Duncan cooling his political heels at DreamBox, Inc.

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

His billionaire patrons don't really know what to do with Arne Duncan. He left Obama's Dept. of Education in a mess. His snarky comments about the white suburban opt-out moms may have helped Trump win the election. His ill-conceived Race To The Top "reforms", underwritten by Bill Gates, were a flop by all measures of reform. And before resigning, Duncan feathered his nest by sending millions of dollars in federal funds to Chicago charter school operators.

When Duncan did arrive back in town, the city's elite immediately began a Duncan clean-up and rebranding operation to lay the groundwork for a Duncan run for political office. There was even talk of him running for mayor in place of Rahm Emanuel.

He was given a cushy, high-paying job at the Emerson Collective by heiress Laurene Powell Jobs, the billionaire widow of Apple founder, Steve Jobs. There, he got help writing his requisite book, “How Schools Work,” in which he claims that public schools are "run on lies".

But as a one reviewer noted:

"Duncan spends hardly any pages embedded in schools or talking to teachers, principals or students...Duncan heads off to high-end addresses in the Loop, and later D.C., determined to roll out reforms that hold a mirror of truth to the broken system. But what, then? We don't learn how the surgical decisions being made at high altitudes end up impacting classrooms in cities like Chicago, Baltimore or Detroit...

As all around us swirls the fever for school choice, we don't learn much about the outcomes of pushing for options beyond traditional schools, such as charters, which Duncan championed when he ran Chicago's school system. And we don't learn how some schools in high-poverty neighborhoods beat such odds and send their Calvins to college — stories that really illustrate how good public schools work in the era of limited resources and vast income inequality.

As things have turned out so far, Duncan's return came too late for a run for governor and as you may have noticed, Rahm is still running for mayor. He hasn't dropped out to make room for Arne as was rumored only a month ago.

So where to next? The answer came this week when Duncan was named to the Board of Directors of Dreambox Learning, Inc.

According to Edweek's Marketplace K-12,

The digital math company DreamBox Learning has picked up a massive infusion of capital—$130 million—from an investment group, and it has added a big name to its board of directors: Arne Duncan.

DreamBox announced Tuesday that it is the recipient of that substantial monetary infusion from The Rise Fund, a global investment company that seeks financial returns from its support for social and environmental causes.

The $130M from Rise is its largest-ever education investment and allows it to take a majority position in DreamBox. The Rise Fund counts Jobs, Netflix founder and right-wing school privatizer, Reed Hastings, and Duncan's long-time Chicago ed-business mentor, John Rogers (Ariel Investments) among its investors.

As you might have guessed, DreamBox is Apple (IOS)-based, not PC.

So Duncan will have to cool his political heels at DreamBox, using his DOE connections to sell another bullshit math program to schools and districts that don't want it or need it and making sure his patrons get a good return on their investment.

It's kind of a flashback to the days when Pres. Bush's brother Neil used his connections to sell his Cow (Curriculum on Wheels) to public school districts.

Rahm's Infrastructure Trust, a failed privatization scam.

Rahm Emanuel flew in Randi Weingarten  to support the Infrastructure Trust. 

The BGA's Alejandra Cancino writes in Crain's, that Rahm Emanuel's grand PR stunt, known as the Infrastructure Trust, has done nothing to rebuild Chicago's infrastructure nor to build any trust. In short, it was a sham and a humbug, a facade under which to carry out even more failed privatization deals.

Writes Cancino:

...the infrastructure trust that Mayor Rahm Emanuel once hailed as a model of out-of-the-box thinking to jumpstart public works has proved anything but.

 Launched five years ago this month, the Chicago Infrastructure Trust has accomplished little and done so at a snail's pace. None of the $800 million in financing that Emanuel claimed he had lined up from institutional investors to bankroll city projects ever materialized, with resources so tight that the trust on several occasions has been late by more than a month in paying staff and once by several months.

What's more, city records reviewed by the Better Government Association show trust operations and projects have been largely dependent on public financing even though Emanuel sold the idea as an innovative financing scheme to free taxpayers from cost and risk.

As of October, the trust still owed money to some former employees, consultants and contractors, according to its most recent audit report.

Sounds like one of Trump's deals. Doesn't it? And there were more. Like the the failed privatization of Midway Airport.

I warned about the Trust back in 2012 when Rahm first touted it as a model for other cities to follow and claimed that it would bring thousands of jobs to Chicago. And I wasn't alone.

Ald. Scott Waguespack, 32nd, (yes, there are a few honest ones on the council) opposed the trust's creation pushed for more transparency and City Council oversight.

Ben Joravsky, writing in the Reader, called Rahm the "trust fund mayor" and warned of the lack of transparency around IT.

