Plutocrats in New York Flood Albany with Anonymous Gifts to Promote Education Agenda

There are a lot of ways to shape a story, and there’s an important contrast between the story about the politics of public education that appeared in yesterday’s NY Times and another story published earlier this week in the Albany Times Union.  Both are about the same subject—the impact on New York’s public schools of Michael Bloomberg and Joel Klein and a bunch of billionaire hedge fund managers.  But Kate Taylor’s story in the NY Times is framed as a political battle—StudentsFirst NY vs. teachers’ unions.  The story to which Taylor pays less attention—though it is the backstory behind her report— is the attack on traditional public schools and public school teachers (not their unions) by a bunch of wealthy investors who are far less likely than most New York families ever to use public schools.

If this is a political fight with two sides, it is really about the 99 Percent whose interests are served by the institution of public education and the 1 Percent represented by New York’s Wall Street investment community.  And Chris Bragg in the Albany Times Union focuses on the question we should all be thinking about: In these times of exploding inequality, is it a good idea that anonymous political gifts of the very rich are buying the policy that shapes the institutions that serve the majority of our children?

Bragg explains: “Three groups pushing education reforms that spent heavily lobbying state government this year funded at least a portion of their efforts through donations whose original sources are essentially untraceable…  StudentsFirst NY Advocacy, the Coalition for Opportunity in Education, and Families for Excellent Schools spent more than $8.3 million during the 2015 legislative session lobbying state government to promote charter schools and other issues, according to recent lobbying disclosure filings… The original donors behind more than $3.4 million of the spending remain murky in the groups’ biannual filings.  In one instance, StudentsFirst NY Advocacy received a $1 million donation from a heavily overlapping but technically separate group run out of the same office, obscuring the original sources of the seven-figure gift.”

While New York’s legislature passed a state ethics reform law in 2011, Bragg reports: “The law took effect in 2013. Loopholes quickly became apparent… If a donation is given to an intermediary that then gives to a lobbying group, only the intermediary’s identity must be disclosed under the 2011 ethics reform. The state lobbying and ethics panel, the Joint Commission on Public Ethics, acknowledged in a February report that entities were currently able to ‘construct funding mechanisms that may avoid disclosure while still technically complying with the law and the regulations,’ and suggested lawmakers might address the issue. The State Legislature has not done so.”

One group that operates within the letter but not the spirit of the law is Families for Excellent Schools. Bragg tells us: “Families for Excellent Schools, another Manhattan group that also lists the same address as StudentsFirst NY but says that it operates separately, has taken a much more direct approach that has allowed its donors to remain anonymous.  Families for Excellent Schools, which spent $1.6 million on New York lobbying so far this year, has an issue-oriented nonprofit arm that would have to disclose its benefactors.  But the group does almost all its lobbying through its apolitical arm, which does not have to report its donors under New York lobbying laws and can take tax-deductible donations.  The apolitical arm spent a staggering $9.7 million on Albany lobbying in 2014, but it did not disclose a single donor.”  Bragg continues: “The heavy lobbying spending as defined by New York law, plus the IRS restrictions on lobbying by such nonprofits could raise potential issues regarding the group’s tax status.”

Despite its frame that emphasizes a war between plutocrats and teachers’ unions, Kate Taylor’s piece in the NY Times does report some very interesting information about the advocacy effort, begun in the Bloomberg-Klein years, to disrupt what this group calls the traditional public education status quo.  Taylor provides some history: “StudentsFirst NY was founded in 2012 by Joel I. Klein, who had been the schools chancellor for more than eight years under Mr. Bloomberg; Michelle Rhee, a former Washington schools chancellor; and the billionaire hedge fund managers Daniel S. Loeb and Paul Tudor Jones.  It receives some support from StudentsFirst, the national organization Ms. Rhee founded in 2010, but has its own board of directors and functions independently.  Mr. Bloomberg himself does not appear to be involved in StudentsFirst NY.”

Taylor brings the history up to date: “Making teacher evaluations more dependent on test scores, reforming tenure and increasing the number of charter schools in the city were all priorities of StudentsFirst NY and became significant pieces of the governor’s (Andrew Cuomo’s) agenda for the 2015 legislative session…. Emails obtained through the Freedom of Information Law, as well as interviews, show that Mr. Cuomo and his senior education advisers were in close touch, by e-mail and telephone, with Ms. Sedlis (Jenny Sedlis, executive director of StudentsFirst NY) and her board members in the weeks after the governor’s re-election last November.  On Dec. 9, for example, the governor met with Ms. Sedlis and several of her board members at the Harvard Club to discuss education policy issues, a spokesman for StudentsFirst NY said.”

New York City’s current mayor, Bill deBlasio has not made the expansion of charter schools his priority but has instead—with his chancellor Carmin Farina, a career educator—worked to improve the city’s system of traditional schools. The big-money lobbying organizations in New York have helped Governor Cuomo fight deBlasio’s policies to support and improve the city’s public schools.   Taylor describes the dark-money expenditures by Families for Excellent Schools, the same organization examined by Bragg: “Last year, it spent $9.6 million on lobbying, more than any other entity in the state…. Much of this money was spent on advertisements attacking Mr. deBlasio for his opposition to charter schools and a later ad praising Mr. Cuomo for coming to their aid.”

Like Bragg, Taylor questions the tax exempt status of Families for Excellent Schools: “Families for Excellent Schools is approved by the Internal Revenue Service as a 501(c)3 organization, referring to the section of the tax code regarding charities, meaning that donations are tax-deductible, and under New York State law, it need not disclose donors.  Those organizations are allowed to spend only a small portion of their money on lobbying, but the federal definition of lobbying, in contrast with the state’s definition, is relatively narrow.”  Taylor quotes Susan Lerner, the executive director of Common Cause New York about the danger of anonymity in political giving: “The danger is the public really doesn’t know from the advertising who is trying to push public policy and what their motivations might be.”


2 thoughts on “Plutocrats in New York Flood Albany with Anonymous Gifts to Promote Education Agenda

  1. Very thorough investigation of what is happening in the Big Apple and beyond. As always, thanks for your blog. It gives your readers an exceptional analysis of the current situation.

  2. Pingback: Plutocrats in NYC Wielding Power, Buying the Airwaves, and Trashing Public Schools Again | janresseger

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