Archives for category: For-Profit

Senator Sherrod Brown of Ohio is a Democrat, and he is known as a progressive. He has also been known in the past as a supporter of charter schools.

However, even Senator Brown had a wake-up call as charter scandals multiplied in his home state. He could not help but notice the multiple editorials appearing in newspapers across the state, as well as news stories in national media about the charter owners who were becoming multimillionaires by donating to Republican politicians and getting more funding and less scrutiny of their charter schools.

He wrote a letter to Secretary of Education John King expressing his concern with the U.S. Department of Education’s award of $71 million to Ohio to open more charter schools (a grant put on hold because of outrage from Ohioans), as well as the embarrassing performance of the state’s charter sector. If Senator Brown has had his eyes opened, at last, that is a big step forward.

The letter can be read here.

Juan Rangel, a political activist in Chicago, created the city’s largest charter chain, called UNO. Rangel was co-chairman of Rahm Emanuel’s mayoral campaign in 2011, when he first ran for mayor. UNO was an amazing cash cow. It collected $280 million over five years from the state. Governor Pat Quinn and House Speaker Mike Madigan took care of UNO, giving it a grant of $98 million to expand, a staggering amount for a single charter chain. Meanwhile, UNO fired its for-profit management firm and took charge of its operations, claiming 10% of all revenues for itself. None of UNO’s activities were monitored by anyone. Conflict of interest rules covered public schools, but not UNO.

Here is the ultimate nonpartisan article summing up the rise and fall of UNO and Juan Rangel. Here is my short summary of that brilliant article.

Once UNO won $98 million from the state, many friends and relatives got a piece of the action:

As the Sun-Times would reveal in February 2013, a long line of contractors, plumbers, electricians, security firms, and consultants tied to many of the VIPs on UNO’s organizational chart got a piece of the action. Rangel spelled out in tax documents and in later bond disclosures that the construction firm d’Escoto Inc.—owned by former UNO board member Federico d’Escoto, the brother of Miguel d’Escoto—was the owner’s representative on three projects funded by the grant. Another d’Escoto brother, Rodrigo, was paid $10 million for glass subcontracts for UNO’s two Soccer Academies and a third school in the Northwest Side neighborhood of Halewood.

The vendor lists were peppered with other familiar names: a $101,000 plumbing contract awarded to the sister of Victor Reyes, UNO’s lobbyist, who helped secure the state grant; a $1.7 million electrical contract given to a firm co-owned by one of Ed Burke’s precinct captains; tens of thousands in security contracts to Citywide Security, a firm that had given money to Danny Solis, and to Aguila Security, managed by the brother of Rep. Edward Acevedo, who voted for the $98 million for UNO.

As the scandals broke into public view, thanks to the enterprising reporting of the Chicago Sun-Times, Rangel resigned in December 2013.

Fred Klonsky writes about the consequences for Rangel. The SEC fined Rangel $10,000 while he admitted no wrong-doing. He is allowed to pay it off at $2,500 per quarter.

Klonsky writes in incredulity:

When he resigned from UNO he received a severance package of nearly a quarter million bucks.

$2500 a quarter?

That probably equals his lunch tab.

When Rangel ran UNO it was reported by the Sun-Times as having spent more than $60,000 for restaurants on his American Express “business platinum” card including thousand dollar tabs at Gene & Georgetti, the Chicago steak house.

This is one of the best articles you will ever read on the subject of for-profit schooling in poor countries. It is beautifully illustrated and contains interviews with key players in the for-profit education industry. The author is Graham Brown-Martin. The subject is public-private partnerships in Africa. The discussion centers on the efficacy and ethics of the movement to turn the responsibility for schooling over to for-profit Bridge International Academies in countries that have lagged far behind in providing universal public education. What you will learn is that the “market” is huge. The cost of the scripted schooling is $6 a month, which leaves out many children whose families cannot afford $6 a month.

Start with the cartoon at the opening of the link, which explains “the magic of the market.”

Last month, a grand jury in Florida indicted employees of Newpoint Education Partners and three other companies for grand theft, money laundering, and other crimes. The company, started by former employees of the White Hat management company in Ohio, lost the charters for several schools that it was running where the alleged crimes occurred.

Now, two more charter schools are cutting their ties with Newport, following an investigation by a local TV news station.

One week after an 8 on Your Side investigation uncovered $235,000 in bogus school loans, two charter schools funded with state tax dollars in Jacksonville have decided to sever ties with a for-profit management company we’ve been investigating for months because of the financial chaos it helped create in Pinellas charter schools.

The Jacksonville charter school loans by Newpoint Education Partners which are cited in a 2015 financial audit do not exist, something that caught even the treasurer of San Jose Preparatory High School and Academy by surprise after 8 on Your Side uncovered and reported it.

Are there any law enforcement officials in Jacksonville, or is it left to the media to investigate criminal activity?

