By Diane Kepus
November 1, 2014
Then comes an even warmer New York City day in August when the investors have all gathered in a tiny private club in Manhattan so eager to hear about the next “cash cow”, and education consultant Rob Lytle was happy to oblige.
Lytle, his suit neatly pressed to honor a king stated proudly, “Think about the upcoming rollout of the new national academic standards for public schools. If they’re as rigorous as advertised, a huge number of schools will suddenly look really bad with their students testing way behind in reading and math. And private, for-profit vendors, (PublicPrivate Partnerships) (PPP), selling lesson plans, educational software and student assessments will be right there to provide it.”
Before we go any further, maybe we should take a look at Rob Lytle. He is employed by the Parthenon Group and is the Co-Head of the Education Practice Department along with Karen Khemka. Lytle states he has led client engagements on general strategy, performance improvement, and investment due diligence across a broad spectrum of educational organizations.
In reality, “a guy who likes to play with the big business boys and is joined by Public Private Corporations involving them in co-businesses using our children as their ‘human collateral’”. Their words, not mine.
Lytle goes on to tell them to imagine what this could mean for their “bottom-line”. IF these new standards are as rigorous as advertised, the schools are all going to look bad and they’ll need help quick. And we can be right there to provide it.”
“You start to see the entire ecosystem of investment opportunity lining up. It could get really, really big.”
And indeed, investors of all stripes could just smell the big profit potential in public education. They could already hear the “cha-ching”! They were like a bunch of high school boys getting ready for their first prom visualizing their evening expectations.
Never ever forget there has been a massive national and international organized plan to privatize education which has been in the process of being implemented over several decades. Billionaires such as the Bill and Melinda Gates Foundation, Carnegie, Broad Foundation, Bush Dynasty and the Pearson Corporation among others, have infiltrated hundreds of governmental bodies including school boards, city and county councils and other sections of our local, state and federal government.
You don’t think former President Johnson pulled the original ESEA out of his hat do you? Then there’s George H.W. Bush first talk about Charter schools and volunteerism to be used toward a student gaining their diploma.
Ever since the Carnegie Foundation put out their 1934 Report on the Commission on Social Studies things regarding education have been headed down a slippery slope.
“The True Goal of School Choice” by Charlotte Iserbyt is extremely telling!
The goal is to turn the education system into a for-profit center worth tens of billions of dollars while at the same time turning our kids into “worker-bees” for the factories and fields. They can spout all they want to about 21st Century College and Career Readiness and fancy acronyms like STEM, but if this were true then why in the world would our children be learning Skinnerian Outcome Based Education through the CCS and at the same time masquerading that Charter/Choice is the better road to take.
Charter, Private and Parochial schools are using the CCS– so ask yourself, what is the point of all this?
Have you all forgotten we have foreign Gulen Charter schools in this country with the blessings of the U.S. State Department and they are also funded by YOUR tax dollars? What is wrong with American parents to think it is “kool” for their kids to attend an Islamic school when they are not Islamic and to allow their child to travel to Turkey for 4-5 weeks during the summer for private indoctrination?
Has everyone lost their minds?
Parents and school administrators all over the country think it makes them special to be associated with the International Baccalaurate program. Never mind the school district don’t care they are spending millions upon millions of dollars on this program with no superior results. Most parents are not even aware their tax dollars are being used to pay for the program nor do they care. And they certainly are not looking at what the program is subtlety teaching them. Try looking up GAIA for their Science.
The U.S. State Department also has allowed the UN/UNESCO proprietary curriculums to be implemented in our schools and there is even less control of these programs in the Charter schools.
There are also criminal elements of which have been allowed and encouraged politicians to personally benefit from using their public positions to profit from their votes and actions.
Lytle states the K-12 market is tantalizingly huge! He states:
“According to the NCES the U.S. spends more than $591B a year to educate kids from ages five through 18. The entire education sector, including college and mid-career training represents nearly 11% of the U.S. gross domestic product, more than the energy or technology sectors.
Traditionally, public education has been a tough market for private firms to break into – fraught with politics, tangled in bureaucracy and fragmented into tens of thousands of individual schools and school districts from coast to coast.Now investors are signaling optimism that the “golden calf” 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.”
WOW! ‘If I were a rich man, yubby, dibby, dibby, dibby, dum’!
The very simple fact is the education system did NOT even begin to fail until the Federal government got their hands on the education of our children. They touch nothing they don’t ruin. Public education is not broken. It is not failing or declining – it is the curriculum, standards and object of controlling our children’s lives that has failed and the “reformers” looking to manage everything for their share of the “pot”.
