Archives for category: Education Industry

Last week, I posted about a conference sponsored by the pro-voucher American Federation for Children, celebrating the destruction of public education in New Orleans. The participants seemed gleeful. One speaker spoke of bankruptcy as a wonderful opportunity to eliminate public education and start over.

Peter Greene decided that it was his civic duty to listen to the entire panel discussion, and he shares his impressions here.

Greene tries to understand the spirit of jollity in the discussion:

The actual title of the panel is “Knocking Out Yesterday’s Education Models,” though Persson reports that Bradford makes a joke about the working title being “What Happens After You Blow It All Up.” If you watch it, I will warn you that the most disconcerting thing about the whole discussion is the jaunty, breezy, jolly, jokey tone of the whole business. As a teacher, it is beyond disconcerting about watching people discuss blowing up the work that you’ve devoted your life to while they laugh and smile and yuk it up like the whole destruction of traditional public education is hilarious….

Greene summarizes the presentations of each of the speakers. Here are a couple of examples:

Katie Beck

COO of 4.0 Schools, Beck has a Teach for America pedigree, and went through the Harvard College. She gets “how do you turn education into a more entrepreneurial space” as a question, so I guess we’re skipping over “why the hell would you want to do that?”

Her outfit likes to work with people who are “obsessed” with a problem and who want to make money from the solution. Okay, I’m paraphrasing, but I’m not loving her message, and she does that thing where every sentence ends like a question? Anyway, her term for institutional isomorphism is “the hairball” because, you know, traditional public school is just a disgusting mess. So, for instance, instead of starting with a charter that will spend $2 million and look like “an iteration of” existing schools, they help little boutique start-ups. Because anything that looks like the old way is obviously bad. I had the hardest time wading through Beck, who is so clearly focused on developing business without much interest in the education side of things. All of her ideas deal with the best way to get a business started up, with no concern expressed for the students who become the guinea pigs for these start-ups.

Bradford asks if for-profit people are any different to work with that the other altruistic folks. But she doesn’t work with “bad actors” who are in it to make a buck. And being for-profit helps those people keep themselves honest because when you’re obsessed with solving a problem, you have to ask “is this solving it enough that someone’s willing to pay for it.” Which I wouldn’t call “keeping honest” so much as “missing the entire point of running a school.”

Rebecca Sibilia

So here comes the lady who’s quote got us interested in this panel in the first place. If we want all of her comments will it, as she suggests, make her sound better. Well, no. The whole thing is even worse than the quoted portion, which tells us a little something about how she sees herself.

Bradford asks her how we pay for all this innovation. And she opens with, “The problem is, we can’t.” Which is a remarkably honest answer [insert my usual complaint about trying to run charter systems without being honest about the true cost.] She will now break down the three problems that EdBuild is trying to solve.

First, the way that we’re funding schools is “largely arbitrary” and “doesn’t make any sense.” And Sibilia seems far too smart to believe that baloney, but just in case, here goes: People set up schools in their community, for the students who live in their community, so they funded them by collecting money from everyone who lives in the community. Later on, state governments got involved in trying to even out the differences in funding inherent in a local-based system. There are lots of things to hate about how this is all playing out, but it’s silly to pretend that the system just fell from the sky for no reason at all. Her criticism about uneven funding outcomes seems to be that by favoring one district over another financially, you’re creating an artificial market bias. One might complain that some students are getting fewer resources than they deserve, but that doesn’t seem to be her concern. It;s the savage and unwarranted abuse of the free market that’s the issue.

Second, she doesn’t like the borders that are created by property taxes, which seems exactly backwards. Municipal borders exist, and folks who live within them are taxed. Not the other way around. She thinks this leads to a mistake– trying to get resources into those borders instead of “focusing on how we can break those borders” which is a less objectionable way to say “how we can get some students out.” Because “breaking the borders” instead of “getting resources into the borders” has to mean that we are going to just let some areas collapse in unmitigated poverty. Which, as we’ll see, is exactly her plan.

