Several education advocacy groups convened a press conference this morning in New York City to demand that Eva Moskowitz return the $8.5 million recently contributed to her charter schools by hedge fund billionaire John Paulson. Hedge funds have bought up much of Puerto Rico’s debt, speculating that it is a great investment, but their “investment” will bankrupt Puerto Rico. Since many of Success Academy students are of Puerto Rican heritage, it doesn’t seem decent to take money that is tied to damaging the economy of Puerto Rico and impoverishing its people.
This is the press release:
Success Academy Pressured to Return $8.5 Million Hedge Fund (Dirty Money) Donation
PRESS ADVISORY
The charter school chain in New York City should not accept any money tied to the suffering of Puerto Rican children and families, many of whom already live in poverty
WHAT: Advocates will call on Eva Moskowitz and Success Academy to return an $8.5 million donation of “tainted money” from controversial hedge fund manager John Paulson. In Puerto Rico, where many New Yorkers and Success Academy families have roots, Paulson is profiting from the debt crisis. He is linked to austerity measures that may lead to deeper cuts in school funding and wages for workers that will harm Puerto Ricans. Success Academy’s expansion should not benefit in any way from the suffering of Puerto Rican children and families.
Fifty-six percent of Puerto Rican children already live in poverty, and now hedge fund managers like Paulson want to threaten access to educational opportunity just to make bigger profits.
WHO: Education advocates, parents, community leaders, and concerned residents of New York. Leaders and members of the Hedge Clippers, Alliance for Quality Education, New York Communities for Change, Make the Road New York, Strong Economy for All, Citizen Action New York.
WHERE: Steps of City Hall, Lower Manhattan, NYC.
WHEN: Today, August 5, 10 a.m.
MORE BACKGROUND: Paulson has focused on transforming Puerto Rico into a low-tax, high-luxury playground for the wealthy. As a Bloomberg News headline put it, “Paulson’s Paradise Lures Rich Fleeing Taxes.” He has purchased $120 million of Puerto Rico’s debt. Like other hedge fund managers, he is looking to collect massive profits from his investments – even if it means drastic austerity measures like cuts to public education funding and wages that will destroy the lives of families and children. Paulson’s paradise is a nightmare for Puerto Ricans.
Diane Ravitch's blog 
What’s the position of Campbell Brown—a SUCCESS ACADEMY Board of Director, and supporter? And what’s the position of her new organization, “The 74,” on this?
Ms. Brown kisses the behinds of these same hedge funders when the come to fundraisers for SUCCESS ACADEMY schools? Isn’t that a contradiction? Isn’t she married to one of them as well?
And how about her other organization? The “Partnership on Educational Justice”? What’s that group’s take?
Isn’t Ms. Brown’s whole thing about caring the for the education and well-being of poor people? Doesn’t that include those poor people living in the U.S. territory of Puerto Rico?
We just got an answer from Eva, but not yet from Campbell:
“”Success Academy is proud to accept money from John Paulson.”
— Eva Moskowitz
http://www.nydailynews.com/news/politics/lawmakers-slam-eva-moskowitz-8-5m-john-paulson-article-1.2316262
However, politicians of Puerto Rican descent—a female state senator, a city councilman—have joined in the condemnation of Eva.
—————
“Lawmakers slam Success Academy’s Eva Moskowitz for taking $8.5M donation from hedge fund manager
“by John Spina
“NEW YORK DAILY NEWS
“Thursday, August 6, 2015, 1:33 AM
” Lawmakers slammed Success Academy charter boss Eva Moskowitz Wednesday for accepting an $8.5 million donation from controversial hedge fund manager John Paulson.
“Paulson recently bought $120 million of Puerto Rico’s debt and has developed a luxury retreat for wealthy Americans fleeing rising taxes in the U.S.
“His critics say he is exploiting the island’s recent economic troubles.
” ‘You should not be living and making a profit off the bones of Puerto Rico,’ said New York State Sen. Gustavo Rivera. ‘This is blood money.’
” ‘It’s important Eva Moskowitz stand up and say we don’t take dirty money,’ said City Councilmember Antonio Reynoso.
“But Moskowitz dismissed the criticism, saying: ‘Success Academy is proud to accept money from John Paulson.’ “
My favorite line about this is from Norm’s Scott’s piece, regarding the hedgefunders’ goals of exploiting this crisis to remake Puerto Rico’s school via union-busting, charterizing, and privatizing:
———–
NORM SCOTT:
“When will Arne Duncan start saying:
” ‘The Puerto Rico default was the best thing
that ever happened to Puerto Rico.’ ”
—————
http://ednotesonline.blogspot.com/2015/08/today-press-conf-demands-eva-return-8.html
It would be nice if we could raise the consciousness of the Puerto Rican parents of Eva’s students, and then have them all do a massive walkout of SUCCESS ACADEMY charter schools.
