New Report: How Big Money Has Been Swinging Elections Against Public Education

In a fine new report, the Network for Public Education Action exposes, “how the super rich buy elections to undermine public schools.” The report presents nine case studies—in Newark, New Jersey; Washington state; Los Angeles; Perth Amboy, New Jersey; Louisiana; Rhode Island; Minneapolis; New York; and Denver—where billionaire dollars have been carefully invested to buy elections and promote the privatization of public education.

Who are the people investing their fortunes in privatizing public schools? The report, Hijacked by Billionaires, begins with profiles of the people who have either donated more than a million dollars to candidates or political committees or have contributed to at least three of the nine elections profiled in the case studies. The report’s index of billionaires includes Netflix’s Reed Hastings; the Walton family, founders of Walmart, and including Alice Walton, Jim Walton, Carrie Walton Penner, Greg Penner, and Steuart Walton; Donald and Doris Fisher, founders of The GAP; the Bloomberg family including former New York mayor Michael Bloomberg and his daughter Emma; Microsoft founder Bill and his wife, Melinda Gates (The report tracks personal, not Gates Foundation gifts.); California businessman Eli Broad; co-founder of Microsoft, Paul Allen and his Vulcan Inc.; California businessman William Bloomfield; Lane Grigsby and Cajun Industries, the Louisiana construction company; former ENRON trader John Arnold and his wife Laura; the Bezos family including Amazon’s Jeff Bezos and his parents Jackie and Mike; venture capitalist Nick Hanauer; Samson Oil heiress Stacy Schusterman; SiliconValley venture capitalist Arthur Rock; Steve Jobs’ widow, Laurene Powell Jobs and the Emerson Collective LLC; Eagle Capital Management’s Ravenel Boykin Curry IV and his wife Elizabeth; Purdue Pharma’s Jonathan Sackler; and Katherine Bradley, who is connected with three of the case studies and whose husband chairs Atlantic Media Group.

So… what’s in it for these people? “Many of the big charter chains have boards that include billionaires—allowing those who would never dream of sending their own children to a charter or neighborhood public school to direct the education of thousands of disadvantaged children. For some billionaires, charter directorship has become a source of pride and prestige. Other billionaires despise teacher unions (and all unions) and blame them for the struggles of poor students. They prefer charter schools, because more than 90% of them have no unions… Others have true disdain for democracy and believe if ordinary people govern their schools, corruption is inevitable. Still others believe that only the marketplace and consumerism can produce quality. If the marketplace and competition made them and their business successful, then surely that will work for schools too. All are united by the belief that education cures poverty and that their enormous wealth has little to do with the economic injustice and generational poverty that plagues our cities and rural communities… The billionaires’ refusal to confront the importance of poverty and its negative effects on school performance suggests that their focus on school choice is meant to distract us from policy changes that would really help children, such as increasing the equity and adequacy of (public) school funding, reducing class sizes, providing medical care and nutrition for students, and other specific efforts to meet the needs of children and families.”

Here are brief summaries of three of the report’s case studies:

After a string of failures, Washington State finally passed a ballot initiative to permit charter schools: “In November 2012, Washington State voters passed the Charter School Ballot Initiative 1240, which provided for the establishment of up to 40 charter schools within five years.  It passed by a very slim margin, 50.69% in favor, to 49.31% opposed. This was Washington State’s fourth charter school ballot initiative with the first three attempts having failed in 1996… 2000… and 2004…  In addition to ballot initiatives, pro-charter legislation had been proposed and failed.”  Who were the billionaires who invested enough to get the initiative passed in 2012? The largest investors from within Washington were Paul Allen and Bill Gates, the co-founders of Microsoft; venture capitalist, Nick Hanauer; and Jackie and Mike Bezos, parents of Amazon’s Jeff Bezos. Large out-of-state investment came from Netflix’s Reed Hastings and Education Reform Now, based in New York, the 501(c)(4), dark-money affiliate of Democrats for Education Reform. The report lists other investors, including $1.1 million from Alice Walton.