But warnings fell on deaf ears. Why? Because there were the big banks, like Citibank and big Democratic Party backers singing the Trust's praises. Namely, Bill Clinton who stood shoulder to shoulder with Rahm when IT was rolled out. .

And then there was AFT Pres. Randi Weingarten who Rahm flew to Chicago so she could offer her union's support of the Infrastructure Trust at Bill Clinton's Global Initiative Conference.

“People want to work,” Weingarten said. “And what we’re seeing, whether it’s the mayor’s infrastructure program here in Chicago or everything else we’re doing around the country, is that when labor and business start working good together on trying to put people back to work with good jobs, when we start building things again, it builds huge hope around the country.”

To her credit, Randi had been in town a few weeks earlier to support and march with thousands of rallying union teachers. If you followed my blog at the time, you know that I gave her props for that.  But now, here she was rallying support for Rahm's great privatization scheme, cheering it on with the very forces that were attacking the CTU in a massive media campaign.

She wasn't alone among union leaders either. The Mayor had put Jorge Ramirez, president of the Chicago Federation of Labor, on the board of the Trust. The promise of jobs, no matter how illusory, is pretty enticing. Just ask the sell-out union leaders who have drunk Donald Trump's "Make America Great Again" kool-aid.

Former CPS Liar-in-Chief lands on her feet at Midway

I doubt you are, but if you're worrying about the fate of former CPS Liar-in-Chief, Becky Carroll,  you can stop now.

After serving as J.C. Brizard's and prison-bound Barbara Byrd-Bennett's Kellyanne Conway and then as the head of Rahm Emanuel's Super PAC, "Chicago Forward", Carroll has hit it big as a Midway Airport contractor. In other words, she's landed (see what I did there?) on her feet. Take heart Kellyanne. There's life (and profit) even after a failed career of mendacity and prevarication.

The Sun-Times reports:

A 15-year, $75 million makeover of Midway Airport concessions was cleared for takeoff Wednesday on a runway crowded with clout-heavy contractors. The contract with a group known as Midway Partnership LLC was approved at an action-packed City Council meeting dominated by business legislation.

 The $248 million Midway overhaul will give the Southwest Side airport 1,400 more premium parking spaces, a Taste of Chicago-style concession makeover with more space, and 27 security lanes — up from 17 — to unclog a notorious passenger bottleneck.

Did you know that "broke Chicago", where school budgets are being slashed to ribbons, had $248M laying around to put at the service of wealthy airport concessionaires? This, after years of failed Rahm attempts to sell off poorly-run Midway to any taker who wanted it.

And as I scroll through the article, I come upon Becky's name. She's hit the jackpot as a member of the "winning team" of contractors -- all Rahm political loyalists of course.

And here, I thought Becky's area of expertise lie in school closings and CPS corruption cover-ups. How was I too know she was an airport food concession maven as well?

What happened to the feds' probe of Chicago Public Ed Fund? Where'd everybody go?

Rahm and Griffin.

Back in April, 2015, we heard that the feds were in town, supposedly looking into the Chicago Public Education Fund (CPEF) and its involvement in the Barbara Byrd-Bennett/SUPES no-bid contract scandal. Remember? Subpoenas were flying and the names of some of the biggest players in corporate school reform were being dropped to the press.  Among those names were CPEF's billionaire board members, Bruce Rauner, Penny Pritzker,  Susan Crown, Mellody Hobson (wife of George Lucas), and the state's richest man, Ken Griffin. 

While the Fund wasn't the target of the investigation, and no-bid contracts with kickbacks are usually no big deal in Rahmville, it was reported that its board had given SUPES a $380,000 contract to train area network chiefs and their deputies. But when things started getting hot, they quietly discontinued their funding. 

Ace Catalyst reporter Sarah Karp, now with the BGA, made the point then, that if the Fund had been more transparent about its de-funding of SUPES, "taxpayers might have saved the $12 million of the more than $20 million SUPES was paid before its contract was cancelled".  But transparency is a no-no around CPEF's fancy downtown headquarters (nice view of the lake).  

As Karp puts it:

No one outside The Fund’s staff and board of directors knows how it decides which programs to support, what the results have been and how or whether the results are communicated to CPS.

So since April, there's not been a word in the media about CPEF or the investigation. Where'd everyone go? 

Griffin just sold his condo for $16M.

Rauner, now the governor, was at one time the CPEF board president. He denied any culpability in the SUPES affair, telling the feds that it was his pal Rahm Emanuel and not him, who brought SUPES, Gary Solomon, and Byrd-Bennett into town. 

