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Why Hedge Funds Love Charter Schools | Alan Singer

10 Jul

Obscure laws can have a very big impact on social policy, including obscure changes in the United States federal tax code. The 2001 Consolidated Appropriations Act, passed by Congress and signed into law by President Bill Clinton, included provisions from the Community Renewal Tax Relief Act of 2000. The law provided tax incentives for seven years to businesses that locate and hire residents in economically depressed urban and rural areas. The tax credits were reauthorized for 2008-2009, 2010-2011, and 2012-2013.

As a result of this change to the tax code, banks and equity funds that invest in charter schools in underserved areas can take advantage of a very generous tax credit. They are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend out. According to one analyst, the credit allows them to double the money they invested in seven years. Another interesting side note is that foreign investors who put a minimum of $500,000 in charter school companies are eligible to purchase immigration visas for themselves and family members under a federal program called EB-5.

The tax credit may also explain why Facebook CEO Mark Zuckerberg partnered with the former mayor of Newark, New Jersey to promote charter schools, donated a half a million dollars worth of stock to organizations that distribute charter school funding, and opened his own foundation, Startup: Education, to build new charter schools.

The real estate industry, which already receives huge tax breaks as it gentrifies communities, also stands to benefit by promoting charter schools and helping them buy up property, or rent, in inner city communities. One real estate company, Eminent Properties Trust, boasts on its website “Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments. This portfolio includes over 160 locations spread across 34 states with over 200 tenants.”

The Charter management group Charter Schools USA recommends that rental costs should not exceed 20 percent of a school’s budget. However the Miami Herald reported that in 2011 nineteen charter schools in Miami-Dade and Broward exceeded this figure and one in Miami Gardens paid forty-three percent. The Herald called south Florida charter schools a “$400-million-a-year powerhouse backed by real-estate developers and promoted by politicians, but with little oversight.” Its report found charters paying exorbitant fees to management companies and that many of the highest rents were paid to landlords with ties to the management companies running the schools.

Tax benefits and real estate investment may also explain why Wall Street is so hot on raising money for charter schools. On Monday night, April 28, 2014, hundreds of Wall Streeters gathered at Cipriani in Midtown Manhattan to raise funds for Success Academy Charter Schools. Former Florida Governor and GOP presidential contender Jeb Bush gave the keynote address. The dinner was chaired by hedge fund manager Daniel Loeb. Loeb is the founder of Third Point LLC and chairman of the board for Success Academy. The gala raised at least $7.75 million for Success Academy. Also attending were Kyle Bass of Hayman Capital Management, Joel Greenblatt of Gotham Asset Management, Boaz Weinstein of Saba Capital, John Paulson of Paulson & Co. and Erik Prince, the founder of Blackwater USA.

According to The New York Times, the ten highest paid hedge fund operators with close ties to charter schools also includes David Tepper number 1 at $3.5 billion in 2013, founder of founder of Appaloosa Management and New Jersey based “Better Education for Kids”; Steven A. Cohen number 2 at $2.4 billion of SAC Capital Advisors, which was forced to pay a $1.2 billion dollar penalty for insider trading, who has given over $10 million to the Achievement First charter school network; and Paul Tudor Jones II tied for tenth at $600 million, founder of the Tudor Investment Corporation who has supported charter schools through his Robin Hood Foundation.

via Why Hedge Funds Love Charter Schools | Alan Singer.

ALEC’s Voucher Playbook: Keep expanding, leave public school students nothing « Education Votes

10 Feb

As a parent, how would you feel if someone was depleting funding from your child’s public school and giving it to a private or religious school that gets to pick and choose which students it wants to enroll?

It’s already happening in several states nationwide, thanks to the American Legislative Exchange Council, also known as ALEC, one of the biggest adversaries of public education.

ALEC is a privately-funded group made up of ultra-conservative, right-wing state lawmakers from across the nation, foundations and think tanks that support a free market and limited government, and corporations. These groups work together, in secret, to promote and protect the interests of the 1-percent. ALEC uses money from its wealthy donors to wine and dine state lawmakers and, in exchange, these lawmakers promote its “model legislation” back home.