In 2011, a huge influx of out-of-state money tipped the Louisiana Board of Elementary and Secondary Education: “John White spent two years as a teacher with Teach for America. He later became an executive director of TFA in both Chicago and New Jersey and a deputy superintendent in New York City under ‘reform’ chancellor Joel Klein. Louisiana Governor Bobby Jindal decided he wanted White as his state superintendent… The only problem was that Jindal did not believe that Louisiana’s then current state board, the Board of Elementary and Secondary Education (BESE), would deliver enough votes in support of White.  In Louisiana, the state superintendent is determined by a supermajority of BESE members—at least eight out of the total eleven must vote a candidate into office….”  Jindal reached out to his friend Jeb Bush and the political influence of Bush’s Foundation for Excellence in Education and an alliance of pro-corporate-reform state school superintendents Jeb had convened—Chiefs for Change.  Members of both groups reached out to key allies to help fund the 2011 BESE election: Michael Bloomberg, Eli Broad, John and Laura Arnold, Alice and Jim Walton, and Carrie Walton Penner.  Smaller gifts came from Arthur Rock, Reed Hastings, and Michelle Rhee’s StudentsFirst.  From within Louisiana, the Grigsby family and Cajun Industries donated a quarter of a million dollars. BESE was flipped to Jindal’s satisfaction, and John White, Jindal’s favorite candidate for state superintendent—the guy favoring Teach for America—was approved by the new BESE.

The third example among NPE’s case studies is of New York, a state where Wall Street money has made Governor Andrew Cuomo a strong supporter of charter schools: “Since his first gubernatorial campaign in 2010, Andrew Cuomo received generous contributions in exchange for his support of charter schools…  When Cuomo sought money from the hedge fund community, it was made clear that he needed to support their pro-charter agenda… In exchange for Cuomo’s support of charters, charter board members became extraordinarily generous to the Cuomo campaign. One donor was the Great Public Schools PAC, started by the controversial Success Academy Charter School leader, Eva Moskowitz.” Success Academy Charters’ board members have been primary contributors: Dan Loeb, Bruce Kovner, Joel Greenblatt and his wife Julia, Bryan Binder, Daniel Nir and his wife Jill Braufman, Andra and Dana Stone, Kent Yalowitz, Catherine Shainker, Jarret Posner, Suleman Lunat, and John Petry.  The list of New York and Connecticut donors to Cuomo campaigns—people who are connected with charter schools, and even in some who own construction companies that build charter schools—continues for three pages.  In Cuomo’s 2014 bid for reelection, “All the efforts and contributions made by charter advocates paid off.  In the final two months of the election, Andrew Cuomo outspent his Republican gubernatorial opponent… five to one… Post-election, Andrew Cuomo Inc., was left with about $9 million for his next campaign.”

The Network for Public Education Action urges readers to follow the money in their own states. “Education reform billionaires are trying to buy elections across the country… The Citizens United decision allows corporations and other groups and individuals to form Super Political Action Committees (Super PACs) called Independent Expenditure Committees (IECs). These IECs are allowed to ‘spend unlimited sums of money on ads and other communications designed to support or oppose a candidate.'” However, because Independent Expenditure Committees are required to report their contributors to the Federal Election Committee, the report’s authors were able to document many of the names of contributors.

NPE Action’s new report that tracks an enormous web of wealthy givers trying to undermine public schools across the states is disturbing.  The report traces the massive political power of people whose fortunes have grown with today’s exploding inequality.  In his new book, Winners Take All: The Elite Charade of Changing the World, Anand Giridharadas worries about the same trend. Giridharadas challenges the power of money in our modern Gilded Age: “What is at stake is whether the reform of our common life is led by governments elected by and accountable to the people, or rather by wealthy elites claiming to know our best interests. We must decide whether, in the name of ascendant values such as efficiency and scale, we are willing to allow democratic purpose to be usurped by private actors who often genuinely aspire to improve things, but first things first, seek to protect themselves… We must ask ourselves why we have so easily lost faith in the engines of progress that got us where we are today—in the democratic efforts to outlaw slavery, end child labor, limit the workday, keep drugs safe, protect collective bargaining, create public schools, battle the Great Depression, electrify rural America, weave a nation together by road, pursue a Great Society free of poverty, extend civil and political rights to women and African Americans and other minorities, and give our fellow citizens health, security, and dignity in old age.” (pp. 10-11) (This blog explored Giridharadas’s new book here.)