See, many states fund schools with property taxes, and in many states property taxes can’t go to schools of choice. “We’ve had charter schools for a quarter of a century, but we’re still treating them like an experiment. And so that’s a problem and we have to fix it.”

So, there is a ton of Wrong packed into that. First of all, the modern corporate charters these guys are talking about haven’t been around for twenty-five years. Second, they are experiments, and not very successful ones, at that, having not yet figured out how to stop some charters from being Ohio-style nests of incompetence and corruption. Third, charters have used their fledgling nature as part of their excuse to avoid the same oversight and accountability that public schools enjoy. Every time a charter wants to set up a new rule for itself, its argument is, “We’re a charter. We should be free to experiment and Try Stuff.”

Sibilia’s argument is that charters should get lots of sweet, sweet public tax money. Neither she nor other charter advocates make a convincing case for that.

But she’s going on about the evils of property taxes being linked to public schools, and she and Bradford share a laugh at how it’s still called millage, which apparently proves that it’s just so antiquated and uncool. Har. And she goes on to try to make a point that funding is based on the teacher, and not the student and their needs, but somehow property tax locks this in, and so places where the charters are getting a new teacher corps (young? cheap? unprofessional? she doesn’t explain the critical differences) are locked in. But until we can bust up the whole funding system (she also does not say what she wants to replace it with), none of the cool reforms being discussed here will be sustainable. And that much is probably true.

Bradford sets up her next bit by observing that some school districts are in trouble and he would argue most can’t afford to stay open, and that would be awesome, and I say, you know what would help with that? What would help is to stop allowing charters to suck the blood out of the public system. And all that brings us to the quote that has circulated, where she envisions bankruptcy as a great way to blow up a district, specifically getting rid of all its “legacy debt” so that they no longer have to pay for like buildings and pensions, which is totally cool because having a school district go bankrupt is no problem for students, just the adults. Which is just– I mean, I imagine that students would notice that their district is collapsing financially and cutting programs and teachers and resources with a chainsaw. “Bankruptcy is not a problem for kids,” is a statement that in the best of contexts is still grossly tone-deaf and reality-impaired. In the context of Sibilia’s discussion of how to blow up public schools so we can has charters, it’s even more tone-deaf and reality-impaired.

And while the tone of the whole panel is, as I said, disturbingly light and happy, Sibilia is just so thoroughly gleeful about the prospect of districts becoming bankrupt, their pensions zeroed out and their teaching staff scrubbed. I have seen people less excited about getting engaged to the eprson of their dreams.

Greene discovers that the most thoughtful member of the panel is Andy Smarick, who has frequently spoken of the urban school district of the future as one that has no public education. But Smarick in this panel reflects on the danger of unintended consequences.

What he says is, yes, we’ve got an old hide-bound system, and we might want to blow it up and replace it, but when you do that you break a lot of systems and policies that are tied to it. “When you tug on that thread, you see a lot of the fabric start to warp. This is not to say we shouldn’t pull on that thread–”


There is a downside to all this that should not be ignored. And he brings up Chesterton’s fence. Which is an old British notion that you don’t take down a fence until you understand why it was put up in the first place.

‘So, some of the worst changes to the revolutionary evolutionary point are when we, with great hubris, with great certainty, look at something and we think is messy, untidy, inefficient, and we don’t see the wisdom, we don’t see the long-standing virtue, value, that is in it that has been tested over time, that has evolved, and we technocratically with great brilliance the best and brightest among us decide we’re going to change that thing.’

He tells a story about forest management and mistakes made in the name of commoditized lumber. Or knocking down swamps and then discovering we’d made a mess. Or the human social capital destroyed with high rise public housing. So, he says, as we tinker with all the pieces parts of schools, “let’s at least have a little humility and recognize that with that change comes a casualty.” And that those casualties often are the least advantaged.