Larry Cuban is a keen observer of the marketing of new technologies to schools. In this post, he looks at the common practice of claiming that the product being sold causes guaranteed success, I.e. a “proof point.” The salesmanship involved is akin to the advertisers’ claim that their product will cure all illnesses, calm your itch, make you beautiful, and fix your hearing.

Schools have long been targets of fast-talking salesmen, but now the snake oil is presented professionally as a miracle cure to raise test scores. In addition to the usual profit motive, there is today the entrepreneur’s devout faith in disruptive innovation. Heaven help the schools. When they come calling, slam the door and don’t let them put their foot in it.

The New York Times published an article by journalist Tina Rosenberg about Bridge International Academies and its plans for expansion in Liberia and other African nations. The article is balanced, on the surface, yet overall presents a positive picture of the investors who want to replace universal public education with an African version of charter schools. Although this is presented as smart philanthropy, it will eventually be a highly profitable business, when 200 million children are enrolled.

Bridge International Academies includes investors such as Bill Gates, Mark Zuckerberg, and Pearson.

Public education activist Leonie Haimson described the article this way:

“This is at least the 2nd time that Tina Rosenberg of Solutions Journalism has favorably written in the NYT on an ed company funded by Bill gates or Gates Foundation w/out disclosing that Sol Journalism is also funded by Gates foundation.

She also did a column last year on New Classrooms/School of One that has gotten funding fr/ Gates w/out disclosing this connection —

despite this statement on the Solutions website:


We recognize that there are ethical concerns inherent in using philanthropic funding to support journalism that explores efforts to advance solutions. The reality is that the ecosystems of philanthropy and social change are interconnected. It is, therefore, inevitable that some newsrooms and journalists we support will report on issues that involve our organization’s funders, some of which are large-scale foundations that have supported thousands of organizations in dozens of fields.

We believe that it would be a disservice to society to exclude critical reporting on social innovations funded by these sources. On the other hand, it is critically important that such relationships not conflict with the principles of independent journalism. SJN’s grant recipients, whether newsrooms or individual journalists, should adhere to the highest standards of conduct as set forth in by bodies such as the Society of Professional Journalists.

We require that our grant recipients remain completely transparent about any potential conflicts of interest that could arise in the context of reporting on an issue of interest to a Solutions Journalism Network funder. Just as important, news organizations that receive support from the Solutions Journalism Network have full editorial control over their coverage.


The highest and primary obligation of ethical journalism is to serve the public.

Journalists should:

– Avoid conflicts of interest, real or perceived. Disclose unavoidable conflicts.

Last week, the Houston Independent School Board deadlocked in a 3-3 tie vote on whether to renew its contract with the vendor supplying the teacher evaluation program.

Audrey Amrein-Beardsley explains their decision here.

At least three board members realized that five years of this program had not moved the needle by an inch. If performance matters, then EVAAS was a failure.

Beardsley is one of the nation’s leading researchers in the study of teacher evaluation.

She writes:

Seven teachers in the Houston Independent School District (HISD), with the support of the Houston Federation of Teachers (HFT), are taking HISD to federal court over how their value-added scores, derived via the Education Value-Added Assessment System (EVAAS), are being used, and allegedly abused, while this district that has tied more high-stakes consequences to value-added output than any other district/state in the nation. The case, Houston Federation of Teachers, et al. v. Houston ISD, is ongoing.

But just announced is that the HISD school board, in a 3:3 split vote late last Thursday night, elected to no longer pay an annual $680K to SAS Institute Inc. to calculate the district’s EVAAS value-added estimates. As per an HFT press release (below), HISD “will not be renewing the district’s seriously flawed teacher evaluation system, [which is] good news for students, teachers and the community, [although] the school board and incoming superintendent must work with educators and others to choose a more effective system.”

Open the link, read the full article, and read her links. This is excellent news.

The bad part of her post is the news that the federal government is still giving out grants that require districts to continue using this flawed methodology, despite the fact that it hasn’t worked anywhere.

Apparently, HISD was holding onto the EVAAS, despite the research surrounding the EVAAS in general and in Houston, in that they have received (and are still set to receive) over $4 million in federal grant funds that has required them to have value-added estimates as a component of their evaluation and accountability system(s).

So Houston will have to find a new vendor of a failed methodology.

Paul Krugman asks in this column how the Republican Party could have allowed a con artist like Donald Trump to take over the party and become its nominee. Why didn’t other Republicans expose the scams and frauds that have generated profits for Trump? Why were reporters able to discover what was in plain sight but not the other candidates?

He says it is because a party that worships profit and insists that government is the problem is wide open for frauds, profiteers, and grifters. “Greed is good” is not a maxim to live by.

He writes:

Consider this: Even as the newspapers are filled with stories of defrauded students and stiffed contractors, Republicans in Congress are going all-out in efforts to repeal the so-called “fiduciary rule” for retirement advisers, a new rule requiring that they serve the interests of their clients, and not receive kickbacks for steering them into bad investments. Paul Ryan, the speaker of the House, has even made repealing that rule part of his “anti-poverty plan.” So the G.O.P. is in effect defending the right of the financial industry to mislead its customers, which makes it hard to attack the likes of Donald Trump.

