The great $660 billion public pension rip-off

Edward Siedle is president of Benchmark Financial Services and is a former investigator with the Security and Exchange Commission's Division of Investment Management. He writes in Sunday's New York Times:

Nearly a quarter of all state and local public pension assets have disappeared -- $660 billion in state workers’ retirement savings taken off the radar and swept into high-cost hedge, private equity, venture and real estate funds with little or no public oversight.

Kickbacks, bribery, self-dealing, fraud, tax evasion and outright theft have been protected as confidential “trade secrets” or “proprietary business information” exempt from disclosure to the public under various state freedom of information laws. Not surprising, the parties complicit in this secrecy strategy neglected to tell workers and other stakeholders about it. The policy itself was crafted and set in place in secrecy.

Read Siedle's entire account here.

Duncan ignored his own I.G.'s warnings on charter fraud

The purpose of this report is to echo the warning issued by the OIG and to inform the public and lawmakers of the mounting risk that an inadequately regulated charter industry presents to our communities and taxpayers. 

NEW REPORT ON CHARTERS...“Charter School Vulnerabilities to Waste, Fraud And Abuse,” authored by the Center for Popular Democracy and Integrity in Education, echoes a warning from the U.S. Department of Education’s Office of the Inspector General.

The report draws upon news reports, criminal complaints and more to detail how, in just 15 of the 42 states that have charter schools, charter operators have used school funds illegally to buy personal luxuries for themselves, support their other businesses, and more. The report also includes recommendations for policymakers on how they can address the problem of rampant fraud, waste and abuse in the charter school industry. Both organizations recommend pausing charter expansion until these problems are addressed.

The report explained that the problem has its roots in a historical disconnect between the original intentions that launched the charter school movement and the commercial forces that have overtaken it since. At first, the report noted:

    Lawmakers created charter schools to allow educators to explore new methods and models of teaching. To allow this to happen, they exempted the schools from the vast majority of regulations governing the traditional public school system. The goal was to incubate innovations that could then be used to improve public schools. i The ability to take calculated risks with small populations of willing teachers, parents, and students was the original design. With so few people and schools involved, the risk to participants and the public was relatively low. -- Salon

The report references a memorandum issued by the OIG to the Department. The OIG stated that the purpose of the memorandum was to, “alert you of our concern about vulnerabilities in the oversight of charter schools.” The report went on to state that the OIG had experienced, “a steady increase in the number of charter school complaints” and that state level agencies were failing “to provide adequate oversight needed to ensure that Federal funds [were] properly used and accounted for.”

IN NYC... In a contentious hearing Tuesday, City Councilman Daniel Dromm wondered aloud whether the city's 183 charter schools, which receive taxpayer money but are privately managed, were creating "educational apartheid" in the nation's largest school system. Mr. Dromm, a Queens Democrat, also said he wants more information about how charter schools discipline children and how much they pay their executives. --- WSJ

MORE COMMON CORE LOOT FOR PEARSON

Valerie Strauss reports in the Washington Post that British publishing/testing giant Pearson, has won another multi-million-dollar deal with one of the two multi-state consortia that are designing new Core-aligned states with federal funds.

The Partnership for Assessment of Readiness for College and Careers, or PARCC, is hiring Pearson, according to a news release, to develop test items and forms, deliver paper and online versions of tests, consult with states to come up with cut scores that determine what is a good score and what isn’t, report results to various constituencies, and analyze the scores.

 According to EdWeek, James Mason, who helped negotiate the contract, wouldn't put a price tag on the deal, but called it, "one of "unprecedented scale."

'Tech vultures' LEAP towards profitability in Chicago

Millions of dollars intended to support innovations in resourced-starved public schools has long been funneled to privately-run charter schools. One of the chief funnelers in Chicago is non-educator Phyllis Lockett, a former leader of the Civic Consulting Alliance and New Schools for Chicago, a venture philanthropy organization that invests in the growth of privately-operated charter schools. She previously held marketing, sales and business development roles with Fortune 500 companies, including IBM, Kraft Foods and General Mills.

NSFC was originally established as The Renaissance Schools Fund by Chicago’s business and civic leadership (remember the debacle that was Arne Duncan's so-called Renaissance 2010?)  RSF raised $50 million, to create 13 charter networks and tripled the number of charter schools in Chicago. The Civic Consulting Alliance (CCA), is a consulting firm for government agencies.

Lockett was one of those people who made wild claims about charters, even touting them at one point as a cure for Chicago gun violence. Even while in the employ of Chicago Public Schools, she's mainly been a pitch woman for ed-tech companies.

But now Lockett is on the move. With a big investment from well-heeled corporate reformers, she's launched a new "education focused" non-profit, called LEAP Innovations, with $4.2 million in funding. Lockett said in a Wednesday interview that her goal is to raise $8 million to cover LEAP's first three years of operating expenses. Half the money is coming from the Broad Foundation and the Gates Foundation, which have historically backed privately run charter schools.

Chicago has the epicenter of tech company marketing to school systems and according to tech hustler and former Gates ed guy Tom VanderArk: 

Phyllis Lockett’s move from schools to tools is symbolic of the EdTech explosion in Chicago which rivals New York and may be second to the Bay Area in EdTech startups and funders. Lockett will help connect teachers to the tech sector while advancing short cycle trials and iterative development. Keep an eye on Chicagoland.

But except for buying some new furniture and window dressing, most of these millions will never really make it into classrooms and classroom teachers will have no say in how the money is spent. Rather, the money will go directly or indirectly the purchase of untested technology and required training of teachers.