So, first time I ever wanted to give a certified reformster a round of applause. And I’ll add that I’ve known actual conservatives my whole life, and as I have watched ed reform unfold, I don’t understand why more alleged conservatives do not share Smarick’s point of view.

A few years ago, I dared Andy Smarick to read James Scott’s “Seeing Like a State.” He got the point. It is about “the best and brightest” imposing their grand ideas on the little people–with disastrous results.

He is thinking. That is a good sign.

Charters kill unions. Ninety percent of charters are nonunion. Their sponsors want it that way..

Personally, I am completely opposed to for-profit charter schools. I think they are an abomination. I believe that every cent paid by taxpayers should be dedicated to the needs of children and their teachers, and not a single cent should be paid to investors.

Q. What are your views on private school vouchers, tuition tax credits, and charter school accountability and transparency?

BS: I am strongly opposed to any voucher system that would re-direct public education dollars to private schools, including through the use of tax credits. In addition, I believe charter schools should be held to the same standards of transparency as public schools, and that these standards should also apply to the non-profit and for-profit entities that organize charter schools.

This is what was on her blog from our questionnaire for HRC:
Q. What are your views on private school vouchers, tuition tax credits, and charter school
accountability and transparency?

HRC: I strongly oppose voucher schemes because they divert precious resources away from financially
strapped public schools to private schools that are not subject to the same accountability
standards or teacher quality standards. It would be harmful to our democracy if we dismantled
our public school system through vouchers, and there is no evidence that doing so would
improve outcomes for children.

Charters should be held to the same standards, and to the same level of accountability and
transparency to which traditional public schools are held. This includes the requirements of civil
rights laws. They can innovate and help improve educational practices. But I also believe that
we must go back to the original purpose of charter schools. Where charters are succeeding, we
should be doing more to ensure that their innovations can be widely disseminated throughout
our traditional public school system. Where they are failing, they should be closed.

People often wonder why hedge fund managers and entrepreneurs are so devoted to the proliferation of charter schools and so hostile to public schools. If you survey the research, it is clear that they get about the same results overall as public schools. There are some that get high scores, but they usually get them by cherry picking the most motivated and able students. Some are fly-by-night operations.

What’s the lure? I believe that some number of the 1% who love charters are motivated by a desire to do good. Others think the free-market of choice and competition will work wonders. Still others are motivated by profit. None are at all concerned that they are inflicting grievous harm on a basic public institution that is central to our democracy. Or they they are experimenting on other people’s children.

Laura H. Chapman reminds us of the power and allure of profits.

She writes:

In Forbes magazine, 2013, by Allison Wiggin.

“About the only thing charters do well is limit the influence of teachers’ unions. And fatten their investors’ portfolios.

In part, it’s the tax code that makes charter schools so lucrative: Under the federal “New Markets Tax Credit” program that became law toward the end of the Clinton presidency, firms that invest in charters and other projects located in “underserved” areas can collect a generous tax credit — up to 39% — to offset their costs.

So attractive is the math, according to a 2010 article by Juan Gonzalez in the New York Daily News, “that a lender who uses it can almost double his money in seven years.”

It’s not only wealthy Americans making a killing on charter schools. So are foreigners, under a program critics call “green card via red carpet.”

“Wealthy individuals from as far away as China, Nigeria, Russia and Australia are spending tens of millions of dollars to build classrooms, libraries, basketball courts and science labs for American charter schools,” says a 2012 Reuters report.

The formal name of the program is EB-5, and it’s not only for charter schools. Foreigners who pony up $1 million in a wide variety of development projects — or as little as $500,000 in “targeted employment areas” — are entitled to buy immigration visas for themselves and family members.

“In the past two decades,” Reuters reports, “much of the investment has gone into commercial real estate projects, like luxury hotels, ski resorts and even gas stations. Lately, however, enterprising brokers have seen a golden opportunity to match cash-starved charter schools with cash-flush foreigners in investment deals that benefit both.”

More at.

