Leaders of New Group Have an "Interest" in Education

Increasingly privatized education -- with charters, consultants and competition -- offers more opportunities for investment and profit-making. Its proponents have a special and vested interest in the policies they promote.
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Few people define themselves as being a member of a special interest. That term applies to the folks on the other side -- the people you disagree with. New Yorkers got more evidence of that this month with the formation of StudentsFirstNY. In a nutshell, the group wants to preserve and extend the education policies of New York City Mayor Michael Bloomberg and battle the teachers union, which has had an increasingly rancorous relationship with Bloomberg.
In its mission statement, the group declares,

StudentsFirstNY will be New York's leading voice for students who depend on public education for the skills they need to succeed, but who are too often failed by a system that puts special interests, rather than the interests of children, first.

Nice sentiments. But the people behind this statement hardly qualify as disinterested observers anymore than the United Federation of Teachers does. The New York StudentsFirst group is an offshoot of the national organization StudentsFirst, created by former Washington, D.C. schools superintendent Michelle Rhee. It includes many who have backed the Bloomberg administration's education policies over the years -- people who even their foes have come to call reformers. The name persists after 10 years of "reformers" running the city's schools and racking up a decidedly mixed record. Whatever they have or have not done for students in New York City and beyond, though, these policies have helped make some people rich and successful.

Technology Benefits

Take board member and former city Schools Chancellor Joel Klein. After making about $250,000 a year in that job, Klein cashed in in 2010 when he became head of the education division at Rupert Murdoch's News Corp. Press accounts at the time said Klein received a $1 million signing bonus and salary of $2 million, along with stock options, and a $1,200-a-month car allowance. He also was reported to be eligible annual bonuses of up to $1.5 million a year. That bonus, one would expect, would hinge to some extent of the success of the education division, which sells technology to public schools.

Technology in schools is a hot topic these days. The data-driven policies championed by Bloomberg, Klein and others require districts to buy systems to crunch and track that data. Klein also has long pushed for more technology in classrooms. This may be all to the good, but Klein clearly has an interest here. A case in point: When Klein was chancellor, he enthusiastically backed the work of a company called Wireless Generation, which developed the city's student tracking system, and Race to the Top, the Obama administration's program to support innovation education. Two weeks after Klein signed his lucrative deal with News Corp, it bought Wireless Generation. Then in June, the state education department awarded Wireless Generation $27 million of New York's Race to the Top money. The deal came courtesy of a no-bid contract, an arrangement that "smacks of cronyism," Forbes blogger Erik Kane wrote at the time. (State comptroller Thomas DiNapoli killed the contract last summer, citing the phone hacking scandal engulfing Wireless Generation's new parent company.)

Charter Members
Also on the board of StudentsFirstNY is Geoffrey Canada, chief executive and founder of the Harlem Children's Zone. Along with former Mayor Ed Koch, another board member, Canada wrote an op-ed for the Daily News earlier this month, providing a rosy look at Bloomberg's accomplishments in education and calling for his policies to continue. But, it warned, "The education establishment and special interests will try to undermine us and the cause of educational progress.

Canada, though, is somewhat of a special interest himself -- a big beneficiary of Bloomberg and his policies. Harlem Children's Zone received at least 102 contracts, totaling more than $71 million from the city in the 10 years ending in 2009. The organization reportedly got more than $500,000 from Bloomberg himself between 2001 and 2008. It also operates three charter schools.

Canada's 2010 compensation from the organization totaled $450,872. He's also become something of a star -- featured prominently in the movie Waiting for Superman and in an American Express ad. In light of this, it's hardly surprising that Canada has proved himself one of Bloomberg's biggest fans. Before signing on to StudentsFirst, Canada testified in support of Bloomberg's controversial bid to extend term limits in 2008, served as the public face of a supposedly grassroots effort to continue mayoral control of school in 2009; spun for the mayor following a 2009 mayoral candidates debate; and reportedly called presidential adviser Valerie Jarrett on Bloomberg's behalf in a move to persuade Obama not to endorse Bloomberg's Democratic opponent, William Thompson.Canada may believe that all this has been in the best interests of New York City kids. But it has also been in his interest.

Then there's Eva Moskowitz, perhaps the most polarizing person in the charter school movement. Her Success Academy Charter Schools have spread to three boroughs, attracting large numbers of applicants and opposition. As Moskowitz built her empire, Bloomberg and Klein went out of their way to provide her schools with space in Department of Education buildings -- sometimes in the face of fervent opposition from the regular public schools and their communities.

There's no secret why Moskowitz fought so hard for those deals. (Her demands for space and Klein's almost subservient responses to her merged in reams of emails obtained by the Daily News in 2010.) It's free. "Without the deal on rent-free space, the network would be forced to stop expanding," NewSchools Venture Fund director and Success Charter board member Jim Peyser told CapitalNY.

As leader and founder of Success, Moskowitz made more than $400,000 in 2010. Some believe Moskowitz, a former member of the New York City Council and unsuccessful candidate for Manhattan borough president, could try to parlay her education experience into another run for political office. Charter schools also have benefited Moskowitz's husband, Eric Grannis. He serves as executive director of the Tapestry Project, which seeks to create more charters, and according to its web site "has provided legal counsel to more than a dozen charter schools."

Many others on the StudentsFirstNY board are from the world of finance. Hedge fund managers have emerged as leading supporters of the education movement in general and the charter movement in particular -- even though most do not send their kids to public schools. No doubt, many, perhaps even most, of these very rich people want to make a difference and help kids.

But if education becomes increasingly privatized -- with charters, consultants and competition -- it would offer more opportunities for investment and profit-making. Then too the reform movement holds that poverty is an excuse -- not a reason -- for low educational achievement. Good teaching, the reasoning goes, trumps a bad neighborhood or family situation. In other words, the rhetoric behind education reform lets the one percent off the hook for the problems of our educational system -- and blames teachers instead.

The Leader

Overseeing StudentsFirst is Rhee, who has become a national figure, and probably quite affluent, thanks to education reform. After serving with Teach for America, she founded the New Teacher Project. Districts hire the project to recruit and train teachers. Money from that work has gone to support its advocacy efforts on such issues as ending layoffs based on seniority and changing the evaluation system for teachers, causes closely aligned with Bloomberg. American Federation of Teachers president Randi Weingarten has called the project "a wholly-owned subsidiary" of the New York City education department. The organization had $27 million in revenues in her final year there.

Rhee, of course, went on to become schools superintendent in Washington, D.C. After D.C. voters booted her boss -- at least partly because of her, according to most political observers there -- she went on to found StudentsFirst. In a rare look inside the finances of StudentsFirst, the Huffington Post's Joy Resmovits found, it expected to have $225 million in revenue between 2010 and 2013 in its 501(c)3 alone.
The organization has not disclosed, as far as I can tell, how much of that goes to pay Rhee. We do know, though, that Rhee gets up to $50,000 for a lecture and also expects such perks as first class air travel to the site and a VIP suite.

None of this means that Rhee and her minions may not have good ideas -- or that they should not form a group to lobby legislators and persuade voters. But let's not let them get away with saying they don't have a special -- and vested -- interest in the policies they promote.

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