ALEC wants to shortchange your children and dismantle public education by robbing them of badly needed funding and giving it to private schools. Its ultimate goal is to privatize public education, which its corporate donors see as a multi-billion dollar industry just ripe for the taking.

ALEC members subscribe to the flawed theories promoted by Economist Milton Friedman, who believed that our children, their education, and, ultimately, their futures, should be left to market influences. According to Friedman, education improvements would come, “by privatizing a major segment of the educational system—i.e., by enabling a private, for-profit industry to develop that will provide a wide variety of learning opportunities and offer effective competition to public schools.”

How did ALEC get its foot in the door with vouchers? The answer—by introducing them on a small scale, usually as a pilot program aimed at a target audience, i.e. children with special needs. However, once that door was opened, ALEC legislators came back again and again, introducing bills to expand these programs to cover more and more students. That’s certainly what happened in Wisconsin, Arizona, and Florida.

In 1990, there was just one state with a voucher program, but now almost 20 states and the District of Columbia have voucher programs that are depleting public schools of critical monies. In fact, during the 2011-12 school year, more than $800 million was set aside for voucher programs—which have also been cloaked as tuition tax credits and scholarships as well as education savings accounts. Despite this growth, vouchers have never been shown to improve student achievement.

ALEC is also pushing other model bills to privatize public education and profit off our children. These bills include the following:

Legislation that directs school funding toward the purchase of software sold by ALEC’s corporate members

Bills that require school districts to purchase assessments sold by ALEC’s corporate members

Bills that require public education students to take at least one on-line course (offered by – guess who…ALEC’s corporate members!)

Bills allowing for-profit charter schools (run by – you guessed it… ALEC members!)

It’s time for pro-public education activists to take a stand. Click here and sign our petition and tell ALEC to stop cashing in on our children.

via ALEC’s Voucher Playbook: Keep expanding, leave public school students nothing « Education Votes.

The 500-Pound Gorilla | nytechprepper

2 Feb

12 years ago this article made frightening predictions. Sadly, they are a reality today in American education.

PHI DELTA KAPPAN

October 2002

The 500-Pound Gorilla

By Alfie Kohn

The best reason to give a child a good school. . .is so that child will have a happy childhood, and not so that it will help IBM in competing with Sony. . . There is something ethically embarrassing about resting a national agenda on the basis of sheer greed.

– Jonathan Kozol

I give a lot of speeches these days about the accountability fad that has been turning our schools into glorified test-prep centers. The question-and-answer sessions that follow these lectures can veer off into unexpected directions, but it is increasingly likely that someone will inquire about the darker forces behind this heavy-handed version of school reform. “Aren’t giant corporations raking in profits from standardized testing?” a questioner will demand. “Doesn’t it stand to reason that these companies engineered the reliance on testing in the first place?”

Indeed, there are enough suspicious connections to keep conspiracy theorists awake through the night. For example, Standard & Poors, the financial rating service, has lately been offering to evaluate and publish the performance, based largely on test scores, of every school district in a given state – a bit of number crunching that Michigan and Pennsylvania purchased for at least $10 million each, and other states may soon follow. The explicit findings of these reports concern whether this district is doing better than that one. But the tacit message – the hidden curriculum, if you will – is that test scores are a useful and appropriate marker for school quality. Who has an incentive to convince people of that conclusion? Well, it turns out that Standard & Poors is owned by McGraw-Hill, one of the largest manufacturers of standardized tests.

With such pressure to look good by boosting their test results, low-scoring districts may feel compelled to purchase heavily scripted curriculum programs designed to raise scores, programs such as Open Court or Reading Mastery (and others in the Direct Instruction series). Where do those programs come from? By an astonishing coincidence, both are owned by McGraw-Hill. Of course, it doesn’t hurt to have some influential policy makers on your side when it’s time to make choices about curriculum and assessment. In April 2000, Charlotte K. Frank joined the state of New York’s top education policy-making panel, the Board of Regents. If you need to reach Ms. Frank, try her office at McGraw-Hill, where she is a vice president. And we needn’t even explore the chummy relationship between Harold McGraw III (the company’s chairman) and George W. Bush. (1) Nor will we investigate the strong statement of support for test-based accountability in a Business Week cover story about education published in March 2001. Care to guess what company owns Business Week?