Governor Brown has until October 11 to sign or veto legislation that would ban for-profit charter schools in California. it is outrageous to squander taxpayer dollars on profits for investors and outrageous executive salaries. This bill should be a slam dunk for Governor Brown, a man with a keen sense of justice. Now I hope the legislature tightens oversight of nonprofit charter schools and reviews their executive salaries to be sure that they really are nonprofit. And while they are at it, they should ban charter schools in affluent communities, which violate the spirit if the charter movement, which wassupposedto help the neediest kids, not to enable rich parents to create a publicly-funded private school for their children.

Here is the legislation awaiting Governor Brown’s signature:

“For-profit charter schools: Charter schools run by for-profit corporations would not be allowed in California under the terms of AB 787, authored by Assemblyman Roger Hernández, D-West Covina, which passed the Legislature. Six for-profit charter schools operate in the state, and California Virtual Academies, managed by the for-profit K12 Inc., is the largest. The bill’s author noted that K12 paid its top six executives a total of nearly $11 million in 2011-12, while the average California Virtual Academies teacher’s salary was $36,150, about half of the average teacher pay in the state. The author raised the question of whether a for-profit corporation would try to limit services to students to increase profits.”

This article explains the financial shenanigans of unscrupulous charter operators. Not every charter founder rips off taxpayers, but the public needs to know when charter schools are set up to benefit greedy investors, not children.

“Eileen Appelbaum, co-author of the important book Private Equity at Work, flagged an important article in on how a secretive consulting firm that was previously investigated for corruption and a local law firm are engaged in complex, high cost bond deals to implement an asset stripping strategy that Appelbaum and her co-author Rosemary Batt have called out as a private equity enrichment scheme that impairs operating businesses. It’s bad enough to see this sort of thing take place in the dog-eat-dog world of Corporate America. It’s even worse to see it take place in charter schools, where the losers are students, by virtue of unjustifiably large portions of charter fees go to unproductive rental payments and financing fees, as opposed to education, and to taxpayers, who over time face inflated costs to fund profiteering masquerading as education.”

The article then refers to the scandalous real estate deal to finance a luxurious building for the String Theory charter school in Philadelphia.

“The nub of the looting strategy is the acquisition and leaseback of lavish buildings to house charter schools. Because charters are correctly perceived to be risky tenants, bond financings for these purchases are at junk bond rates, meaning high financing costs are heaped on top of what would already be unjustifiably high rental charges, by virtue of putting schools in educationally unproductive glamorous digs. And of course, in an environment where it’s business as usual to lard up bond deals that could be done on a plain-vanilla basis with far more complicated deals that lower interest rates a smidge in return for allowing consultants to charge hefty fees and the financiers to dump risks worth more than the cost savings on the hapless borrower through derivatives, the financial rent extraction can occur at an even greater scale on a high-cost financing.”

And this is a quote from a story at

“In 2007, Independence Charter School issued a bond for $18 million dollars with help from the PIDC for the purchase and renovation of the vacated Durham Elementary at 16th and Lombard streets. That school had been built in 1907 and maintained by the district with tax dollars for a century. Now, millions in debt and interest from Independence’s charter bonds are also being paid off with tax dollars.
In situations like these, [Rutgers professor Bruce Baker said, taxpayers are paying for the same buildings twice, while relinquishing public ownership of those properties.
“It’s not that anyone is doing anything ‘wrong,’ ” he said, “But rather that public policy permits a bad deal for the public — one that essentially gives away a public asset while charging transaction fees along the way.”

How long will this theft of public property be allowed to continue?

The cases cited in this article are not isolated. There are a growing number of charter schools that buy the property the school will use, using publicly-financed bonds, then pay rent to themselves, at exorbitant rents.

These practices have been perfected by for-profit charter corporations, but some faux-nonprofits do it too.

William Stroud is the principal of Long Beach High School in New York.

