Nine Billionaires Are About to Remake New York’s Public Schools

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Hedge-fund manager Whitney Tilson stands at a Harvard club podium in midtown Manhattan, facing a room full of investors eating eggs and bacon, and eager to learn more about charter schools. The walls of the wood-paneled room are lined with the portraits of Tilson’s Harvard forefathers. Above the podium where Tilson stands hangs an ornamental gold ship, swaying. In the corner of the room is a large screen, on which the logos of the day’s sponsors, the Bill and Melinda Gates Foundation and the Walton Family Foundation, float like guardian angels. Two large stone fireplaces dominate the west end of the room. Their exaggerated mantelpieces are each decorated with two empty crests and a laurel—symbols of power drained of any purpose.

Tilson begins an enormous PowerPoint presentation, speaking of the inequities black and Latino children face in the public school system. “Your entire prison population is in these red bars,” he explains, showing red bars indicating the high percentage of poor black and Latino children who could not read at a fourth-grade level. No such children, nor their parents, seemed to have been invited to this presentation.

Despite the role poverty plays in determining whose kids gets stuck in those red bars, Tilson declares to the room of Ivy League investors, “This is not rocket science. Notice on my list there’s no #5, no Spend More Money. You get new facilities and smaller classrooms but nothing changes. Nobody believes anymore that if you give us more money we’ll solve all the problems.”

Something Is Rotten in the State of New York

These exact talking points were echoed in Democrat Andrew Cuomo’s State of the State address, last January, where the governor commanded the legislature, “Don’t tell me that if we only had more money [for education], it would change. We have been putting more money into this system every year for a decade and it hasn’t changed and 250,000 [failing children] will condemn the failing schools by this system.”

Putting his money, or lack thereof, where his mouth is, Cuomo has banked his gubernatorial legacy on a budget that would again fail to meet the state’s public-school funding requirements, instead increasing the privatization of New York’s education system and weakening New York State’s once powerful teachers’ union, NYSUT. Cuomo’s education reform proposal would tie 50 percent of teacher evaluations to student test scores, based on a controversial practice called Value-Added Modeling, drastically weaken teachers’ opportunity for tenure, expedite the firing of teachers, make room for a hundred more charter schools, and promote state takeover of “failing” (or poor) school districts—a tactic that has been used to expand charter school growth without the consent of elected school boards across the country. In his 2014 re-election bid, Cuomo declared that as governor he would work to enact long-term measures to “break” public education, which he called “one of the only remaining public monopolies.” His pledge will be put to the test when the state legislature votes on his budget proposals at the end of this month.

The consensus that New York public schools do not require more funding is curious, given the landmark 2006 Campaign for Fiscal Equity court ruling and subsequent statewide resolution ordering the state to correct its inequitable school-funding formula to provide every student their constitutional right to “sound basic education.” In 2007, Governor Spitzer and the New York State Legislature enacted a statewide resolution, creating one statewide school aid formula based on student poverty concentration and district wealth and promising to add $5.5 billion in schools’s operating aid over four years. Yet in 2009, after two years of more equitable funding, the state froze school aid, citing the financial crisis. Over the next two years, New York State actually cut school funding, including $2.1 billion in classroom cuts.

Click to enlarge. Source: Marina Marcou-O’Malley/Alliance for Quality Education

Zakiyah Ansari, a parent and public schools advocate with the labor-backed Alliance for Quality Education, called such reasoning shameful, “Why do Cuomo and these hedge funders say money doesn’t matter? I’m sure it matters in Scarsdale. I’m sure it matters where the Waltons send their kids. They don’t send their kids to schools with overcrowded classrooms, over-testing, no art, no music, no sports programs, etc. Does money only ‘not matter’ when it comes to black and brown kids?”

But the coalition to remake New York’s education system isn’t hearing it. A few years ago, such blunt threats against public schools, the state’s formidable teachers’ union, NYSUT, not to mention the majority of Cuomo’s own party, would have been unthinkable. Yet over the last year, a dark-money charter-school advocacy group, Families for Excellent Schools, smashed almost all lobbying records in Albany and a Super PAC, New Yorkers’ for a balanced Albany poured $4.3 million into six Senate races, helping tip the Senate Republican in a state with six times as many registered Democrats as Republicans. Thus, with the infusion of five business-friendly senators, Governor Cuomo’s radical education reform bill is suddenly a real political possibility.