Special Interests Threaten Future of Public Education as Money Drives Politics

In Winner-Take-All Politics, political scientists Jacob Hacker and Paul Pierson describe the impact of organized money on our national politics:  “The foremost obstacle to sustainable reform is the enormous imbalance in organizational resources between the chief economic beneficiaries of the status quo and those who seek to strengthen middle-class democracy.  Powerful groups defending the winner-take-all economy—business coalitions, Wall Street lobbyists, medical industry players—are fully cognizant of the massive stakes involved, and they are battle-ready after years of training.” (p. 291)

Last weekend the NY Times launched a series of articles that demonstrate the power of organized money in state politics as well.  Powerful organizations, able to designate themselves as not-for-profit, are wielding enormous political influence as money is bundled and distributed to skirt even the political funding regulations of the most careful states.  Such funding has permitted political groups to “flip states,” contributing to the reality that 36 states are now run by one-party—one political party holding majorities in both houses of the legislature and the governor’s mansion.  Today 13 state governments are controlled solely by Democrats and 23 by Republicans.

The NY Times reports, “Both sides rely on interlocking networks of political action committees, party organizations and nonprofit groups, often based in states with forgiving campaign finance rules, that work in concert to raise contributions and shuffle money to thousands of local races around the country.  In some states, liberal or conservative donors have established political nonprofits that function like shadow parties, often exempt from the contribution limits or disclosure requirements that apply to candidates and traditional parties…  Campaign contributions that would be banned or restricted in one state can be sent to a state where the rules allow money to flow more freely, often scrubbed of the identity of the original donor.”

The Center for Media and Democracy has also exposed the role of the State Policy Network of conservative state foundations all linked in a well-staffed national network and working in tandem with the American Legislative Exchange Council, which pairs member legislators and business lobbyists to craft model laws that  benefit business and promote privatization, and that can be introduced in several state legislatures all at once.

Public education has been targeted in one-party states that now lack bipartisan checks and balances.  In this blog I have recently written about what is happening to public education in some of those states .  Closest to my heart, of course, is my own state, Ohio, where I have been tracking very closely issues around school finance for 25 years.

Only recently, as Ohio politics has been entirely dominated by big money and one party rule, have I seriously believed that engaged citizens—including the public school teachers and parents who know the most about what is happening in their communities’ schools—can have virtually no impact on what happens in Columbus.  It is a frightening feeling as we watch state funding reduced year after year—school nurses and librarians cut; school social workers eliminated in Cleveland, a school district with more concentrated poverty than most American cities; and students pay to play sports or join the debate team even in relatively wealthy suburban school districts.

And yet Ohio’s charter scams continue unregulated.  Ohio takes more from public school districts to pay for students in charters than the state aid allocated per child in traditional public schools. And William Lager and his Electronic Classroom of Tomorrow siphon millions that ought to be flowing to the state’s public school districts.

This week brought another report of lax oversight.  The Columbus Dispatch reports that 17 charter schools closed last year in Columbus alone.  All were authorized by something called the North Central Ohio Educational Service Center (ESC), based not in Columbus but instead in Marion and Tiffin.  Jim Lahoski, the superintendent of the ESC told the Dispatch that, “he doesn’t think the ESC is particularly at fault.  It was a difficult market, and some of the operators simply weren’t ready to handle running a school.”

When the Dispatch asked the Ohio Department of Education (ODE) whether the ESC, that seems unable effectively to vet charter school plans, ought to be sponsoring charter schools, ODE spokesman John Charlton replied that Ohio law does not give the ODE the real power to regulate the sponsors of charter schools: “The way it works right now is, if a school has a sponsor and they sign a contract, that school can open.  We don’t have any approval or denial power.”

During 2013, when 17 charter schools closed mid-year in Columbus, 250 students had to find other schools on short notice.  Nine of these schools lasted only a couple of months into the fall, but neither the state nor the school districts whose money had followed children to the charters were able to recoup the money.  “The state spent more than $1.6 million in taxpayer money to keep the nine schools open only from August through October or November.”

There is no discernable movement in the Ohio legislature, however, to strengthen regulation of Ohio’s worst charters or to regulate their sponsors.  Steve Dyer, a former member of the Ohio House of Representatives and former chair of the House Education Subcommittee of the Finance Committee, explains: “Nearly $888 million is being spent on Charters this school year—a 7.7% increase over last school year’s record amount.  Between Charters and Vouchers, Ohio now spends more than $1 billion a year on privately run schools.”