“Our lives have become increasingly commercialized in a modern, global society that everywhere promotes consumerism; surrounding us with images that link glamor and status with possessions. The desire to have more, new, “better” things infiltrates our sub-conscious, influences our daily behaviors, and compromises our value system in remarkable ways. What we have, becomes a substitute for who we are. Buy happiness.

“I often refer to the commercialization of public education, i.e. the contemporary takeover of schooling by a corporate elite that imposes its own paradigm rather than a vision of education as liberation; a system which would develop our full potentials as individuals, strengthen our sense of community with each other, define what it means to be a human being in the grandest sense – values, thoughts, and behaviors. Schools can provide a forum for us to explore how we can make the world a better place.

“Instead, the corporate leaders that guide educational policy, inspired by Milton Friedman’s ‘Freedom and Democracy’ and their own self-interest, have transformed public education into a marketplace. Education becomes synonymous with “achievement” results, and “choice” becomes the reform lever. Students and teachers are measured according to standardized test performance. Significance of data becomes more essential than quality of relationships. Public monies are “freed up” so private service providers can be contracted. And there’s the big money – sales in curriculum and assessment, and educational technology.”

Michael Grunwald, who usually writes about politics, not education, has posted a mostly admiring profile of Arne Duncan.

Bottom line: He really cares!

What he leaves out: Arne’s persistent support for privatization of public education.

He does touch on the opposition to high-stakes testing, but skirts the hot-button issue of teacher evaluation by test scores.

But he does feel bad about the instability that has occurred in Chicago since he left.

And Undersecretary of Education Ted Mitchell cries when he talks about Arne. Michael Grunwald probably doesn’t know that Ted gave up a $750,000 a year job as CEO of NewSchools Venture Fund, the leading privatization organization in education, to join Arne.

As Grunwald says, you can’t understand Arne if you don’t understand basketball. I know a lot about education, but I don’t understand basketball. So that’s my problem.


A new, for-profit charter chain named Pansophic is planning to take over charter chain schools in Ohio. The linked story was published in June, but there have been no follow-ups since then. Either the deal was completed or is pending.

Pansophic is a new company founded by Ron Packard, formerly of McKinsey, Goldman Sachs, and the online giant K12. As CEO of K12, Packard was paid $5 million yearly.

The company also expects to acquire charters run by for-profit Mosaica in Ohio. Pansophic will become the biggest for-profit charter chain in Ohio.

“Akron-based White Hat Management reportedly sold off management of 12 elementary charter schools Friday to an out-of-state, for-profit company that could acquire a third charter school company, an attorney for the charter schools’ public boards said.

“The two deals would make Pansophic Learning the largest for-profit operator of Ohio charter schools, which has become a taxpayer-funded $1 billion private industry.”

White Hat has produced poor academic results for 20 years.

Now, Ohio’s for-profit charter schools will be outsourced to a Virginia corporation that also focuses on the bottom line: profit.

Are these for-profit schools really public schools or are they profit centers that hoodwink parents to enroll their children?

This is what Ohio’s charter law says (thanks to reader Bethree):

“Opening paras of Ohio charter school law: “3314.01 (A) (1) A board of education may permit all or part of any of the schools under its control, upon request of a proposing person or group and provided the person or group meets the requirements of this chapter, to become a community school… (B) A community school created under this chapter is a public school, independent of any school district, and is part of the state’s program of education…”

Is a school owned by a for-profit corporation in Virginia still a “community” school? Is it a “public” school?

How much more of this flimflam will the voters and taxpayers of Ohio tolerate? Do they care about the education of their children?

It is alarming to see private capital and equity investors getting into the business of financing charter schools. And making a handsome profit. Of course, they would not invest unless the profit were there.

If you think the privatization of public education represents “positive social change,” this may be the fund for you.

Turner Capital, in partnership with tennis star (and high school dropout) Andre Agassi, predict returns of 12%. In these days of low interest rates, that is a handsome return.

