And fatten their investors’ portfolios.

An article appearing in the Sept. 10th issue of Forbes, gives a swift kick in the rear end to charter schools. According to Forbes contributor Addison Wiggin, charter schools have selective enrollments, don't perform any better than regular public schools, and are part of a corrupt system that funnels public funds into the pockets of privatizers and corporate cronies through real estate deals and tax credits.

He writes:

Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9% of the state’s charter schools and are collecting 38% of the state’s charter school funding increase this year. The operators of both firms donate generously to elected Republicans.

In Florida, the for-profit school industry flooded legislative candidates with $1.8 million in donations last year. “Most of the money,” reports The Miami Herald, “went to Republicans, whose support of charter schools, vouchers, online education and private colleges has put public education dollars in private-sector pockets.”

But it's not just about Republicans. Wiggin saves his best shots for Democrats like the ones in Philadelphis who closed  23 public schools  — about 10% of the total — to be replaced by charters. Not to mention Arne Duncan who "rolled out the Obama administration’s “Race to the Top” initiative, doling out $4.4 billion in federal money to the states — but only to those states that lifted their caps on the number of charter schools."

Something I wasn't aware of was a program called EB-5 that encourages foreign investors who pony up $1 million in a wide variety of development projects — or as little as $500,000 in “targeted employment areas” — to buy immigration visas for themselves and family members.

“There’s a risk to taking education to Wall Street,” says Education Week — “one that helps explain why so few publicly traded companies cater to the educational needs of students in elementary, middle and high school.”

But EdWeek charter school blogger Katie Ash attacks Wiggin's piece for being "inflammatory." Wiggin doesn't mince words, says Ash, "and I'm sure many will take offense at his staunch views."

Not me. He's shooting straight.