When I learned that the phony “Families for Excellent Schools” was forced to pay a hefty fine by state officials in Massachusetts, I invited Maurice T. Cunningham to write about it. New Yorkers are familiar with this billionaire-funded group from the time when it made a $6 million television buy to thwart Mayor de Blasio’s plan to establish accountability for charter schools. FES, pretending to be the voice of poor black and brown families, suddenly appeared with bulging pockets to shower millions on TV advertising and politicians, not what one would expect from “families” who live in poverty. As a result of their efforts, charters in New York City got the right to co-locate in public school buildings with no rent ever, and if they preferred a private space, the city was obliged to pay for it. What was certain was that not a one of the billionaires behind FES was planning to send any of their children to charter schools or public schools in New York City.

During the campaign in Massachusetts last fall, Professor Cunningham wrote about the dark money pouring in to influence the Question 2 referendum. Despite the money, opponents of charter expansion lost.

This is what Professor Cunningham wrote:

Families for Excellent Schools Driven Out of Business in Massachusetts

Maurice T. Cunningham

Associate Professor, University of Massachusetts at Boston

Families for Excellent Schools, the hedge funded bully of school privatization, has not only been exposed but driven out of business in Massachusetts.

Last year FES was leading the campaign, through its ballot committee Great Schools Massachusetts, to pass a referendum that would expand the number of possible charter schools in the state. Not only was GSM overwhelmed at the November election by teachers unions, but FES’s wild spending attracted the attention of the Massachusetts Office of Campaign and Political Finance. This past week OCPF released a Disposition Agreement with FES that found that the group had violated Massachusetts campaign finance laws. FES acted as a political committee without registering with OCPF, and channeled over $15 million from donors “without disclosing the contributors, and by providing funds to the GSM Committee in a manner intended to disguise the true source of the contributions.” (OCPF press release here).

The consequences for FES: OCPF levied its largest fine in history, over $426,000, being the total amount of cash on hand for FES and its political arm Families for Excellent Schools-Advocacy. FESA agreed to dissolve its social welfare group status with the Internal Revenue Service. FES Inc. agreed to forego political activities in Massachusetts for four years.

Not only did OCPF release its Disposition Agreement it also required OCPF to divulge the donors it had promised to hide, and their contributions. FES’s list of funders was eye-popping. Boston hedge fund titan Seth Klarman of Baupost LLC was in for $3.3 million. Bain’s Joshua Bekenstein and his wife chipped in with $2.5 million. Jonathon Jacobson of Highfields Capital Management was good for $2 million. Other contributors came from Adage Capital Management, Summit Partners, and Par Capital Management. Alice Walton of the WalMart fortune kicked in $750,000.

Each of those powerful individuals was promised by FES that their identities would be kept secret, hidden behind the Internal Revenue Code rules for 501(c)(4) social welfare organizations. Except this time, it didn’t work. OCPF conducted a thorough investigation and exposed FES for what it is: a dark money political operation.

The Disposition Agreement should be studied across the country and state regulatory agencies pressed to follow its teachings. There is absolutely no reason why citizens should not be informed about who is spending millions to influence their vote. It’s shameful and the dark money train must be derailed if we are not to descend into a plutocracy. OCPF’s action is great news for Massachusetts and great news for democracy.