Clearly, the governor’s ambitions are not focused on New York State any longer. A recent Quinnipiac poll, for example, indicates Cuomo’s education proposal has lowered his overall approval rating to its lowest in office, with only 28 percent in support of and 63 percent against his massive reform plan. While 50 percent support his advocacy of charter schools, an overwhelming 71 percent do not believe teachers should be evaluated based on student test scores, and 65 percent do not believe such scores should determine tenure. Furthermore, if Cuomo was at all interested in staying in New York, he would not be waging an all out war against the state’s still formidable teachers’ union, once considered the preeminent political force in Albany. “Andrew Cuomo’s career is based on copying everything Bill Clinton ever did, going against teachers’ unions with the support of billionaires, just like the Clintons did with Walmart,” argues one Albany lobbyist to The Nation. “He’s not especially original, but he’s tough, mean, and can execute a plan. He doesn’t give a rats’ ass about education, he just wants Wall Street money. He sees the backing of billionaires key to his future success.”

And over years, Cuomo has earned this backing. According to a recent Competitive Advantage Research analysis, individual contributions to Cuomo during his tenure as attorney general and governor from New York City’s hedge-fund community alone amount to over $4.83 million; additionally, hedge-fund managers have also given $2.53 million to the New York State Democratic Party Committee’s Housekeeping fund, which Hedge Clippers called “a Cuomo-controlled slush fund that has been used to pay for advertisements to support the Governor.” Thus, in exchange for the hedge fund community’s financial support, Cuomo is willing to deal a massive blow to the state’s public school system.

Click to enlarge. Source: Jon Reznick/Competitive Advantage Research

But according to an investigation by The Nation, several hedge fund–backed organizations have been laying the groundwork for this maneuver for years, even before Cuomo took office. The current push for education reform in New York is not an expression of the vast majority of New York’s parents and children but the result of a five-year-long billionaire hedge-funders’ campaign to realize their own vision for public schools.

The Billionaire Boy’s Club

In the 2014 election cycle, no two groups dominated Albany more than the pro–education reform Families for Excellent Schools (FES) and the anti-tax Super PAC New Yorkers for a Balanced Albany. Cuomo’s policy proposals come straight out of FES’s playbook. Eliza Shapiro in a recent Capital New York piece, noted that Cuomo’s report about New York’s ‘failing schools’ crisis “was sometimes indistinguishable from the eight reports on struggling schools F.E.S. [Families for Excellent Schools] has sent reporters since the summer.”

This rapid purchase of this influence is unprecedented. As Capital New York reported, last September and October alone Families for Excellent Schools spent nearly $2.9 million, more than doubling the previous spending record for that period and making ideas like a 50 percent test-based teacher evaluation suddenly conceivable. The year’s final numbers are not out yet, but if such high levels of spending has continued, Families for Excellent Schools will have spent $13.4 million in 2014, the largest single-year lobbying spree in New York state history. Similarly, in just a matter of weeks, New Yorkers for a Balanced Albany’s $4.3 million ad buy pushed the possibility of a Republican Senate takeover from probable to guaranteed, freeing Cuomo to go even farther rightward in his State of the State budget proposal.

Nonetheless, despite the two groups’ distinct political expenditures and public rhetoric, it is almost certain that Families for Excellent Schools and New Yorkers for a Balanced Albany are funded and organized by the same small network of people: the same nine New York hedge-fund billionaires.

Though Families for Excellent Schools presents itself as a grassroots parent education reform organization, four of its five original board members are Wall Street titans like Bryan Lawrence and Paul Appelbaum, who made their millions in the hedge fund and private equity worlds respectively. Families for Excellent Schools’ known donors include corporate foundation groups like the Walton Family Foundation ($700,000) and the Broad Foundation ($200,000), but these donations account for only a tiny fraction of Families for Excellent Schools’ overall revenue. In contrast to most “grassroots” parents’ organizations, Families for Excellent Schools has retained the services of David Grandeau, New York’s former top lobbying regulator, whose expertise has helped shield its donors’ identities by funneling most of its spending through a non-profit 501(c)(3) organization.