As best I can tell, LEAP will be a conduit for tech companies competing for public school business. Lockett, who has no background or training in education, will then be in charge of evaluating whether these technologies "are working." Another component of the nonprofit, called The Collaboratory, will be a teacher training center. After all, these tech companies need more than a sales division. They also need public school districts to pay for training in the use of their products. The third focus will be working with schools to "overhaul" their teaching methods.

Among the seven Breakthrough Schools receiving the first round of Lockett's LEAP money, are some charter schools that don't even exist yet -- a middle school operated by KIPP and a school operated by Great Lakes Academy.

Reporter Noreen S. Ahmed-Ullah wrote in Tuesday's Tribune about the nonprofit's first effort in that vein: Grants to seven Chicago schools to explore how gadgets, such as the iPad, can be used to tailor lesson plans to individual students.

"What happens is, you see all of these incubators and funds that have cropped up all over the country that are dedicated to education tech, but there's zero efficacy or validation as to what is actually working," Lockett said. "And educators are so overwhelmed with the budget pressures, with the accountability pressures, and they have no time to understand what's out there and what's good and what's not good. There are a lot of vultures out there."

Among the new technologies Lockett is selling are facial expression cameras, posture analysis seats, pressure computer mice, eye tracking devices, and computer programs to track a student’s mood be used in schools. The Tribune's Melissa Harris writes:

The first products LEAP will be testing through its pilot program focus on improving literacy among children in pre-K through eighth grade. Lockett expects reading instruction in the future to be far more individualized.For example, your computer's camera would follow your eyes as you read text online. Then, based on that eye scan, the software would be able to identify the words, phrases or even concepts that tripped you up and explain them in greater detail for you.

Yes, there's a lot of vultures out there.

Gordon Lafer On EPI Milwaukee Private Charter Schools Report

Don't miss this excellent Wisconsin Public TV interview with EPI economist and ed researcher Gordon Lafer criticizing "blended learning" at Rocketship charters.

Backers of these reforms are particularly enamored of a new type of charter school represented by the Rocketship chain of schools—a low-budget operation that relies on young and inexperienced teachers rather than more veteran and expensive faculty, that reduces the curriculum to a near-exclusive focus on reading and math, and that replaces teachers with online learning and digital applications for a significant portion of the day. Rocketship proposes that its model—dubbed “blended learning” for its combination of in-person and computerized instruction—can cut costs while raising low-income students’ test scores (Rocketship Education 2011).

The call for public schools to be replaced by such tech-heavy, teacher-light operations comes from some of the most powerful actors in local and national politics: the major corporate lobbies, including Wisconsin Manufacturers and Commerce, Americans for Prosperity, and the Metropolitan Milwaukee Association of Commerce (MMAC). It is these groups, rather than parents or community organizations, that provided the impetus for legislators to consider proposals for mass school closure and privatization in Milwaukee.

And here's Lafer's most recent report: Do Poor Kids Deserve Lower-Quality Education Than Rich Kids? Evaluating School Privatization Proposals in Milwaukee, Wisconsin

Wal Mart special on charter schools

New York Times education writer, Mokoto Rich reveals the extent to which the billionaire Walton Family underwrites the entire national charter school enterprise. For example, in Washington D.C....

In effect, Walton has subsidized an entire charter school system in the nation’s capital, helping to fuel enrollment growth so that close to half of all public school students in the city now attend charters, which receive taxpayer dollars but are privately operated.

Wal-Mart heiress Alice Walton gave $1.7 million to a Washington D.C. charter schools initiative alongside fellow billionaires Bill Gates, Paul Allen and Steve Ballmer.

The Waltons are right up there with Gates and Broad.

 Walton’s investments here are a microcosm of its spending across the country. The foundation has awarded more than $1 billion in grants nationally to educational efforts since 2000, making it one of the largest private contributors to education in the country. It is one of a handful of foundations with strong interests in education, including those belonging to Bill and Melinda Gates of Microsoft; Eli Broad, a Los Angeles insurance billionaire; and Susan and Michael Dell, who made their money in computers. The groups have many overlapping interests, but analysts often describe Walton as following a distinct ideological path.

According to Rich, they are also the money behind many of the right-wing think tanks like the Thomas B. Fordham Institute and the American Enterprise Institute for Public Policy Research, as well as ALEC.

AND...Walton money also played a role in a recent attacks on N.Y. Mayor Bill de Blasio after he resisted the charter operator's rent-free incursions into public school buildings.

Philly fires thousands of teachers, then hires a new 'director of recruitment'

Here's how things work in the Ownership Society.

There's a revolving door between the private sector and what's left of the public. Take for example this week's hiring by the nearly-collapsed Philadelphia Public Schools, of TFA alum Kendra-Lee Rosati as director of recruitment -- whatever that it. Rosati will pull down $90K to start in this newly-created slot in the bureaucracy.

Rosati's last job was in Oklahoma with Teach for America, where her title was managing director of talent strategy and people experience, according to her Facebook page. She's also worked with KIPP Charter Schools as director of growth strategy from September 2012 until last July. Don't you love her job titles? It like her patrons told her, "call yourself whatever", when she printed her new business cards.

Remember, Philly schools have been decimated this past year, with dozens of school closings in black and Latino communities, thousands of teachers and staff (including nearly every school counselor) being fired, while private schools, privately-run charter schools and prisons being fed millions in public funds, diverted from public schools in Gov. Corbett's state budget.

But there's always room at the table for somebody, somebody sent.

Ownership Society gathering at the Phoenician

At the Phoenician

Thanks to Gary Stager for the heads-up on the upcoming GSV Education Innovation summit, which he describes as a corporate takeover of public education being plotted in the open, is held at The Phoenician Resort in Scottsdale.