Might I add it is these intrusive market-based “reformers” that have allied themselves with those who have long sought to destroy public educationwho are the monsters here.
All this has caused exactly what you would expect. With the transfer of public funds to private management companies/groups, and the creation of thousands of deregulated, unsupervised, and unaccountable charter schools it has opened the public coffers to profiteering, fraud, scandals and exploitation by large and small entrepreneurs. All with the encouragement of almost ALL elected legislators.
A conference at the NY University Club billed as a how-to on “private equity investing in for-profit education companies”, drew a full house of over 100 attendees.
You can be sure your children are headed for real problems when your state passes legislation to cover every “nook and cranny” of the public-private dealings in your state – especially if they are given carte blanche as they were in Florida.
Do you for one minute think these corporations care about your child’s success or failure in education or anything else for that matter?
In the venture capital world, transactions in the K-12 education sector soared to a record $389M in 2013, up from a mere $13M in 2005.
Do you realize that is a 3,000% increase in 6 years on the backs of YOUR children? This figure is expected to reach over $788B by next year.
And what do you get from the business world if you fight back? A nasty letter from the CEO of ExxonMobil to the governor of your state threatening to take their business elsewhere!
The rise and growth of the for-profit education industry has some really hard hitters on their side. They seek out different ways to sell products to schools and school districts, selling a variety of programs to match the Common Core Standards, even writing lucrative deals for charter school properties, data mining and investing in various Charter School Management Companies.
The goal for them: 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, ofGSV Capital, a Silicon Valley type investment firm from Chicago which invests heavily in education start-ups including Knewton Inc. and Avenues, a New York–based private for-profit school with plans to expand into a global chain. (Tuition for the 2014-2015 year is $43,400 plus another $2,200 for snacks, athletic uniforms, and lap tops, etc.) Before and after school programs and transportation are optional). There is no doubt that you can make a lot of money in the business of education.
I know this article is about Charter schools, but it is also about the $$ flowing around our children like a cold cloud. I hit pay dirt today. If you have followed my postings these past few years you know I name names and two of my favorite names are Jeb Bush and Chris Whittle. And this will end back up in Charter schools.
Chris Whittle, Chairman and CEO of Avenues, is best known for his founding of the Edison Charter Schools in 1992 (now Edison Learning). Now I know where a good share of his funding came from.
Whittle who presents himself as a “mild-mannered” genial man with his bow-ties and cardigan sweaters, is in fact a troublemaker who has had the reputation of getting himself swallowed up by hornet’s nests since his first business venture right after college. I’m going to stick to the one regarding Edison Charter Schools – also one of the first Charter school failures.
In 1989, Whittle Communication tanked and problems were uncovered having to do with the company’s accounting (they hadn’t paid state taxes dues) and Whittle was described by auditors as grandiose, profligate and self-deluded. The assets were split up, liquidated and their massive headquarters sold.
In 1991, with Whittle Communications still hanging on by a thread, it was re-named the Edison Project (or Edison Schools Inc., or Edison Learning – they were changing so fast) and began his first education involvement as a for-profit education management company. The initial idea was to create a network of 1,000 newly built private schools within a decade, but as the privatization drive picked up steam, he saw an opening in simply managing existing public schools for local governments. Charter Schools – he is a personal friend of Jeb Bush!
Making the circle of friends included the involvement of Tom Ingram (campaign manager and chief of staff to former TN governor and U.S. Secretary of Education from 1991-1993, Lamar Alexander), Benno C. Schmidt, Jr.(co-founder of Avenues), John Chubb (political scientist from the Hoover & Brookings Institutes), and Chester E. Finn, Jr. (assistant secretary of education to former presidents Reagan and George H.W. Bush). Originally founded around the idea of school vouchers, Edison primarily contracted with school districts on the basis of performance partnerships, alliances, and charter school establishments.
The company never posted a profit and in 2001 the share’s reached $36 and plummeted another 95% in 2002 promoting a management buyout.
Roger Milliken, an 87-year-old textile and chemical mogul was rumored to be considering bailing Whittle out. Whittle was embarrassed for being known to being courted by a notorious right-wing radical with news stories and editorials saying Whittle’s business plan was to depend on “old fashioned panhandling”.
