Archives for category: For-Profit

Christopher A. Lizotte of the University of Washington and Dan Cohen published an interesting research paper about how market-driven policies have been promoted and sold. The paper was published in 2014-2015, and the trends described here have become more powerful, promoted by some of the wealthiest people in the nation. The title of the paper is “Teaching the Market: Fostering Consent to Education Markets in the United States.”

Abstract. Marked-based reforms in education have garnered the support of politicians, philanthropists, and academics, reworking the nature of public education in the United States. In this paper we explore the methods used to produce consent for market-based reforms of primary and secondary (K-12) schooling in the United States, focusing on two case studies to interrogate how this consent is generated as well as how these reforms are resisted in place. In doing so we illustrate how market-making in public services is a contested terrain and the importance of understanding the nature of their roll-out at the local level.

Here is a brief excerpt:

We understand this shift toward marketization in education and its recent acceleration as being situated within the broad neoliberal shift towards privatization and deregulation of formerly public goods that has taken place over the past thirty years. As in other sectors that have been subject to this treatment, this process has occurred not simply through the retreat of the state but through the deliberate repurposing of the state to reshape its institutions in the image of a market (Peck and Tickell, 2002); indeed, many of the reforms that have taken place within education are the result of explicit state policies to create market pressures within education (Lubienski, 2005): These policies include (to name a few): the imposition of standardized testing as a method through which schools can be ‘judged’ by the market, the threat of school closures for ‘failing’ schools, and the use of selective grants to reward schools and districts conforming most closely to principles of deregulation and privatization. Crucially, however, these marketization processes require careful priming in order to generate public consent for market-based reforms. In particular, the marketization of education is powerfully promoted through the notion of school ‘choice’. Presented as an apolitical and socially neutral mechanism for allowing parents to maximize their children’s educational opportunities, choice is endowed with a moral authority that obscures the power inherent in who can exercise the power to choose and the available range of choices. This choice, it is argued, finds its natural expression in the expansion of markets as a supposedly level playing field where the best-performing options rise to the top and those that fail are eventually discarded. Indeed, as Rose (1999) claims, choice, defined as the individual maximization of opportunities, has become the litmus test by which good membership in the polity is defined. In this light, the term, like those used to describe other market-making projects in public services, hides assumptions about what kinds of choice can be legitimately exercised and under what circumstances. The power to ‘choose’ as it is understood under contemporary capitalism is a highly individualized capacity that seeks to maximize one’s return on investment. Other alternative possibilities tend to fade out of view in the language of most market-based school reformers.

Carol Burris, executive director of the Network for Public Education, wrote the following:

As you know, the House is trying to block federal funding to charters controlled by for-profits. But it will be an uphill battle. I recently did an investigation into the private sale of 69 charters by for-profit NHA. It is jaw-dropping. Please read about it and share. This is a critical time to get the word out. Thanks, Carol

https://www.washingtonpost.com/education/2021/09/14/charter-school-scams/

Jan Resseger, a prominent social justice advocate in Ohio, recently wrote about Jeb Bush’s cliche-ridden defense of for-profit charter schools. The House of Representatives passed a budget proposal to prohibit federal funding of them. Jeb Bush is a relentless proponent of privatization:

Her commentary was published by the National Education Policy Center. She begins:

It’s clear that the charter school lobby is upset about the House of Representatives’ effort in its proposed budget resolution to curtail abuses in the federal Charter Schools Program and to reduce the program’s appropriation by $40 million in the upcoming fiscal year.

Jeff Bryant explained last week: “The top lobbying group for the charter school industry is rushing to preserve millions in funds from the federal government that flow to charter operators that have turned their K-12 schools into profit-making enterprises, often in low-income communities of color. The group, the National Alliance for Public Charter Schools (NAPCS), objects to a provision in the House Appropriations Committee’s proposed 2022 education budget that closes loopholes that have long been exploited by charter school operators that profit from their schools through management contracts, real estate deals, and other business arrangements.”