Finally, the con job that lies at the heart of so much Republican politics makes it hard to go after other, more commercial cons. It’s interesting to note that Marco Rubio actually did try to make Trump University an issue, but he did it too late, after he had already made himself a laughingstock with his broken-record routine. And here’s the thing: The groove Mr. Rubio got stuck in — innuendo that the president is deliberately weakening America — was a typical example of the political snake-oil the right sells along with free money and three-minute cures for high blood pressure.

The point is that Mr. Rubio was just as much a con artist as Mr. Trump – just not as good at it, which is why, under pressure, he kept repeating the same memorized words. So he, like all the G.O.P. contenders, didn’t have what it would have taken to make Mr. Trump’s grifting an issue. But at least so far it appears that Hillary Clinton and her allies won’t have the same problem.

In the months ahead Republicans will claim that there are equivalent scandals on the Democratic side, but nothing they’ve managed to come up with rises remotely to the level of even one of the many Trump scams in the news. They’ll also claim that Mr. Trump doesn’t reflect their party’s values. But the truth is that in a very deep sense he does. And that’s why they couldn’t stop him.

Thank you, Assemblywoman Susan Bonilla, for writing a bill to ban for-profit operators of virtual schools.

The bill, Assembly Bill 1084, “would prevent charter schools that do more than 80 percent of their teaching online from being operated by for-profit companies or hiring them to facilitate instruction. If passed and signed into law by Gov. Jerry Brown, the legislation would effectively put companies like K12 out of business in the Golden State.

“Our taxpayer dollars should be spent in the classroom to help our students, not used to enrich a company’s shareholders or drive up its profits,” Bonilla said in an interview.

But K12 spokesman Mike Kraft railed against the proposal, calling it “another cynical effort to take away the rights of parents to choose the way their kids are educated.”

How cynical are those “special interests” who want to take away K12 Inc.’s ability to profit while providing inferior education!?

That company is K12 Inc., a publicly traded Virginia firm that allows students who spend as little as one minute during a school day logged onto its software to be counted as “present,” as it reaps tens of millions of dollars annually in state funding while graduating fewer than half of its high school students. Students who live almost anywhere south of Humboldt County may sign up for one of the company’s schools.

Assemblywoman Bonilla was acting in response to a brilliant series of articles by Jessica Calefati in the San Jose Mercury News, exposing the profitable but educationally bankrupt K12 Inc., the corporation founded by the Milken brothers and publicly traded on the New York Stock Exchange.

I hope Assemblywoman Bonilla and the media will review the abundant research on K12 Inc, such as the Credo study or the NEPC study. What she will learn is that students in online charter schools lose ground and fall behind their peers in real schools.

If California chooses to waste millions of taxpayer dollars on bad schools to enrich the stockholders and the Milken family, shame on the legislators and the governor.

The New York Times wrote a front-page expose of ECOT only weeks ago. The online charter school has an on-time graduation rate of 20%. Students get credit for “participation” if they log in for only one minute. It is very profitable for its owner, William Lager. Despite its dismal results, the Republican speaker of the House was its graduation spoke at its graduation ceremonies. William Lager is the state’s biggest donor to Republican politicians. They have been good to him in return. He has been awarded nearly $900 million in public funds for his low-performing e-school since 2002. Pending in the legislature is a bill to regulate ECOT and similar institutions just a little bit. The chances of its passage are slim to none. Lager is a very generous man.

From 2000-2013, Lager has donated $1.4 million to Republican politicians in Ohio. Of course, he has given more since then.

This is what ECOT–the state’s lowest performing school–has received from the legislature (data supplied by Bill Phillis, former deputy state commissioner of education and now retired and relentless watchdog of education spending):















How cool is that? He gives $1.4 million to politicians, and he gets $864 million to run a school with a graduation rate of 20%, with no accountability or transparency. Now that is what you call a terrific “return on investment”!

Here is the latest from Bill Phillis of the Ohio Equity and Adequacy Coalition:

A post on the Facebook page of the chairman of the House Education Committee, Andrew Brenner

“I attended the ECOT graduation today. Cliff Rosenberger was the keynote speaker. It was impressive.”

Bill Lager, the ECOT man, certainly knows how to gain the favor of state officials. The June 5 ECOT graduation speaker was Cliff Rosenberger, the Speaker of the House. Senator Coley introduced the speaker. Senator Coley is on the Senate Finance Committee where SB 298 was blocked from passage this spring. This bill requires online charters to verify they are serving the students for which they receive funding.

The ECOT graduation ceremony VIP lineup probably sealed the doom of SB 298 [the bill to require charter school transparency].

Former governors, even Jeb Bush, state superintendents and other state officials have graced the stage of previous ECOT graduation ceremonies.

The Plunderbund article of June 6 provides some startling insights into the ECOT industry. This article should create a sense of urgency in the public education community.

Is there no no in the Ohio legislature who can stop this waste of taxpayer dollars?

Does anyone care?

William Phillis


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