——
Oh and here’s Perdido Schools line referencing the phenomenon of SUCCESS ACADEMY students regularly soiling themselves as a result of stress and not being allowed to go to the bathroom (from a NEW YORK Magazine article… Eva dismissed the idea that this was a problem, as it toughened up students apparently),
————
PERDIDO SCHOOLS:
“Hey, what’s a little blood money when it will buy some extra ‘Test Prep Pampers’ for the kids to wear during the school day?”
———
http://perdidostreetschool.blogspot.com/2015/08/moskowitz-refuses-to-give-back-blood.html
Here’s another piece:
First, a couple quotes:
——————
“This is blood money that (Paulson)’s making off the island. This is the same money that’s actually flowing to Success Academy.”
—- Bronx State Senator Gustavo Rivera, a native of Puerto Rico
———–
” ‘Tell me who your friends are and I’ll tell you who you are,’ ” Mr. Reynoso said, quoting a popular Spanish proverb. “Right now, the message Eva Moskowitz is sending to us and the diaspora of Puerto Rico is that her friends are false, and they take advantage of the terrible financial policies in Puerto Rico that have crippled the residents and the citizens of Puerto Rico.”
— Brooklyn Councilman Antonio Reynoso, a Dominican-American
———–
http://observer.com/2015/08/democrats-demand-success-academy-return-blood-money-from-puerto-rican-debt-holder/#ixzz3i2lMfCjM
—————
“Democrats Demand Success
Academy Return ‘Blood Money’
From Puerto Rican Debt Holder
“By Will Bredderman | 08/05/15 12:57pm
“Latino elected leaders joined liberal anti-charter school activists on the steps of City Hall to demand that Success Academy Charter Schools return an $8.5 million donation from hedge fund manager John Paulson because of his role in the Puerto Rican debt crisis—where the government is slashing education spending in a desperate effort to balance its books.
“Standing with liberal groups like New York Communities for Change and the Working Families Party—both of which have ties to teachers unions and the de Blasio administration—the politicians argued that Success, the largest chain of charter schools in the city, was both profiting from austerity pains in Puerto Rico and sending a message to students with roots in the island.
“Mr. Paulson last year hailed the island as the ‘Singapore of the Caribbean’ after his firm Paulson & Co. scooped up $120 million in tax-free Puerto Rican municipal bonds last year.
“ ‘This is blood money that he’s making off the island,’ said Bronx State Senator Gustavo Rivera, a native of Puerto Rico. ‘This is the same money that’s actually flowing to Success Academy.’ ”
Bronx Assemblyman Victor Pichardo, a Dominican-American, accused Mr. Paulson and Success founder and CEO Eva Moskowitz—a former councilwoman—of profiting from Puerto Rico’s $70 billion debt crisis.
“ ‘Everybody here who’s potentially benefiting from this massive economic disaster in Puerto Rico, don’t use this as an opportunity to aggrandize yourself, he said.
“It was a sentiment Brooklyn Councilman Antonio Reynoso, another Dominican-American, echoed.
” ‘Tell me who your friends are and I’ll tell you who you are,’ Mr. Reynoso said, quoting a popular Spanish proverb.
” ‘Right now, the message Eva Moskowitz is sending to us and the diaspora of Puerto Rico is that her friends are false, and they take advantage of the terrible financial policies in Puerto Rico that have crippled the residents and the citizens of Puerto Rico.’
“Mr. Paulson also has a stake in several hotels and resorts in the territory. Several outlets have reported the billionaire, who also has holdings in banks and utilities in Greece, is in fact taking a bath on his investments as the island has begun to default on the debt—though the New York Times and CNBC allege that Paulson & Co. quickly sold off its shares of Puerto Rican bonds shortly after buying them.
“Many liberal advocates blame federal policy, which curtails the commonwealth’s trade, inhibits its ability to collect taxes and limits its aid from Washington, for the debt crisis. They have called on Congress to pass a bill that would allow the territory to restructure its municipal debts the same way a state would—a power Puerto Rico does not currently possess.
“Paulson & Co. did not immediately respond to requests for comment.
“Ms. Moskowitz, however, defended both the financier and her decision to accept his money. She noted Mr. Paulson has given to numerous other organizations, including the Central Park Conservancy and Harvard University, and argued the money would allow students in the five boroughs to access a better education.
“ ‘Success Academy is proud to accept money from John Paulson, one of the the country’s leading philanthropists,’ she said in a statement sent to the Observer. ‘His gift will benefit thousands of New York City children who would otherwise be forced to attend failing schools.’ “
The slimy profitering is infinite.
Give back the money?
Somehow the words “from her cold, dead hands” come to mind …
What happened to trickle down?
