Money Grab: Heather Steans, Chicago School Closings and K12 Inc.

by , posted on Friday, March 29th, 2013 at 9:16 pm

State Senator Heather Steans and Stand for Children are ultimately responsible for Chicago school closings and the recent increase of charter school applications like the 18-district virtual charter initiated by K12 Inc. in the Chicago suburbs.

Rahm Emanuel, Barb Byrd-Bennett, Heather Steans, Jonah Edelman

Rahm Emanuel, Barb Byrd-Bennett, Heather Steans, Jonah Edelman

I started researching SB79 and HB 5825, the legislation that created and gave the Illinois Charter Commission super “override powers” and autonomy from the Illinois State Board of Education (ISBE).  If SB7 gave education activists concern, SB79 and HB 5825 should have started a five-alarm fire.

Because of SB79, K12 Inc., a for-profit, Wall Street-traded company applied for a virtual charter scam in 18 suburban school districts.  Why are they doing this?  K12 Inc. anticipates that the state charter commission will override local rejections of their taxpayer rip-off scheme and approve the charter despite overwhelming local opposition.

In Chicago, Rahm Emanuel took a more direct approach to help out his wealthy friends who want to replace Chicago public schools with profit-driven charter schools.  Rahm’s unelected school board president, Barbara Byrd-Bennett, announced on Thursday, March 21st that CPS would be closing 61 public schools.  You can bet that profit-driven charters will be popping up  to replace the recently closed pubic schools.  The Illinois Charter Commission created by SB79 will pave the way.  Rahm’s election and appointment of Byrd-Bennett brought this multi-year, multi-million dollar effort to the 10-yard line.

In a recent In These Times article, Kenzo Shabata explains Byrd-Bennett’s role as a “cleaner.”

“Byrd-Bennett can be thought of as something of a “cleaner…”  In the school system of the neoliberal era, the job of the cleaner is to close as many schools as possible and replace them with charter schools before the public catches on to the plan.”

It should come as no surprise that Byrd-Bennet has connections to the profitable K12 Inc.  According to a Sun-Times profile piece on Byrd-Bennet:

“Also, she’s served as an adviser to K12, Inc., that Virginia-based for-profit company that serves up virtual and cyber schools. And she’s been on the board of Common Core. UNO Charter Schools chief Juan Rangel’s on that, too.”

Steans Did the Heavy Lifting on SB79:

I don’t know the dirty details of how SB79 got passed, but I’m willing to bet that Steans chairmanship of the Appropriations Committee had something to do with it.  Any lawmaker who wanted state funding for a project or organization back home would have to go through Steans.  She could easily trade funding for that project for a “yes vote” on SB 79.

I never understood why Heather Steans was such a strong advocate for charter schools until I discovered that her influential husband, Leo Smith, is a teacher at Perspectives Charter School and an ardent advocate for charters.  Apparently Smith is a bit of a bully, as evidenced by his aberrant behavior and the interruption strategy he employed at a political opponents’ event in 2009 (Read the PSB account).

Over the course of four years, Steans and Smith donated $100,000 to Rod Blagojevich.  Some have alleged that these contributions influenced her appointment to the state senate seat she now holds.  However, it is Leo Smith’s $25,000 contribution to Stand [On] for Children that bothers me the most.

The $36,000 that K12 Inc. spent lobbying Springfield lawmakers over the past six years gets dwarfed by the $1.6M that Stand has spent buying access to Illinois lawmakers.  The biggest investors in the charter school money grab are all hedge fund managers who have funded their front group, Stand for Children, a political action committee (PAC) in Illinois.  We know that Stand gets their money from hedge fund managers and financial investment firms (see chart below).  We also know that Stand played a critical role in lobbying for SB79 and HB 5825.

I certainly understand the profit motives of K12 Inc.  I understand the profit motives of the hedge fund managers behind Stand for Children.  What I don’t understand is how Heather Steans and her husband, Leo Smith can still ignore solid evidence that charters don’t improve grades.  The Steans family influence peddling to transform our education system into a profitable business model doesn’t stop with Stand or an appointment to the Illinois Senate.

Advance Illinois:

An issue advocacy group cynically named, Advance Illinois, is yet another pro-charter group that works with lawmakers to craft legislation like SB79 and HB 5825.  It should come as no surprise that the organization is run by Robin Steans, Heathers’ sister.

Robin Steans Executive Director Advance Illinois

It also should not surprise anyone that financial supporters of Advance Illinois are mega-millionaires and foundations connected to businesses seeking to make money off of  profit-driven charters – notice the CME group, Madison Dearborn Partners, Chase Bank, the Waltons and Gates foundations.

Advance IL corporate donors

Here is a video of  Advance Illinois lobbyist, Amy Berringer-Cole talking about how great charter schools are.