Christopher Byron, an old friend of Whittle, noted all of Whittle’s business failures and his inability to generate profit. He went on to remark that Edison’s business plan in reality was nothing more than relying on philanthropy and would be “inherently” nonmarket based. Elaborating on the charge of “panhandling,” Byron wrote:
What else would you call it when a NASDAQ listed company, which is presumably in business to make a profit, cannot even sell its service to nearly 20 percent of its clients, let alone make any money for itself thereafter, without first soliciting the indirect support of various philanthropic foundations around the country?
At the same time Byron was showing how Whittle was failing to operate Edison truly like a business, others were highlighting exactly the different ways “for-profit” schooling was rendering public schools unaccountable by subjecting them to the whims of the market and lack of transparency.
To paint you a clearer picture, Edison under the leadership of Whittle, had by September, 2002 accumulated $276.3M in debt dating back to 1996 plus another $61.8M in losses prior to 1996.
Also in 2002 as Edison was scrambling for capital, the Securities and Exchange Commission announced Edison was settling a claim for misrepresenting corporate income to investors. The investigation revealed Edison had been counting “state” to “teacher” payments as company income despite the fact Edison never received that money. Edison failed to disclose that as much as 41 percent of its revenue that year consisted of money that it never saw,a sum of $154 million.
There is far too much to try and share with you about this company and the deceitful practices of Chris Whittle. I think you get the picture. His charter schools around the country were beginning to break their contracts giving their reasons as finances and lack of performance.
Kenneth Saltman who wrote a book about the Edison Schools stated: “what is happening is Edison had failed to achieve both its original mission and its financial goals”. The original mission was to privatize public schools through voucher schemes. That turned into running public schools through performance contracting.
Edison, which was eventually made private in 2003 in a buyout facilitated by Liberty Partners on behalf of the Florida Retirement System and the three pension fund trustees, then Florida Attorney General Charlie Crist, Florida Chief Financial Officer Tom Gallagher, and Florida Governor Jeb Bush. This involved using the pension investments from the state's public school teacher’s pension fund. The trustee’s tried to ward off objections stating “that would be playing politics”.
Make no mistake – this deal was financed with retirement funds of Florida teachers and other state employees against their loud and hardy protests. The Public employees and their unions had absolutely nothing to say about the deal and Whittle came away from this deal with a promised $600K per year and a bonus worth nearly triple his base pay!
All the protests made to Bush by teachers, federal employees plus retirees fell on deaf ears. Even Florida Education Association spokesperson Mark Pudlow said that Bush "has had a strong privatization agenda."
The wheels of the money go round and round, round and round!
This is a political/business game! Politician’s pass the legislation in favor of the management companies so they can make more money and in turn the management company gives the politicians more money so he in turn will present more legislation making the management company’s job easier for them to make more money so they can give more to the politician to then again!
Whittle and Edison are not unique. There are scandals galore in all forms all over the country. You should be checking on the Charter Management companies in your state and make every effort to protect your children. There are far too many charter schools failing for numerous reasons which far exceed regular public schools and who is paying for all this manipulation – your children!
© 2014 Diane Kepus - All Rights Reserved
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Diane Kepus – Parent, Education/Human Trafficing Researcher, Speaker
My background as an Accountant /Auditor showed me my love of “digging.” In 1980 when I took up the hobby of Genealogy as the TV commercial says “I was in deep babe.”
I am married with a blended family of 8 children, 13 grandchildren and one great-grandson and you can readily understand why I chose Education or the “lack thereof” and Human Trafficking as my passions for the past 4 years.
I have witnessed the decline in the scholastic achievement levels of our children brought about by the interference of the Federal DOE and individuals/businesses who choose to use our children as “human collateral” for their own financial gains. In the process they are leading them into a Communist agenda to be overseen by the United Nations.
I actually began my Education research regarding the “International Baccalaurate” (IB) program and that branched out into all aspects of foreign education of which has been allowed into our schools. Then it moved on to the push for Charter Schools with “unelected” school boards to the infiltration of the Common Core State Standards which are to be implemented into the states without proper state legislation.
The Common Cores State Standards (CCSS) are an important issue we must tackle by getting the information out to the parents so they can help stop this. This is not about making your children smarter, or worrying about whether they will actually go to college or not – this is about Total Control by others who are not their parents. The cost alone – wait until your property taxes go off the charts to pay for this. It is all about $$ and Big Business.
My goal is to reach as many people as possible to teach and inform them the truth about the Common Core State Standards and all the other evil things of which are being put on our children on a daily basis and most of it without parental permission.
E-Mail: [email protected]