The executive director of National Alliance for Public Charter Schools, Nina Rees went on C-Span to try to defend the program, and now it’s clear that the organization is calling on old allies to push Congress to cancel the House Appropriations Committee’s proposed elimination of all federal funding for charters operated for-profit by Charter Management Organizations. Bryant reminds us that Nina Rees was the deputy assistant for domestic policy for former Vice President Dick Cheney.

This week Jeb Bush, the ultimate old advocate for school privatization, came out of the woodwork with an op-ed circulated all over the country by the Tribune News Service. Bush’s piece appeared in our Sunday Cleveland Plain Dealer. Toward the end of his article, Bush gets to the point and protests the proposed House Budget Resolution: “Not only does it specifically cut $40 million in education funding (from the Charter Schools Program), but the House budget bill also includes alarming language that would prevent any federal funds from reaching any charter school ‘that contracts with a for-profit entity to operate, oversee or manage the activities of the school.’”

Bush thinks that the U.S. Department of Education ought to be allowed to make grants to charter schools whose operators are, in many cases, collecting huge profits at the expense of our tax dollars and at the expense of children whose education programming is reduced to ensure operators can make a profit. I guess he isn’t bothered by the charter management companies that have managed to negotiate sweeps contracts that gobble up more than 90 percent of the state and federal operating dollars and manage the school without transparency.

Open the link and read the rest.

Peter Greene writes in Forbes about the furor that erupted when House Democrats passed legislation to ban federal funding of charters managed by for-profit organizations. The charter industry and its lobbyists went bonkers, falsely claiming that the bill would prevent them from buying food from for-profit companies or hiring plumbers who work for profit.

He wrote:

The House Appropriations Committee has caused a stir with one tiny paragraph in its 198-page health, labor and education spending bill.

SEC. 314. None of the funds made available by this Act or any other Act may be awarded to a charter school that contracts with a for-profit entity to operate, oversee or manage the activities of the school.

The presence of for-profit operators in the charter school sector has long been a concern for critics, with almost all states outlawing a charter school strictly run for profit. But charter school operators have long worked a variety of loopholes, keeping the sector a highly profitable one, and most of those loopholes involve a non-profit charter school hiring a for-profit business. null

We are not talking about contracting services like school buses or cafeteria management; these kinds of side functions are frequently contracted out both in charter and public schools, but they are not the school’s primary activities.

The bill is clear and specific about targeting for-profit entities that “operate, oversee or manage the activities of the school.”

Sometimes the money comes from the real estate side of the charter business. There is such a thing as a business that specializes in charter schools and real estate. In some states, the government will help finance a real estate development if it’s a charter school, and in general developers have noted an abundance of cash. Though, as one charter real estate loan bond financier told the Wall Street Journal, “There’s a ton of capital coming into the industry. The question is: Does it know what it’s doing?” Many states have found a problem with charters that lease their buildings from their own owners as well. null

One example of a real estate operator making money from the real estate side was Carl Paladino of Buffalo. Paladino worked with charter operators via flipping properties and making “leaseback” deals, as detailed in a report from the Alliance for Quality Education. Paladino not only profited from the schools, but from investments in surrounding properties. He was not shy about any of it. On the question of making money from working with charters, the Buffalo City News quoted him: “If I didn’t, I’d be a friggin’ idiot.”

While many charters may contract out critical functions such as curriculum, the extreme cases are what are called “sweeps” contracts, in which the charter management organization (CMO) fully runs the school in exchange for as much as 95% of the revenue that comes in. A report that the Network for Public Education issued earlier this year details many of the creative ways that CMO’s turn a profit. CMO’s come in a variety of sizes, from chain operations running many schools all the way down to mom-and-pop CMOs that run a single school.

These arrangements can become convoluted. In Florida, one charter founder moved on and off the board of directors regularly to allow payments from his school to himself, and while the school was having trouble paying teachers, it was paying his company tens of thousands of dollars to license the school logo.

One could argue that outlawing for-profit charters actually made things worse, and that what would have been clear and open attempts to profit from a school are now hidden behind multiple operational layers.null

But all of this still leaves a simple question—what’s wrong with having charter schools managed, directly or indirectly, for profit?