Stager writes:

The Phoenician is a monument to its builder, Charles Keating, a criminal who helped destroy the United States economy during the Savings and Loan crisis of the 1990s. Surrendering the future of public education to Jeb Bush and the greedy cynics partying with him in Arizona is as vulgar and misguided as trusting Charles Keating with government backed banks.

The sponsors list reads like an Ownership Society who's who list, including Gates, Pearson, Kaplan, McGraw... Well, you get the picture.

Speakers include: Jeb Bush, Chris Cerf, Reed Hastings, Penny Pritzker, Cami Anderson, Margaret Spellings, Tom VanderArk... Yuck!  Kind of a rogues gallery of privateers, charter hustlers, union busters and Bush bureaucrats.

Spears must be checked at the door.

Follow up on the scrubbing of the Academica Charter story

Following up on the feds' investigation of Academica Charter Schools in Florida, and the scrubbing of the original Miami Herald story. Here's Bob Sikes' updated report in Scathing Purple Musings along with Kathleen McGrory's revised story in the Miami Herald.

Sikes writes:

Its hard to count the number of times that McGrory used “conflicts of interest” in her story. No word yet of whether or not the Federal Department of Education will use its SWAT team to raid the Zulueta compound. Or any of the offices belonging to the three Florida republican legislators with close ties to the Zuluetas.

According to McGrory:

A preliminary audit report obtained by the Herald/Times identified potential conflicts of interest between the for-profit company Academica and the Mater Academy charter schools it manages. One example the auditors cited was the transfer of money from Mater Academy to its private support organization, which shares the same board of directors. When asked about the potential conflicts of interest raised in the report, Academica attorney Marcos Daniel Jiménez, in an email to the Herald/Times, touted the charter school network's academic record and commitment to its students.

 Charter school critics said the Inspector General’s findings were a reason to push back on HB 7083, the bill that could weaken the power of school districts over new charter schools.

I suspect it was Jiménez' hollow denial of impropriety that caused the Herald to scrub McGrory's original story, although I still don't understand why they did it. The denial could have easily been reported in a follow-up story.  There must have been a phone call from somebody with clout. I suspect Rep. Frisen. Highly unusual.

Kenneth Wright, victim of D.O.E. raid in 2011. 

In some ways, it reminds me of a previously scrubbed article involving Duncan's I.G. troops invading  the Stockton, CA home of Kenneth Wright at 6 a.m. on a Tuesday morning in 2011. As I recall, Wright was wrongly suspected of reneging on his student loans. The original ABC News story was scrubbed after a phone call from the D.O.E. The next day it was re-posted, minus an interview with victim Wright.

The Washington Post picked up my story (without crediting me) and then waffled after receiving the same call from the D.O.E.'s clean-up man Justin Hamilton. While a few papers and some bloggers ran with Hamilton's sanitized version of the raid, he couldn't make it go away. Chalk one up for the independent media.

What happened to McGrory's Miami Herald story on Feds' charter investigation? I asked...

Fernando Zulueta, president of Academica, gets a drink at the bar in Cain at The Cove, an exclusive beach club in the Bahamas' Atlantis resort. Academica held a leadership retreat for principals of several charter schools there. MIAMI HERALD PHOTO

Last month I wrote about Florida's great charter school profiteers, Rep. Erik Fresen, his sister Maggie, and brother-in-law, Fernando Zulueta who runs Academica Charter Schools, one of the largest charter chains in the country.

Today, Bob Sikes at Scathing Purple Musings re-posts a story which he credits to columnist Mary McGrory from the Miami Herald, "Academica Charter Schools Under Federal Investigation." Actually, Sikes got it wrong. The great Washington Post Reporter Mary McGrory has been dead for 10 years. The piece on Academica was written by Tampa Bay Times/Miami Herald staff writer Kathleen McGrory. Regardless, it's a good, solid news piece about the Education Department’s Inspector General Office audit of the South Miami-based Academica Corp. as part of a broader examination of school management companies nationwide. The story implicates the powerful Zulueta family as well as Fresen.

McGrory writes:

The auditors found that three of the schools in the network — Mater Academy, Mater High and Mater East — entered into leases with development companies tied to the Zulueta family. Two of the leases were executed while Zulueta sat on the Mater board. In addition, Mater Academy hired an architectural firm from 2007 through 2012 that employs Fernando Zulueta’s brother-in-law, state Rep. Erik Fresen, the report said.

“We identified four related-party transactions, two of which indicated, at a minimum, the appearance of conflicts of interest between Mater Academy and its CMO [charter-management company],” the auditors wrote. Fresen declined to comment Friday.

But when I went to the Herald's site to look for McGrory's original piece, it was no longer there. Nor were there any links to it in any of the search engines. Was it scrubbed? Why? Did clout-heavy Rep. Fresen make a phone call? I wondered.

To find out, I called the Herald's news room and asked them what happened. I was told by Herald Editor Jeff Kleinman that the paper had "jumped the gun" and that the story was pulled because it was "incomplete" and would reappear in tomorrow's paper. Strange! Usually if a story is incomplete (which every news story is), you run a follow-up. You don't scrub the story and all the search engines.

But okay. I'll look tomorrow to see if and how McGrory's  piece been rewritten and find out what "jumped the gun" means.

Rauner makes big profits off the jailing of children

Thanks to a lucrative state contract given him by none other than Gov. Quinn, Republican billionaire Bruce Rauner is making millions in the prison/industrial complex. Quinn says he didn't know Rauner was still associated with GTCR. 