“LOS ANGELES—Turner Impact Capital has launched the Turner-Agassi Charter School Facilities Fund II to invest up to $1 billion in charter school development nationwide. The fund plans to build 130 charter schools for best-in-class operators by 2020. This is an evolution in Turner’s social-impact investment model, which simultaneously produces investor returns—as much as 12%—while promoting and motivating positive social change.

“Bobby Turner, CEO of Turner Impact Capital, expects the fund to hit $400 million in commitments by late November 2015. The remaining $600 million of the $1 billion fund will be secured through construction debt. “We’ve already had our first closing with more than $150 million, and we expect to close out the fund by the end of November,” Turner tells “We are also incredibly excited to announce that we have partnered with Merrill Lynch to offer up to $100 million of the fund to clients of their private banking platform. It is exciting for us because it is an opportunity to enable individual investors, not just institutional investors, and high net worth individuals to be a socially impactful investor.”

“In addition to Merrill Lynch, the investors in the fund include the University of Michigan endowment, the Texas Permanent School Fund and Citibank. The fund has a $5 million investment minimum and will focus on developing the facilities in dense and distressed neighborhoods nationwide. The schools will be net-leased to charter school operators. “We build environmentally friendly and learning-friendly educational facilities for best-in-class charter school operators,” says Turner. “In essence, we are a build-to-suit private equity fund with the caveat that we provide a bridge to ownership.”

Civil rights attorney Wendy Lecker excoriates Connecticut Governor Dannel Malloy for favoring privately-managed charter schools over underfunded urban public schools.

Lecker thinks Malloy should be guided by some recent court decisions.

“Charter schools want it both ways. To get taxpayer dollars, they want to call themselves public schools. However, they do not want to educate the same children as public schools, or be subject to the same rules. Courts are beginning to challenge this duplicity. In Texas and Arizona, courts have ruled that charters are not entitled to the same funding as public schools. Now, the Washington Supreme Court ruled that charter schools are not public schools at all and it is unconstitutional to divert any money intended for public schools to them.

“Central to the Washington court’s decision was the connection between public schools and local democracy. The court noted that local control is the “most important feature” of a public school because it vests in local voters the power, through their elected agents, to run the schools that educate their children.

“Charters in Washington are authorized by state agencies and governed by unelected boards. The court concluded that charter schools are not true public schools because they are “devoid of local control from their inception to their daily operation.”

“This ruling follows another major decision by Washington’s Supreme Court, holding the legislature in contempt for failing to adequately fund its public schools, and fining it $100,000 a day.

“The refusal to fund public schools and simultaneous willingness to divert money to privately run charter schools has parallels to Connecticut.
In January, Gov. Dannel P. Malloy will have to defend the state’s failure to fund our public schools as the CCJEF schoolfunding trial he has failed to thwart finally begins.

“While spending millions of taxpayer dollars trying to prevent children in underfunded school districts from having their day in court, the Malloy administration has aggressively expanded privately run charter schools and funded them at levels higher than schools in our poorest districts receive. Charter schools receive $11,000 per pupil annually from the state, while children in Bridgeport public schools, for example, receive less than $9,000 per pupil annually in ECS funding. New Britain Schoolsreceive less than $8,000 per pupil. Connecticut charter schools also tend to serve less needy, therefore less expensive-to-educate, students than their district counterparts.

“Moreover, the state, in violation of its own laws, concentrates charters in a few districts, forcing those financially strapped districts to pay additional millions to the charter schools for special education and transportation.

“The Malloy administration applies a double standard to charters on one hand and underfunded public schools on the other. As I have documented, the State Board of Education routinely reauthorizes charter schools despite their failures, while poor districts are subject to state takeover despite the state acknowledging that the districts’ troubles are financial ( The SBE even blindly handed over tens of millions of dollars to a convicted embezzler/charter operator,Michael Sharpe.”

Meanwhile the Malloy administration does nothing to alleviate segregation in charter schools.

Connecticut, like Washington State, has a strong tradition of local control.

Lecker says the courts will have to step in to protect the children of Connecticut from the neglect and indifference of the Malloy administration.


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