In the rest of the article, he explains why for-profit charters are a terrrible idea.

Jeff Bryant is one of the best informed writers about charter schools in the nation. He is chief correspondent for Our Schools and director of the Education Opportunity Network. He explains here why the charter industry is using misinformation to stop a Democratic proposal to ban federal funding for for-profit charter schools.

He begins:

The top lobbying group for the charter school industry is rushing to preserve millions in funds from the federal government that flow to charter operators that have turned their K-12 schools into profit-making enterprises, often in low-income communities of color.

The group, the National Alliance for Public Charter Schools (NAPCS), objects to a provision in the House Appropriations Committee’s proposed 2022 education budget that closes loopholes that have long been exploited by charter school operators that profit from their schools through management contracts, real estate deals, and other business arrangements. NAPCS also objects to the legislation’s proposal to cut 9 percent from the federal government’s troubled Charter Schools Program (CSP).

The House budget proposal, which was passed out of the majority Democratic committee “in a party-line vote,” according to the Hill, has been praised by numerous education groups, including the National School Boards Association, the National Education Association, and the National Center for Learning Disabilities, for, among many things, more than doubling Title I funding for schools serving low-income children, providing over $3 billion more to educate students with disabilities, and increasing federal spending on K-12 education programs, Education Week reports.

The legislation mostly aligns with the President Biden administration’s proposed budget for K-12 spending, as reported by Chalkbeat in April 2021, and the provision ending federal funding of for-profit charter school operators reflects Biden’s pledge, made in his presidential campaign, to “not support any federal money for for-profit charter schools, period.”

The For-Profit Charter Problem

The specific provision regarding for-profit charters that NAPCS objects to states, “None of the funds made available by this Act or any other Act may be awarded to a charter school that contracts with a for-profit entity to operate, oversee or manage the activities of the school.”

Controversies over for-profit charter school operators are long-standing and largely unresolved

As University of South Carolina law professor Derek Black explains on his personal blog, “Most states require charter schools to be nonprofit. To make money, some of them have simply entered into contracts with separate for-profit companies that they also own. These companies do make money off students.”

A 2021 report by the Network for Public Education (NPE)—an organization co-founded by education historian Diane Ravitch that advocates for public schools—examined more than 1,000 charter schools that were contracted with for-profit management companies and found that the schools’ nonprofit boards were often mere fronts for profit-making enterprises that use the charter schools they operate to “maximize their profits through self-dealing, excessive fees, real estate transactions, and under-serving students who need the most expensive services.”

Among the practices that for-profit charter operators employ, according to the NPE report, is to establish “sweeps contracts” that “give for-profits the authority to run all school services in exchange for all or nearly all of the school’s revenue.”

The report also “identified over 440 charter schools operated for profit that received grants totaling approximately $158 million between 2006 and 2017,” from the CSP, despite “strict regulations” against awarding CSP funds to charter schools operated by for-profit entities…

NAPCS’s president and CEO Nina Rees told a CNN reporter that the legislation “could impact schools that contract out for cafeteria services, special education services, or back office staff…”

After the CNN article was published, it was updated with a quote from Connecticut Representative Rosa DeLauro, a Democrat who chairs the House committee that drafted the proposal, who called NAPCS’s petition campaign “a well-funded misinformation campaign,” and said, “The language [of the proposed legislation] is clearly focused on ending the practice of charters accepting federal funds only to have the school run by a low-quality, for-profit company rife with conflicts of interest.”

National Alliance for Public Charter Schools’ Nina Rees talked about congressional efforts to reduce federal funding of charter schools.
— Watch on www.c-span.org/video/

House Democrats want to ban for-profit charter management organizations, as Biden promised. Rees thinks this is terrible. CSPAN quotes the NPE report on for-profit EMOs (Chartered for Profit). Listen to call-ins at the end, which are opposed to charters. One call-in comes from Carol Burris, who wrote the NPE report. Rees makes for/profit charters sound benign. They are not. They are in it for the money.