Rauner formerly headed GTCR LLC, a Chicago private equity firm in which he still holds a stake as an investor. Since December 2012, GTCR has owned Correctional Healthcare Cos., which got a five-year contract with a five-year renewal option from the Illinois Department of Juvenile Justice in February 2013 to provide medical, dental and mental health evaluations and treatment for the approximately 900 inmates, ages 13 to 20, of six state-run youth detention centers in the Chicago area and downstate. The state deal is worth as much as $99.3 million. -- Politics Early & Often

That would put him in the position, if elected in November, of overseeing a state contract he and his business partners stand to profit from. Rauner says he has no plans to divest himself of these holdings.

The for-profit company employs medical professionals who treat an average of 70,000 inmates a day at more than 250 correctional facilities around the United States. In Illinois, the company has drawn criticism in connection with a federal lawsuit filed in 2012 by the American Civil Liberties Union of Illinois against the state Department of Juvenile Justice, accusing the state agency of inadequately treating detainees with mental health conditions. 

Charters in the 'Era of Accountability'

More than $900 million in state and local tax dollars, some of it approved by local voters, will be transferred this school year from local schools to nonprofit, publicly funded Ohio charter schools that did not exist 20 years ago. Who is watching how all of that money is spent? -- Columbus Dispatch

I'm just reading one of those tracts, attacking the idea of elected school boards, from a right-wing think tank, the Fordham Institute. The tract refers to this as "the era of accountability" and in this particular report uses the word accountability no less than 14 times or about twice per page. Another of Fordham's anti-school board screeds is actually called: Governance in the Accountability Era.

Coming from them, that phrase always makes me laugh. Why? Because the think tank also doubles up as as a school voucher proponent and one of the main sponsors of privately-run charter schools in the state of Ohio. And as I have pointed out before, here, here, and here, Ohio is the state with arguably the worst charters in the nation and the ones with the least public accountability. The Institute itself, has even referred to Ohio charters as "a laughing stock". And while Fordham talks a lot about Public accountability & private-school choice, they have also provided cover for some of the worst operators in the state, like White Hat's David Brennan. 

Part of the problem is that there's no school board oversight of privately run charters and the think-tankers want to keep it that way.

SEE HOW THEY RUN...Watch how operator Jim Sinclair of Lorain Preparatory Academy of Excellence, practically goes underground when a reporter tries to find out some basic information about his school. And...

That was not out of the ordinary in calls to nearly 300 Ohio charter schools — funded with state and local tax dollars and, by law, subject to the same transparency rules as traditional schools. The calls were made as part of a school-choice project by the Akron Beacon Journal and the News­Outlet, a consortium of journalism programs at Youngstown State University, the University of Akron and Cuyahoga Community College.  

Tea-Party Gov. John Kasich, speaking at the February meeting of the Ohio Newspaper Association, responded to a Beacon Journal editor’s question about inability to obtain basic information from charter schools.

“We’ll work with you any way we can. I’m not going to hide from you,” Kasich said. “In terms of this specific information, where you can’t get anything about these charters, we have to dig into that."

But why do we have to "dig", Governor? Isn't this the era of accountability?

How Cuomo engineered de Blasio's defeat on charters with help from Wall St.

Cuomo at staged rally: “You are not alone. We will save charter schools.”

Javier Hernandez and Susanne Craig, writing in the New York Times, tell an eerie tale about how Gov. Cuomo backed by powerful Wall Streeters and hedge-funders was able to defeat Mayor de Blasio's effort to hold back the charter operators' assault on public schools. 

The Governor, who has always been in Wall Street's pocket, even had chief charter hustler Eva Moskowitz stage a protest of charter school supporters for the media in Albany, one at which he "spontaneously" appeared, telling the crowd that he would be their savior. Moskowitz runs a group of charters and pays herself nearly a half-million/year salary.

According to Hernandez and Craig:

As the governor worked to solidify support in Albany, his efforts were amplified by an aggressive public relations and lobbying effort financed by a group of charter school backers from the worlds of hedge funds and Wall Street, some of whom have also poured substantial sums into Mr. Cuomo’s campaign (he is up for re-election this fall). The push included a campaign-style advertising blitz that cost more than $5 million and attacked Mr. de Blasio for denying space to three charter schools. 

 A lot was riding on the debate for Mr. Cuomo. A number of his largest financial backers, some of the biggest names on Wall Street, also happened to be staunch supporters of charter schools. According to campaign finance records, Mr. Cuomo’s re-election campaign has received hundreds of thousands of dollars from charter school supporters, including William A. Ackman, Carl C. Icahn, Bruce Kovner and Daniel Nir.

Right-wing billionaire Ken Langone organized Republicans for Cuomo earlier this year knowing that a real Republican had no chance of defeating him. He's donated lots of money to Cuomo's war chest in exchange for the governor's support for charter schools, and issue near and dear to Langone's heart.

Langone: "I talk to him about charters. He gets it."

Kenneth G. Langone, a founder of Home Depot who sits on a prominent charter school board, gave $50,000 to Mr. Cuomo’s campaign last year. He said that when the governor asked him to lead a group of Republicans supporting his re-election, he agreed because of Mr. Cuomo’s support for charter schools.

“Every time I am with the governor, I talk to him about charter schools,” Mr. Langone said in an interview. “He gets it.” 

Noticeably missing from de Blasio's rearguard were AFT and UFT leaders Randi Weingarten and Michael Mulgrew. Without the teacher unions at his back, and in order to salvage his expanded Pre-K program,  the mayor obviously was forced to make a tactical retreat on charters.

