Despite Big Problems Charters Attract Hedge Fund Support and Presidential Candidates Hungry for Dollars

While the New York Times seems determined to promote charter schools, other news agencies and educational groups are expressing increased reservations about their lack of performance, excessive expense and political and financial backing.
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While the New York Times seems determined to promote charter schools, other news agencies and educational groups are expressing increased reservations about their lack of performance, excessive expense and political and financial backing. The Center for Media and Democracy (CMD) reports that 2,500 charter schools have failed since 2000. The list includes "ghost" schools that collected public funds but never served any students. These include 25 charter schools in Michigan that were awarded federal grants of between three and four million dollars in 2010-2011 but never opened. CMD estimates that during the last twenty years the charter school industry has received over three billion dollars in federal tax dollars that should have gone to public schools.

These are just some of the recent charter school debacles.

Florida's fifteen-year charter expansion program largely operated by private, for-profit, companies, cost billions of dollars in public funds. Although it is one of Florida's fastest growing "industries," there is virtually no public oversight of spending and performance. In the last five years, over fifty 56 charter schools in South Florida alone have been forced to close, mostly because of because of mismanagement. The companies that ran the closed schools owe large sums to local school districts for services not provided. A major supporter of Florida charter schools was former Governor and current Presidential hopeful Jeb Bush.

In the state of Washington courts recently ruled against providing public money to charter schools, arguing that they lacked public accountability. The court case was brought by a coalition of civic groups including Washington Education Association, the League of Women Voters of Washington, El Centro de la Raza and the Washington Association of School Administrators. Washington Education Association is a union representing Washington state teachers.

In the financially strapped Chester Upland school district in Pennsylvania publicly funded, privately operated, charter schools, drained the resources from public schools that are on virtual life support. Pennsylvania requires the district to pay charter school operators $40,000 for every special education student enrolled in a charter, but the state only reimburses the district about $16,000. A majority of the districts 7,500 children now go to the charters. The district is now broke and public school teachers are working without pay. Republican Presidential candidate Rick Santorum sent his own children to the Western Pennsylvania Cyber Charter School when he was a Senator. While in the Senate, Santorum voted in favor of a motion supporting charter schools and school vouchers.

In Nashville, Tennessee there is a backlash against charter schools led by school board member Will Pinkston. The Nashville school system ranks 54th out of 67 urban school systems in America in per-pupil funding. Meanwhile charters are currently costing the district about $75 million a year with projected increases to between $150 and $160 million. The charter expansion campaign in Nashville is led by the KIPP network that "partners" with the Walton (Walmart) Family Foundation, the Broad Foundation, the Bill and Melinda Gates (Microsoft) Foundation, and the Dell (Computers) Foundation.

In Ohio, Governor John Kasich, another Republican Party presidential contender, has close ties with the state's charter schools. This summer, David Hansen, the school-choice chief in the Ohio Department of Education was forced to resign after accusations that he had manipulated test score reports to show charter schools doing better than they were. Hansen is the husband of Beth Hansen, Kasich's former chief of staff and current presidential campaign manager.

In Louisiana, Governor Bobby Jindal, another Republican Presidential aspirant, is a big charter school booster. Under his oversight, nearly every school in New Orleans was converted to a charter. Despite its rigid commitment to charterization, Louisiana remains one of the worst performing states on nationally referenced tests like the ACT. Desperate to prove their "success," New Orleans charter school administrators compete for the best functioning students and counsel out poor performers. In the decentralized charter school system, no public agency is responsible for keeping track of all students.

A recent study by the National Bureau of Economic Research on North Carolina charter school enrollment and performance from 1999 to 2012 found that "charter schools in North Carolina are increasingly serving the interests of relatively able white students in racially imbalanced schools." Enabling legislation "explicitly stated that charter schools could not discriminate on the basis of race or ethnicity." However, the study found the percentage of White students attending North Carolina charter schools is increasing as is the number of schools where White students predominate. In Durham County, "where the rapid growth of charters has not only increased racial segregation," it has "also has imposed significant financial burdens on the school district." Their research suggests that charters are systematically recruiting White and academically higher performing minority students to boost school-wide performance on standardized exams and that the trends they observed will continue and accelerate.

Los Angeles is now gearing for a fight over expanding the number of charter schools so they eventually register half of the students in the district. The plan would cost the school district almost half a billion dollars to implement. The project is pushed by the Eli and Edythe Broad Foundation. It calls for creating 260 charters over the next eight years. The plan is opposed by the Los Angeles teachers union. The Broads have close personal ties to former President Bill Clinton and Democratic Party Presidential candidate Hillary Rodham Clinton and have contributed to their past campaigns.

At the same time that the charters are making this big push to take over education in Los Angeles, a report from the Los Angeles Unified School District documents that its traditional magnet schools are out-performing its charter schools. Although charter school students performed better than students left behind in regular classrooms, only 39% of students in charters met or exceeded the state's new English Language Arts learning standards and only 28% in math. Certainly not a stellar performance that supports the call for new charter schools.