Maybe St. Eva should use that donation to PAY RENT TO NEW YORK PUBLIC SCHOOLS. How about that idea?
Internecine strife?
For those still suffering under the delusion that “we are winning” note the following:
http://perdidostreetschool.blogspot.com/2015/08/de-blasio-hits-new-low-in-quinnipiac.html?m=1
DeBlasio is starting to take a real beating and it’s looking like the contender most likely to beat him is probably going to be a pro-Eva entity.
So no, she won’t give back the money and she has certainly not peaked as yet in her ascendency.
A Hillary win will have all the stars aligned nicely against us, yet again, and everyone will be really shocked.
“Success Academy Pressured to Return $8.5 Million Hedge Fund (Dirty Money) Donation”
“He has purchased $120 million of Puerto Rico’s debt.”
Why not pressure the investors selling Puerto Rican debt to return Paulson’s $120 million?
Another approach: they could also pressure the Teachers’ Retirement System of the City of New York and other big pension funds to amend their bylaws that prohibit them from buying junk-grade municipal and government bonds. This would prevent the distressed debt from being sold to evil hedge funders like Paulson in the first place.
Paulson did not actually earn that $120 million dollars to begin with. It was never really his. Ill gotten gains should not be returned to bad actors.
Let’s jump to massive conclusions that support our position without putting forth any logical argument:
“Hedge funds have bought up much of Puerto Rico’s debt, speculating that it is a great investment, but their “investment” will bankrupt Puerto Rico.”
It is so hard tore read anything on the anti-edreform movement side because it all comes across as so biased
Joe Frick,
I should have prefaced my remarks by telling you that I spoke at length with a major equity investor, who explained to me that hedge funds have given heavily to Republican candidates for Congress, on the expectation that they will NOT permit Puerto Rico to declare bankruptcy. He informed me that the hedge funds own most of Puerto Rico’s debt, which they bought at bargain prices, and they stand to reap hundreds of millions of dollars–perhaps billions– if Puerto Rico is not allowed to declare bankruptcy and is required to pay its debts in full. How they can manage this feat is unclear since its debt is staggering. That is not a “biased” opinion. It is fact.
According to this CNN piece, the person that you spoke to is incorrect. This piece and other sources suggest that hedge funds own 20-30% of the debt, not most of it:
“So who gets hurt if Puerto Rico doesn’t pay up — or if it only pays back a fraction of what it owes? It could be you.
A lot of regular Americans hold these bonds.
“I am worried. Any Puerto Rican is worried,” Rey J. de Leon, a 42-year-old lawyer in Puerto Rico told CNNMoney. “We have a lot of people who are seniors and they depend on the returns from those bonds to live on a month-to-month basis.”
Over 20% of bond mutual funds own Puerto Rican bonds, according to data from Morningstar (the exact numbers are 377 funds out of 1,884 United States bond mutual funds).
The majority of the funds with exposure are municipal bond funds or high yield bond funds. Puerto Rico’s bonds have municipal status, meaning they are tax exempt. That’s why a lot of retirees buy them.
In total, bond mutual funds hold about $11.3 billion of the island’s debt. Another roughly $15 billion is held by hedge funds. The remainder of the [$70 billion] debt is held largely by individuals — mostly Puerto Ricans and mainland Americans.”
http://money.cnn.com/2015/07/01/investing/puerto-rico-bond-holders/
Much of the hedge fund money arrived only after Puerto Rican bonds were downgraded to junk, meaning that the bonds were off-limits to almost all institutional investors—mutual funds, pension funds, and so on. The hundreds of millions or billions of dollars the hedge funds stand to make is nothing more than the promised return on the enormous sums of cash that they lent to the Puerto Rican government when no other lenders could or would—money that allowed the Puerto Rican government and economy to keep functioning.
However, there’s that old saw about if I owe you a million dollars, I’m in trouble; if I owe you a billion, you’re in trouble. The size of Puerto Rico’s debt would seem to place its creditors in that second category, and they will likely have to restructure the timeline or the amount of their bond repayments. It should also be said that several news reports indicate Paulson has taken a bath on his investments in Puerto Rico; it actually isn’t even clear whether he still holds any bonds at all.
Actually, I was wrong to say that the hedge fund investment will “bankrupt” Puerto Rico. The hedge funders oppose bankruptcy. What they want is deep cuts and austerity and full repayment on their investments
True, Joe. And everything on the ed reform side of the debate is equally biased. I’ve read so many editorials that open with some version of: “Public education in American is broken.”
They never explain how it’s broken. Occasionally they cherry-pick some stats. But by opening with a powerful declaration and then never really proving it, they get the point across.
This is why I don’t value ed research. Just look at the funders of the research and you’ll know the data analysis beforehand.
George Santayana: “There are three types of lies. Lies, damn lies and statistics.”
