September 21, 2016

Credit: Pictures of Money

The 20th of the month campaign finance deadline for charter school ballot committees just passed and it was a snooze. The Waltons have lost interest in us, the dog that didn’t bark still isn’t barking, and the hedge fund money launderer Families for Excellent Schools added a mere $1 million in dark money to the coffers of the New York based Great Schools Massachusetts. That means that GSM’s prospects for success are still Up to You New York, New York. So let’s spend a little time on Families for Excellent Schools of New York, funder of the charters campaign.

The September 20 report shows GSM took in $1,029,193.11, of which $1,000,000.00 was donated by dark money Families for Excellent Schools Advocacy. Dark money means that you, the voters of Massachusetts, will never know the true contributors behind all those nice TV ads. Adding together the September 9 and September 20 reports, GSM has collected a total of $9,214,498.43. FESA has kicked in $6,750,000.00. There were a handful of additional major contributors in the September 9 filings, so the total amount coming out of New York is $7,240.000.00, and the total amount of GSM’s dark money contributions is $7,900,000.00.

FES has been active in both Connecticut and New York, and on March 19, 2015 The Nation published a revealing account of FES, 9 Billionaires Are About to Remake New York’s Public Schools—Here’s Their Story. Lo and behold, one of the 9 Billionaires was Massachusetts own Seth Klarman, New England’s most prolific giver to Republican and conservative causes. Klarman was also a funder of the ballot committee Public Charter Schools for Massachusetts, the predecessor of Great Schools Massachusetts, but like the other F(o)unding Partners of GSM he’s disappeared from its contributor lists. Klarman is also a huge donor to Strategic Grant Partners, whose Managing Director and also huge donor to SGP and to the predecessor of GSM is Joanna Jacobson, who in 2013-2014 steered $2,150,000.00 of SGP’s grants to Families for Excellent Schools for startup operations in Massachusetts, which according to a letter from Ms. Jacobson to the Boston Globe had nothing whatsoever to do with the current campaign; which would beggar the reliability of the word “Strategic” in the name Strategic Grant Partners, but there you have it. Six of SGP’s major contributors also contributed to the launch of the GSM predecessor, but they have all now disappeared from contributor filings, strategically or not.

But that diverted me from the topic of Mr. Klarman, who according to The Nation helped bankroll Families for Excellent Schools, which in 2014 and 2015 became the most expensive lobbying operation in the history of New York State. The rise of FES coincided with the emergence of a Super PAC known as New Yorkers for a Balanced Albany, a conservative anti-tax group that invested $4.3 million into six state senate races, moving the senate into the Republican column and thus enhancing both the prospects for charter and anti-tax action. The 9 Billionaires are not political bumpkins – they hired New York’s former top lobbying regulator to advise on how to shield FES’s donors from being revealed by hiding behind the 501(c)(3) format. But still, according to The Nation:

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. . . .

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. . . .

[T]hrough 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.

To return to the FES remote field office in Boston, GSM is not only beholden to FES for much of its funding to buy TV ads but for day to day operations. The OCPF reports also detail in-kind contributions, and most of those to SGP are from Families for Excellent Schools or Families for Excellent Schools Advocacy, both of 80 Pine St., 32nd floor, New York, New York. These neighbors contribute grassroots events, postage, T-shirts etc. plus staff salaries and travel for GSM. On September 9 FES reported spending $73,930.06 on a variety of matters including $19,200.00 for “strategic consulting.” FESA spent $227,089.79 for staff time. On the September 20 report, all the in-kind contributions were from FESA, a total of $72,868.26 including $46,999.86 for staff time. (The only other in-kind contributions were by dark money Education Reform Now Advocacy, the funder of dark money Democrats for Education Reform). FESA is an Internal Revenue Code 501(c)(4) and FES is a 501(c)(3). The distinction according to opensecrets.org is that:

501(c)(3) groups operate for religious, charitable, scientific or educational purposes. These groups are not supposed to engage in any political activities, though some voter registration activities are permitted. 501(c)(4) groups are commonly called "social welfare" organizations that may engage in political activities, as long as these activities do not become their primary purpose.

Not that I’m trying to stir up any trouble.

That brings me back to the dog that didn’t bark, the apparent disappearance of Klarman, Jacobson, and most of the other F(o)unding Partners of GSM. Six of the F(o)unding Partners are also long-time contributors to Strategic Grant Partners, which has been preparing for this moment for years. Is it more likely that they’ve abandoned the cause, or that they are hiding behind the dark money FES, a tactic previously employed by one of the F(o)unding Partners and member of the 9 Billionaires, Seth Klarman?

All of this could be easily cleared up if Great Schools Massachusetts, Families for Excellent Schools, and Families for Excellent Schools Advocacy revealed the real flesh and blood contributors. Throw in Education Reform Now and Democrats for Education Reform, Strategic Growth for Massachusetts, and Great Schools for Massachusetts, and voters would have a clearer picture of what this campaign is all about. But that’s not the way dark money works.  

It all puts me in a New York state of mind.

Louis D. Brandeis: "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."

[Full disclosure: as an educator in the UMass system, I am a union member. I write about dark money (and other things). I don't write about charter schools, nor have I taken a position on them. I have taken a position against plutocracy and in favor of democracy, and thus against dark money.]

Great Schools Massachusetts, Families for Excellent Schools

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