Nonetheless, overwhelming institutional similarities indicate that Families for Excellent Schools is largely funded by the same nine hedge-fund billionaires behind almost all of New Yorkers for a Balanced Albany’s rapid expenditures. Hedge fund manager Joel Greenblatt, who gave $250,000 to New Yorkers for a Balanced Albany, founded Success Academy, a charter school chain that has been spearheading Families for Excellent Schools’ on the ground efforts. Additionally, hedge fund mogul Daniel Loeb, who gave $1.025 million to New Yorkers for a Balanced Albany, sits on the board of Success Academy and Julian H. Robertson Jr. who also gave $1 million to the PAC, is the father of the founder of PAVE charter school, also affiliated with Families for Excellent Schools. To top it all off, as WNYC reported last year, Families for Excellent Schools and the New York branch of New Yorkers for A Balanced Albany’s registered parent organization, StudentsFirst, share a business address.

Click to enlarge. Source: Jon Reznick/Competitive Advantage Research

Taken together, these two organizations have provided a vehicle for a tiny group of wealthy NYC hedge-fund managers not just to push their vision of education reform but to tip the political balance of the entire state—throwing support to Cuomo and state Republicans—to ensure its success.

Astroturfing a Movement

Though Families for Excellent Schools really began making headlines in 2014 with its record lobbying expenditures, its first few years were spent quietly organizing rallies with charter school parents and college students in support of education reform issues. Much of this “activism” was funded and directly organized by FES.

FES’ director Jeremiah Kittredge, for example, trained student organizers from the college group, Students For Education Reform, which the pro-charter school advocacy group Education Reform Now boasted about helping laying the groundwork for back in 2010. Though Students For Education Reform has begun to implode due to students’ concerns about its top-down corporate agenda, SFER, like its parent organization Education Reform Now, has raised headlines for allegedly violating its 501(c)(3) status in explicitly pro-education reform political activities in mayoral and state races nationwide.

Since then, Families for Excellent Schools has moved on to larger, more high-profile public rallies, composed primarily of charter-school parents and students, attempting to pressure lawmakers from New York City to Albany. The protests have benefitted from the controversial decision of charter operators like Success Academy to shut down their schools, bus thousands of students to protests and notify parents that they “must” come and protest. “It was cut and dry, they tell us if we can’t go to the rally, our kids won’t have anywhere to go,” said one Success Academy parent, who wished to remain anonymous for fear of retaliation, “So you have to find childcare for them or take off work for their charter school propaganda.”

In October 2013, FES organized a rally across the Brooklyn Bridge after New York City mayor Bill de Blasio declared plans to charge charter school operators rent for the free public space they receive, often at the expense of traditional public school students. According to one top Albany lobbyist, during this time Cuomo was on the phone with StudentsFirst NY board members and hedge fund moguls Paul Tudor Jones II and Daniel Loeb, “thirty to forty times a day.” As The New York Times reported, the next year Families for Excellent Schools and StudentsFirst NY worked directly at the behest of Governor Cuomo, scheduling a mass rally in Albany to overshadow de Blasio’s signature Universal Pre-K legislation, spending $3.6 million on anti–de Blasio TV ads and eventually defeating the mayor’s attempts to make private charter operators pay rent.

When asked about this massive spending, FES’s Jeremiah Kittredge claimed to Capital New York, “There is no price tag on elevating the voices of parents demanding better schools for their kids.” Though in Family for Excellent Schools’ early days at least, there appear to have been quite specific price tags. FES’s 2011 tax forms, for instance, list $98,795 in “parent stipends,” which accounted for almost a quarter of the group’s non-payroll expenses that year. Though proving what Families for Excellent Schools’ “parent stipends” actually fund may seem difficult to prove, a 2012 American Enterprise Institute publication explains, “other groups, such as Families for Excellent Schools, use side payments—financial stipends of $250–$1,000 per year—to give parents an incentive to participate in mobilization and advocacy efforts.”

Parent advocate for the union-backed group Alliance for Quality Education Zakiyah Ansari questioned Family for Excellent Schools’s intentions. “The parents’ issues are real issues, public schools are not being able to provide, but the charter schools’ plan is not about the parents, its about how hedge fund billionaires making more money off of our black and brown children. FES’s Jeremiah Kittredge says he agrees with the government budget, that schools don’t need more money! How can he say that when they’re actually owed over $5.9 billion statewide and fully funded schools is what we as parents really want.”