Stumble across enough suspicious relationships like these and your eyebrows may never come down. However, we don’t want to oversimplify. The sizable profits made by the CTB division of McGraw-Hill, as well as by Harcourt Educational Measurement, Riverside Publishing, Educational Testing Service (ETS), and NCS Pearson(2) – the five companies that develop and/or score virtually all the standardized tests to which students and prospective teachers are subjected – cannot completely explain why public officials, journalists, and others have come to rely so heavily on these exams. Let’s face it: for a variety of reasons, people with no financial stake in the matter have become boosters of standardized testing.(3)

More important, even if one could point to a neat cause-and-effect relationship here, the role that business plays in education is not limited to the realm of testing. Indeed, its influence is even deeper, more complicated, and ultimately more disturbing than anything we might reveal in a game of connect the corporate dots. Schools – and, by extension, children — have been turned into sources of profit in several distinct ways. Yes, some corporations sell educational products, including tests, texts, and other curriculum materials. But many more corporations, peddling all sorts of products, have come to see schools as places to reach an enormous captive market. Advertisements are posted in cafeterias, athletic fields, even on buses. Soft drink companies pay off schools so that their brand, and only their brand, of liquid candy will be sold to kids.(4) Schools are offered free televisions in exchange for compelling students to watch a brief current-events program larded with commercials, a project known as Channel One. (The advertisers seem to be getting their money’s worth: researchers have found that Channel One viewers, as contrasted with a comparison group of students, not only thought more highly of products advertised on the program but were more likely to agree with statements such as “money is everything,” “a nice car is more important than school,” “designer labels make a difference,” and “I want what I see advertised.”)(5) More…

via The 500-Pound Gorilla | nytechprepper.

ALEC sponsors linked to new efforts to recruit, groom anti-public education candidates « Education Votes

26 Jan

They are two of the biggest names connected to the American Legislative Exchange Council ALEC—a group made up of right-wing state lawmakers from across the nation and conservative, wealthy fat cats who work together to promote legislation to protect the interests of the 1-percent.

But now, Charles and David Koch, known to many as the infamous “Koch Brothers,” appear to be branching out. This is bad news for those who love democracy and anyone who cares about children, public education, or the rights of teachers and education support professionals to advocate on behalf of students.

The Koch Brothers have been linked to a new political firm with the mission of handpicking and grooming right-wing candidates who can win elections at the local, state, and federal levels and, more than likely, are willing to do the bidding of ALEC.

The firm is called Aegis and is located just outside the nation’s capital in Arlington, Virginia. It’s almost certain that many of Aegis’ clients, if elected to office, will serve as puppets for Koch-backed groups like ALEC. More…

via ALEC sponsors linked to new efforts to recruit, groom anti-public education candidates « Education Votes.

Key tips for helping education activists spot ALEC legislation « Education Votes

18 Jan

It’s no secret that the tentacles of the American Legislative Exchange Council ALEC stretch far and wide—poking into conservative-led state legislatures and becoming entwined with right-wing politicians willing to do the bidding of the rich and wealthy.

Those politicians who belong to ALEC are not going to tell you that they are promoting its agenda. That’s why, as a pro-public education activist, you may need some sort of guide to let you know when a proposal making the rounds in your state capitol is linked to ALEC.

In fact, today, Education Votes is giving you three tips that may help you spot education-related legislation that is ALEC-inspired or comes directly from its corporate-backed bill mill.Remember, ALEC legislation puts the interests of the nation’s richest 1 percent over working and middle-class families. Therefore, bills influenced or handwritten by ALEC are going to:

  • Promote the rich
  • Silence educator voices and/or
  • Dismantle public education

Promote the rich

Any legislation that promises deep tax cuts for huge corporations while draining badly needed funding away from students, public schools, and the retirement security of educators may be an ALEC bill. ALEC wants to defund government by eliminating taxes and shrinking public investments in the necessary avenues families can use to gain upward mobility, like public education. Without a quality public education, wealth remains concentrated in the hands of a few.

