Archives for category: Education Industry

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.

This article by Dave McKenna is an investigative report centered on the activities of Mayor Kevin Johnson of Sacramento (husband of Michelle Rhee). Johnson was a major basketball star back in the day, and he seems to have a bright political future.

But the article says there are troubling details about his political shenanigans that may cause problems for him.

It is amazing how many of his problems are connected to the charter industry.

McKenna writes:

Johnson is husband to Michelle Rhee, the controversial school-privatization activist, and there is considerable evidence that their shared desire to turn public schools into engines of profit for private actors is what has driven much, if not most, of Johnson’s more recent wrongdoing. Despite, or perhaps because of, this, he’s enjoyed the profile and appointments of a national figure on the make: public appearances with President Barack Obama, portrayal as a latter-day Metternich by The New York Times, and the patronage of serious players like Michael Bloomberg and Bill Gates.

A new scandal, though, is putting Johnson’s rise at serious risk. It involves the mayor replacing civil servants with private citizens funded by the Wal-Mart empire and tasked with the twin purposes of working to abolish public education and bring in piles of cash for Kevin Johnson.

The rising star, it seems, set up a fake government—and some people are starting to notice.

It is hard to remember that we once had stable schools in this country. That was before No Child Left Behind and Race to the Top went into full implementation. Now, schools in African American and Latino communities are routinely targeted for state takeovers, turnarounds, transformations, and transfer to chartering entities, without the consent of the people who live in the communities and the people whose children attend the schools. The billionaires pushing the “parent triggers” want parents to have the power to turn their school over to a charter corporation, but they are unwilling to grant them the power to say “no” to a takeover or a closure ordered by the Mayor, the Governor, or some bureaucrat.

Takeover goes in only one direction: privatization.

If this subject interests you, you will find this brief report of great value. It summarizes the “systematic disenfranchisement of African-American and Latino communities through school takeovers.” It describes the failure of all of these measures, from the takeover of New Orleans to the takeover of Detroit to the takeover of Newark to the takeover of public schools in Tennessee. One thing that all these schools have in common is that they enroll children of color. The powerful assume that African American and Latino parents lack the political power to stop them, and so far they have been correct.

The hunger strike at Dyett High School in Chicago demonstrates that there are ways for the “powerless” to take power. With the strength of their will, they can force those who hold the levers of power to back down.

That same fortitude is needed in all the threatened communities. The same local leadership can change the outcome.

Fred LeBrun is rapidly emerging as the most astute education writer in New York State. He writes for the Albany Times-Union so there is a good chance that the Governor’s staff and the legislative staff read what he writes. I hope so.

In this article, he skewers Cuomo’s plan to put struggling schools into “receivership.” That’ll fix them. Millions will be burned while the state ignores the root causes of low-performance in school: poverty. It seems that all the schools on the Governor’s list are in poor communities. Black and brown children will be Cuomo’s playthings, as teachers and principals and other staff are fired and new ones brought in, who will also be fired.

It is painful to read. You know that millions of dollars will be spent on consultants, and by the time the money is all gone, there will be more schools to hand over to Cuomo’s hedge fund buddies to turn into low-performing charters.

LeBrun writes:

While New York public education struggles to resolve an idiotic dependence on standardized tests, waiting in the wings is another poorly-thought-out plan threatening more harm than benefit: school receivership.

So far you haven’t heard a great deal about it because the dramatic consequences are a year off, but you will. And, unlike the statewide disgust over Gov. Andrew Cuomo’s testing obsession that affects every school district and has gotten a lot of press, the threat of receivership at the moment hangs over only 144 “struggling” schools — not districts — all of them among the state’s poorest. Of these, 20 are labeled by the state Education Department as “persistently struggling” because of the length of time they’ve been “struggling” and need to turn themselves around in just a year, or else. The rest have two years.

In the Capital Region, only Albany’s William S. Hackett Middle School is on the persistent list, but if a handful of schools in Albany, Troy, Schenectady and Amsterdam, including Albany High School, don’t show appropriate progress, they will join Hackett next year.

