Mayor indicted, Chancellor resigning, and the Panel for Educational Policy eliminates its Contract Committee; so much for Mayoral control!!

 

October 2, 2024: Update: Chancellor Banks announced he is moving up his retirement to Oct. 15, 2024, apparently at the Mayor's request.

Mayor Adams has now been indicted on  five federal charges of bribery, fraud and soliciting illegal foreign campaign donations.  Chancellor Banks is resigning as of Dec. 31, 2024, to be replaced by Melissa Aviles-Ramos, current Deputy Chancellor for Family Engagement. This follows the announced resignations of other top officials, including the Police Commissioner and Commissioner of Health, in the last two weeks.

We should recall the false narratives promoted by those including Governor Hochul who insisted on extending unchecked Mayoral control for two more years last April, with no strings attached: that any other system invited corruption, instability, and inefficiency. The Mayor himself insisted on renaming Mayoral control "Mayoral Accountability", and Chancellor Banks threatened to resign if the governance system was altered in any significant way. And look at what has happened since. 

The only minor tweak the Legislature made to Mayoral control was that the Chair of the Panel for Educational Policy chair would be appointed by the Mayor from among three nominees put forward by leaders of the Legislature and Board of Regents. And yet it turns out that the new Chair will be exactly the same man who already held that seat as a Mayoral appointee, Greg Faulkner. The only difference is that now the Mayor will get an extra PEP appointee, to further cement his control over controversial educational policies, as well as questionable contracts and spending.

The Chancellor himself was reported having privately met with the CEO of 21stCentEd in October of 2022, and  subsequently greenlit a major contract with this company that had hired his brother, Terrence Banks, as a lobbyist. According to the Daily News,  21stCentEd has since received more than $1.4 million in business from the Department of Education for providing a variety of services. In cases where a family member is involved, the city requires that a Conflict of Interest waiver be obtained.  And yet Banks never applied for one. Both Chancellor Banks and Terence Banks have had their homes raided and their telephones seized by federal investigators.

Terence Banks also apparently lobbied for a Florida-based tech firm called Saferwatch which markets “panic button” apps to be used to alert authorities in case of school emergencies such as fires or active shooters.  The NYPD signed a contract with Saferwatch which was piloted in several schools  last year.

We have seen tremendous privacy problems with Teenspace, an online mental health program for NYC students 13 and up, relentlessly promoted by the Mayor and the Chancellor, after the Department of Health signed a $26 million dollar with the parent company Talkspace last year. And yet as we have discovered, Teenspace collects, shares and uses personal student data for marketing and commercial purposes with multiple social media "partners" that would be illegal if the contract was with the DOE rather than the Department of Health.  When a NYC student visits the Teenspace website on their phone, their personally identifiable information is collected by 34 cookies, and shared with 15 ad trackers, as well as Facebook, Amazon, Meta, Google, and Microsoft among other companies. The company has also been sued in California for sharing personal data with TikTok, including  the mental health data of minors. One should not be surprised to learn that lobbying firm for Talkspace is Oaktree Solutions, the firm owned by Frank Carone,  a close associate and a former chief of staff to the Mayor who was with him last night when Adams was huddling with his attorneys after learning of his federal indictments.

Shortly after he was elected, Mayor Adams own partner,  Tracey Collins, who already worked at DOE,  was promoted and named the “senior adviser to the deputy chancellor of school leadership,” and recieved a 23% boost to her salary to $221,597 a year.  Shortly thereafter, Sharon Adams, the wife of the Mayor’s brother Bernard Adams, was hired by DOE, at a salary of $150,000-a-year .

The whirlwind of scandals and investigations surrounding the Mayor and his top appointees, including the Chancellor, should give rise to a new call for more accountability, oversight and checks and balances at DOE, but I fear that no lessons will be learned by those in power, because their interests lie in maintaining one-person rule, and ignoring the voices of parents and teachers.  Indeed, there have been many cases of large-scale corruption at the DOE under previous administrations. 

