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

Monday, December 26, 2016

New for-profit ed management company won't pull Ohio charters out of the muck.

Few states rely so heavily on for-profit management companies as does Ohio. Lately, corporate reformers at the Cambridge Education Group, have formed a new charter school network in to try and clean up the mess created by their former notorious company, for-profit White Hat charters. But Cambridge's new name is not enough to pull them from the muck and corruption of "free market" education.

The company was formed in 2012, founded by Marcus May, a former White Hat executive.

Beacon Journal staff writer, Doug Livingston writes:
The Akron company and the 20 Ohio charter schools it manages are seeking to disentangle themselves from the likes of White Hat Management, a primordial force in Ohio’s charter school movement.
 But Cambridge claims to be different. It has no interest in owning school assets or signing property leases that make it hard for school boards to fire the management companies they hire.
But, writes Livingston, "Cambridge, for all its promise, can’t shake a past rife with questionable business relationships."

Summit Academy, White Hat, Concept Schools of Illinois and Imagine Schools of Virginia and other for-profit charter networks, all like to buy the school buildings they manage, drawing revenue from rent and putting school boards at a disadvantage if they wish to shop around for a new operator. Cambridge school boards — starting with Towpath Trail High School on Market Street — are collecting property deeds, eliminating their use as bargaining chips.


Ohio’s charter schools ...
Drawing state dollars from local school districts, charter schools presented a cheaper, market-driven alternative to government-run schools.
■ Ohio law allowed for the first charter schools in 1998.
■ Nearly 40 percent of the 595 charter schools that ever opened in Ohio have closed. Financial difficulty is cited three times as often as academic failure. More than half the time, closure is voluntary, according to a state directory of shuttered charter schools.
■ Ohio’s charter schools rank among the lowest in the nation in advancing student learning.

May founded Rearden Capital and d’Anconia Development to provide financing and line up private investors to purchase school property, often with an option for the schools to buy the property later. “Rearden” and “d’Anconia” are the neoliberal protagonists in Atlas Shrugged, Ayn Rand’s ode to an unfettered free-market capitalism. Such is the philosophy May and others bring to public education.

A grand jury in Florida indicted School Warehouse and Newpoint Education Partners, May’s version of Cambridge in Florida, on charges of grand theft, money laundering and aggravated white-collar crime.

And so it goes. It's White Hat without the hat.

THE FALLOUT... The Ohio Alliance for Public Charter Schools, one of Ohio’s leading charter-school lobbying and advocacy organizations is disbanding after a decade of shaping the state’s charter-school policy. Some say its demise stems from Ohio’s poor charter-school record, which is causing national funders to pull their support.

Wednesday, December 21, 2016

Did Moskowitz cut a deal with Trump?

Last month, charter schools' biggest hustler, Eva Moskowitz, who pulls down a half-million/year as the operator of N.Y. Success Academies, was in the running for Trump's Sec. of Ed post. She didn't get the job. Trump gave it to fellow plutocrat and religious zealot Betsy DeVos instead.

The Trump transition team may have been frightened off by the spate of negative press about her schools' discipline practices and internal workings and the ongoing federal investigation conducted by the Office of Civil Rights, as well as mounting criticism from local elected officials. It is unclear whether Moskowitz could have even been confirmed as a cabinet official of an agency that is investigating her schools.

But that didn't stop Moskowitz, a Clinton supporter, from swearing loyalty to Trump and his plan for market-driven public schools.

Moscowitz bought space here for $68M.
Then, no sooner had she plopped down $68M in school money for the purchase of ground-floor classroom space in a glitzy Midtown tower, when the auditors caught up with her.

Today she is under fire for financial mismanagement and allegedly ripping off the taxpayers and even her own Success Academy schools for millions of dollars, including thousands that were supposed to have been spent on services that were never delivered to students with special needs.

The Observer reports: 
An audit  by city Comptroller Scott Stringer discovered rampant inaccuracies in the financial reports of Eva Moskowitz’s Success Academy charter school chain—including internal assessments that created the appearance of lower administrative costs, bills to the city for special education services the company could not prove it ever provided and duplicative payments that the chain’s management arm collected from its schools.
 The audit found that in fiscal year 2015, Success Academy schools paid the Success Academy Network an extra $624,342 for services that the Network should have provided in exchange for its $18.3 million management fee. Those services include staff training and professional development, printing, copying and student assessments.
All this has me wondering if this was the real purpose of the Moskowitz's flirtation with Trump. Was she running to him for cover, offering fealty and rendering unto Caesar in exchange for protection? Was she looking at a possible job in the Trump administration as an escape route from the arms of city prosecutors?