“This should be about meeting parents where they’re at, so that our voices are being heard. They know our issues are real, prop us up, then go on television and say what they want to see!” continued Ansari, “They have the audacity to use Black Lives Matter and our real needs, but if they don’t care about our needs…when they run their businesses, why would they do this for their activism?” The Success Academy parent who spoke to The Nation argued the top down approach exerted on parents mirrored the way charter schools treat her six-year old, “Something is missing. It’s all a production…. I’m not sure if I’m going to keep her at Success, she can’t be a kid there. There’s too much discipline, too much grooming. It’s all about timing and competition. Timing their playing, timing their classrooms. Who packs their bags the fastest? Who gets quietest fastest? Its seems so hard to be a six year old there.”

Nonetheless, through savvy investments in lavish protests, hedge-fund managers have paid for a full-blown social movement, thus conferring legitimacy on proposals that stand to benefit hedge-fund managers much more than New York state’s chronically underfunded public school system.

The actions of New Yorkers for a Balanced Albany also illustrate the extent to which New York’s so-called reformers manipulate those outside of their inner circle. Despite its backers obvious interest in shaping education reform policy, New Yorkers for a Balanced Albany did not fund one commercial on education, instead stoking upstate fears of a state takeover by Bill de Blasio’s progressive New York City regime. Even more disturbingly, one of New Yorkers for a Balanced Albany’s main funders, Paul Tudor Jones II, for all his talk about the plight of students of color, also gave $500,000 to the NY State Senate Republican Campaign Committee housekeeping fund, which in turn churned out anti-immigrant mailers. The materials denounced New York’s proposed version of the DREAM act, which would help undocumented immigrants attend college.

Why Do Hedge Fund Executives Suddenly Care About Poor Kids?

Why the New York hedge fund community has rallied around the issue of education reform, specifically in support of charter schools and against teacher tenure, is more complicated. Their policy prescriptions—basing 50 percent of teacher evaluations on student test scores, for instance—are not in any way grounded in mainstream education research.

“The problem is that Cuomo’s backers aren’t paying much attention to the people who actually understand how Value-Added Modeling works,” explains Professor Julian Vasquez Heilig, an education policy researcher at California State University. “Education statisticians have come out many times saying these models are being used inappropriately and are unstable because other things happen in students’ lives outside of the teachers they encounter. When a kids’ parents in a high needs district are deported, and their achievement plummets, this actually has nothing to do with the teacher.”

Vasquez Heilig added that the reform proposals seem founded on a desire to destroy the development of long-term professional educators, rather than any empirical analysis: “We know 70 percent of teachers will bounce between high performing and low performing from year to year. So this is creating an impossible high stakes testing gauntlet between a young excited teacher and their path to quality, veteran expertise. If you’re looking for a cheap churn-and-burn teaching force, this is your policy, but if you want experienced, qualified teachers, committed to a schools’ long-term success, this is a disaster.”

From a purely business standpoint, however, such cost-effective education reform proposals do make sense for the hedge-fund community, especially given the alternative education reform option: the legally required equitable funding of New York public schools, as mandated by the state’s highest court in 2007. Low-income New York school districts haven’t received their legally mandated funding since 2009 and the state owes its schools a whopping $5.9 billion, according to a recent study by the labor-backed group Alliance for Quality Education. Yet somehow in this prolonged period of economic necessity, billionaire hedge-fund managers continue to enjoy lower tax rates than the bottom 20 percent of taxpayers.

As a recent Hedge Clippers report pointed out, the hedge-fund community has achieved these gains over the last decade and a half by buying political influence and carving out absurd breaks and loopholes in the New York state tax code. Since 2000, 570 hedge fund managers and top executives have poured $39.6 million into the campaign coffers of New York state politicians. Thus, despite New York’s progressive reputation, its school-district funding-distribution system is actually one of the most regressive nationwide, similar to that of states like Texas, North Carolina and Missouri.

