DFER’s Campaign to Dominate Local School Boards and Launch Charters

In Hedging Education, Justin Miller, for The American Prospect, describes “how hedge funders have over the past decade underwritten a movement to mushroom the number of local school board members who support the rapid expansion of charter schools. “A network of education advocacy groups, heavily backed by hedge fund investors, has turned its political attention to the local level, with aspirations to stock school boards—from Indianapolis and Minneapolis to Denver and Los Angeles—with allies.”

It all began in New York City, where, “Whitney Tilson, straight out of Harvard… deferred a consulting job in Boston to become one of Teach for America’s first employees in 1989.  Ten years later, he started his own hedge fund in New York.  Soon after that, Teach for America founder Wendy Kopp took him on a visit to a charter school in the South Bronx. It was an electrifying experience for him… The school was one of two original Knowledge Is Power Program schools—better known as KIPP, which has since grown into a prominent charter network with nearly 200 schools in 20 states plus the District of Columbia, serving almost 70,000 students, predominantly low-income and of color…  Tilson… started dragging all his friends, most of whom were hedge fund investors, from Wall Street up to the south Bronx to see the KIPP school.  ‘KIPP was used as a converter for hedge fund guys,’ Tilson says. ‘It went viral.'”  When he became a charter school evangelist, Tilson really didn’t know much about public schools themselves: “I personally never knew what the situation was like for families forced to attend their local school in the South Bronx, or Brooklyn. I didn’t know of anyone who dropped out of high school or college—much less that there were high schools where half the students dropped off.” One wonders whether Tilson also visited public schools in New York City or whether he just accepted that KIPP’s approach is the best strategy for educating children in poor neighborhoods.

Tilson and his friends in the hedge fund world founded a new political organization, Democrats for Education Reform, and, according to Justin Miller, they set out to confront what they considered to be the politically powerful supporters of public schools, the teachers unions.  “Basically, if you were anybody who was anybody in hedge funds, you probably chipped in.  Tilson called the group Democrats for Education Reform (DFER), and set it with a mission ‘to break the teacher unions’ stranglehold over the Democratic Party.'”  Miller adds that DFER also targeted national Democratic leaders: “Early on, DFER identified then-Senator Barack Obama and then-Newark Mayor Cory Booker as promising politicians willing to break with teachers unions.”

Miller corrects the common assumption that hedge funders got into supporting charter schools for the money: “Many critics of the corporate education-reform movement are quick to accuse proponents of seeking to cash in on the privatization of one of the United States’ last public goods.  And while there are certainly those in ed-reform circles who stand to benefit from a windfall of new education technology, testing, and curriculum services, hedge funders by and large do not fit that stereotype. Theirs is more of an ideological and philanthropic crusade, rather than a crude profit-seeking venture.”

Miller reports that DFER, which is currently active in 13 states and the District of Columbia has expanded the role of charters across the country by partnering with other Astroturf groups that, like DFER,  pretend to be local, but are in fact, well-funded national organizations—StudentsFirst (that just merged with 50CAN), 50CAN (operating in 7 states), Stand for Children (with 11 state affiliates), and Students for Education Reform, described by Miller as an Astroturf offshoot of DFER.  Shavar Jeffries, the national president of DFER, denies, of course, that DFER is an Astroturf organization: “Our state chapters are not run by people flying in from Washington.  They are staffed by local political organizers and education experts that are overwhelmingly from the communities they work in.”  Miller responds: “But the financial influence of the outside charter-boosters is an ill-kept secret.  The pushback against outside pro-charter money in local races has been steadily growing as more and more cities are impacted.”

These organizations have, according to Miller, been able to influence local school board races with big financial investments primarily because, “Compared with other political races where a campaign will stretch over the better part of a year… school board races are unique.  Filing deadlines are much closer to Election Day, meaning that the field of candidates doesn’t fully materialize until quite late and the actual races don’t heat up until about two months out.  That makes it more difficult to vet candidates and learn about connections.  Campaign finance reports exposing big money often pop up late….”

These big national groups—DFER, StudentsFirst, Stand for Children, 50Can and Students for Education Reform—have, as profiled by Miller, influenced school board elections in Denver, Minneapolis, and most particularly Indianapolis, where candidate Gayle Cosby eventually raised a total of $80,000 (from several organizations and investors) to support her successful 2012 school board candidacy: “DFER pumped more than $40,000 into Cosby’s campaign, hiring her a campaign manager, orchestrating several direct-mail flyer blasts, and buying up radio spots.  This was unheard of in Indianapolis school board races.”

Cosby is described as reflecting that after DFER contributed $40,000, “At that point, I felt a loss of control in certain respects.” Today Cosby has become disillusioned with the cause promoted by her original campaign investors: “Cosby has since taken up the role as the board’s main dissenter. She believes that charter special interests have completely co-opted the desire for change in the schools and have promoted an agenda that sees charter schools and privatization as the only way to fix Indianapolis Public Schools. Four seats will be up in 2016, including Cosby’s, who has decided not to seek re-election….”

