Would Rob McCord stop the privatization of Public Education?

and other questions about the soul of the Democratic Party.

The struggle for a well-funded and vibrant Public Education system in Philadelphia has been long and storied.  The School Reform Commission’s announcement that it would close 23 schools, was the latest outrageous development, and one of the many severe consequences of Governor Corbett’s decision to cut $1 Billion from the state education budget.  The school closings, as has been well documented, happen in almost exclusively low-income and majority African-American neighborhoods.

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The resistance has been fierce.  It has been led by young people, parents, teachers, school safety staff, and unionists from many industries.  It has included massive student walk-outs, hunger fasts, civil disobedience, and much more.  The resistance has operated with a unity and clarity of purpose that brought organizations together, and engaged thousands of people, who sought to put their outrage to good use.

There is nothing that will challenge that unity and clarity more than the Pennsylvania Governor’s race.  It is with this in mind, that we believe we need to examine Rob McCord’s candidacy, particularly as his campaign just released a video that puts forward his experience as a businessman as giving him perspective on the need for Education.  This is in line with Mayor Nutter’s governing strategy, which has often suggested that “government is a business.”

However, Philadelphians and Public Education activists who have had to fight Mayor Nutter are clear that this type of thinking has been detrimental and in some cases devastating to Public Education.  It is precisely the approach that has led to schools that run like factories or worse, prisons.  It is exactly that “cost-effectiveness over everything” mantra that has led to program cuts, school closings, and attacks on teachers.  In fact, leading anti-privatization activist Diane Ravitch just posted a blog praising new elected NYC Mayor Bill De Blasio for appointing an educator – not a businessman, to be the city’s Chancellor of Education.

On this key point, it is not just Rob McCord’s recent campaign video that is disturbing, but more importantly, his record.

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In 2001, Public Education activists fought against the state take over led by Republican Governors. This included fighting against a for-profit education management company, Edison Schools’ bid to privatize the entire Philadelphia School District.

Rob McCord, at that same time, was a leader of Early Stage Partners PA, a venture capital firm.  Under McCord’s leadership, Early Stage Partners PA invested in LearnNow – a for-profit education management company with revenue of $38 million dollars per year.[1]

LearnNow’s CEO was a fellow Wharton School grad, a businessman by the name of Gene Wade.  The NY Times described him as “… more education entrepreneur than educator.”[2] LearnNow, with Wade, at the helm worked to establish private, for-profit, management of Chester Schools.

Early Stage Partners PA’s website, at the time, boasted LearnNow as part of it’s portfolio,

“LearnNow won a very important contract representing a total of 2,350 students in the Chester, Pennsylvania Upland School District. Shortly thereafter, in July 2001, Edison Schools (Nasdaq:EDSN) acquired LearnNow in a stock transaction valued at approximately $30 million.”[3]

LearnNow received a contract to manage Chester Schools and just three months later, sold the company to the main competitor, they had sought to distinguish themselves from.  The New York Times put the sale even higher, at $38 million.  That sale meant profit – good returns on investment for Rob McCord and other Early Stage Partners PA investors, but it did not sit well with those tasked with the education of Chester’s young people.

The Philadelphia Inquirer noted at the time, the concern this caused Public Education activists like Keith Reeves, director of Swarthmore College’s Center for Social Policy Studies, he said,

“LearnNow really knew how to focus in on and energize the community. They had persuaded us that they could offer us something very different [from Edison]. One has to question whether they can deliver that now.”

Chester Public Education advocates also pointed to the duplicitous nature of an education management company that “won” a contract in March 2001, and just three months later sold the company to Edison Schools for $38 million.

Charles Gray, whom headed the Chester Upland district task force that crafted the recovery plan said,

“I’m disappointed. I have some problems with it. . . . If [the two firms] had initially come to the process with this arrangement, I’m not sure it would have been accepted.”

It is no surprise that just a few months later, when Edison Schools, who had since brought former LearnNow CEO, Gene Wade on-board, would push to demand concessions from teachers.  Their for-profit approach demanded they please their investors at all cost, and they were more than willing to fight educators on the ground for resources and power.  Businessmen were to get richer.  Teachers were to get poorer.

These types of decisions, those made to maximize profit at the expense of young people, mislead public officials and parents, and fight Teacher’s Unions are at the core of the privatization agenda that Early Stage Partners PA under Rob McCord’s leadership, participated in.

The Democratic Primary for Governor offers many candidates who, in the primary, will commit to restore funding.  However, the primary offers few candidates, who dare to take on the problem at its root, and challenge the privatization agenda.  Could this be because candidates like Rob McCord have donors and friends who like him have personally profited from the privatization agenda?

The future of Public Education in Philadelphia and Pennsylvania is in many ways a question of who will win the battle for the soul of the Democratic Party.  The struggle for how to address Public Education challenges has a strong relation to another key aspect of this battle: how Democratic Party fundraising is conducted.

What we see is that big donors are largely businessmen who invest in elections to see a return, what will the return be in this election?

The “Third Way” – Wall Street-financed wing of the Democratic Party has pushed to abandon the fight for democratic campaign finance laws.  They’ve done so because their donors demand that their “right” to influence elections (disproportionately) be protected.  So more and more we see even Democrats opposed to what the majority of working people need and want, such as Public Education and Public infrastructure broadly.

BLANK-ROME-Sam-Lerner-Rob-McCord-Larry-Flick*

Rob McCord puts forward his “prolific fundraising” as an asset – but an asset for who? How does that shape his accountability?

It is Democrats who fight for real campaign finance laws and democratic regulations on investment who are assets to the majority of us.  The majority of us could not, like Rob McCord, rely on millionaire friends or donate $200,000 of our own money, to fund a campaign, like he did in his bid for PA Treasurer.  It is a history that’s only made more disturbing with the perspective on how this money is made – in one case, through the privatization of Chester Schools.

The vast majority of Americans believe there is too much money in politics.  Seventy-Six percent believe it gives rich people disproportionate influence.[4]  It is this pay-to-play electoral terrain that has incubated the destruction of Public Education in Philadelphia and beyond.

It is no time for a Democratic Party nominee whose rise to power was an egregious abuse of Pennsylvania’s lack of campaign finance laws.  This is no time for a nominee who has personally profited from the privatization of schools.

***

References:

* This photo was published by the Philadelphia Public Record on Dec. 13th, 2013.  It shows Rob McCord at the Blank Rome party at the Pennsylvania Society gathering.  Blank Rome is a law firm that specializes in services like White Collar defense, Banking, and Finance.

A)  “It’s in the Country’s Best Interest for Poor Folks To be Smart’: The most compelling opportunities for social entrepreneurs are the public schools.”, Fast Company, Rekha Balu, November 2000. http://www.fastcompany.com/40961/its-countrys-best-interest-poor-folks-be-smart

[1] “Edison Schools to Acquire LearnNow, Inc.: Combines Nation’s Largest Schooling Company With One of Industry’s Fastest Growing ”, PRN Newswire, June 4, 2001 http://www.prnewswire.com/news-releases/edison-schools-to-acquire-learnnow-inc-72019022.html

[2] “For Profit and People: UniversityNow Rides a Low-Cost Wave”, The New York Times, Anya Kamenetz, November 1, 2013
http://www.nytimes.com/2013/11/03/education/universitynow-rides-a-low-cost-wave.html?_r=0

[4] “Reuters Poll: Most Americans Think Too Much Money in Politics”, NewMax, Thursday, 24 May 2012,http://www.newsmax.com/Newsfront/americans-money-politics-elections/2012/05/24/id/440238
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