ALEC also wants to siphon money away from the retirement security of the teachers and education support professionals who have dedicated their lives to serving their communities. This will drive good educators out of the profession, decreasing students’ chances of getting the type of education they deserve.

Silence educator voices

ALEC also wants to weaken the voices of educators who fight for students to get the resources they need to succeed in and out of the classroom. ALEC wants to prohibit the voluntary deduction of union membership dues from union members’ paychecks. Without a strong union, educators have very few options they can use to stand up for students. You’ve seen these type battles play out in places like Wisconsin, Michigan, and Indiana.

Dismantle public education

From vouchers to parent trigger, bills promoting so-called education “reforms” or funding proposals that undermine public education and threaten every child’s access to quality community schools are more than likely ALEC-influenced legislation. For example, vouchers and tuition tax credits schemes rob public schools of badly needed dollars and, yet, fail to give students the education they deserve. Once again, a quality, public education is the best avenue working and middle class families can use to become upwardly mobile.

Now that you know what to look for, it’s time to join the fight against the coordinated effort to defund and dismantle public education. Click here to sign our petition and tell ALEC to stop cashing in on our kids, and stay tuned to Education Votes, where you can get the latest information about ALEC and what you can do to prevent its policies from impacting your community.

via Key tips for helping education activists spot ALEC legislation « Education Votes.

Landlords for 2 proposed Chicago charter schools have ties to Emanuel – Chicago Sun-Times

17 Jan

Two people with ties to Mayor Rahm Emanuel could be among those to benefit from new, publicly financed charter schools up for approval next week by Chicago Public Schools officials.

A South Side minister allied with the mayor and a real estate broker who is an Emanuel friend could end up as landlords for new schools, collecting rent paid for by taxpayers.

The Chicago Board of Education is set to vote next week on 22 proposed schools being sought by nine charter operators. Those that are approved would come back before the school board in May for final approval.

One of two schools that Des Plaines-based Concept Schools chain hopes to open next school year — at 8522 S. Lafayette Ave. in Chatham — would be the first tenant in a building owned by an arm of the Fellowship Missionary Baptist Church.

The Rev. Charles Jenkins, its pastor, touts on his church’s website how he “filled a key role” on Emanuel’s transition team when the mayor was elected in 2011. Jenkins gave the invocation at Emanuel’s swearing-in. He is an Emanuel appointee to the City Colleges of Chicago board and a board member of the private group New Schools for Chicago, which helps fund new charter schools.

If approved, the Concept school would pay nearly $529,000 in rent its first year, with annual lease payments going up to more than $961,000 by the fifth year, according to documents filed by Concept. It said the payments would go to the Fellowship Educational and Economic Development Corp., a not-for-profit headed by Jenkins. More…

via Landlords for 2 proposed Chicago charter schools have ties to Emanuel – Chicago Sun-Times.

Capitol Fax.com – Your Illinois News Radar » Rauner accuses union leaders of “bribing” politicians

12 Jan

* Bruce Rauner on WGN Radio today…

“The government union bosses, they are bribing politicians to give them unaffordable pensions, free healthcare, outrageous pay and benefits and they’re bankrupting our state government, they’re raising our taxes and they’re forcing businesses out of the state, and as a result we’ve got brutally high unemployment.”

* This is a guy who has used his millions to his own benefit, political and maybe otherwise. For example, he made huge contributions to a Democratic governor and then received a bigtime pension investment deal…

Rendell left the meeting buoyant, but confessed to aides he never asked the would-be donor for a set amount. Rendell “just had a feeling,” he told them. A week or so later, the Chicagoan, Bruce Rauner, sent a check for $200,000. Another check, for $100,000, came just before the election. At the time, Rauner’s private-equity firm had business with the state of Pennsylvania. GTCR L.L.C. was managing $110 million in pension funds for the State Employee Retirement System, records show. After Rendell became governor, the state doubled its stake in GTCR funds, to $226 million. That meant at least $4 million more in management fees to the firm.

* He also used his big pile of cash to help pass education reform…

Edelman openly bragged about how his group had outfoxed the teachers unions and the Illinois media, and had taken advantage of an opening with House Speaker Michael Madigan to pass his sweeping education reform proposal, which is now state law. His remarks created a huge stir and Edelman has since apologized for his candor, but most of what he said about Illinois politics was quite fascinating and definitely worth a look.