Being an eduEntreneur does not always pay off. Chris Whittle founded the Edison Project, which was supposed to be for profit, but after much turmoil, its stock price plummeted, and he moved on. (Read Samuel Abrams’ fascinating history of the Edison Project in Education and the Commercial Mindset).

Most recently, Whittle founded Avenues, which was planned to be a global chain of boutique for-profit, private schools. Tuition at the state-of-the-art Avenues in NYC is $59,800. It’s opening was announced Ina full-page ad in the New York Times.

A few years ago, Whittle and Avenues parted company. In 2014, Whittle listed his 11-acre home in the jet-set Hamptons for $140 million, but it didn’t sell.

The Wall Street Journal recently reported that Whittle’s property in the Hamptons was purchased by the Avenues Global Holdings for $700,000 and will be sold to pay off the $6 million debt that Whtitle owes the school.

In an auction that took place Tuesday morning, Avenues was awarded right and title to the property, subject to other liens, for a credit bid of just $700,000, the spokeswoman said. The auction was a forced sale to satisfy more than $6 million in debts owed to Avenues by Mr. Whittle. Avenues expects to officially take title to the property next week and will make plans for the property soon after, the spokeswoman said.

“We hope that this facilitates the recovery of the more than $6 million that remains owed and unpaid to Avenues,” the spokeswoman said.

The property had been on the market most recently for $95 million, down from the $140 million Mr. Whittle first listed it for in 2014, The Wall Street Journal reported.

Reached by phone, Mr. Whittle said he has “had better days.” He said he had taken out a very large mortgage on the property in order to fund his latest venture, Whittle School & Studios, another for-profit school network, but the Covid-19 crisis derailed his plans.

Nancy Bailey writes here about the growing influence and persistence of the billionaire-funded groups that want to privatize our nation’s public schools.

Despite the substantial research that shows the ineffectiveness of free market school choice, the school choice in undeterred. As Bailey shows, “reformers” (disrupters) have become influential voices in the Biden administration and have created new groups to press their agenda of privatizing public schools. The new dean of the Harvard Graduate School of Education is a free market “reformer.”

Despite the persistent failure of the “reformers’” strategies, they press on, attacking public schools, supporting state takeovers, fighting to expand charters and vouchers. The billionaires continue to pour millions into their hobby, which is chicken feed to them.

This is an important article. Please read it.

After a scathing state audit of its finances, the EPIC virtual charter school cut its ties to the school’s for-profit co-founders.


The governing board of Epic Charter Schools underwent a major overhaul Wednesday night and then declared its independence from the for-profit school management company owned by Epic’s co-founders.

Epic’s seven-member board of education unanimously approved a mutual termination agreement, effective July 1, to end its contract with Epic Youth Services, which reportedly has made millionaires of founders David Chaney and Ben Harris.

“Big day for our school; big shift, obviously,” said the newly seated board Chair Paul Campbell, an aerospace and energy executive who founded the Academy of Seminole charter school.

“This school has outgrown its management company, which is why we did what we did today. There is no more CMO (charter management organization). … Not only will we save tens of millions of dollars, but you’re taking a significant leap forward in technology for this school…

In early October, a report on the state’s investigative audit of Epic revealed lax school board oversight and that one of every four taxpayer dollars Epic received went to the for-profit school management company, Epic Youth Services.

The state auditor found that 63% of those monies — nearly $80 million budgeted for students’ learning needs — has been shielded from all public or auditor scrutiny. The auditor is still battling in court to get access to those spending records.null

The state audit also revealed that Epic Youth Services was relying almost solely on Oklahoma public school employees to do the administrative work for both Epic’s Oklahoma and California schools while collecting tens of millions of dollars in management fees.

It also found that the company “improperly transferred” $203,000 in Oklahoma taxpayer dollars from the Oklahoma schools’ student Learning Fund account to help cover payroll shortages at Epic’s California charter school.

Angie Sullivan teaches first-grade students in a Title I school in Las Vegas. She writes regularly to every member of the legislature and to journalists to tell them what it is like from a teacher’s perspective.