My takeaways from this early defeat in de Blasio's battle to redefine New York politics:

1. The election of a progressive mayor means little if the grass-roots movement that elected him returns to the barracks when the election is over. 
2. So-called mayoral control of the schools is a myth. What we saw in N.Y. last week was an exercise in corporate control of the schools. So long as the Wall  Streeters and hedge-funders own the governor and most other state politicians, the cities and their schools will be largely at their mercy. 
3. Mayor de Blasio must pick and choose his battles carefully in accordance with how many troops he has behind him. His election shows that he has the support of the city's poor and working families. But to maintain that support he has to rely on them and organize them to win victories for them. 
4. While BdB enjoys support from most rank-and-file teachers and other unionists, AFT and UFT leaders or unreliable allies at best. 

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.

Next frontier for the charter school hustlers, 'Inner Ring' Suburbs

For those of you who aren't fluent in post-racial-era reform/speak, inner-ring is code for black and Latino suburbs. As the inner cities become whitenized, with hundreds of thousands of African-Americans being pushed out because of lack of jobs, limited access to social services, and unaffordable housing costs, these suburban districts are growing rapidly and are now being targeted for takeover by competing charter companies.

Local school districts, like Dist. 149 in south-suburban Dolton/Calumet City, IL are facing an all-out assault by the big charter chains. So far they've beaten back the attack but only by diverting much of their energies away from educating children to defending themselves before groups like the IL State Charter Commission. That Commission has the power to override decisions about charter expansion made by local school districts. In other words they can approve a charter school application whether a community wants it or not.

At the upcoming National Charter School Conference at the Mandalay Bay Hotel in Las Vegas, Allison Jack from the Illinois Network of Charter Schools will be presenting on "Inner Ring Suburbs: The Next Frontier of Charter Growth."

It's the next frontier, get it? And who knows what or who these new frontiersmen will find out there?

The sun continues to shine on Florida's charter school hustlers

Barbara Smaller, New Yorker

Attention charter operators and ed profiteers. Florida is the place if you like warm weather and easy money in real estate. I got to see how the charter game is played in the Sunshine State during my days at USF when Jeb Bush was the guv. Now, under Rick Scott and his ed adviser Michelle Rhee (not to mention disgraced former ed commissioner Tony Bennett), the state has opened up even wider for charter expansion.

Fresen (R) chairs the Education Committee

Florida Rep. Erik Fresen,  a Tea Party Republican, chairs House Education Appropriations hearings on charter expansion. But his sister Maggie, and brother-in-law, Fernando Zulueta  run Academica Charter Schools, one of the country’s largest and wealthiest for-profit charter school management firms, with more than 90 schools in Florida alone. Fresen also has worked as a land-use consultant for Civica, an architectural firm that has designed several Academica schools. Really?

Fresen is pushing a bill HB 7083 that would require school districts to make public school buildings available to charters and turn over closed public school to charters. It would also make it easier for out of state charter operators to compete for schools and school real estate.

Does this sound like N.Y.? It should. Only FL has no pols like N.Y. Mayor de Blasio ready or able to really take on the powerful charter hustlers like their state's versions of Eva Moskowitz. Florida charters are among the worst in the country. Gee, I wonder why.

The most recent windfall for Fresen (who also represents the state's gaming interests) and family came when Palmetto Bay council members on Monday unanimously approved plans for a 1,400-student charter school within a residential and commercial complex development. The charter school will be part of the Somerset Academy Inc. franchise managed by Academica. Fresen’s district includes a part of Palmetto Bay and in 2011, he sponsored changes in state law to limit municipal power over charter schools.

The Miami Herald reports:

According to Palmetto Bay Mayor Shelley Stanczyk, the property’s zoning designation and laws governing charter schools all converged in “a perfect storm” to force the council’s hand to approve, with no guarantees that the school would adequately address the traffic and congestion issues sure to arise with an added influx of 1,400 students every work day...

...“If you want a place with as little control as possible, put it in an Enterprise Zone. And then if you’ve got a school with legislated protection, so that [municipal] control over approving and not approving is very limited, you’ve got a double whammy of not being able to control any of the effects,” Stanczyk said.

BASEBALL CHARTERS...Bloomberg News reports that the politically connected Zulueta is working on a deal with Major League Baseball and celebrity (why?) Pitbull to have his charter school company partner with the Washington Nationals on a D.C.-based charter operation. The Rhee connection with D.C. pols and Sec. Duncan, should play a big role here. Academica opened Somerset Preparatory Academy in Washington last September as a toe-hold in the region. Pitbull opened up last year's National Charter Schools Conference and was introduced by Zulueta.

Names that pop up in the deal include Nina Rees, president of the National Alliance for Public Charter Schools, who insists "it’s not a gimmick. Since most charters don’t have a building when they receive authorization, she said, they need a cash infusion up front..." AND Greg Richmond, president of the National Association of Charter School Authorizers, who "agrees that celebrity-brand schools are not to be dismissed."

I think Richmond, Zulueta, Rees, Fresen, Duncan, Scott, Pitbull... and their whole gang need to be dismissed.

Moscowitz' gang won't pay rent. Drop $3.6M on TV ads attacking BdB

Instead of paying their share of rent for co-occupying N.Y.C. public school buildings, Eva Moscowitz and her hedge-fund friends, have spent $3.6 million over the past 3 weeks, for TV ads attacking Mayor de Blasio.

According to the Daily News:

Families for Excellent Schools — founded by a deep-pocketed group of current and former financiers — has run a series of ads, including a heart-wrenching spot blaming de Blasio for taking away the “hopes and dreams” of 194 students by blocking Success Academy Harlem Central’s co-location plan. De Blasio earlier this month blocked three Success charter schools from co-locations in public school buildings while allowing five others to go ahead.

De Blasio signs paid sick leave bill into law.