I suppose affluent, Harvard-educated folks like Steans and Smith probably think that re-arranging the chairs on the deck of the Titanic via a charter school is the best way to fix our education system.  I would argue that smaller class sizes and more parental involvement achieved through living wage laws and the Employee Free Choice Act  are the best ways to improve education outcomes, but, I didn’t go to Harvard.  I graduated from Illinois State University, a public school.

There Was a Problem with SB 79 and Steans/Chapa LaVia Pushed HB 5825 to “fix it:”

Apparently a flaw in SB79 didn’t allow the new charter commission to receive funding from ISBE.  Stand for Children, Steans, and State Representative Linda Chapa LaVia used HB 5825 to fix this oversight. After HB5825 passed the house on  March 28, 2012, Heather Steans added two significant amendments to the bill and passed it through the senate on May 22nd.  The bill was sent back to Chapa LaVia’s committee after she filed Steans two amendments. With the pension issue dominating discussions, the bill was temporarily stalled.  During Veto session (November 2012 – January 2013), lawmakers pushed HB 5825 through the House Rules Committee.   According to the League of Women Voters,

“HB 5825 SA 2 “Provides that the State Charter School Commission is established as an independent commission (instead of State agency)”.  The bill “provides that the Commission shall be under the State Board of Education for administrative purposes only” while prohibiting “the State Superintendent of Education from reducing or modifying the budget of the Commission or from using funds appropriated to the Commission without the approval of the Commission”.”

My Account of an HB 5825 Hearing:

I was sitting in Room 114 of the state capital on the afternoon of May 28, 2012 when Chapa LaVia was trying to get HB 5825 through committee.  Essentially this was a concurrent bill to approve of Steans additional two amendments that were added in the Senate.  A Madigan aide held a paper up and whispered into the ear of a junior lawmaker (I didn’t catch his name) in the back row of the committee meeting. The junior lawmaker ended his introduction of the bill by stating, “this bill has the support of Stand for Children.”  Some members of the committee nodded as if this was a good thing.  Chapa LaVia invited someone from ISBE and a Stand for Children lobbyist to testify. Both testified that “this is just a way for the staff of the Illinois Charter Commission to get paid.”  During the testimony, the staff of the commission was described as three people and the amount of private funds that needed to be allocated was $300,000 (I’m going off memory on the $300K).

State Representative Monique Davis (D-Chicago) argued briefly that if these were private funds that they [private entities] should pay their own people, not the state.  State Representative Bob Pritchard (R-DeKalb) asked the “question of the day” about pensions and that seemed to take the train off its tracks.  Pritchard asked if this would make employees of the charter commission eligible for a state pension.  “Yes, they would be state employees and they would be eligible for a state pension,” responded the ISBE spokesperson.  Chapa LaVia then pulled the legislation and brought the committee meeting to an end, stating that she had her own questions about the bill.

Done Deal:

Almost six months later, the bill was brought back, unchanged, via the Rules Committee, during veto session, and it passed out of the Rules Committee 4-1.   The house voted, unanimously (114-0) on November 28, 2012 and Governor Quinn signed it on January 25, 2013 where the bill became law (Public Act 097-1156).

In a December 2012 constituent meeting with Representative Chapa LaVia, she told Jean Pierce and I  the same thing that I heard during the committee hearing.  Essentially she saw HB 5825 as just a way for employees of the charter commission to get paid.

HB 5825 did much more damage than that.  Thanks to the Steans Amendments, it solidified that the charter commission did not fall under the jurisdiction of ISBE and was not a state agency.

(105 ILCS 5/27A-7.5)
Sec. 27A-7.5. State Charter School Commission.
(a) A State Charter School Commission is established as an independent commission State agency with statewide chartering jurisdiction and authority. The Commission shall be under the State Board for administrative purposes only.

HB 5825 also created a funding stream for charter schools that ISBE could not touch for public school funding.  It is through this dedicated funding stream that $8,000 per child will be funneled from taxpayers’ pockets to K12 Inc. if their virtual charter scam goes through.

(g-5) Funds or spending authority for the operation and administrative costs of the Commission shall be appropriated to the State Board in a separate line item. The State Superintendent of Education may not reduce or modify the budget of the Commission or use funds appropriated to the Commission without the approval of the Commission.

Conclusions – Money Grab:

The combination of SB79 and HB 5825 have effectively invited K12 Inc. and other unwanted profit-driven charters to Illinois.  These bills set up Rahm’s school closings and disrupted the lives of thousands of children, largely in minority communities, in Chicago.

While this is being pitched as a “necessary reform,” we know k12 Inc. will make $8,000 per child if they are successful.  We don’t know how much money hedgers invested in Stand for Children and Advance Illinois will make off of Rahm’s school closings.  We don’t know if the Steans family will make money on any of this, but they sure did put a lot of time and money into the construction of a profit-oriented education system.

Test Question: Should your child’s education be traded on the stock market or CME like a bushel of corn or barrel of oil?

Answer: It’s time to fight back and demand a repeal of SB79 and to keep Wall Street tycoons and Illinois hedge fund managers out of Illinois’ public education system.


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