What happens now for schools like Hackett is as complicated as directions to Atlantis, and about as reliable.

Albany school Superintendent Marguerite Vanden Wyngaard becomes the acting school receiver, with broad powers, for the next year. A required community engagement team composed of the principal, staff, teachers, parents and even students from Hackett will forward recommendations for improvements to the superintendent, who will use them to help create her intervention plan to turn the school around. The plan is due at State Ed for approval by the end of this month. Over the next year, the community team will look over her shoulder as the intervention plan unfolds.

In the meantime, the school receiver can do pretty much what she wants (with approval from State Ed): change the curriculum, replace teachers and administrators, increase salaries, reallocate the budget, expand the school day or year, turn Hackett into a community school, even convert to a charter school. Although there’s enormous rigmarole attached to much of it, including going charter. Remember, the receiver in this case remains the superintendent for the rest of the district, so she is answerable for any wild and crazy ideas to the voters through the school board.

Anyway, to help start the process, Vanden Wyngaard can apply for a grant from a $75 million pot set up by the state, although she’ll have plenty of competition from other “persistently struggling” school receivers in Syracuse, Rochester, Buffalo, Yonkers, New York City and elsewhere. She has a year to do her turnaround. Or the hammer falls and we are off to Neverland.

Then the state would appoint an independent receiver who is answerable only to State Ed. At which time the process of community involvement, an intervention plan, and the rest are repeated, only now change is apt to be far more radical, with wholesale staff firings. An independent receiver can be a person from an approved list that doesn’t yet exist, or an institution or charter school. Although charter schools upstate have been mostly a bust, as Albany well knows. Middle school charters in Albany could not save themselves, let alone others.

So. If you’re getting the idea that this receivership idea seems like a plan designed to fail and thus prepare the way for school privatizers to make a bundle, move over.

For one thing, the state has yet to give school receivers a clear idea of what would constitute appropriate progress to avoid an independent receiver. Presumably, we’ll know by the end of the month when intervention plans have to be approved. What is expected and how reasonable it is will answer a great deal.

Because just a year to show any marked improvement on any front for a school like Hackett, no matter how thoughtfully considered, broadly accepted by the community, or earnestly pursued, is absurd. Real change needs time for all stakeholders to become invested. Teachers at Hackett today are still complaining that attendance and discipline as major problems, just as it was when I substituted there, oh, a half century ago. These are, after all, manifestations of the poverty and despair underlying most of Hackett’s problems; they don’t go away. They are the community’s problems, not just Hackett’s.

And for any turnaround plan to stand a chance of success, it will need tons of money and sustained financing for years. Curiously, while the law creating school receiverships is rich in the detail of who can be fired and not rehired, on punitive measures, and what extraordinary powers a receiver may exercise, it does not specify who will pay for an independent receiver.

Keeping in mind, always, that the state has an abysmal record in meeting its education commitments. At the moment, the state owes New York City more than $2 billion in aid; Albany more than $37 million; Schenectady nearly $60 million.

So there you have it. A boondoggle in the making. Cuomo forced us to accept a mandate of an independent receiver for certain schools labeled struggling by his cohorts at State Ed, but so far there isn’t a hint of state money to pay for it. Can you imagine what that burden will do for school budgets like Albany’s?

Oh, and it gets better. Amusingly, the concept of “struggling” public schools is defined by the educational establishment as the bottom 5 percent of all state schools based on a host of criteria. Which means no matter how much struggling schools improve, there will always be 5 percent at the bottom who potentially need a receiver.

What a surprise. • 518-454-5453

What would you rather be? A mid-level bureaucrat monitoring fiscal matters in the school district or a millionaire?

Find the answer to this question in this article about Philadelphia.

“MANY OF the recent charter bond deals have been helped by Santilli & Thomson, a New Jersey-based firm that has made millions off consulting contracts and bond fees.

“The firm, run by ex-School District of Philadelphia finance officials Gerald Santilli and Michael Thomson, touts on its website “more than 50 years of combined experience in municipal school management.”

“There is no way to know exactly how much Santilli & Thomson has earned in taxpayer-funded contracts from charter schools, according to a district spokesman. The firm did not respond to numerous requests for comment.

