Again, It's about the Money

Over at The Stranger Slog, Goldy reports yet another interesting story about 1240; the Bezos family is funding four PACS.   They are Children for WA PAC, Democrats for Ed Reform WA PAC and Education Voters Political Action Fund.  The newest one is Revising the Status Quo.  Most of the money from all of them comes from the Bezos family, including Jeff Bezos' mom and dad.  And, in turn, Stand for Children throws some of its money in there.  (It's a long line of circulating money usually starting from a wealthy person/entity like the Gates Foundation.)

Further more, all of these IEs were done by the same direct mail house, Amplified Strategies, a firm that proudly boasts its work on the No on I-1098 (High earners income tax) a campaign to which the billionaire Bezos family contributed $150,000.

So while it may look like Cann and Bowman are getting a lot of support from a broad array of good-sounding organizations with "education" in their names, it's pretty much just the libertarian tax-hating/charter-school-loving Bezos family (which has also given $500,000 to the charter schools initiative) laundering its money through a bunch of shell PACs. Legally, but still....

Keep in mind that there is a new rule that requires campaigns to note on their advertising their top 5 donors.  If the Yes on 1240 campaign has to disclose that most of the money comes from out-of-state, not good so you create lots of PACS so the money is spread out.  Also, as Goldy points out, it makes it look like there are many "education" groups supporting 1240 as well as other candidates.  

More about who makes money on public education from this article from Reuters, Private Firms Eyeing Profits from US Public Schools.  

The investors gathered in a tony private club in Manhattan were eager to hear about the next big thing, and education consultant Rob Lytle was happy to oblige.

Think about the upcoming rollout of new national academic standards for public schools, he urged the crowd. If they're as rigorous as advertised, a huge number of schools will suddenly look really bad, their students testing way behind in reading and math. They'll want help, quick. And private, for-profit vendors selling lesson plans, educational software and student assessments will be right there to provide it.

"You start to see entire ecosystems of investment opportunity lining up," said Lytle, a partner at The Parthenon Group, a Boston consulting firm. "It could get really, really big."

How big is this market?

The K-12 market is tantalizingly huge: The U.S. spends more than $500 billion a year to educate kids from ages five through 18. The entire education sector, including college and mid-career training, represents nearly 9 percent of U.S. gross domestic product, more than the energy or technology sectors.

In the venture capital world, transactions in the K-12 education sector soared to a record $389 million last year, up from $13 million in 2005. That includes major investments from some of the most respected venture capitalists in Silicon Valley, according to GSV Advisors, an investment firm in Chicago that specializes in education. (bold mine)


Now investors are signaling optimism that a golden moment has arrived. They're pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.

The conference last week at the University Club, billed as a how-to on "private equity investing in for-profit education companies," drew a full house of about 100.

The goal: an education revolution in which public schools outsource to private vendors such critical tasks as teaching math, educating disabled students, even writing report cards, said Michael Moe, the founder of GSV.

"Education is behind healthcare and other sectors that have utilized outsourcing to become more efficient," private equity investor Larry Shagrin said in the keynote address to the New York conference.

And look how well healthcare is doing in the U.S.

From Diane Ravitch:

"This is a new frontier," Ravitch said. "The private equity guys and the hedge fund guys are circling public education."

Some of the products and services offered by private vendors may well be good for kids and schools, Ravitch said. But she has no confidence in their overall quality because "the bottom line is that they're seeking profit first."

And Special Ed?  Low-hanging fruit. 

Another niche spotlighted at the private equity conference: special education.

Mark Claypool, president of Educational Services of America, told the crowd his company has enjoyed three straight years of 15 percent to 20 percent growth as more and more school districts have hired him to run their special-needs programs.

Autism in particular, he said, is a growth market, with school districts seeking better, cheaper ways to serve the growing number of students struggling with that disorder.

Bottom line:

Claypool and others point out that private firms have always made money off public education; they have constructed the schools, provided the buses and processed the burgers served at lunch. Big publishers such as Pearson, McGraw-Hill and Houghton Mifflin Harcourt have made hundreds of millions of dollars selling public school districts textbooks and standardized tests.

Critics see the newest rush to private vendors as more worrisome because school districts are outsourcing not just supplies but the very core of education: the daily interaction between student and teacher, the presentation of new material, the quick checks to see which kids have risen to the challenge and which are hopelessly confused.

At the more than 5,500 charter schools nationwide, private management companies -- some of them for-profit -- are in full control of running public schools with public dollars.