“They have parents believing there’s no way they’re going to find space for these 194 students,” said Zakiyah Ansari, advocacy director for the labor-backed lobbying group Alliance for Quality Education. “Do they tell them they’re spending $3.6 million on these ads in less than a month? Put that into the building that you say you can’t find.”

In the mean time, the mayor is moving ahead with his plan to offer prekindergarten to all 4-year-olds in New York City. He also signed the Paid Sick Leave Bill into law. Combined with previous legislation, more than a half-million New Yorkers will now be able to take up to five sick days without fear of losing their job.

DFER brags: Our money beat Travis

Mitchell on the make and on the take.

School privatizers and charter hustlers from DFER are all over Twitter, taking credit for Christian Mitchell's  questionable narrow victory over progressive candidate Jay Travis. The IL branch of the N.Y.-based hedge-fund-started group dropped more than $50,000 into the Mitchell campaign through its newly-activated Chicago school reform PAC.

Instead of boasting, they should be headed back to the drawing board wondering why, with all their money and lots more from the likes of the likes of JPMorgan Chase & Co.PAC, Illinois Energy Association, Chicagoland Chamber of Commerce PAC, and California billionaire Eli Broad, an incumbent like Mitchell was is this close to losing his seat to underdog Travis. 

Mitchell, backed by House Speaker Michael Madigan was leading Travis by only a few hundred votes as polls closed. But reports of widespread voting "irregularities" have thrown the outcome into question. Travis has not conceded. 

DFER's State Director Rebeca Nieves-Huffman, says her PAC will now turn its attention to Chicago’s 2015 aldermanic elections which she says will be a referendum on the future of education in the city.

“We are committed to supporting candidates in the upcoming city elections who share our vision, and we intend to hold elected officials accountable for their opposition to the policies our students need to succeed,” Nieves-Huffman said.

Huffman is an old hand at union-busting and comes to DFER from the National Association of Charter School Authorizers (NACSA) where she managed the grant-making work of the organization through its Fund for Authorizing Excellence and before that, from the KIPP Foundation.

In addition to Nieves-Huffman, the PAC has hired a Stakeholder Engagement Director, Sean Harden, who was Mayor Richard Daley‘s executive assistant and liaison to the interfaith community. They have also snagged Cook County Board President Toni Preckwinkle‘s budget spokesman, Owen Kilmer, who previously worked as a campaign operative for the Illinois Senate Democrats and as deputy press secretary for Gary Chico‘s 2011 mayoral campaign, to be the group’s communications chief.

According to the right-wing Illinois Observer, the PAC which was formed in 2011 but has lain dormant for nearly two years, has recently pulled in $60,500, including $21,000 from James and Paula Crown and $5,000 from Jennifer Steans, the sister of State Senator Heather Steans (D-Chicago).

The Crowns are also big financial backers of the statewide school reform PAC Stand for Children Illinois.

Its leaders expect to raise more than $1 million for 2015.

For a better sense on how DFER operates, see my blog post from last April. 

Here's more on DFER from School Finance 101.

Netflix education: Favoring markets over democracy

What's the No. 1 problem afflicting schools? According to Netflix CEO Reed Hastings, it's elected school boards...Fickle voters create too much churn. You know, the darn democracy thing. So uncontrollable.-- San Jose Mercury News

Thanks to Diane Ravitch for calling out Netflix founder and CEO Rod Hastings as a major player in corporate-style school reform. Hastings, says Ravitch, is on the board of various charter schools and charter chains, including Rocketship and KIPP.

Hasting's goal is to get government out of schooling, get rid of publicly elected school boards, and turn schools over to private operators.

Ravitch writes:

ALEC has pushed the idea of a state charter panel, appointed by the governor (and sometimes the legislature), whose decisions override local control. The problem with school boards is that the local populace can replace them by vote. In other words, as Chubb and Moe argued 25 years ago in their book advocating for vouchers, Politics, Markets, and Schools, markets are better than democracy.

Here it is, right from the horse's [Hasting's] mouth.

The privatization of science replaces public good with super-profits

INTEL billionaire Gordon Moore and his new Thirty Meter Telescope which will sit on a Hawaii mountain top.

In Washington, budget cuts have left the nation’s research complex reeling. Labs are closing. Scientists are being laid off. Projects are being put on the shelf, especially in the risky, freewheeling realm of basic research. Yet from Silicon Valley to Wall Street, science philanthropy is hot, as many of the richest Americans seek to reinvent themselves as patrons of social progress through science research. 

American science, long a source of national power and pride, is increasingly becoming a private enterprise. This according to New York Times science writer William Broad who reveals that while government financing of basic science research is plummeting, private donors have filled the void, raising questions about the future of research for the public good.

According to Broad, this is philanthropy in the age of the new economy — financed with its outsize riches, practiced according to its individualistic, entrepreneurial creed. The donors are impatient with the deliberate, and often politicized, pace of public science, they say, and willing to take risks that government cannot or simply will not consider.

Growing health & wealth gap... Among the consequences of the growing privatization of scientific research, a widening of the historical racial inequalities in health care and disease research, disparities that decades of studies have shown to contribute to higher rates of disease and death among blacks, Hispanics and other minority groups.

Among the biggest players: Michael R. Bloomberg, the former New York mayor (and founder of the media company that bears his name), L.A. philanthropist Eli Broad, James Simons (hedge funds), David Koch (oil and chemicals), Bill Gates (Microsoft), Eric E. Schmidt (Google) and Lawrence J. Ellison (Oracle).

I can almost hear Bill Gates saying, "What do you mean you don't want our money?"