“However, a analysis of financial documents for several charter schools that received municipal bonds found that Santilli & Thomson has billed at least $5 million since 2010….

“After working for 14 years as executive director of fiscal management for the school district, Santilli moved into charter consulting full time in 1999, shortly before String Theory was founded.

“Santilli personally helped found several other schools, like First Philadelphia Charter and its sister school, Tacony Academy, before starting his own consulting firm with Thomson.

“After a while, it appears [Santilli] realized that this could be a lucrative and growing business, and that he could make more money doing the work on his own,” said former school district chief financial officer Michael Masch.

“Santilli & Thomson was subpoenaed as part of a federal investigation into charter corruption in 2010, but no one there was ever charged with a crime and the firm’s contracts have continued to grow. The charters that Santilli helped found have become some of his biggest clients and secured some of the biggest bond deals in city history.

“What Santilli does to facilitate these arrangements is unclear. Consultants like Santilli & Thomson face little scrutiny from the Pennsylvania Department of Education.”

Other firms have also reaped the benefits of charter consulting. The best pay-off comes when the company that owns the charter owns the space used by the school and pays itself large leasing fees. Sweet.

“Reimbursements rose 79 percent – to $6.8 million annually – while the number of charter schools increased by just 20 percent, state records show. Only a fraction goes to schools that rent their buildings from unrelated owners.

“The issue isn’t limited to Philadelphia, according to state Auditor General Eugene DePasquale, who is conducting a statewide review of charter leases.

“About half the charter schools we’ve audited basically have this circular arrangement where there’s an entity that owns the building and an entity that leases the building, and they’re connected,” he said.”


The Ohio Supreme Court ruled that property purchased by the for-profit charter management corporation White Hat using public funds belongs to White Hat, not the public.

I’m no lawyer, but this decision says to me that the schools’ stuff does not belong to the public, but to a private entrepreneur. I take that to be an acknowledgement that White Hat privatized the assets of the school. More evidence that charter schools are not public schools. If they were, their stuff purchased with public funds would belong to the public.

White Hat was sued by the boards of 10 of its charter schools, all of which have closed for poor performance.

“A charter school operator – not the schools themselves – own the classroom desks, computers and other equipment purchased with state-provided tax dollars, the Ohio Supreme Court ruled today.

“The ruling represented a victory for the charter-school operator, White Hat Management Co., and a defeat for 10 now-closed schools in Northeast Ohio that claimed they owned the property since it was bought with public funds.

“Justice Judith Ann Lanzinger wrote in the majority opinion that charter school operators perform a governmental function and establish a fiduciary relationship with the schools they manage in purchasing school equipment, contrary to the position taken by White Hat.

“That finding should allow the public to obtain charter-school operator financial records that long have been withheld, said Karen Hockstad, a Columbus lawyer who represented the ex-White Hat charter schools.

“Current law largely does not address the duties of school operators and does not restrict the provisions of contracts between operators and charter schools, Lanzinger wrote.

“Therefore, a provision in White Hat’s contract allowing it to title property in its name and later require the schools to buy back any property they wanted to keep is enforceable, the opinion stated.

“Unless there is fraud, courts cannot save “a competent person from the effects of his own voluntary agreement,” the opinion said.

“The schools were represented by their own legal counsel and they agreed to the provisions in the contracts. They may not rewrite terms simply because they now seem unfair….”.

“The funds were paid by the state to the seven Hope Academies and three Life Skills Centers in the Cleveland and Akron areas that hired White Hat in 2005 to handle operations. White Hat received 95 percent of each school’s state funding to pay teacher salaries, building rentals, utilities and other expenses.

“The schools’ lawyer had argued the funds remained public despite their payment to White Hat and that classroom equipment belonged to the schools.

“About $100 million was paid by the state to the seven Hope Academies and three Life Skills Centers in the Cleveland and Akron areas that hired White Hat in 2005 to handle operations. White Hat received 95 percent of each school’s state funding to pay teacher salaries, building rentals, utilities and other expenses.