Pritzker's off playing Obama's Sec. of Commerce, leaving Rahm holding the bag on school closings. She was a member of the school board that approved them along with the SUPES deal. 

And hedge-funder Griffin? (among Rahm/Rauner's largest campaign contributors). He took a bit of a hit when wife Ann divorced him. But he's still in the game, bigger than ever.

His most recent deal... Crain's reports that Griffin just sold his Chicago condo at the Waldorf Astoria for a mere $16M, the same price he bought it for 17 months earlier. The sale was the second-highest home sale in the Chicago area during 2015, after an $18.75M purchase at the Park Tower by an associate of Lucas and Hobson.

I'm sure this is all on the up-and-up, but it turns out that Griffin originally bought the place from ("an entity connected with") himself and then sold it to ("an entity connected with") himself. 

Sounds like a win-win. It always is for these guys. 

UNO corruption just the 'tip of the iceberg'. Billions lost to waste, fraud and corruption annually in privately-run charters

UNO boss Juan Rangel was Rahm Emanuel's campaign chairman in 2011.  

Chicago's $80-million/year UNO charter scandal, adds significantly to the estimated $200 million which will be lost this year alone to charter school waste, fraud, and corruption. That estimate is only "the tip of the iceberg" according to a report issued last April, by the Center for Popular Democracy and the Alliance to Reclaim Our Schools. It based on a study of only about one-third of the states with charter schools.

According to the report:

The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.4 billion in 2015.

In 2014, the Federal Securities and Exchange Commission (SEC) charged UNO Charter School Network with defrauding investors in a $37.5 million bond offering for school construction by making materially misleading statements about transactions that presented a conflict of interest. According to the SEC’s complaint, UNO failed to notify the state of two construction contracts totaling $12.9 million with the brothers of one of UNO’s top executives. Additionally, the charter school operator failed to notify bond investors that the state could take the loan that the bond was assured with back for the non-disclosure of the contracts.

Call it the charter corruption tax. We all pay it every year and it's money taken right out of our public school classrooms.

President Obama’s proposed budget for fiscal year 2016 includes $375 million specifically for charter schools (a 48% increase over last year’s actual budget).

Camp Philos at the Vineyard. My invite must have gotten lost in the mail.

Walton/Broad took their whole crew to Martha's Vineyard over the weekend to bone-up on marketing tactics for charter/privatization brand. How nice for them. What about me? I like the Vineyard.

Topics included: Doubling Down on Success or Losing It All: What’s At Stake in 2016;

How We Win: Strategies and Tactics to Combat an Organized and Vocal Opposition; 

What’s Next in the Edu Political Funding World?; and How to Tell the Pro-Reform Story Successfully.

The Philos "reform" crowd, mostly Clinton Democrats I'm told, includes the likes of -- Rahm Emanuel, Howard Fuller, Peter Cunningham, Gov. Andrew Cuomo, Senator Mary Landrieu, Eva Moskowitz, Charles Barone (DFER), Ben Austin (Parent Revolution), and so on.

Last year, Edushyster tried to go, but they wouldn't let her in. She obviously didn't have the proper security clearance. 

We hear a bunch of Chi electeds went to Martha's Vineyard this past wknd with @DFER_News. Check out their camp.... https://t.co/U3BmJxZcnO

— Raise Your Hand (@ILRaiseYourHand) October 20, 2015

J.B. Pritzker and Goldman Sachs doing the special ed hustle

J.B. Pritzker

Goldman Sachs and J.B. Pritzker may call it "philanthropy" but it's a profitable brand that includes their benefiting financially from cuts in special ed and from every child who's dropped from or pushed out of a SpEd program.

It's all because of the latest corporate scheme in which private firms foot the initial bill for public services and then are repaid with interest if those services reduce the number of kids in special ed. They call it "social impact" investing.

In Utah for example, GS and J.B. have committed $7 million to area pay-for-success programs through the United Way, which will fund preschool services for five cohorts of children. Even at a 5% rate of return, they still receive 95% of any special-education savings to the state until the investments are repaid with interest. After that, the firms will receive 40% of ongoing cost savings until the participating students complete sixth grade.

If only companies like Goldman Sachs didn't operate virtually fax-free, there would likely be adequate public funding for special ed and all other education funding. Instead schools are forced to operate on the largess of private investment firms who not only operate at a profit, but also influence important public ed policy issues -- like which child should be in SpEd and which one needn't be?

According to Crain's,

United Way of Salt Lake is betting that the savings from keeping kids out of special-education, which is much more expensive than providing standard instruction, will provide the repayment to the investors.

About 600 students enrolled in public and private preschool programs in 2013. Of those students, 110 4-year-olds were expected to need special education during their kindergarten year. But only one of the students — who are now in the first grade — has required special education, which translates to about $281,000 in cost avoidance for Utah's public education system with 95% kicking back to the investors.

