Chicago Charter Operator in Corporate Pockets

I am a first-generation American whose Mexican immigrant parents instilled a very different sense of citizenship than that espoused by the United Neighborhood Organization (UNO) and its network of charter schools. For me, civic responsibility includes speaking truth to power.

In some ways, it is very easy to understand why the American Enterprise Institute (AEI) would release a report praising Chicago charter operator UNO. Juan Rangel, UNO's CEO, has been quick to beat up on unions and shower praise on Chicago's wealthy elite. And while the United Neighborhood Organization, the umbrella group that operates the UNO Charter School Network, is a community organization in name that does little to preclude AEI's support. Under Rangel's leadership, UNO has let itself be co-opted by a myriad of corporate interests. In 2007, Rangel supported a ComEd Astroturf campaign to raise electricity rates on Chicago citizens. UNO also sent out canvassers to promote a Waste Management plan obtain approval for the dumping of garbage in a Southside landfill. As a right-wing, pro-business think tank, I suspect AEI can see a bit of its own ideology in Juan Rangel and UNO. Just how much of an industry front group is AEI? They took Phillip Morris money and released a report minimizing the social costs of smoking. They took ExxonMobil money and joined the ranks of global warming deniers.

Other aspects of UNO should have given AEI some pause. Just last week, Parents United for Responsible Education (PURE) and the Chicago Local School Councils met with representatives from the Illinois Inspector General to demand an explanation into the finances of the United Neighborhood Organization (UNO) Charter School Network. Why were Chicago parents pushing for an investigation? According to PURE, UNO has issued three bonds -- one of which is rated one notch above "junk" status-to finance their push for expansion. UNO has $67,800,000 in outstanding debt (calculated at $12,500 per pupil), and needs millions in government earmarks to expand its charter network so that it can repay its bankers -- instead of investing in current students. I thought AEI was all about fiscal responsibility? How could the same group of debt hawks overlook UNO's unsustainable debts?

When a similarly indebted charter school in Palm Bay City, Fla. went bust, it left over 700 students scrambling to find placements in other schools. If a school district, city, or other public body mismanaged their finances like that, AEI would be condemning their fiscal irresponsibility. Apparently charter operators with $12,500 in per-student debt get a free pass, so long as they are willing to go to bat for the same ideological causes. Beyond their debt, UNO is demanding huge earmarks from Illinois politicians. After receiving the largest subsidy ever given to a charter chain in state history -- nearly $100 million in 2009 -- UNO is back this year, asking for an additional $35 million. It is hard to understand how AEI would overlook UNO's dependency on special financial treatment, especially when AEI has been critical of "pork" earmarks in the past. This is to say nothing of UNO's bold embrace of patronage politics, another anathema to the free market policies AEI supports.

Given UNO's awful unsustainable debt load, their heavy reliance on state bailouts and open reliance on patronage politics, AEI's gushing UNO story may seem out of place. What could cause the hardnosed fiscal hawks at AEI to ignore such shortcomings? UNO is a major political force. And, under Rangel's leadership, UNO has demonstrated its willingness to serve the needs of their corporate partners, even when doing so conflicts with their values as a community organization. No wonder AEI is so enamored with UNO -- they operate with a similar deference to their corporate funders.