According to Michael Kink, an advocate of fair share taxes with the labor-backed Strong Economy For All Coalition, “We could fund the court order completely with fair share taxes.” This would include closing the carried interest loophole that allows hedge funds to pay a smaller share of their income in taxes than, according to Hedge Clippers, “their limousine drivers, dry cleaners, servants, helicopter pilots, and doormen.” Taxing hedge fund fees and profits fairly would bring New York hundreds of millions of dollars that could go straight to local schools. A recent Hedge Clippers analysis found that fair-share taxes and fees targeting hedge funds, billionaires, high-income LLCs and major corporations could raise between $3.1 and $4.2 billion dollars per year—well over the annual minimum required by state law’s school funding formula. But Cuomo’s hedge fund–backed proposals fail to even approach these standards, instead parroting the convenient logic of corporate education reformers that the problem is not the lack of school funding, but the way in which it is spent.

“It was outrageous when the governor said the lack of school funding was not an issue,” explains New York State Senator Liz Krueger (D). “And it’s consistent with his attempts to fail to make good on the CFE lawsuit commitment, somehow ignoring the fact that the poorest-achieving schools are also the most underfunded.” Commenting on the hedge fund forces backing such proposals, Krueger continued, “I can never know what people’s actual intentions are. But it does seem that there is a pattern of spending enormous lobbying money in lobbying and attempting to influence campaigns…. Hedge funds seem in particular to have made a fine art of not paying their taxes, allowing fundamental public services to be inadequately funded.”

Putting it more explicitly, Jonathan Westin of the labor-backed New York Communities for Change, argues the main point of the hedge fund–backed education reform push is thus “about shaping and controlling the public school system so that they will continue to get away with not paying hundreds of millions in taxes.”

In this light, the hedge-fund community’s fervent advocacy of the charter-school movement reflects its neoliberal social vision for the state and society. Charter schools are imagined as institutions where students can be reshaped to prevail against structural barriers like racism and poverty. As hedge-fund billionaire Paul Tudor Jones II claimed, contrary to decades of empirical evidence, “We proved with the charter school that the achievement gap was a myth, that with the right schools, kids from the poorest neighborhoods could do every bit as well as kids from the richest ones.”

To “make up for” pervasive inequality, in lieu of correcting it, hedge-fund billionaires like Daniel Loeb of Success Academy and Larry Robbins of KIPP have promoted charter schools that envelop students in hyper-disciplined and surveilled school environments in which their every decision, down to their most minute physical movement, can be measured, assessed and addressed. This “no excuses” pedagogical approach signals to students that the only barrier to their success is their character. In other words, as Cuomo put in his the State of the State address, students under the charter school paradigm should understand their educational opportunity as “the great equalizer.”

A Long Time Coming

Of all the hedge-fund billionaires dedicated to education reform, none stands out more than Paul Tudor Jones II, founder of the pre-eminent New York charity network, the Robin Hood Foundation; a founding member of StudentsFirst New York; and one of the main organizers behind SFNY’s Super PAC, New Yorkers for a Balanced Albany.

Jones, who is worth approximately $4.6 billion, rose to prominence in the financial world by famously predicting (and shorting) the market just before the October 1987 crash, reaping an estimated $100 million for his fund as the rest of the world economy was decimated. He acquired islands in the shape of his initials as part of his $30 million Chesapeake Bay estate. Jones owns three aircraft, hundreds of thousands of acres of “sumptuous bush-chic” wildlife reserves in Tanzania and a private helicopter to fly him from his Greenwich, Connecticut, mansion to his Wall Street office.

Despite Jones’s lavish lifestyle, fellow hedge-fund billionaire Louis Bacon scoffed at the idea that Jones’s interest in education reform may not purely philanthropic. “They will use the plutocrat angle to make sure he doesn’t educate poor kids the way he educated his own kids,” argues Bacon. But if these good intentions are true, the question then arises: Why is Jones actively financing groups working to maintain the funding gap between poor kids and his kids? After all, Jones sends his children to private schools in Greenwich, Connecticut, where pre-K alone cost $30,000, over $10,000 more than what the average student receives in New York’s poorest school districts.

Other problems with Jones’s narrative shed light on a long campaign to change public education. According to Jones, his interest in transforming New York state education policy started in 2013, when Robin Hood Foundation executives convened at McKinsey & Co.’s midtown offices for their twenty-fifth anniversary and had a collective epiphany that to attack poverty, they needed to improve public education nationwide. But e-mails leaked to The Nation suggest that Jones, the Robin Hood Foundation and his New York City hedge-fund colleagues had been laying the groundwork for what would become Families for Excellent Schools and StudentsFirst’s New Yorkers for a Balanced Albany, since at least 2010. This finding suggests that today’s push for education reform is not a self-starting, grassroots mobilization, but a concerted corporate advertising campaign. Many of the astroturf tactics used in today’s education reform push were being planned and practiced five years ago.