Vicki Phillips, who runs the Gates Foundation’s education division, said her team is “disappointed by Randi’s decision.” -- Politico

Our big investment in school reform. "hasn't led to significant improvements." --Bill Gates

I'm still learning on this one, but I have some idea what it was that prompted Randi Weingarten and the AFT leadership to turn their back on millions of dollars in Gates funding. Politico's Caitlin Emma with help from Stephanie Simon report that the break came "after rank-and-file union members expressed deep distrust of the foundation’s approach to education reform." But that rank-and-file anger has been simmering in the union for years, ever since 2009 when the so-called Innovation Fund partnership was first sealed with a $2 million kiss from Bill and Melinda. So why now?

Of course, the revolt has grown louder these days, especially in N.Y. where thousands of union members are ready to go to the barricades in Albany over Common Core testing and teacher evaluation. Not to mention the  inner-Democratic Party battle is raging between Gov. Cuomo and Mayor de Blasio over charter school expansion which could spill out into the upcoming national elections.

Gates at 2010 AFT Convention

Resentment over Gates influence within the union has spread way beyond the small group of activists who first stormed out of the AFT convention in 2010, when Bill first unveiled his model for teacher development and his so-called Value-Added Model (VAM) of evaluation based largely on student test scores. In recent months, Gates has used that funding as a lever, threatening to pull it from districts who oppose VAM.

It was also at this convention where Gates expressed his disappointment with the small schools movement and explained why he had shifted funding away from creating smaller learning communities over the past decade, focusing instead on testing and teacher evaluation.

Our work in schools began with a focus on making high schools smaller, in the hope of improving relationships to drive down dropout rates and increase student achievement. Many of the schools we worked with made strong gains, but others were disappointing. The schools that made the biggest gains in achievement did more than make structural changes; they also improved teaching.

Bill & Randi at Dec. 2010 Newsweek interview

Soon after, Gates and Weingarten gave this joint interview to Newsweek which had the aura of a puppet show with Bill's hand operating Randi's mouth.

Weingarten: What we’re seeing is that the United States, instead of moving ahead, is actually stagnating. We’re basically in the same place we’ve been, and these countries have moved forward. They’ve spent a lot of time investing in the preparation and support of teachers. Many of them teach a common curriculum, very similar to the common standards that Bill Gates and the Gates Foundation have been supporting. And they create the tools and conditions that teachers need to teach, and they have mutual respect and accountability.

Since then, Gates has handed over $11 million in AFT funding. Pocket change for Bill to be sure, but more than enough to influence union policy, despite Randi's denials. She still denies the obvious, saying she doesn't believe Gates funding influenced the Innovation Fund’s direction. Hopefully the rift with Gates will create space for her to move further on Common Core and other issues, as she appears to be slowly doing, if her appearance at last week's NPE Convention is any indication.

At the 2012 AFT Convention there were already indications of rank-and-file pressure on the leadership. First there was the presence of the Chicago delegation, led by CTU President Karen Lewis. Gates was nowhere in sight and Diane Ravitch gave the keynote.

Now Diane Ravitch blogs about the break:

[Randi] understands that many members of the AFT do not trust the Gates Foundation, do not like Bill Gates’ public statements such as encouraging larger class sizes, or his unwavering commitment to measuring teacher quality by student test scores, despite the lack of evidence for its efficacy. I welcome this change and thank Randi and the AFT for severing ties with the Gates Foundation. Gates and Pearson have bought most of American education. Those who represent teachers should be free of their influence.

That's a bit of an overstatement. The AFT hasn't actually severed its ties with the Gates Foundation, which, according to Politico, funds other union projects besides the Innovation Fund.

The AFT’s executive council hasn’t formally voted to reject Gates funding for other projects, but Weingarten said she would be very cautious about taking such grants. “I don’t want to say ‘never never ever ever,’” she said, but “this is a matter of making common bond with our members and really listening to the level of distrust they have in the philanthropies and the people on high who are not listening to them.”

We're still watching of course.

No Austin City Limits at Rahm's fundraiser in Texas

Cash cow for Rahm's Texas pals.

What's Rahm doing at SXSW? What else? He's 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.

According to Sunday's Trib:

The event will be held Monday evening at the home of Charlie Jones, one of the co-founders of C3 Presents, according to an invitation to the fundraiser that Emanuel campaign consultant John Kupper provided when contacted by the Tribune. Also listed as hosts are C3 co-founders Charles Attal and Charlie Walker. The concert promotions company has run Lollapalooza since 2005. It signed a contract with the Chicago Park District in 2012, during Emanuel's term, to continue operating it until at least 2021.

Other hosts at the Austin fundraiser include Ben Barnes, former Texas lieutenant governor and founder of political consulting, lobbying and crisis management agency Ben Barnes Group, which has offices in Austin and in Washington, D.C. Wyeth Wiedeman, a partner at the firm, is also a host, as is venture capitalist Tom Meredith, the former acting chief financial officer of Motorola and former CFO of computer giant Dell Inc.

Wow, 16-year run (hopefully Rahm will be long gone by 2021) and they pay virtually no taxes to the city. Who gets contracts like that these days? Well, the 3 Charlies do. Okay, I know what you're thinking. The mayor promised not to take any campaign contributions from from city contractors.

No prob, says Rahm flack Sarah Hamilton who claims that the rule does not apply in this case because C3 Presents has its deal with the Park District -- not the City. Oh and Emanuel's travel to Texas will be paid for by the mayor's political campaign and not taxpayer dollars, says Hamilton.  Uh, yes, but that's a few hundred bucks he laying out in order to raise millions.

A difference without a distinction, you say? Tell it to the judge.

