A reader asks a reasonable question, perhaps wondering why states like Ohio and Pennsylvania continue to authorize cyber charters despite their abysmal results.
He brings up Michael Milken, who was convicted on charges of securities fraud and tax violation and sent to jail in 1990. According to his bio on Wikipedia, Milken made $1 billion a year and was paid out about $1.1 billion in fines and settlements of claims. One way to understand what is happening in education today is to read Connie Bruck’s book about Milken, the junk bond king, in Predator’s Ball. Junk bonds and leveraged buyouts led to lots of “creative destruction” of familiar brand names.
Today, Milken is a leading figure in the education reform movement.
He is one of the founders of the nation’s biggest cyber charter chain, K12. His foundation invests in merit pay (which as I have previously observed, never works); it gives awards annually to outstanding teachers. One does wonder if it is appropriate for an ex-felon to run schools that receive public funding. I don’t think he could work in a school because schools–at least, public schools– usually fingerprint future employees and don’t hire ex-cons. Cyber charters make a lot of money for their sponsors, but they provide a low-quality education, if you judge it by academic results.
| I don’t understand the concept of “legal fraud”. Is that just reserved for corporations and some politicians?Re: CorporationsMilken owns K12 Inc and they are operating in 32 states + DC:http://www.k12.com/schools-programs/online-public-schoolsMilken is a convicted felon who admitted to and was imprisoned for fraud related to fiscal managment. Today, he typically says he’s just an investor in his companies and I believe he tries to conceal his real involvement in them by playing a kind of corporate musical chairs. At the very least, state government officials should be able to track and identify his true involvement in his companies and prevent those companies from receiving public funds on the basis of his felony convictions over money matters. I think it’s possible to do, because the feds prevented him from obtaining financial aid for a university he owned, since his felony convictions were related to violating US securities laws. Perhaps it’s because they were violations of federal laws and not state laws, but one would think the issue is more about fraud involving money, rather than jurisdiction.Re: Certain PoliticiansMy city’s former mayor of 22 years got our city into some truly terrible long-term contracts that privatized some public services, in order to cover fiscal deficits, including a 75 year parking-meter contract and a 99 year parking garage contract. Parking rates immediately skyrocketed and that is going to be lasting our ENTIRE lifetimes. This former mayor now works for the very law firm that negotiated that parking-meter deal:
I just don’t get why these kinds of things look like fraud and yet might be legal. Are there that many loopholes? It’s particularly disconcerting when the politicians who do such things are attorneys who are familiar with the law –and the loopholes, too, I guess. This mayor was previously a State’s Attorney. Our last two governors, who were also lawyers, are currently serving time in prison for crimes they commited while in office. One has to wonder why some people manage to avoid prosecution or sanctions while others don’t. Admittedly, I’m sometimes glad when little people, with little money and little crimes that don’t have victims are not targeted, but when we’re talking about big people, with big money and big crimes that impact millions of folks, not so much. |
Diane Ravitch's blog 
What’s even more disconcerting about this story is that Mary Futrell (former president of the National Education Association) is on the Board of Directors http://www.k12.com/about-k12/our-team/board
Every year Milken gives out about a million dollars in surprise awards for teachers. Milken’s net worth is estimated at one billion dollars. Let’s put that in perspective. As a classroom teacher, I make, say the average $52,000 a year. If I were to be as generous as Milken, I would need to spend about $52 of my own money every year on students. I, like most teachers I know, spend that much of my own money on my classroom before the first day of school.
The collective “giving” of teachers, and we’re only talking financially here, go far beyond anything Milken has done. Consider for many teachers, a set of new books probably means a sacrifice of something personal. For Milken, dropping $25,000 isn’t even noticed.
For spending my own personal money on my classroom, the reward is intrinsic. (In 2011, Indiana disallowed the $250 deduction for school teacher expenses.) What does Milken get for spending his own personal money? My guess is a diversion from the racketeering, securities fraud, and insider trading scandals afflicting his business as he negotiates and brokers deals with government officials in “public” education.
Milken and other “philanthropists” donating money are creating a tangled web of deception. For example, last March on a visit to Indiana, Ms. Ravitch criticized State Superintendent Tony Bennett and his department of education as being pitted against teachers. Bennett claimed he works hard to recognize and reward good educators, then includes the Milken award along with other, shoddy measures, as one way he recognizes good educators.
By the way, K12 Inc, Milken’s cyber business is a donor list for Bennett’s campaign. Bennett has pushed hard that all Hoosier students must take at least one virtual class before graduation.
Tangled indeed. Enough to make me say, please in the name of humanity, no more philanthropy.
Can you say philanthropic vulture????
TN bought TEAM/TAP, a teacher evaluation system from a Milken owned company called NIET. http://www.tapsystem.org/about/about.taf?page=nietbio_lmilken
The 1-5 scoring rubric met the requirement in Race to the Top to evaluate teachers with “objective” measures.
The Milkens have been marketing TEAM/TAP since the mid 1990’s. If it is so effective, shouldn’t there be dozens of studies replicating its success? There are none. Peer-review constrains bad science and practices, and protects those from harm who are subjected to its application. It’s not an overstatement to say that, absent critical review, the TEAM evaluation can identify teaching quality about as well as rolling dice.
That the Milken family foundation has bypassed peer review and critical analysis and sold its “product” to the taxpayers is very curious. This use of our public funds deserves further scrutiny. Recall that co-founder Michael Milken is a convicted felon. Rudy Giuliani successfully prosecuted him for a massive fraud in 1989 that destroyed his company and cost the taxpayers millions in the ensuing cascade of savings and loan failures. Milken’s crimes were so egregious, president G.W. Bush refused to give him a presidential pardon. Caution and study here would seem wise. http://articles.latimes.com/2009/feb/03/business/fi-milken3
Outsourcing to contractors with a history of fraud has the potential to be a spectacular boondoggle. Our students will be the victims. Who will be held accountable?
Thanks for this post today, Ms. Ravitch. It was the missing piece I needed for a Hoosier blog: http://ahuntingtonteacher.blogspot.com/2012/07/bennetts-education-reform-in-indiana.html