Back in 2010, the groups’ names were different but the individuals and issues were almost identical. As with Families for Excellent Schools and New Yorkers for a Balanced Albany today, Democrats for Education Reform, led by hedge-fund elites like Whitney Tilson and Joel Greenblatt, were pushing for charter-school expansion and an increase in high stakes testing. At that time, however, hedge-fund education-reform forces were pushing their agenda through New York City rather than Albany, given their almost seamless relationship with the Bloomberg-era Department of Education.

In February 2010, for example, then–NYC Schools Chancellor Joel Klein, national DOE official John White and NYC DOE Public Affairs Director Lenny Speiller were actively coordinating with the hedge fund financed Political Action Committee, Democrats For Education Reform (DFER), to win charter-school expansion across the state in the upcoming legislative session.

E-mails leaked to The Nation from February 2010, for example, include a strategy deck of slides reviewed by Klein, White, Speiller, Joe Williams, a director of Democrats for Education Reform (DFER), and Bradley Tusk, a consultant for DFER’s 501(c)(3), Education Reform Now, and Patrick Van Keerbergen, who would eventually become DFER’s National political director. The deck, entitled “Giving the Charter Movement the Political Organization it Needs,” outlines which organizations would run a campaign to both lift New York State’s charter school cap from 200 to 460 schools and influence the 2010 gubernatorial elections. The deck also discussed how much these ambitious projects would cost.

Two days after that strategy deck was passed around, Klein (DOE), White (DOE), Tusk (Education Reform Now) and Joe Williams (DFER/ERN) had a conference call with members of the Paul Tudor Jones’s Robin Hood Foundation, in which Klein demanded the Robin Hood board give Education Reform Now more money, according to anonymous source, who spoke to The New York Times. The source claimed that Klein told Jones’s foundation that “their philanthropy was going to amount to minuscule results unless they stepped it up.” Though a DOE spokesperson denied the accusation that Klein was directly fundraising on ERN’s behalf, e-mails obtained by The Nation also suggest that Klein and John White actively strategized with Tusk and Williams before the call on how to push the Robin Hood Foundation to donate, in spite of concerns that funding such overt political activity would be illegal for a charity. Nonetheless, as with Families for Excellent Schools’ today, White, Klein, Tusk and Williams knew they could get around such legal concerns by carefully funneling dark money through an accompanying 501(c)(4).

After the call, Klein and Tusk shared a joke about not wanting to “alienate any donors. :)”—another telling indication that Klein, despite his government position, may have been actively seeking to help fundraise for Education Reform Now.

Regardless of its legality, the call seems to have been successful. Two months later, the Robin Hood Foundation promised Education Reform Now $1 million, money that helped buoy its second (and successful) attempt to lift the charter cap in the May 2010 budget. And according to Steven Brill in his book Class Warfare, around this time the hedge-fund alliance for education reform really began to take off. That April, for instance, Education Reform Now’s Joe Williams and Bradley Tusk schmoozed over drinks with Paul Tudor Jones II and other hedge-fund billionaires at Home Depot founder Kenneth Langone’s Five Avenue apartment, where they planned a successful campaign to secretly spend millions through a 501(c)(4) political action fund and win the charter cap increase. As with Families for Excellent Schools’ mostly secret financing today, Brill notes that Education Reform Now’s donations never became public, and that in May a room full of eager billionaires was able to push the legislature to authorize increased charter-school expansion. Given the market share won for charter-school operators by this legal violation, New York’s charter-school movement could certainly count the campaign a success, and the New York hedge-fund crowd led by Paul Tudor Jones II was fully on board.

Education Reform Now faded from the New York scene, but helped two new groups, Families for Excellent Schools and StudentsFirst, rise to take its place, with generous donations. According to IRS forms, for example, in 2012 Education Reform Now gave $10,000 in cash to Families for Excellent Schools, as well as a $49,500 cash grant to the Tapestry Project, which also gave Families for Excellent Schools $19,000 sometime between July 2011 and June 2012.