What these type of private funding schemes do is create pressures on school districts to remove students with special needs out of individually designed learning programs.

Pritzer says:

"Im not in the business of investing for 5 percent returns" but, "there are portions of people's portfolios invested in low-return opportunities, like treasuries. If you can prove this out, Goldman, Fidelity and other investors who put large amounts of capital into bonds, they could put them into social-impact bonds."

While social impact bonds pay out a relatively healthy interest rate when they succeed — between 5 and 7 percent a year in the Utah program — the investors lose all the money when they fail.

According to Huffington Post:

The success of the program is Salt Lake is intended to provide a more replicable template for funding and implementing preschool programs.

Chicago operates in early childhood Head Start programs in much the same way. Instead of relying on public funds to expand the programs and keep the benefits for itself, Rahm Emanuel has turned to lenders such as Goldman Sachs, Northern Trust and the Pritzker Family Foundation to provide the upfront money, with promises of substantial profits for the lenders down the road if the program goes as planned.

Great hustle, J.B.

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?

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.

Quazzo's desperate letter to her troops. She's a walking billboard for an elected school board.

Rahm's hand-picked school board member Deborah Quazzo is pissed. She gives a bunch of "no comments" to Sun-Times reporters Lauren Fitzpatrick and Dan Mihalopoulos, in their latest expose of her companies. They reportedly raked in another $1.3 million from CPS-funded charters, including: Noble Network of Charter Schools, Urban Prep Academies, KIPP Chicago Public Charter Schools, LEARN Charter School Network and Perspectives Charter Schools.

She says, she can't talk about it because she is under investigation by the IG. But in private, she's making plenty of noise.

"Enough is enough", she threatens in a letter to her corporate friends and supporters as she tries to rally the troops in her behalf. I got a copy of the letter this morning. In it, she blames all her "unwanted publicity" on the Chicago Teachers Union, and a well-coordinated media conspiracy to defame her.

That said, with another story in Monday’s Chicago Sun-Times, I have now been featured in that paper seven times (including three front page stories) since December 22nd – as well as having had my office picketed by the Chicago Teachers Union.  The ink was not even dry on the initial cover article before an editorial was published the very next day calling for my resignation.  It is likely no coincidence that there is a City Club debate on the issue of an elected school board on Monday.  The seeming coordination is remarkable. 

She is a "private person", she says, "who has never sought publicity – favorable or otherwise" and is only serving on Rahm's board because she wants to help "all children". I don't blame her for wanting her dealings with CPS schools to remain in the dark. But maybe she should have thought of that before assuming a public position on the mayor' appointed board.

Most of Rahm's corporate backers protect their city and school board contracts simply by tossing a few grand into his already over-stuffed campaign fund or super PAC. They don't feel the need, as Quazzo obviously does, to sit on a board where they will attract public scrutiny.

She closes the letter with a paean to the mayor, an attack on "adult agendas" and a call for her hedge-fund friends to write angry letters on her behalf to the Sun-Times.

 Under the passionate leadership of Mayor EmanueI and the leadership at Chicago Public Schools, Chicago Public School students have a longer school day, access to full day kindergarten, and expansion of STEM and IB education among other initiatives.  Great progress is being made, as is seen in virtually all measures, but we still have a long way to go.  

I believe it is time for Chicagoans, and, individuals who care across the country, to stand up united against any force that distracts from our core mission – a better future for all Chicago’s children.  Adult agendas are driving focus away from what we should all care deeply about – the welfare of and future opportunity for ALL of Chicago's 400,000 students and for that matter all children in our country.  As an initial step towards that goal, I would so appreciate it if you would take a minute and express your views to the leadership at the Chicago Sun-Times.

She includes their names, pictures and contact information. 

Quazzo sounds pretty desperate. I think she's toast. Too much baggage for Rahm to carry. She should do the right thing and step down. Right now she's a walking billboard for an elected school board.

Chuy Garcia: Rahm treating CPS as a 'profit center'

Quazzo  (F. Klonsky)

Mayoral candidate "Chuy" Garcia accused Rahm of treating education "as a profit center for people with powerful connections." He couldn't be more right. Latest case in point in the mayor's defense of his hand-picked board member, Deborah Quazzo, who uses her board seat to protect her ed-biz investments.

According to the Sun-Times:

Quazzo, a millionaire venture capitalist, has invested in five educational technology companies that have been paid about $3.8 million by CPS since 2010, $2.9 million of it since June 2013, when she replaced Pritzker.