Detroit 90/90, a charter school management company that operates Detroit's largest charter school network is busy fighting efforts by its teachers to join a union. The company is currently challenging a National Labor Relations Board ruling during the summer that Teach for America recruits should be in the same bargaining unit as regular teachers. Maybe they are on to something, but the charter management company claimed TFA recruits were" temporary service workers," not professional educators, and ineligible to become part of the teachers' union.

In New York City there is a backlash against a pro-charter school television advertisement developed by Families for Excellent Schools. The ad, which cost half a million dollars to produce, accuses Mayor Bill de Blasio of forcing minority students to attend failing schools. Critics charge the ad is racist in the way it portrays urban Black children. Families for Excellent Schools is a major charter school advocacy group with ties to New York State Governor Andrew Cuomo, a charter school supporter who may be considering his own Presidential run. Four of Families for Excellent Schools' founding board members are major Wall Street power brokers.

According to its website, Hedge Clippers is "working to expose the mechanisms hedge funds and billionaires use to influence government and politics in order to expand their wealth, influence and power." Last spring it turned the "clippers" on Eva Moskowitz's Success Academy charter school network and its big money corporate backers. Success Academy does produce high scores on standardized exams, but repeatedly critics charge it is because of zero tolerance policies that victimizes lower performing students. They are suspended and pushed families to transfer out. Diane Ravitch raised questions about why in upper grades where students are tested there are fewer students in Success schools than in lower grades. She also wondered why students in these schools scored high on state assessments but not on tests for admission to top high schools. This puzzling data supports the idea that lower performing students are pushed up to keep the average up and suggests the heavy test prep at Success Academy does not translate into real academic success.

In April Moskowitz and Success Academy ran a fund-raising gala at Cipriani 42nd Street, an "Italian Renaissance inspired masterpiece" with "towering marble columns, soaring ceilings, magnificent inlaid floors and glorious chandeliers," that drew top-of-the-line hedge fund managers.

Attendees included Dan Loeb of Third Point hedge fund, a major contributor to right-wing Republican politicians who "donated" $130,000 to Karl Rove's far-right PAC American Crossroads, and Bruce Kovner, founder of Caxton Associates, a major supporter of the right-wing American Enterprise Institute. Kovner's wife is on the Board of Directors of the Moskowitz charter empire. Success board member Charles Strauch, the former head of a telecommunications company, publishes a blog that charges gay marriage is contributing to America's decay, claims that global warming is a hoax being perpetuated on the American public, and refers to African Americans as "society's losers."

According to Hedge Clippers, other wealthy characters supporting Success Academy and the charter school movement include Paul Singer of Elliott Management, Paul Tudor Jones of Tudor Investment, and John Paulson of Paulson & Co. Singer was a major Romney supporter and is the CEO and chair of the Board of Trustees of the right-wing Manhattan Institute. He has been raising money for Republican candidate Marco Rubio's Presidential bid. Paul Tudor Jones was another big Romney supporter. Jones, Loeb, and Paulson have all donated to Jeb Bush's "Right to Rise" Political Action Committee. Hillary Clinton has also been a supporter of charter schools and Democratic Party donors were also at the Moskowitz extravaganza.

In 2013, twenty-eight of the richest Americans worth at least 1.3 billion dollars each primarily built their fortunes through hedge fund market speculation. John Paulson is the fourth wealthiest hedge fund operator, 36th richest American, and 78th richest person in the world. Not all hedge fund managers are super-rich. Some are just very very rich. Daniel Loeb of Third Point was worth 2.3 billion in 2014 and ranked only 277 on the Forbes list of wealthiest Americans, but this may be because Loeb spends so much time as a director of an anti-teacher union group StudentsFirst and on the Board of Trustees of the Manhattan Institute. Paul Singer, CEO of Elliott Management, is only worth $1.5 billion. Singer, no relation to me, ranks 381 in the United States and only 1,154 in the world on the Forbes list.

The American Federation of Teachers publishes an annual watch list of hedge fund operators deemed hostile to teachers, teacher unions, and teacher pensions, and lobbies to blocked them from managing teacher pension funds. The AFT's first target was hedge funds managers connected to the anti-union groups such as the Manhattan Institute and StudentsFirst. These hedge fund managers were profiting off of union funds and the same time they were supporting efforts to destroy the union and eliminate pensions. In response to pressure from the AFT, Cliff Asness, a right-wing economic libertarian with AQR Capital Management and a member of the Board of Trustees of the American Enterprise Institute and Thomas McWilliams, a managing partner at Court Square agreed to leave the board of directors of the Manhattan Institute.

Question: Are charter schools and their hedge fund supporters the inspiration for Times Square "desnudas" - naked with a coat of paint?

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