Edelman told the Aspen Institute’s conference participants that wealthy investor Bruce Rauner had approached him about expanding his group’s school reform efforts to Illinois.

* And then there were all the conveniently timed contributions to local political organizations just ahead of slating sessions…

State Senator Kirk Dillard released the following statement today regarding the Cook County Republican Party endorsement:

“Today’s endorsement is yet another sad example of Bruce Rauner buying the election. Ask yourself: why would Cook County GOP bosses support Rauner, knowing that he voted democrat, gave millions of dollars to state and national democrats, is a Rahm Emanuel insider, AND hired a convicted Blagojevich insider to win state contracts? There’s only one explanation — the Bruce Rauner money machine was at work again. Only in Illinois would the legitimate concerns of rank-and-file, grassroots Republicans be dismissed so brazenly. Welcome back, pay-to-play!

Not to mention that if the unions had successfully “bribed” politicians here, why did pension reform pass and get signed into law?

I mean, really, he’s fast becoming a bigger drama queen than Joe Walsh. More…

via Capitol Fax.com – Your Illinois News Radar » Rauner accuses union leaders of “bribing” politicians.

Rauner in newly surfaced video: ‘adamantly, adamantly’ against raising the minimum wageVoices | Voices

9 Jan

 

SPRINGFIELD-A day after Bruce Rauner offered qualified support for a minimum-wage hike, a new video surfaced Thursday showing the GOP gubernatorial candidate telling an audience of Downstate Republicans in September that he “adamantly, adamantly” opposes raising the income bar for Illinois’ working poor.

The video in which Rauner appears to contradict the minimum-wage platform he outlined Wednesday came from the Democratic-funded Super PAC, American Bridge 21st Century, which Thursday posted on YouTube the recording of Rauner addressing the issue four months ago before Ford County Republicans.

“I am adamantly, adamantly against raising the minimum wage. My view is we already have the second highest unemployment in America. We already have an outrageously high unemployment rate among low-income, poor minority kids in Chicago, in Rockford, in Peoria and East St. Louis. And raising the minimum wage is just going to blow them out and take away their jobs. We cannot do this,” Rauner said in the video.

“Let’s be clear: The right answer to raised wages is a booming economy with employers competing to hire people and having our young people well educated and well trained,” Rauner said, drawing applause from the crowd gathered Sept. 7 at a Gibson City golf course.

On Wednesday, Rauner said he misspoke and was “flippant” in remarks during a December candidates forum in the Quad Cities, when he appeared to advocate rolling back Illinois’ $8.25-an-hour minimum wage to the national minimum wage of $7.25 an hour.

Rauner told the Chicago Sun-Times that he does not believe that and actually favors increasing the national minimum wage to as much as $10 an hour. If there is not the federal will, Rauner said he would be open to increasing Illinois’ rate so long as it was tied to business-friendly workers compensation and tort reforms and changes in the state’s corporate tax structure.

Raising the minimum wage, Rauner said Wednesday, “won’t crush small business owners, and it can help struggling families.”

The group that posted Thursday’s video of Rauner sounding a completely opposite tone on the minimum wage in September said it demonstrates the Winnetka Republican isn’t dealing honestly with voters on his attitudes toward how much Illinois’ working poor should be paid.

“This isn’t an instance of a gaffe, but an instance of a millionaire candidate caught telling the truth that he opposes raising the minimum wage,” American Bridge 21st Century spokesman Eddie Vale said.

American Bridge 21st Century is a liberal Super PAC funded by labor unions and major Democratic donors. The group’s largest financial backer is billionaire hedge fund manager George Soros, a well-known supporter of liberal causes who donated $1 million to the group in 2012, campaign records with the Federal Election Commission show.

Since 2011, the American Federation of State County and Municipal Employees has contributed $675,000 to American Bridge, while the National Education Association has chipped in another $300,000, federal records show. More…

via Rauner in newly surfaced video: ‘adamantly, adamantly’ against raising the minimum wageVoices | Voices.