Quazzo is the “founder [in 2009] and managing partner of GSV Advisors—part of GSV Capital Corp., “a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. GSV Advisors is “a firm that provides advisory services to companies in the education and business services sectors.” In plainer language, GSV Advisors invests in firms that that bring high-tech to solving problems in education. An example is GVS-backed DreamBox Learning, online individualized math instruction that, the company claims, “improves early educational outcomes for every child—regardless of zip code.”

She's also an ex officio board member of KIPP Chicago (Knowledge is Power Program), a charter school operator; New Schools for Chicago, an organization that raises money for charters.

NEEDED--An elected school board.

CPS' Great Interest Rate Swap. Running schools "like a business".

"I have 30 years in the business," said Vitale, a former bank executive and former president and CEO of the Chicago Board of Trade. "I'm not a neophyte." -- David Vitale

Today's Trib blows the lid off of the Great CPS Interest-Rate-Swap in which the mayor and his hand-picked school board traded the future of the public school system for cash. If this sounds a lot like former Mayor Daley's parking meter deal -- it should.

It was Daley's $1/yr. man David Vitale, who engineered the dirty deals which also had support from a bill run through the state legislature by Sen. Pres. John Cullerton. Cullerton defended the bill, calling it part of "an effort to run government [schools-m.k.] more like a business."

The CEO at the time was none other than Arne Duncan (although for some reason, the Trib report spares him any mention). From 2003 through 2007, the district issued $1 billion worth of high-risk auction-rate securities, nearly all of it paired with complex derivative contracts called interest-rate swaps, in a bid to lower borrowing costs. But lower costs they didn't. Over the life of the deals, the district stands to pay an estimated $100 million more in today's dollars than it would have on traditional fixed-rate bonds.

The banks benefited, of course. Derivative contracts created new profit opportunities, and fees on auction-rate securities were higher than for other types of bonds.

The Tribune reports:

No other school district in the country came close to CPS in relying so heavily on this exotic financial product. In fact, market data show the district issued more auction-rate bonds than most cities, more than the state of California.

Even though this latest scandal preceded Rahm Emanuel, the current mayor is still tied to it. It was Rahm who brought Vitale over from turn-around company, AUSL and made him Board President. Vitale is still Rahm's go-to financial guy and the district continues to pay through the nose for his dealings.

 Vitale is now president of the Chicago school board. Since Mayor Rahm Emanuel named him to the post in May 2011, he has presided over slashed budgets, teacher layoffs and the closing of more than 40 schools. As the Tribune reported last year in its "Broken Bonds" series, tens of millions of dollars in borrowed money went into schools that are now closed.

Rahm's way of paying for pre-school puts millions into pockets of his investor friends.

If there’s one thing we know about Wall Street, it’s that most Wall Street firms are not in the business of philanthropy.

Yet the city is about to enter into a $30 million agreement with several Wall Street lenders to finance an early education program that from all appearances will allow banks to profit off the educational success of children with almost no risk to their own bottom lines. -- Mark Anderson at the Ward Room 

 Instead of simply finding the money in the city budget to expand the program and keep the benefits for itself, however, the city has turned to lenders such as Goldman Sachs, Northern Trust and the Pritzker Family Foundation to provide the upfront money, with promises of substantial profits for the lenders down the road if the program goes as planned.

Fran Spielman at S-T writes:

Rahm' plan for funding early childhood education is being compared to former Mayor Daley's parking meter plan.

“This is basically privatizing Head Start — giving these banking companies a very high rate of return — higher than even what we saw in the Infrastructure Trust,” said Ald. Scott Waguespack (32nd), one of a handful of aldermen who voted no.

“Head Start has been proven to work for decades…. It reminds me of the parking meter deal. The same type of people came in and said it was a high-risk asset [when] it was a low-risk asset...We lost billions of dollars. We’re not gonna lose billions here. But, taxpayers under this scheme are gonna pay a lot more than if we just went out and re-allocated resources we already have.”

Aramark's mess in Chicago schools pales in comparison to what they've done in Michigan prisons

Today's Detroit Free Press reports that a fired Aramark prison food worker filed a whistle-blower complaint Wednesday with the Occupational Safety and Health Administration, alleging she lost her job for complaining about falsified records and kitchen practices that endangered health and food safety.

McVay alleges she was harassed and retaliated against for complaining about a lack of temperature monitoring in cooking; the serving of raw or undercooked meat; falsified records related to dishwater temperature and cleaning solution quality; the serving of meat that had been dropped on the floor; changing the dates on stored leftover food so it could be served after its throw-away date; suspected inflating of the count of meals served — part of the basis for which Aramark is paid by the state — among other issues.