She wrote this missive:

Shannon Bilbray-Axelrod should recuse herself from charter school legislation.  It is unethical for her to line her lobbying pocket and then work on charter legislation.  Scott Hammond and Carrie Buck should also recuse themselves from working on charter language having made millions in the business.  Unethical.  

While you are in AB420, you should amend the Charter Authority requirements.   

To sit on the 9 member board, you should have not earned money from a for-profit school.   

The number of recusals from Charter Authority board members while trying to do business is ridiculous. 

Oftentimes decisions are made with a questionable quorum because too many folks on the dais are making money from the business and have to recuse. 

If you are a charter lawyer, charter consultant, charter owner – not the time to sit on the decisions making board.  It is unethical.   

You should have to wait 3 years after profiting from charters before being allowed to sit on the board.  
The chair of the Charter Authority should not run a charter.   

This leads to awkward business.   

The Chair leaves the dais to go to the table to have the board give her permission and/or money.  I have seen Chair Melissa Mackedon who runs a charter in Fallon do this several times.   

It is like insider trading – benefitting their business and themselves.  Then popping back up into positions to hand out money and favors to other charters.  Charter Board Members should not be on both sides (giving and receiving) routinely in meetings.  Unethical.  

Former or current legislators should not sit on the Charter Authority Board.  It appears that they legislated to make millions.  Pat Hickey and Randy Kirner are examples of folks who recently left their positions and then became part of the Charter Authority Board.

Lawyers like Jason Guinasso who have chaired the board should not be able to come back a few years later to manipulate charter language or the board.   He addressed them as friends trying to take advantage of his connections.  Recently Guinasso approached the board from the table on behalf of a charter he most likely set-up for failure while he was chair.  The theft and lawsuits cost Nevadans.


https://www.nevadacurrent.com/2020/06/29/lv-charter-school-alleges-it-paid-1-6m-to-utah-management-company-for-nothing/

https://kutv.com/news/beyond-the-books/nevada-charter-school-ends-business-ties-with-american-preparatory-schools-in-utah

New EMOs/For-Profit Service Providers should not be allowed in the state.  No more new for-profit campuses under their umbrellas either.  They have made a huge mess.   Academica basically has a weird monopoly with different branches.   They are posed for rapid expansion.  Folks outside the state watching Academica in Nevada are very concerned.  

For-profit corporations like Academica take advantage of states like Nevada.  Language should be included to prevent rapid expansion and the ability to siphon money into side businesses.   This robs students and gives millions to side businesses.   Folks like Gulenist Soner Tarim should not be able to come into Nevada and apply for a charter – with language in the contract that gives them 12% off the top and ability to rapidly expand by being a EMO/Service Provider.  These should be two different things – EMO/Service Provider and Charter Applicant.  These administrators and side businesses are making a ridiculous amount of money and do not have to bid out their services.  The public should be able to see these contracts since the taxpayer is paying.  Folks should not be handing contracts out to their friends and family.

EMOS/Service Providers should not be allowed to break the charter diversity laws like Academica did intentionally when opening the Northern Pinecrest.  Academica should be closed for that.

PPP loans were given to both the charter campuses and the management corporations and all the side businesses.   How much money did a for-profit charter really get during the pandemic?   They got money for the EMO/Service Providers/Campus/Friends/Family etc?  Then held an informational meetings to warn everyone “not to say anything”.  

125 Florida charter schools already funded by taxpayers received $50 million in PPP loans https://www.abcactionnews.com/news/local-news/i-team-investigates/125-florida-charter-schools-already-funded-by-taxpayers-received-50-million-in-ppp-loans

I hope the FBI comes and arrests everyone involved in this mess and lining their pockets. 

https://www.nevadacurrent.com/2020/12/24/nevada-charter-schools-got-millions-in-ppp-loans/ 

$350+ Million in education money annually and not one person knows what it is spent on.

And seems like legislators are just fine with that?


The Teacher,

Angie Sullivan


https://www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/8052/Text