We'll soon find out if her gambit worked.

Cross-posted at Mike Klonsky's SmallTalk blog.

Wednesday, December 14, 2016

Bill Gates is the perfect partner for Trump. No billionaire left behind.

“But in the same way President Kennedy talked about the space mission and got the country behind that... whether it’s education or stopping epidemics … [or] in this energy space, there can be a very upbeat message that [Trump’s] administration [is] going to organize things, get rid of regulatory barriers, and have American leadership through innovation.” -- Bill Gates
Okay, so now that Bill Gates has jumped aboard the Trump train, that means no billionaire is left behind. Right? (Bloomberg??).  Gates' comparison of Trump to JFK may sound like a stretch to some. To me too. But Gates claims it's all about innovation. JFK did champion the Cold War space race with the Russians while Trump seems to have joined the other side. But maybe Gates means they both pushed war with Cuba. I don't know. The world's a much different place now. I'm pretty sure Gates wants no part of a trade war with China.

What I do know is that Trump is a perfect fit for the world's richest man and his muscle-foundation. For one thing, Gates is all for deregulation of industry, a promoter of nukes and is one of the world's great all-time polluters. The Gates Foundation's record in Africa (no Virginia, he wasn't just about vaccines) is criminal and the foundation was also one of the biggest stockholders in BP Oil when the great Gulf oil spill happened.

For another, like Trump he's a great believer in strong-man, autocratic leadership and finds democratic processes messy and too expensive and time consuming for someone with his economic leverage.

As an example, Gates was forced to spend millions on a referendum in Washington State authorizing charter schools. It failed three times before winning in 2012 by 1 percent of the vote. Voting is much to stressful and expensive a process for the world's richest man.

As for the rest of the Gates Foundation's education reform initiatives, they won't have to change much under Trump rule. I doubt the Gates' will be dumping any more funds into Common Core Standards, even though Betsy DeVos has been a supporter of CCSS in the past. Gates was already starting to back away from the standards back in August and DeVos is not likely to pursue them given the influence of the anti-common core Alt-right's influence in the regime. On the campaign trail, Trump referred to Common Core as a “disaster” and Trump voters are generally wildly anti-Common Core as well as anything even faintly federal.

Bill and Melinda will likely embrace Betsy DeVos' choice (charter and voucher) mania as they always have. As for DeVos' penchant for blurring the lines between public and private, and between state and religion, Gates has never had a problem with either. I remember the foundation once giving millions to the Discovery Institute, a group pushing the teaching of Intelligent Design.

Gates is big on using student test results as a basis for evaluating teachers. We'll have to wait and see how DeVos falls out on that.

Sunday, December 4, 2016

My investment tip for the DeVos era. Charter school real estate.

Clockwise from top left: the Coral Springs – Imagine School, Imagine At South Vero, Plantation – Renaissance Charter School, Championship Academy of Distinction Davie Campus, and Charter School Capital CEO Stuart Ellis

I'm thinking back to the time when hedge-fund school reformer Whitney Tilson mocked me for suggesting that he and his investment group were profiteering from privately-run charter schools.
"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!
Turns out I was spot-on and he was covering up. 

So this is the time of year I like to hand out more free investment advice to my readers. You're welcome. 

With the appointment of Betsy DeVos as Trump's education chief, charter school real estate profiteers and corporate reformers like Tilson are rubbing their hands together with glee. This is a great time to get into that market while stock prices are still relatively low. 

Charter School Capital, an academic investment group based in Portland, just scooped up five charter schools spread throughout Florida for $71.74 million. The sellers were MG3 Development Group and ESJ Capital Partners, a pair of local real estate companies. The deal illustrates how investing in nontraditional real estate like schools can be lucrative, especially when other markets like residential and commercial properties appear to be cooling down. 
The deal breaks down to $17,935 per enrolled student. Not bad.

More from the Real Deal...
Despite their controversial status among educators, charter schools have become hot commodities in the real estate community, with a slew of new speculative projects breaking ground in South Florida over the past year. Notably, the W.P. Carey investment trust bought a Broward County preparatory school for $68.6 million in June as part of a larger $167 million deal to acquire three U.S. private academies.
Of course, if profiteering off of the lives of primarily poor, black and Latino students makes you puke or keeps you from facing yourself in the mirror, I would suggest you find another area of investment.