 ******

Chicago Mayor Rahm Emanuel's privatization of school janitorial services, handing them over to Aramark and SodexoMagic,  has left schools in a filthy mess with principals and parents (not to mention hundreds of laid-off workers) howling for change. But Aramark's mess at CPS pales in comparison to what they're doing in Michigan's prisons.

Michigan's Tea Party Gov. Rick Snyder, has turned the state into the vanguard of privatization in an attempt to bust the state's unions and fire higher-paid, experienced public employees, including teachers, without due process.

Aramark Correctional Services has had an astonishing record of incompetence in state after state, says MoTown columnist, Jack Lessenberry  In Ohio, there have been several near-riots in prisons after they ran out of food. Florida fired Aramark long ago for contract violations and for boosting their profits by skimping on inmate meals.

Kentucky did the same, after lousy Aramark food service provoked an actual prison riot. Later, an audit discovered what the state said were food quality issues and overbilling.

Ohio editorial writers have been urging that state's governor, the right-wing ideologue John Kasich, to fire Aramark for issues that include maggots in the food, staffing shortages, and running out of food, presumably to maximize profits.

Last December, Aramark (ARMK) began running Michigan’s prison kitchens under a three-year, $145 million privatization deal which eliminated about 370 union jobs and was supposed to make food service more efficient while saving the cash-strapped state millions.

But according to a Bloomberg Businessweek report, privatization hasn’t quite worked out that way.

More than 100 Aramark employees have been fired for alleged misconduct that included sneaking cell phones into prisons, distributing drugs, and having sexual contact with inmates. On Sept. 23 an Aramark worker at an Ionia prison was fired on suspicion that he’d tried to pay one prisoner to beat up another. The next day a worker at a maximum-security prison, also in Ionia, lost her job after corrections officers found a 65-page love letter she wrote to an inmate with whom she was allegedly having an affair.

In August, before the latest revelations, Snyder announced he was appointing Edwin Buss, who has run prison systems in Florida and Indiana, to independently monitor the Aramark contract. Buss’s annual salary of $160,000 will be covered by a $200,000 fine levied on Aramark by the Michigan Department of Corrections following reports of meal shortages and maggots in food served to prisoners. An additional $98,000 fine for infractions that included a dozen instances of “overfamiliarity” between employees and inmates was waived in March.

Detroit News

According to the Detroit News,

When maggots were repeatedly discovered in Aramark prison kitchens over the summer, it was consistently reported that the company previously had paid a $98,000 fine to the state for previous contract infractions. We’ve now learned that was not true. While the fine was levied against Aramark, it was never paid after Corrections director Dan Heyns intervened and told Gov. Rick Snyder’s office he would “tone down [his] attack dogs, delay or cancel any fines.”

Aramark's next big move -- health care. Yikes!

So Mayor Emanuel, what is it you like so much about Aramark? Please tell us.

The Chicago Way

Every day it's something.

Today there's two stories shining light on the Chicago way. The first is by Greg Hinz at Crain's. He writes about Rahm Emanuel's city council floor leader, Ald. Pat O'Connor and a woman who's "volunteered" to be the bookkeeper of his political campaign fund, even writing checks for him.

That would be Mary Ann Roti-Walz, the daughter of the late 1st Ward Ald. Fred Roti and — you knew this was coming — a $65,676-a-year aide to Mr. O'Connor's Committee on Workforce Development. 

O'Connor is also Rahm's education guy in the council. I don't see any contradiction there. Do you?

As old man Daley used to say, when asked about giving his nephew the city's insurance business, "If a man can't reach out and help his own family, what kind of society are we living in?"

BGA chief Andy Shaw says:

 "This is how things work in Chicago. People in government jobs think you have to thank the boss by doing political work."

Rahm at SXSW

WHERE'S RAHM? ...The second is by S-T's Dan Mihalopolous, who lays bare the connection between younger, Richie Daley and the C3 boys down in Texas (all my vexes live in TX) who have made a killing here in Chicago with Lollapalooza. What's wrong with that, you ask? Nothing except for an obvious error of omission. While DM ties all the right threads together connecting Daley and his nephew Mark Vanecko to the Austin Lollapalooza cabal, there's not a mention of Rahm in the whole full-page story.

As I (here and here) and others have pointed out on several occasions, it's Rahm, much more than Daley, who is benefiting directly from the Lollapalooza deal. Remember Rahm's trip to SXSW last February? Believe me, he wasn't there two-steppin'.  He was stuffing his election war chest at an Austin fundraising party put on by a group of "heavy hitters" who do bazillions in business up in Chicago.