Eric Goldstein was hired in 2004 during Bloomberg/Klein years as a deputy overseeing food, transportation and high school sports, and promoted to chief executive in 2007. Goldstein was just recently sentenced to two years in prison, for a corrupt scheme he was involved in 2015-2016, during the De Blasio administration, by receiving bribes in exchange for turning a blind eye to tainted food served to public school kids — including chicken tenders laden with plastic, bones and metal, causing choking.

There is also the recently revealed, shocking case of DOE staffers in the Queens office who took their own kids on trips to Disneyland and other trips by using federal funds meant to provide educational experiences for homeless children.  For some reason, the DOE failed to ask for restitution for the money stolen; and neither the DOE nor the Special Investigator for Schools  reported the alleged fraud, forgery and misuse of federal funds to any authorities for possible prosecution.  To make things even more bizarre, the SCI held off posting its findings report, dated January 2023, for nearly two years after it was completed, and when they did so, they posted it quietly without any press release or notification, perhaps in hopes it would be ignored by the media focused instead on the allegations and investigations surrounding the Mayor.  I have since reported these alleged crimes to the Inspector General's office of the US Department of Education, and the U.S. Attorney for the Southern District of New York.

There have been many more multi-million dollar DOE corruption scandals under Mayoral control over the last 20 years, a selection of which I summarized in my testimony to the State Education Department and my presentation last year to the NYC Bar Association, both posted here.

And yet despite all these allegations of cronyism and worse, the first thing that the newly reconstituted Panel for Education Policy did in its first meeting of the new school year on September 25 is to eliminate its Contracts Committee by amending their  Bylaws  as depicted below.

This committee, whose meetings have been livestreamed and recorded, has provided the only public airing of discussion and questioning of DOE officials by PEP members of the rationale behind  hundreds of millions of questionable DOE contracts before the final Panel vote.  The approval to ditch the committee was 13-6, with one abstention.   As usual, every Mayoral appointee plus the new, supposedly "independent" Chair voted in lockstep to eliminate the Contracts Committee and its monthly public meetings.  So much for so-called Mayoral accountability!

A short history of Seth Andrews after he pleads guilty to embezzlement in federal court

Bank surveillance photo of Seth Andrew from DOJ indictment

Seth Andrew, founder of Democracy Prep charters and former Advisor to Arne Duncan and the White House on the use of education technology has pleaded guilty to stealing more more than $200K from the charter network he founded, in order to receive lower interest rate on a mortgage for an apartment he had purchased in NYC.  

Seth started Democracy Prep in 2005 when he was only 28 years old.  The charter school's curriculum was portrayed as focused on instilling "civic values", and the network was encouraged to expand rapidly by then-Chancellor Joel Klein, who gave his charters space in NYC public schools.  I met Seth a few years later, when he reached out to me and gave me a tour of one of his co-located charter schools in Harlem.  

I found him an intriguing character, obsessively throwing a rubber ball against the wall while we walked through the halls of the school, and never taking off his baseball hat though the network had a rigid dress code for students, who were forbidden to wear hats, wear the wrong color socks or the wrong kind of belt.  When we were touring the school, he stopped one student in the hall and berated her for having her Uggs showing. I wondered how long he would last at his own charter school before being suspended or pushed out.  I later learned that his baseball hat was something of a calling card for Seth, and it is even mentioned in the indictment document.

Democracy Prep  is a "no excuses" charter chain, known for its strict disciplinary practices and high attrition rates.  I questioned him about their demerit system which called for keeping students after school for small lapses of behavior, to sit in a room silently, without being able to read or do homework. We discussed Eva Moskowitz, founder of Success Academy, and when I asked him if she didn't give a bad reputation to the charter school movement, he said he thought she was useful because she kept negative attention off other NYC charters like his.