"I look around the world and I don't see any country doing this but us," Ravitch said. "Why is that?"

Why indeed if many countries are doing so much better than the U.S.


dan dempsey said…
n..... asked "Will Americans never learn?

Three Members of Congress Introduce Constitutional Amendment to Limit Expenditures on Election Campaigns

The proposed Constitutional Amendment, which says, “Congress and the States shall have the power to regulate and set limits on all election contributions and expenditures, including a candidate’s own spending.” The authors are U.S. Senator Bernie Sanders of Vermont, U.S. Senator Mark Begich of Alaska, and U.S. House member Ted Deutch of Florida.

The proposed amendment also says, “The rights protected by the Constitution of the United States are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests under the laws of any state, the United States, or any foreign state.” However, the amendment also says the proposal could not limit the freedom of the press.

So three legislators have figured it out and learned something.
AlexAdam said…
This comment has been removed by a blog administrator.
seattle citizen said…
When I said in an earlier post that the accusation of being "for the status quo" was THE main talking point of the reformers, I didn't know they would actually use it in the name of one of their finger puppet astroturfs, "Revising the Status Quo." Pathetic.
Sahila said…
Joe Biden's brother Frank owns the trouble-plagued Maverick charter school chain...

Jeb Bush started the first charter school in Florida...

Romney has $10,000,000 invested in Solamere Capital, a PE firm headed by his son Tagg. Solamere offered its clients TA Associates which invests in privatizing education.

David Halperin, March, 2012, writes:

Romney Has Some Great Friends Who Are For-Profit College Owners In the article, Halperin goes on to reveal this:

The New York Times reported in January that Romney praised for-profit colleges, in particular overpriced Full Sail University without telling voters that his campaign and Super PAC had received nearly $100,000 from Full Sail CEO Bill Heavener and from C. Kevin Landry, chairman of TA Associates, the private equity firm that owns Full Sail.

there's money in them thar classrooms....
seattle citizen said…
Ah, interesting...Regarding the new PAC "Revising the Status Quo," Lisa McFarlane over at the Reformist DFER writes this:

"Eric Pettigrew (D, SE Seattle), the lone African American in the Washington State Legislature, has five of the state’s lowest performing schools in his district. During the last legislative session, he introduced a public charter school bill that would have provided new options and potential solutions for many of our struggling schools and struggling students across Washington. While pleading his case for the bill’s passage he asked his Democratic colleagues this simple question, “Do you agree that we need to do something for these kids?”

Their answer? Silence. Instead, Eric Pettigrew’s Democratic colleagues opted to defend the status quo, and they refused to act on the charter school proposal when they had the opportunity.

But Eric Pettigrew did not give up. Instead of dropping the issue and raising money for his own campaign coffers, he started a bold new Democratic Political Action Committee called Revising the Status Quo (RSQ, pronounced “risk”). It is the first PAC of its kind in Washington State.

The aim of the PAC is to “elect intrepid Democrats to the state legislature in Washington. The Democrats supported by this PAC will be independent thinkers, willing and ready to challenge the traditional values, unflinching and interested in a full range of issues. The goal is to support and elect candidates that will do what is best for Washington in every area - including education, business and fiscal responsibility - even if the best way is not the popular way.”...."
Anonymous said…
"While pleading his case for the bill’s passage he asked his Democratic colleagues this simple question, “Do you agree that we need to do something for these kids?” Their answer? Silence."

Let me be blunt. Since she didn't name the colleagues, I cannot verify her statement -- but I think she is lying. Flat out, bold faced lying. I cannot fathom that Mr. Pettigrews colleagues were reduced to silence in the face of his misguided plea to support bad legislation. I bet all of them, every single one, had various reasons (and there are many GOOD reasons -- though again, it is hard to argue with any specificity when no names are given) for failing to support a rushed, badly conceived charter measure, one that I suspect was largely authored by ALEC or its supporters -- and that NONE of those reasons, not ONE, involved believing that the "status quo" was acceptable.

Shame on you, Lisa. Shame! How do you sleep at night? Boy, am I glad I no longer move in the circles you do.

"Instead, Eric Pettigrew’s Democratic colleagues opted to defend the status quo," (no, they didn't -- see above) "and they refused to act on the charter school proposal when they had the opportunity." Yes -- and good for them. I voted to reelect every single one of the "no" voters that I could find on my ballot. And I refused to vote for Pettigrew, whom I consider to be a total sell-out to the ed reform crowd.

--Not fooled, Lisa. Not. Fooled.

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