Who are the heavy hitters? None other than the 3 Charlies, two of whom, Charles Attal and Charlie Walker, were listed as hosts. Their concert promotions company has run Lollapalooza since 2005. They signed a contract with the Chicago Park District in 2012, during Emanuel's term, to continue operating it until at least 2021, giving them a 16-year, virtually un-taxed run. Who get's that?

C'mon Dan, get out of that office once in a while. I'm no fan of the Daley's as everyone knows. But Rahm's statute of limitations of blaming Daley for all his own failures, has run out.

QUOTABLES FROM THE OWNERSHIP SOCIETY

Kershner

Chris Kershner, vice president of public policy and economic development for the Dayton Area Chamber of Commerce

“The business community is the consumer of the educational product. Students are the educational product. They are going through the education system so that they can be an attractive product for business to consume and hire as a workforce in the future.” -- Valerie Strauss in WaPo

Former CPS Liar-in-Chief Becky Carroll now heads up Rahm Emanuel's Super PAC

“This questionnaire will allow us to better understand where aldermanic candidates stand and help us to both plan our strategies well in advance of the election and be more nimble as races tighten up. We want to be well ahead of the curve so, as dynamics change ward by ward, we can be more flexible in directing our resources. That’s why we’re starting so early.” -- Sun-Times

JP Morgan’s “point person” in Detroit, Aaron Seybert  

“The working theory at up to the executive suite, is that spending $100 million in America’s most famously bankrupt city is a good investment. Good for Detroit, yes, but also good for JPMorgan. Best case, good for America.” -- NPQ

Frackers backing Rauner

Nelson Wood, a Mount Vernon-based oil producer who co-hosted the fundraiser, said his colleagues are tired of being idle.

“We just think Bruce Rauner will be the better choice. There’s a lot of consternation out there,” Wood said Wednesday. “The governor should have gotten this going a year ago." -- Capitol Fax

Griffin's divorce. Think of it as a stock split.

The Griffins

SORRY TO HEAR THE NEWS (No, really) that right-wing billionaire power couple, Ken and Ann Griffin are splitting up. Whatever happened to "'til death do us part"?

The Griffins have been the money-bags behind both Bruce Rauner's and Rahm Emanuel's political ascendency. They have also bankrolled much of Chicago's union-busting and corporate-style school reform policies.

For this to happen right in the middle of the Illinois gov's race must be unsettling, especially to Rauner's people. Griffin was in the headlines last month because of his record-breaking $2.5 million contribution to Bruce Rauner’s gubernatorial campaign.

But don't worry,  Rahm and Bruce. Think of it as a stock split. Remember, corporations are people too. Besides, there's a pre-nup. Just in case Ann goes the wrong way, politically speaking.

Revolving door from Rahm's City Hall to hedge-funder's office keeps turning

Matt Hynes

I reported last month about Rahm's machine bagman Matt Hynes jumping ship to go spend "more time with his family." Remember Hynes, the son of former longtime Cook County Assessor, ward boss (19th) and big-time lobbyist Tom Hynes and brother of former state Comptroller Dan Hynes, was the guy who first put the great pension heist idea in Rahm's ear and got SEIU leaders to buy into it.

Now we know who Hynes meant by his "family".

Crain's reports:

Mayor Rahm Emanuel's departing chief lobbyist has a new gig and, metaphorically, it isn't far from City Hall. Matt Hynes, who last month announced his departure as the the mayor's director of legislative counsel and government affairs, will be joining Grosvenor Capital Management L.P., the firm run by Emanuel confident and kitchen-cabinet member Michael Sacks.

Sacks is one of the biggest money-bags patrons feeding Emanuel's campaign trough. He was part of the Emanuel team that negotiated City Council's parking meter deal with operator Chicago Parking Meters LLC. Former mayor Daley now works for that firm. Sacks reportedly talks with Rahm several times daily.

Ald. Bob Fioretti, 2nd, one of Rahm's potential opponents in next year's race, voted “no” on the meter deal and says unpaid mayoral advisers are one thing. “It's another thing when you have them as active participants in a government function,” he says. “We want government-business partnerships, but not these types.”

Sacks is a big promoter of charter schools and serves as a mayoral adviser on the topic. He also sits on the board of After School Matters, Mayor and Maggie Daley's cash-cow after-school program which was used as back entrance to the old City Hall patronage system.

Hynes is not the first Chicago politico recruited by Sacks. Earlier moves to the firm include Kurt Summers, former chief of staff to Cook County Board President Toni Preckwinkle, and Mr. Emanuel's chief information officer, Brett Goldstein.

