Home Business Fallout From Racist Diatribe by NY Charter School Billionaire Continues

Fallout From Racist Diatribe by NY Charter School Billionaire Continues

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In our August 4 report, we mentioned Dan Loeb, a Wall Street tycoon serving as Chairman of the Board at Success Academy Charter Schools, the biggest charter network in New York, whose students are 93% black and Latino.

Last week, Loeb was lambasted widely for a racist remark he made likening Andrea Stewart-Cousins, the pro-public education NY State Senate minority leader, to the KKK.

Calls for his resignation came from many corners, but Loeb, who quickly apologized for the comments, announced he wasn’t going to resign. Loeb, who is a close donor/advisor to House speaker Paul Ryan, has made racist comments before and has also been connected to a number of dark money PACs looking to influence policymakers on charter expansion.

Betty Rosa, NY Board of Regents Chancellor said Wednesday that the issue is “beyond apologies.” NYC mayor Bill de Blasio and his wife agree, as does the NY Daily News editorial board, NYC Council leadership, city labor leaders and Reverend Al Sharpton, who already deployed his National Action Network to protest at Success Academy’s Harlem 1 school.

Hazel Dukes, President of the NAACP, called Loeb’s comments “appalling”, while Joe Belluck, chair of the SUNY Committee on Charter Schools, which authorizes and oversees Success Academy schools, announced they are “reviewing options.” This news comes as the same SUNY committee is considering allowing charters to hire uncertified teachers, a controversial proposal originally championed by Success Academy because over 60% of their teachers leave each year.

Rep. Hakeem Jeffries joined two other Congress members and other elected officials from NY for a rally in support of Senator Stewart-Cousins. They demanded Cuomo return Loeb’s campaign contributions and called for Loeb’s resignation. Other groups, such as Alliance for Quality Education (AQE), the Working Families Party, Citizens Action NY, the Badass Teachers Association, NY Indivisible and Hedge Clippers launched a petition asking Governor Cuomo to return the $170,000 that Loeb contributed to his campaign, along with potentially millions more that went to Cuomo through charter school PACs.

One such PAC, StudentsFirstNY, where Loeb serves as trustee, gave over $10 million to help Republicans win control in this solid blue state, blocking votes on the DREAM Act, funding for needy schools and affordable housing legislation, among other bread-and-butter issues.

A COMMITTEE OF VULTURES

Also brought to light by the Dan Loeb dust-up is the fact that he is one of three Success Board members who have invested heavily in debt obligations in Puerto Rico. A fourth hedge-fund billionaire, John Paulson, was a founding investor in Success Academy and leading Trump donor. These “debt vultures” not only pressure Puerto Rico to lower wages, cut budgets and raise taxes, they invariably siphon money from US taxpayers after bailout packages are structured.

Although they buy the debt at deep discounts, they demand full repayment, contradicting the suggestion that they are philanthropists. Wall Streeters from both parties aggressively lobby and fund campaigns to target low-income communities in Puerto Rico and NYC for school privatization under the guise of ‘saving’ children of color from failing schools and teacher unions, mirroring a popular Trump trope.

“CRAZY” CARL SHUFFLED OFF

The furor over Loeb combined with the recent events in Charlottesville may have hastened action against Carl Paladino, a charter billionaire in Buffalo, who as co-chair of the Trump campaign in NY, has sponsored upstate rallies where Confederate flags flew.

Paladino was supposedly just joking when he shared a picture of a “Trump plow” designed to mash protesters, but after Charlottesville, where a 20-year old white man intentionally ran over and killed a protester, it’s not so funny.‬

The image was sent to a list of friends with whom Paladino shared racist memes, as was another email that led to the vote to remove him from the Buffalo School Board. State Education Commissioner MaryEllen Elia removed Paladino on Thursday. Paladino’s email declared first lady Michelle Obama an ape, and was sent by accident to a local paper.

Less known about Paladino are his controversial “leaseback” deals to charter schools, that divert tax dollars to his development company. Paladino claims he makes only a modest profit, but also buys land around charter schools pre-construction, on the “inside track”.

EVA’S MEA CULPA

Also Thursday, Eva Moskowitz condemned Trump’s muddled remarks about the Charlottesville protests, noting she disagrees with him over everything (besides expanding charter schools) and should have spoke out sooner, adding “It’s one thing to have a President with whose politics you disagree; it’s another to have a President who doesn’t even seem to care about your welfare.”  

This followed the resignation of Democrats for Education Reform (DFER) president Shavar Jeffries, which reportedly occurred before the Loeb remarks. Jeffries visibly opposed Trump and urged lawmakers to distance themselves as well, so he surely bristled when Success met Trump and welcomed incoming Secretary DeVos. Shavar is a cousin of Rep. Hakeem Jeffries who warned Trump’s senior advisor Steve Bannon was a “stone cold racist” when he first entered the White House. Hedgefunder John Petry co-founded Success Academy, but also co-founded DFER, which now needs a new president.

Civil rights groups like the NAACP are quick to call out local Republicans who agree publicly with Trump on issues of race, causing school privatization to gain more attention than usual as Loeb and Paladino make headlines and racial discord reverberates through the country.

CHARTERS CHANGING?

Another factor is the coalescing of “independent” charter schools around principles that address some of the complaints against them, starting with the lack of transparency, conflicts of interest, top-down decision making and cherry-picking of students. The new coalition vows instead to “actively recruit the highest-need students” and collaborate, not compete, with district schools.

Consider also the awkward episode at the annual progressive NetRoots conference in Atlanta, where Democratic state legislator Stacey Evans, who is running for Governor of Georgia, was protested with chants and signs that equated her to Betsy DeVos after she voted in favor of charter schools and private school tax credits equating to vouchers.

Cuomo has been similarly likened to Secretary DeVos for supporting both charters and backdoor vouchers, but the governor may be “evolving”. According to NY state Republican chair Ed Cox, Mr. Cuomo only helped the charter industry to generate campaign donations, and will be backing away just as his re-election and presidential bid get going. As at least nine of Cuomo’s associates remain under indictment, it’s notable that Todd Howe, an aide who pled guilty to bid-rigging charges, also ran a lobbying firm who successfully revived a for-profit “zombie” charter despite a 2010 ban on the practice.

TOXIC TRUMP

With Democrats bailing and Republicans carefully considering their alliances, the Trump era has brought school privatization into stark relief. Yesterday, Carl Icahn, another charter school hedge fund billionaire, resigned from Trump’s business council. But in New York, the balance of power in the Albany hinges on lucrative charter PAC alliances.

In his deleted comment, Loeb began by thanking God for Jeff Klein, the leader of the breakaway Independent Democratic Conference (IDC), a group of eight senators who have raked in $677,000 this year from charter PACs, including $50,000 from Loeb. In return, they have ceded the NY senate to Republicans. As reported in the article which originally triggered Loeb, Stewart-Cousins asked whether Cuomo favored Klein over her because she was a female with “black skin.” Stewart-Cousins and Klein were invited to meet the Journal News editorial board together, but Klein will only agree to meet separately.

2 COMMENTS

  1. Daily News reporting that Loeb has also donated to Sen. Gillibrand, Rep. Hakeem Jeffries, Attorney General Eric Schneiderman and State Comptroller Scott Stringer. Stringer has announced he will be donating Loeb’s money to Andrea Stewart-Cousins.

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