Big shake-out in the test-prep industry predicted as SAT is revamped

The College Board is going to "radically revamp" the SAT — with the goal of putting SAT test prep companies out of business and aligning the test to the Common Core academic standards. But as long as Common Core is chained to high-stakes standardized testing, test-prep will continue to trump authentic classroom teacher and assessment.

According to Politico,

The overhaul reflects deep concern — among students, parents, teachers and college admissions officers — that the SAT did not fairly reflect the work teenagers did in school. It stems as well from a concern that the proliferation of pricey SAT tutoring services gave the wealthy a leg up over the meritorious.

 In a step toward that goal, College Board Pres. David Coleman announced a partnership with Khan Academy to provide free, online test prep materials — including thousands of practice problems and instructional videos. The College Board plans to train tutors and counselors to help students from low-income households to access the online test prep.

FairTest not impressed...Public Education Director Bob Schaeffer says,

“Providing free SAT prep is laudable, but it already exists through programs such as Number2.com. The partnership with the Khan Academy is unlikely to make a dent in the huge market for high-priced, personalized SAT workshops and tutoring that only well-to-do families can afford."    

Standardized tests continue to be a  lousy predictor of college success and a new study released last month by the National Association for College Admission Counseling found that students who are admitted to college without submitting SAT or ACT scores do just as well as their peers in terms of college grades and graduation rates.

IFT leader claims ALEC leader Dillard as his champion -- "A strong voice for teachers." Really?

Dillard (left) and Rauner. They're both worse. 

The American Legislative Exchange Council (ALEC) represents the most reactionary, anti-people, anti-teacher, racist sector of the corporate establishment. They are the architect of  Stand Your Ground and a host of recent legislation aimed at restricting the voting rights of black and Latino voters and increasing the black prison population. Then there's Arizona’s punitive SB1070 immigration bill. They are strongly anti-union and have pushed legislation nationally to dis-empower teacher unions and take away collective bargaining rights of all public employees.

The Arizona-based Goldwater Institute and the Michigan-based Mackinac Center between them successfully shepherded five model bills through ALEC’s Commerce, Insurance, and Economic Development Task force — all targeting public sector unions.

The list goes on and on.

The Illinois Charter Quality Act, passed in 2011, expanded the authority to approve charter schools from school districts to an appointed state commission. On ALEC’s website, a similar bill is filed under “model legislation.” ALEC helped fund the effort to pass the Illinois Charter Quality Act. After the act was signed into law, the state created the Illinois Charter School Commission, which was then given authority to approve charter school applications. The rest is dismal history.

Republican gubernatorial candidate Kirk Dillard, until quite recently, was ALEC's state chairman and is still an active member and supporter of ALEC. ALEC once named him “Legislative Member of the Year.” While he voted recently against the pension-busting SB7 bill in exchange for support from the IEA in his run against even-worse(?) union-buster Bruce Rauner, he is still on record supporting pension-cutting measures, like placing salary caps on pensions, raising the retirement age for teachers, and replacing the pension system entirely with 401K stock-market investment plan.

On social issues, he's Tea Party all the way, supporting concealed-carry gun laws and capital punishment and opposing marriage equality for gay couples. You name it.

OK, enough said about ALEC and Dillard, most of which is old news anyway. But yesterday, the IFT leadership followed the lead of the IEA in endorsing Dillard in the Republican primary and dropping lots of money ("six figures") into his campaign coffers. That alone should be shocking to IFT's own union members, who unlike the mainly suburban and rural IL teachers in the IEA, are nearly all urban democrats.

I wasn't shocked by the IFT's decision to back Dillard. I hate it but expected it and can even understand their rationale. It's basically the lessor-of-two-evils theory (on crack). After all, there are many compromises and tactical diversions that union leaders have to make, hopefully with the understanding and support of their rank-and-file members, especially if they truly believe that Rauner is qualitatively worse or more of a threat than Alec Dillard. I'm not so sure.

Montgomery applauds SB7, calls it a "model."

IFT President Dan Montgomery says the endorsement of Dillard "comes not only with significant resources, obviously, but the hearts and minds of our members who will work, have conversations with families and colleagues around the state to hopefully have Sen. Dillard be the winner in the Republican primary."

But even if you accept the Rauner-is-worse proposition, Montgomery goes way over the line in calling Dillard a "strong voice for teachers and retirees." 

That's not just about a lessor-of-two-evils tactical approach. It's a statement that is not only misleading and dishonest, but a sellout of everything teachers here and throughout the state of IL have been fighting for and against.

Shame on him.

Rahm and Rauner ride the same money train

There's a Republican Party in Chicago. It's called the Democratic Party.

Among it's top leaders are Mayor Rahm Emanuel and Republican candidate for governor, billionaire union buster, Bruce Rauner. Both are backed by the same wealthy corporate donors, especially those who are corporate school "reformers" and public school privatizers like Ken Griffin and Eric Lefkofsky —both on the 2013 Forbes list of billionaires. Members of Chicago’s Crown family, which has an estimated worth of $4 billion, also contributed to both campaigns. The Crown family also contributed to former Mayor Richard M. Daley. They have no problem with either's Democrat or GOP labels.

Remember, it was Griffin, J. Crown and Rauner himself who were among those who bankrolled the teacher union-busting group Stand For Children's incursion into Chicago.

Today's Sun-Times shows how both Rauner and Rahm ride the same corporate money train.

An analysis of campaign contributions since Emanuel ran for mayor and since Rauner launched his gubernatorial campaign shows an overlap of more than 100 campaign contributors...Chicago-based political consultant Don Rose said there’s another reason that goes back to an old idiom: “The common interest of which we speak is neither red nor blue but green.