 

 

 

Mackinac Center Earns Court Smack Down

7 Jan

Late last February, the Mackinac Center Legal Foundation announced it filed a law suit against the Taylor Federation of Teachers, the Taylor School Board and the school district itself over an eleventh-hour contract negotiated before right-to-work took effect. The suit was filed on behalf of three teachers in the district who objected to a special contract clause that guaranteed union dues for a ten-year period.

Judge Julia Stern reviewed the complaint and is recommending to the Michigan Employment Relations Commission that the case be dismissed saying:

“It is not the Commission’s role to modify the terms of a lawful contract on public policy grounds.”

In a separate vote, Taylor teachers agreed to the dues contract clause which was negotiated at the same time as the contract. The contract also included a 10 percent pay cut. Mackinac Center was crying foul over the separate clause, citing that it normally would be part of the contract and not require a stand-alone vote. Democracy Tree is at a loss as to why the Mackinac Center should find that objectionable. Mackinac Center Senior Attorney Derk Wilcox made this argument in their press release:

The union is throwing teachers under the proverbial school bus with a contract that includes a 10 percent pay cut just to continue padding its coffers.”

Taylor schools are among approximately 50 districts in the state that are on the watch list for fiscal crisis. Again, Mackinac Center misappropriated the blame:

“…the district was forced to file a deficit elimination plan with the state in light of a self-created $14 million overspending crisis.”

A review of the district’s per pupil foundation grant paints a different picture. Taylor students are worth $7,709 this school year, down $473 since Snyder took office. With a current student population of 7307, that adds-up to nearly $3.5 million a year in lost revenue. The district is not unique — in truth, it’s emblematic of a larger looming fiscal crisis that will eventually touch all districts in the state.

Mackinac Center lost this legal wrangle, but they have more in the works. The think tank itself lacks legal standing to file these cases, so their legal foundation trolls for teachers willing to file a grievance. Last October, they filed eight additional complaints on behalf of teachers in Coopersville, Petoskey, Clarkston, and Saginaw over claims that the teachers were kept in the dark about their opportunity to opt-out of paying union dues. Perhaps those teachers were living in a cave.

via Mackinac Center Earns Court Smack Down.

Washington Post: Koch brothers’ vast privatization network hides donors « Education Votes

6 Jan

The excerpt below is from a Washington Post article by Matea Gold that exposes the vast and secretive network of Charles and David Koch, oil tycoons whose agenda includes privatizing public education, defunding public schools, dismantling worker rights, rolling back wages, and limiting voting rights. For more information about the Koch brothers, go to StopTheGreedAgenda.com.

The political network spearheaded by conservative billionaires Charles and David Koch has expanded into a far-reaching operation of unrivaled complexity, built around a maze of groups that cloaks its donors, according to an analysis of new tax returns and other documents.

The filings show that the network of politically active nonprofit groups backed by the Kochs and fellow donors in the 2012 elections financially outpaced other independent groups on the right and, on its own, matched the long-established national coalition of labor unions that serves as one of the biggest sources of support for Democrats.

The resources and the breadth of the organization make it singular in American politics: an operation conducted outside the campaign finance system, employing an array of groups aimed at stopping what its financiers view as government overreach. Members of the coalition target different constituencies but together have mounted attacks on the new health-care law, federal spending and environmental regulations.

Key players in the Koch-backed network have already begun engaging in the 2014 midterm elections, hiring new staff members to expand operations and strafing House and Senate Democrats with hard-hitting ads over their support for the Affordable Care Act.

Its funders remain largely unknown; the coalition was carefully constructed with extensive legal barriers to shield its donors.But they have substantial firepower. Together, the 17 conservative groups that made up the network raised at least $407 million during the 2012 campaign, according to the analysis of tax returns by The Washington Post and the Center for Responsive Politics, a nonpartisan group that tracks money in politics.

A labyrinth of tax-exempt groups and limited-liability companies helps mask the sources of the money, much of which went to voter mobilization and television ads attacking President Obama and congressional Democrats, according to tax filings and campaign finance reports. More…

via Washington Post: Koch brothers’ vast privatization network hides donors « Education Votes.

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