Explosion of Private Contracting in Education Created Climate for Chicago Scandal

Sarah Karp, until recently a distinguished reporter for Catalyst Chicago, a publication whose logo says it’s mission is “independent reporting on urban schools,” originally broke the story on the role of Barbara Byrd-Bennett, Chicago’s schools CEO, in securing a huge no-bid contract for school leadership training for her former employer in Chicago, a private contractor, SUPES Academy.

Byrd-Bennett served as CEO of the Chicago Public Schools for thee years before she was accused of having illegally secured a lucrative contract for SUPES.  On Tuesday, as reported by the Chicago Tribune, Byrd-Bennett pleaded guilty “to a single felony count of wire fraud for steering multimillion-dollar, no-bid contracts to a former employer in exchange for the promise of up to $2.3 million in kickbacks.”  Byrd-Bennett never received the bulk of the kick-backs.  Money had been promised as a “signing-bonus” if she returned to SUPES after her tenure at the Chicago Public Schools ended.

Karp, the reporter who persistently investigated a story others ignored, has left Catalyst to join the investigative team at the Better Government Association, and this week she comments on what she believes is the serious issue in the Barbara Byrd-Bennett scandal: the danger posed by today’s vast expansion of private contracting in education.  Speaking of Byrd-Bennett’s fall, Karp writes: “The increasing presence of private money in public education—and the fierce competition to get at that money—made such a scenario almost inevitable.”

Has private contracting increased?  Here is how Karp describes the expansion of contracting in Chicago and across the nation:  “Public schools have long outsourced certain services, covering, for instance, transportation and meals. These days, however, numerous jobs are handled by companies, from custodians and nurses and recess monitors.  Even instruction is sometimes out-sourced, often through computers via education software.  Not to mention that currently more than a fifth of Chicago’s public schools are run entirely by private entities in the form of charter schools or contract schools. Under state law, schools can only be run by not-for-profits.  Yet under Byrd-Bennett, CPS officials devised a way to have for-profit companies run schools by technically making them contractors nestled in a CPS department. CPS isn’t alone. Private companies are all over education.”

Contracting was vastly expanded after 2009 by the U.S. Department of Education’s federal grant competitions, Race to the Top and School Improvement Grants.  Karp explains: “Under U.S. Education Secretary Arne Duncan’s ‘School Improvement Grants,’ the $3.5 billion initiative to improve the nation’s bottom 5 percent of schools, among the ways to qualify for funding: Work with outside companies or organizations.”  Another serious issue: When federal dollars are directed to schools through one-time grants, the funds are less likely to reach the classroom through such investments as reducing class size or adding counselors or social workers.  Because a grant is a one-time cash infusion, it cannot be spent for continuing operating expenses; hiring contractors to help with staff development becomes an appealing use for the money.

In Chicago the people who owned SUPES Academy—and sold what they called “leadership” training to the school district thanks to a no-bid contract—brought the following professional credentials, according to Karp: “One of the outgrowths of so much public education money available to private companies is that entrepreneurs whose expertise is more in sales or making money are getting in the business of education.  Solomon was a disgraced dean of students in a suburban high school district who had spent the last decade being a salesman.  Vranas previously started a wireless Internet company and a venture capital firm.” Gary Solomon and Tom Vranas have also been indicted as part of the investigation of SUPES in Chicago.