The primary reason I despise reform is that it has done two things:
First, it has reduced a soft science to nothing but a stream of quantifiable numbers. Really? If I listed the number of students who have personally benefited from having a trusted adult at school (when they don’t have one at home due to the breakdown of American families today), it would be staggering. But that is so important and non-numeric and isn’t to be found on any evaluation I’ve received in our cute little VAM world.
Second, the reform is NOT about how to educate students better. It’s about who gets the money. Let’s be honest. Edu-firms are raking it in now. Charter schools in my state (Michigan) are mostly run by for-profit corporations. Charters as a whole can best be described as a parallel school system. But charters pay teachers less in nearly all cases in my state, don’t allow unions or disband if the teachers try to unionize) and churn teachers which avoids pensions. Who gets the money? Management!
There is a lot pf pretending and lip service to it’s all about the kids but it isn’t about them at all. It’s about fighting over a massive financial opportunity.
Exactly how did the United States become the most economically powerful country in the history of humanity if it’s schools were as “broken” as the critics claim?
Why do students the world over want to come here to attend college, so they can be learning alongside graduates of our schools “broken” system?
Also, in that same history of humanity, has any country ever improved its educational system by doing all the stuff that reformers are pushing—privatization, union-busting, charter schools, TEACH FOR AMERICA temps/scabs?
We know two that tried, both to disastrous results:
— Chile, where 30 years of a brutal dictatorship allowed it to be Milton Friedman’s petri dish to experiment with privatization and free market principles;
— Sweden, where most recently the government apologized for the wreckage that 20 years privatization and free market principles wrought on that country’s educational system.
It’s been proven no to work, so why is still being pushed?
This stuff is just gross-they’re now purchasing whole governments at bargain prices:
“Struggling to emerge from an almost decade-long economic slump, the Puerto Rican government signed a law in early 2012 that creates a tax haven for U.S. citizens. If they live on the island for at least 183 days a year, they pay minimal or no taxes, and unlike Singapore or Bermuda, Americans don’t have to turn in their passports. About 200 traders, private-equity moguls and entrepreneurs have already moved or committed to moving, according to Puerto Rico’s Department of Economic Development and Commerce, and billionaire John Paulson is spearheading a drive to entice others to join them.”
http://www.bloomberg.com/news/articles/2014-06-26/paulson-s-puerto-rico-paradise-lures-rich-fleeing-taxes
8.5 million is a bargain. It’s a tiny sum in the context of a public school budget. If he pays 8.5 million and (eventually) eradicates public schools and the tax burden that go along with public schools it will be a hugely successful investment.
UNFAIR TO BILLIONAIRES: Why is Paulson being singled out? Another major hedge funder that also sits on the board of Success Academy is Paul Singer, the “Argentina Vulture” who singlehandedly caused an escalation of Argentina’s economic crisis.
Long before this, however, Singer stuck it to Peru:
“In 1996, he paid $11.4 million for $20 million worth of discounted, government-backed Peruvian bank debt. Then, rather than joining with 180 other Peruvian creditors who agreed to a plan using bonds to forgive some of the impoverished country’s debt, Mr. Singer held out in the courts.
At one point he hired an Albany lobbying firm and got New York State to change an obscure law to strengthen his position. In the end, Mr. Singer ended up getting $58 million for his Peruvian investment.” He also turned a $10 million investment in debt held by Democratic Republic of Congo into a $127 million payout. As we know, Congo was ravaged by poverty and genocide, but Singer’s success there came by threatening to expose illegal government corruption — unless they paid him to be quiet. It worked!
Singer’s hedge fund Elliott Management hired Dan Senor, who is Campbell Brown’s husband, so I don’t think Success and these 1%’ers will ever extricate themselves from eachother.
DemocracyNow! also reported that This 2013 article explains that Singer gave generously at a Success Academy gala, alongside Dan Loeb, Paul Tudor Jones keynoted by Chris Christie, while Merryl Tisch sat next to Jeb Bush. So why is Paulson unique?
http://www.bloomberg.com/news/articles/2013-05-23/scene-last-night-loeb-christie-jones-tepper-singer
I know, I know… these are some seriously scummy people—the Scum of scum—and Eva (and her ilk) has no problem or shame associating with and taking money from them, and in Campbell’s case, no problem or shame marrying and procreating with one of them.
It’s freakin’ depressing. I wish I didn’t know any of this, and that I could just go back to being blissfully ignorant of all of this.
But I can’t… so I’ll go on fighting.
To Jack at 12:16 PM–Just as the CTU calls out CPS–“Broke…on purpose.” U.S. public education the same, now that ALEC, the deformers & the hedge funders have tightened their grip–cash-starving the publics right out of existence, so now broken on purpose by greed-mongers such as Eva.
Or, as I call her, Evita.