Billionaire Griffin's influence will be felt no matter who wins the election

Chicago Magazine

The Billionaire Boys Club is flexing its electoral political muscles again in Illinois. The Sun-Times reports that Citadel hedge-fund CEO Ken Griffin has kicked in a tidy $2.5 million to fellow billionaire Bruce Rauner's already bloated campaign fund. That includes $71,000 worth of in-kind contributions for the use of Griffin's private jet. It's reportedly the biggest single Illinois political donation ever — in the modern-day era — to a candidate for governor of Illinois. It's also the biggest ever from an individual other than the candidate himself  in the post-Watergate era when public disclosure records were first required, said one political scientist.

Griffin has also given more than $1 million to Karl Rove’s American Crossroads SuperPAC and has donated heavily to the Koch Brothers’ Americans for Prosperity. He's bigger than two-party politics and also gave heavily to both the Obama and Romney campaigns as well as to Chicago Mayor Rahm Emanuel's political war chest. Griffin and his wife, Anne Dias Griffin are both members of Rahm's kitchen cabinet as is Rauner himself.

Whether Rauner or Gov. Quinn prevails in November's election, Griffin's influence will be felt. The same is true for next year's mayor's race. And that doesn't bode well for teachers, unions, or the state's public school system. Griffin is one of the biggest corporate patrons of privately-run charter schools. He also helped underwrite Stand For Children's 2013 venture into Illinois and was heavily involved in their campaign to pass anti-teachers-union SB7 legislation.

My memo to Sheldon Adelson

The wing-nut billionaire is in the market for a few good Republican pols. I guess his stable is running low on horses. He's got a few old nags but no winners in his gold-plated paddock. So when they read his want ads, GOPers sprinted as fast as their hooves would carry them, out to Vegas to kiss Adelson's ass ring.

On the outside is Romney running neck and neck with Jeb Bush. Chris Christie is wheezing as he rounds the turn. Then there's Rand Paul and the guy from Wisconsin (whatshisname?) bringing up the rear.

And the winner is --- oops, there ain't no winner.

“I don’t want to spend millions on another loser,” said Adelson, who purchased both Newt Gingrich and Mitt Romney in 2012. The casino magnate was scathing in his assessment of the candidates he declined to buy, calling them “a third-rate grab bag of has-beens and dimwits.” -- Borowitz

Forbes reports that in the two days since he hosted the Republican Jewish Coalition’s meeting with all these losers and ne'er-do-wells, at his Venetian Resort and Hotel,  Adelson personally made $2.1 billion — 21 times the $100 million he reported giving away during the 2012 presidential election. So he can easily afford to buy a potential winner. So I decided to drop Adelson a line and offer some suggestions.

Here's my memo to Sheldon: 

Mr. Adelson (or may I call you Sheldon?),

I sympathize with you in your effort to purchase a potential 2016 GOP winner among this gaggle of cretins and boneheads. Here's my advice to you. Believe me Sheldon, I may be broke, but I know what I'm talking about.

Don't get hung up on party labels. We've got a mayor here who's a Democrat in name only and who would be a perfect buy for you. He's a proven winner with the Chicago corporate big boys and local 1%ers. A big cog in the Chicago machine (remember they all turned Republican the day that a black guy, Harold Washington, won the party primary back in '83) so they've had plenty of experience being Republicans. He's a pension grabber and union buster like you. He'll do anything to keep from taxing the wealthy and the corporations. And his brother is Ari, who I know you've done some casino business with in Vegas.

Rahm and Rauner

Rahm was a big supporter of the war in Iraq just like you. and he's even a veteran of the Israeli Defense Forces (volunteered not once, but twice) which I know is dear to your own heart. I'm sure your pal Netanyahu will recommend him highly.

I know Rahm has said some unkind things about you in the past, but believe me, he's for sale --always has been-- and you guys can let bygones be bygones for the good of the cause. Bill Clinton got him for a steal back in the '90s, getting him a retainer from your friends at Goldman Sachs while he was still working on Clinton's campaign. When Rambo (he likes to be called that) resigned from his position in the Clinton administration, he joined Bill's pals at the investment banking firm Wasserstein Perella, where he worked until 2002. Although he didn't even have an MBA or prior banking experience, they still made him managing director at the firm’s Chicago office in 1999 when he made $16.2 million in his two-and-a-half-years as a banker. It's nice to have friends in low high places.

At Wasserstein Perella, he worked on eight deals, including the acquisition by Commonwealth Edison of Peco Energy and the purchase by GTCR Golder Rauner of the SecurityLink home security unit from SBC Communications. So if you need any references (besides mine), talk to your billionaire Republican buddy Bruce Rauner who I'm sure will give Rahm an A+ rating. It was Rauner who bankrolled his last mayoral campaign.

Your pal (I wish),
Mike Klonsky

P.S. Oh yes, and there's no delivery charge on purchases of $20 million or more.