The ties between Education Reform Now and StudentsFirst are even stronger. According to its 2010 tax filing, Education Reform Now had “a fiscal sponsorship agreement with StudentsFirst Institute (SFI)” and Education Reform Now would “receive all donations and pay all Project expenses on behalf of SFI.” Moreover, in 2012 StudentsFirst listed its address as that of Education Reform Now. In his current capacity as board chair of StudentsFirst, StudentsFirst Institute and StudentsFirst New York, Joel Klein appears to have gone from advocating for hedge funders’ donations for projects like the 2010 Education Reform Now campaign to StudentsFirst’s 2014 New Yorkers for a Balanced Albany push. Back in 2010, Klein was asking for contributions from the board of the Robin Hood Foundation, headed by hedge-fund billionaire Paul Tudor Jones II. Five years later, Klein and Jones sit on the same StudentsFirst NY board with at least three other contributors to New Yorkers for a Balanced Albany.

Even in the hiring of consultants, StudentsFirst has stuck with the same people, paying Education Reform Now’s former operative Bradley Tusk, now of Tusk Strategies, to help hone and propagate its message. Additionally, as the recent Competitive Advantage Research analysis proved, after nine billionaire hedge funders powered StudentsFirst’s New Yorkers for a Balanced Albany, NY4BA in turn poured over $400,000 into Tusk Strategies to help flip the New York State Senate Republican.

Manipulative From the Start

It is interesting to note that even back in 2010 at the height of their naïveté about education-reform politics, the hedge-fund reform coalition never considered attempting to build a movement actually centered on the needs and input of students and parents. In fact, internal e-mails from Education Reform Now seem to conceive of parents, particularly parents of color, as objects to authenticate their preconceived plans, rather than active participants and decision-makers within their reform club.

For example, in this 2010 e-mail from former Houston ISD Trustee Natashi Kamrani to Education Reform Now’s Joe Williams presumably asking for someone to sign onto a pro–education reform op-ed, Williams briskly responds, “I don’t have any Hispanic voice that I can deploy right now.”

This instrumental and condescending attitude is also reflected in many of Education Reform Now’s early-mobilization strategies. In anticipation of the 2010 legislative session, for example, the slides also note that DFER/ Education Reform Now should “use” the $700 million in Race to the Top federal funding as leverage for its main issue, lifting New York state’s charter cap, because Race to the Top “is easy to understand” and “lifting the cap may not mean much to parents of children already in charter schools.”

The presentation slides launching programs citywide to “identify and activate charter school parents, supporters and voters” as well as “to have key surrogates in churches across the city talk about the issue every week”:

What exactly Education Reform Now meant by such nefarious-sounding language is difficult to prove, but the strikingly similar initiatives of today’s leading education reform groups suggest their designs were not very grassroots. Families for Excellent Schools’ “parent stipends” for protests sound like a way to “activate parents”, and StudentsFirst’s coalition of pro-Cuomo pastors, who have pledged to preach the gospel of education reform throughout this month, sounds just like Education Reform Now’s planned church “surrogates” program. Such obvious continuities further indicate that the hedge-fund alliance has always intended its education-reform campaign to be a top-down, money-driven media spectacle.

Over a Power Breakfast

Almost five years ago, a fateful agreement was reached. An ambitious then–attorney general, Andrew Cuomo, walked into New York’s “power breakfast” hub, the Regency Hotel, and shook hands with Education Reform Now’s Joe Williams, the man who could help him secure the hedge-fund community’s blessing. Williams told Cuomo that they “were looking for a leader on our particular issue,” and according to Williams the attorney general’s response was a good one. Since that breakfast, millions of hedge-fund dollars have poured into the governor’s coffers, and education-reform stalwart Andrew Cuomo has never looked back.

Thus, over a breakfast not unlike the one enjoyed at the Harvard Club, one man’s ambition and a few other men’s power overrode the decades-long demands of millions of New Yorkers for fully funded public schools. But what does such a profoundly anti-democratic approach mean for the state’s public school system? In less than two weeks, when the state legislature votes on Cuomo’s proposals, New York’s public-school students will find out.

Ava Kofman contributed reporting.

Correction: This article originally stated that Education Reform Now and Joe Williams were fined by the IRS for violating ERN’s 501(c)3 status. They were not fined. The sentence has been removed.