“Social Welfare Agencies” Spending Millions to Push Privatization of Education

While states continue to spend less money on public education than they did in 2007 prior to the Great Recession, lots of people are spending lavishly to promote what is frequently called the corporate school reform movement that features various forms of privatization. It is virtually impossible to follow and master all the details of what is happening.  Every once in awhile, however, this blog highlights some examples of the ways money is being spent to buy the policies that shape the education of our children.  This is one of those posts.

The recent and startlingly lavish publicity campaign against New York Mayor Bill de Blasio’s effort to reign in the excesses of Mayor Michael Bloomberg’s favored charter schools is a good place to start. Yesterday the New York Daily News reported that in the past three weeks a not-for-profit organization called Families for Excellent Schools has spent $3.6 million airing TV ads that attack Mayor de Blasio for denying Eva Moskowitz’s Success Academy Charter Schools the right to co-locate three schools into public school facilities in New York City.  Mayor de Blasio had granted co-location rights to the majority of Moskowitz’s schools that applied for free space, but denied these three because they would endanger very young children by placing them with much older students in high schools or would infringe on the rights of students with disabilities by taking the rooms used for physical therapy and other special services.  To provide a little context, the Daily News reporter described the $3.6 million add buy: “the amount candidates typically spend in three weeks of a heated mayoral primary.”

So… what is Families for Excellent Schools and who are its financial supporters?  In March 2014, Robert Lewis, of WNYC News, reported: “Families for Excellent Schools’ most recent tax filings are from 2012, so it’s unclear how much they’ve raised in recent years or where that money is coming from.  The organization is technically two entities—a standard charity and a tax exempt group that can accept anonymous contributions for advocacy.”  Managed by the 27-year-old Jeremiah Kittredge, Families for Excellent Schools shares an address with New York’s affiliate of Michelle Rhee’s StudentsFirst.  According to Zoe Carpenter, writing for The Nation,  Families for Excellent Schools is chaired by a venture capitalist named Paul Applebaum, although its website lists neither its board members nor its funders.  Stu Loeser, former spokesman for Mayor Michael Bloomberg, is now the organization’s press official.  Lewis reports that Students for Excellent Schools  has received grant funding from the Walton and Broad Foundations, although from the organization’s website one can discern neither what its standard charity functions are nor how the organization’s money is allocated for charity and advocacy.

New York City is not the only place where big money is being used for political advocacy and where the donors of that money are hidden today by the tax code.  Thomas Edsall, writing for the NY Times, explains: “The explosion in secret financing of political advertising has turned tax-exempt nonprofit organizations into the weapon of choice for those who want to influence elections without leaving fingerprints.  Campaign spending by these groups, which do not disclose donors, has grown from a modest $5.8 million in the 2003-4 election cycle to $310.8 million in 2011-2012, an increase of more than 5000 percent with further growth expected in 2014 and 2016…  Most of the money raised from undisclosed contributors flows through nonprofits claiming tax-exempt status under Section 501 of the Internal Revenue Code…. The most common tax-exempt organizations are 501(c)(4) “social welfare” groups, although there is also substantial political cash channeled through 501(c)(6) groups, which are nonprofit trade associations like the United States Chamber of Commerce.”

Writing for The Center for Public Integrity, Rachel Baye traces the role of secretive big-money donations to so-called “social welfare” groups that support privatization of education and that are not required to report their donors:  “StudentsFirst—created by former Washington, D.C. schools chief Michelle Rhee—is leading a new wave of ‘education reform’ organizations, funded largely by wealthy donors, that are challenging teachers’ unions and supporting mostly conservative candidates up and down the ticket in dozens of states…  Among the biggest spenders: the American Federation for Children, 50CAN, Stand for Children and Democrats for Education Reform… They have been funded by a slew of billionaire donors, like philanthropist Eli Broad, former New York Mayor Michael Bloomberg, hedge fund manager Dan Loeb and Netflix CEO Reed Hastings.  However, the full list of funders opening their checkbooks for the education reformers remains a mystery since StudentsFirst and many of the other groups are so called social welfare nonprofit organizations, which fall under section 501(c)(4) of the U.S, tax code.”

This blog explored a new web campaign, Stinktanks.org, from Wisconsin’s Center for Media and Democracy—a campaign designed to expose the quiet linkage through an organization called the State Policy Network, of a tightly connected web of think tanks across the states that are being funded by far-right ideologues with the purpose of promoting privatization and unfettered free markets, and undermining government, regulation and the public good. Many of the state think tanks described by Stinktanks.org and the State Policy Network itself are promoting privatization of public education.  Once again in many instances, the donors are shielded by the tax code.

Rachel Baye quotes University of Wisconsin professor Michael Apple’s explanation of why so many powerful people are donating to the “social welfare” 501(c)(4) agencies that are investing in the political campaigns of local school board candidates and state legislators who seek to  privatize public education: “‘If you look at Broad, Bloomberg, they’re in favor of strong mayoral control of education.  Some of it is also this belief that the corporate sector is the last remaining set of institutions that form the engine of our society.’ But changing the way public education functions also opens windows for private corporations and individuals to make a profit, which is likely a factor in at least some donor’s decisions to open their wallets, he said.”

Potential for profits is huge, according to Baye: “In 2002, the education sector spent an estimated $146 million on technology.  By 2011, that number was estimated at $428 million…”