“White Hat Management is owned by David L. Brennan, of Akron, one of the early proponents of the publicly funded and privately operated charter schools and a major donor to Ohio Republicans…. ”

Two judges dissented. Their dissents were well-reasoned and common sense:

“There has been no quality education, there has been no safeguarding of public funds, and there most certainly has been no benefit to the children,” Justice William M. O’Neill wrote.

“He concluded that the contracts are not enforceable because they “permit an operator who is providing a substandard education to squander public money and then, upon termination for poor performance, reap a bonus, paid for by public money.”

“Justice Paul E. Pfeifer wrote that the court should have overturned the contract.

“The contracts require that after the public pays to buy those materials for a public use, the public must then pay the companies if it wants to retain ownership of the materials,” he wrote.

“This contract term is not merely unwise as the opinion would have us believe; it is extremely unfair, so unfair, in fact, as to be unconscionable. … The contract term is so one-sided that we should refuse to enforce it.”

Wendy Lecker, civil rights attorney, notes that the release of Common Core test scores proved the adage that the tests measure family income.

“Decades of testing evidence show that the only stable correlation that exists, whether it is the CMTs or the SATs and likely the SBACs, is between test scores and wealth. Researchers such as Sean Reardon at Stanford note that wealthy parents not only can provide basic stability, nutrition and health care for their children, but also tutoring and enrichment that gives affluent children an edge over poorer children.

“The wealth advantage extends beyond test scores. Two studies, by St. Louis Federal Reserve and by the Boston Federal Reserve, demonstrate that family wealth is a determining factor in life success. The St. Louis report, published in August, revealed a racial wealth gap among college graduates. A college degree does not protect African-Americans and Latinos from economic crises as it does for whites and Asians. Employment discrimination figures into the disparity, but a major role is played by family wealth. Without a safety net of family assets, graduates of color must make more risky loan and other financial decisions. Last year’s Boston Fed study noted that wealthy high school drop-outs stay in the top economic rung as often as poor college graduates remain in the bottom economic rung. As a Washington Post article put it, rich kids who do everything wrong are better off than poor kids who do everything right. These reports, coupled with the fact that most job openings in the United States are for low-skilled workers, expose the uncomfortable truth that education is not the great equalizer.”

Instead of providing poor kids with smaller classes and other supports, we spend billions on testing.

“Education reformers deflect attention from the supports poor kids need and tell us that all kids have to do is develop some “grit” to succeed. In his best-selling book, “How Children Succeed,” Paul Tough claims there is “no antipoverty tool we can provide for disadvantaged young people that will be more valuable than the character strengths” like grit. Connecticut policy makers are trying to develop tests to measure the degree of “grit” our kids have. We are even told that if students have enough “grit” to get high test scores, our economy will be more competitive….

“Robber-baron education reformers such as Gates fight to protect their wealth to pass on their success to their children. For other people’s children their message is clear, as teacher/blogger Joe Bower remarked: “Let ’em eat grit.””

Governor Paul LePage is a blunt-spoken Tea Party kind of guy, who has won two elections by a plurality, not a majority.

Early on, he aligned himself with Jeb Bush to promote for-profit digital learning.

But now he is in trouble because he threatened to cut the state funding of a charter school that wanted to hire the Democratic House Speaker as its president.

Some legislators are talking impeachment, and the movement seems to be picking up momentum.

The cynic in me wonders why a charter school wanted to hire the speaker of the Democratic House as its president. Charter schools are notorious for finding ways to send money to key political figures, usually as direct campaign contributions. Was this on the up-and-up or just another clever ploy by the charter industry to shore up political support from both sides of the aisle?

Julian Vasquez Heilig is a national treasure. He is a well-educated researcher. He has a conscience and a heart. And with all that, he has courage and humor.

I love reading his blog, Cloaking Inequity. Not only his analyses sharp, but he usually has clever graphics.

This is latest post. He responds to critics of his policy brief on Néw Orleans, and he glories in some unexpected recognition.

Julian is a professor at California State University at Sacramento. If your community is planning a public forum, invite him to speak. You will learn and enjoy.


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