In 2012, the network received $9.1 million from the US Department of Education to expand to states outside New York, and then another $12.7 million in 2016, aided by recommendations from former NYC Chancellor Joel Klein, former DOE "Chief Equity Officer" and scandal-plagued Harvard professor Roland Fryer, and former Louisiana State Superintendent John White.

In 2013,  Andrew was appointed senior advisor to Arne Duncan and  superintendent-in-residence at the U.S. Department of Education; you can see the cast of characters who congratulated him on Twitter. He later served under Obama at the White House Office of Educational Technology, while continuing to be on the payroll of Democracy Prep, according to this CNBC article. 

In 2016, he helped start a charter school in DC, the Washington Leadership Academy. based on virtual reality.  The school won the $10 million XQ prize from Laurene Powell Jobs'  Emerson Collective.  He explained the benefits of having an imaginary science lab to a reporter:

“During that time, no child will be burned, no child will have a chemical spill, and it will cost the school a fraction of what building a lab would require.” said Andrew.

After leaving the Department of Education, he served as Global Director of Policy & Partnerships at Bridge International Academies from 2017 to 2018, which runs for-profit schools in India and Africa, and which I have critiqued on this blog here and here. 

Andrew left BIA to run an organization called Democracy Builders, and in 2020, he announced that they would buy the campus of the now-defunct Marlboro College in Vermont to start a hybrid college program for low-income students, dependent on federal funding. 

But later that year, in April 2020, he was arrested and charged with wire fraud, money laundering, and making false statements.  Through complex maneuvers taking place over several months between March and November 2019, as described in the Justice Dept. indictment, he had transferred over $218,000 from three Democracy Prep's escrow accounts that they are required to retain, and deposited these funds into his own accounts.  His goal was to qualify for a lower mortgage rate for a Manhattan apartment on Central Park West that he and his wife had purchased in August 2019 for $2.37 million.

According to Chalkbeat, the embezzlement was first noted by the SUNY Charter Institute, in a renewal report dated February 2020 for two Democracy Prep schools.  As  the report states:  

The 2018-19 audited financial statements ... continued to identify concerns regarding the internal control structure of the merged education corporation and network. ...Recently, a network contractor discovered a theft of approximately $142,000 in two of the education corporations dissolution reserve fund bank accounts during the 2018-19 fiscal year. The auditor deemed these amounts to be uncollectible and wrote them off in the financial statements....

The most recent audit report for June 30, 2019 reported material weaknesses in record keeping of general ledger accounts and transactions, lack of reconciliations, and overall lack of timely analysis of the financial records and accurate reporting. This, in turn, put the board in a position of not having accurate and up to date information for fiscal decision making. In addition, a cash theft from inactive bank accounts went undetected for months during 2018-19.

Nevertheless, SUNY recommended the renewal of these two charter schools.

Andrew's indictment was first announced April 27, 2021.  After pleading guilty last week, his defense attorneys have now released a  statement that for over two decades, Andrew "has worked tirelessly to expand educational, democratic, and technological opportunity to disenfranchised communities around the world."  His sentencing is scheduled for April 14.  Though the maximum charge is 20 years in prison, the prosecutors and his defense lawyers agreed in a written plea deal that a sentence of 21 to 27 months would be appropriate.

After his departure from Democracy Prep, its expansion has not gone easily. In 2018, its DC charter school in  DC announced it would close , for poor performance as well as "suspension and expulsion rates...drastically higher than citywide averages." Other members of the chain have also experienced serious financial and management problems, as reported here.

More recently, Democracy Prep has been accused of racist practices by former and current students and staff. Seth Andrew subsequently wrote a somewhat ambivalent apology on Medium in June 2020, that he later deleted but is archived here. 

Is this the end of Seth Andrew on the corporate education stage?  Who knows. He seems to have an infinite capacity to re-invent himself and acquire powerful patrons. I wouldn't put it past him to bounce back after prison to launch some other trendy edu-company or product.

A video of his Ted Talk from 2012 is below.