Hedge fund investors seek huge profits through charters like Rocketship

Bondsandblackboards

Earlier this month, ultra-wealthy hedge fund investors gathered in New York City to strategize on how to cash in on public education dollars at a conference entitled, “Bonds and blackboards: Investing in Charter Schools”, as parents from the Alliance for Quality Education chanted outside, “Public schools are not for sale!”  It’s a part of a raging debate surrounding profit motives for charter schools.  Charter schools are private corporations with unelected boards that receive tax payer funds to run schools.  There have been numerous incidents of fraud, embezzlement, and conflicts of interest in charters.   Rocketship has faced multiple accusations of conflicts of interest.  Their school model uses 41:1 student to teacher ratios to free up money to fund software companies and for-profit property investors.  An attorney that has represented Rocketship was recently reprimanded by a Southern California judge for filing a brief in defense of a convicted charter school embezzler on behalf of the Charter School Association of California.   Further questions about Rocketship have been raised since reports came out that Rocketship’s Vice President of Policy, Katy Venskus, was convicted of felony embezzlement at a prior nonprofit.  California has been rocked by a number of charter school scandals, the largest of which involved the failure of the California Charter Academy in 2004, the largest charter school organization in the state at that time.  That organization’s founder, Charles Cox, was indicted on charges of misappropriation of public funds and theft of nearly $5.5 million of tax payer dollars after the charter school collapsed.  Regulations, however, have not been put in place to prevent future charter misappropriations, even as a growing group of wealthy hedge fund investors look to cash in on public tax dollars.

 

George Joseph described the March 2015 hedge fund meeting, entitled “BONDS & BLACKBOARDS: INVESTING IN CHARTER SCHOOLS”, in The Nation:

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.

The hedge fund investor conference was supported by The Gates Foundation and the Walton Foundation.  Both foundations have been significant supporters of Rocketship and the Gates foundation has a representative that sits on Rocketship’s Advisory board.

Rocketship hopes to triple in size in the next 5 years with the help of for-profit hedge fund investors.   Many of the Rocketship properties are developed by tennis star Andre Agassi’s billion dollar Turner-Agassi charter school facilities fund.  Agassi’s partner, Robert Turner, told Bloomberg, “If you want to cure — really cure — a problem in society, you need to come up with a sustainable solution, and that means making money”.  Rocketship board documents suggest that properties funded by Agassi cost tax payers a million dollars more than other funding methods, however, the organization still utilizes Agassi for many of its new properties.  The Gates and Walton Foundation’s active collusion with wealthy hedge fund investors raises a whole host of unanswered questions on unregulated charter school profit motives.

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