Hedge fund executives give 'til it hurts to politicians, especially Cuomo, to get more charter schools
Reader Comment: Your vote counts. . . when it's wrapped in cash.
by Juan Gonzalez
Outside the Harvard Club in Midtown, a group of parents from the Alliance for Quality Education picketed as they chanted, "Public schools are not for sale!"
But the hedge fund chiefs inside had other ideas.
The title of the hedge fund bosses' all-day symposium on Tuesday said it all: "Bonds & Blackboards: Investing in Charter Schools." Sponsored by the Gates Foundation and the Walton Family Foundation, its aim was to convince investors there's money to be made in charter schools.
Hedge fund executives have unleashed a tsunami of money the past few years aimed at getting New York's politicians to close more public schools and expand charter schools.
They've done it through direct political contributions, through huge donations to a web of pro-charter lobbying groups, and through massive TV and radio commercials.
Since 2000, 570 hedge fund managers have shelled out nearly $40 million in political contributions in New York State, according to a recent report by Hedge Clippers, a union-backed research group.
The single biggest beneficiary has been Andrew Cuomo, who received $4.8 million from them.
Several of the governor's big hedge fund donors, such as Carl Icahn, of Icahn Enterprises, Julian Robertson of Tiger Management, and Daniel Loeb, of Third Point LLC, are also longtime backers of charter schools.
Loeb is chairman of the board of the Success Academy network run by former City Councilwoman Eva Moskowitz. He's given $62,000 to Cuomo, while 18 other members of the Success Academy board or their family members have given nearly $600,000 to the governor, according to state campaign records.
But the direct donations don't tell the full story.
In this era after the Supreme Court's Citizens United case, the indirect contributions are even more astounding.
Take, for example, a group called New Yorkers for a Balanced Albany. It financed a massive advertising campaign late last year aimed at keeping the state Senate in Republican hands, largely by blasting upstate Democrats as tied to Mayor de Blasio.
That group received $3.5 million from just six hedge fund backers of charter schools.
Loeb contributed $1 million. So did Robertson, whose son Spencer runs a Brooklyn charter school. The others included Paul Tudor Jones, founder and chairman of Excellence Charter School, with $500,000; Icahn, who founded several Bronx charter schools, with $250,000; and Gotham Capital's Joel Greenblatt, a founder of Success Academy, with $250,000.
The money they gave to New Yorkers for a Balanced Albany thus rivaled the $4.8 million that the teachers union, with its 185,000 members, spent on all political contributions.
But the same people also gave money to other pro-charter groups. Greenblatt, for instance, donated $45,000 to Democrats for Education Reform, a political action committee that, in turn, has given Cuomo $72,000.
Two other pro-charter groups, Families for Excellent Schools and the political arm of Students First New York, spent more than $10 million last year on their lobbying effort.
Paul Tudor Jones, founder and chief investment officer of Tudor Investment Corporation, also donated half a million to the GOP-supporting group which blasts upstate Democrats as ties to de Blasio.
All that money and lobbying triumphed when Cuomo and the Legislature approved up to $2,600 more per pupil for charter school facilities, with New York City expected to pick up a big portion of that.
Now, the governor wants the Legislature to increase the state limit on charter schools.
Little wonder the big-money hedge fund managers gathered at the Harvard Club. They were there to examine, according to program literature, "the current state of the charter schools facilities financing landscape and new innovative financing mechanisms."
In other words, all that money thrown at the politicians is about to pay off.
"Their agenda has nothing to do with improving our public schools," said Zakiya Ansari, spokeswoman for the parents picketing outside.
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