The widening Murdoch scandal and the Wireless no-bid contracts: sign our petition now!

A widening scandal envelopes Rupert Murdoch’s News Corp, revealing how his employees in the UK hacked into the cell phones of murder victims, paid off policemen, and may have even stolen the medical records of the former Prime Minister’s newborn son.  What is indisputable is that his papers used offensively bullying tactics against elected officials to dissuade them from criticizing his methods or investigating his activities.  The latest allegation is that News Corp’s journalists may even have hacked into the phones of American victims of the 9/11 terrorist attacks, leading several US Senators to call for a Congressional investigation.  

NYC’s former Chancellor, Joel Klein, now works for Murdoch, and has been put in charge of his “internal investigation” of this scandal. At the same time questions have been raised surrounding several no-bid contracts that the NY State Education Department and the NYC Department of Education intend to award Wireless Generation, the company that Murdoch bought immediately after Klein announced he would run Murdoch’s new online learning division.   

The state no-bid contract is $27 million for Wireless to build a statewide version of ARIS, the expensive data system that has received widespread criticism from NYC parents, teachers, and principals alike, who say that there are far less expensive and more useful data systems available.  There are also troubling conflict of interest questions, given that these contracts were announced shortly before and after Joel Klein’s departure from the DOE. See also the summary of this controversy from Think Progress.

Sign our petition now, asking the State and City Comptroller to reject these egregious no-bid contracts with Murdoch’s Wireless Generation, with copies sent to the State Education Commissioner John King, the NY Board of Regents, NYC Chancellor Walcott, and the federal independent investigator for the US Dept. of Ed (since the state program is supposed to be paid for with federal funds.) 

A timeline of these events, with more explanation and links to back-up information, is available below.

October 7, 2010:  the NYC Panel for Educational Policy votes to approve a no-bid, 17 month extension of a contract with Wireless Generation for their “School of One”, at an annual amount of $1.9 million.  Wireless is the lead partner in Joel Rose’s online learning project, the School of One.  This contract will pay for six consultants not to exceed $2.7 million (which works out to annual payments to each at over 300K per year.) 

 November 9, 2010:  Joel Klein announced he will resign from DOE to work for Rupert Murdoch as executive VP of News Corp, to head its new “educational” online division, “overseeing investments in digital learning companies.”

 November 22, 2010: It is announced that Rupert Murdoch will purchase 90% of Wireless Generation for $360 million; a company with 400 employees; presumably Joel Klein will oversee this company in the new online division.  Some observers say that he overpaid, as the price is “at a plus “6.5x revenue multiple. That's crazy.”  In a story in the NYT , a spokesperson for News Corp claims that the transaction had been in the works for several months and that Klein “had no involvement” in it, though it is hard to believe that Murdoch would purchase his first online learning company with no input from the person who will head the division.

According to the Times article, “Conflict-of-interest rules set strict limits for city employees, both during and after their tenure, which could make Mr. Klein’s transition a tricky one. City employees are never allowed to disclose confidential information about the city’s business dealings or future strategy, and they cannot communicate with the agency for which they worked for one year after they leave. The rules also bar them from ever working on matters they had substantial involvement in as city employees. “

A spokesperson for DOE says that Klein has now recused himself from all business dealings between the department and Wireless Generation “as soon as we learned that News Corp had acquired” the company, which presumably occurred the day before,  but does not mention if Klein had recused himself earlier, when the decision to extend the Wireless contract was first announced.

January 3, 2011: Joel Klein leaves DOE and takes over at News Corp.

May 4, 2011:  DOE announces its plans to “renew” another no-bid contract with Wireless worth $4.5 million — $1.5 million a year for three years. The document describing the contract says that it is for “published and copyrighted assessment and testing materials.”  The DOE refuses to make the contract available to Patrick Sullivan, a PEP member who requested a copy before the vote.

May 18, 2011: The  PEP rubberstamps the contract, as they have with every other contract ever brought before them.  The vote is 8-1, with two abstentions.

June 9, 2011: NY SED asks the state comptroller permission to award a $27 million no-bid contract to Wireless Generation, to build a data system like ARIS; with federal Race to the Top funds, and that the no-bid aspect of the contract is necessary because of the tight timeline. Wireless Generation claims that Klein had nothing do with the state’s decision to grant them this contract.

Wireless earlier took over the ARIS contract from IBM, which cost city taxpayers $80 million to build.  The contract and purchase price was widely called a boondoggle and a super-mugging at the time; later, these warnings were borne out when teachers and principals pointed out its numerous flaws, especially as compared to more useful data systems that were acquired by schools for relative pennies. Recently, NY1 ran a three part series, pointing out the numerous deficiencies of ARIS.

Yet despite the overwhelming negative experiences of NYC educators on the ground, and their views that there are many other data systems that are far superior to ARIS, SED’s waiver request to the state comptroller claims that “there is no other vendor with the experience, demonstrated capacity, or aligned business model” to rival Wireless, and that ARIS . received “national recognition from Arne Duncan.”

The request claims that Wireless has unique capabilities; for example, it “understands what ‘ELL’ (English Language Learner) means and how analysis of data for students who are classified as ‘ELLs’ would be relevant for an educator.”  

June 15, 2011: City Comptroller Liu reveals he has rejected the $2.7 million Wireless contract that the PEP approved in October, a few weeks before Klein resigned.    He also says that he has stopped payments on checks that DOE attempted to pay Wireless, after his rejection.  Liu says the contract was rejected because Klein failed to provide a letter stating that he had not been involved in approving this contract in the first place.

DOE claims that the Comptroller has no right to reject the contract, and provides a letter from General Counsel Michael Best, which says that Klein had recused himself from any work on Wireless Generation contracts as soon as the company was acquired by News Corp, which occurred in late November.  (Again, as before, there is no mention if Klein was involved before that time.)  The City comptroller spokesperson says, "Because of due diligence, we were able to catch these prior to payment …The DOE is attempting to pay outside consultants without registered contracts, in violation of the State Education Law."

Another super-mugging? NY State Education Department to award $27 no-bid contract to Joel Klein and Rupert Murdoch

From Rachel Monahan of the Daily News comes the startling announcement that the NY State Education Department is about to award a $27 million no-bid contract to Wireless Generation to develop a statewide student data system, and has apparently been granted a waiver by the NY state Comptroller to do so.  

Wireless, which received several no-bid contracts from DOE, is now run by ex-Chancellor Joel Klein and owned by Rupert Murdoch’s NewsCorp. 

Why did the state argue for this contract?  On the basis of Wireless’ record in developing ARIS, NYC’s much criticized $80 million data system.

Recently, Lindsey Christ of NY1 in an award-winning three-part series pointed out the glaring deficiencies of ARIS and the far superior data system developed by NYC teachers for relative pennies.  

Last  fall, Gotham Schools did a similar expose;  we featured critical observations from a teacher about the inadequacies of the system back in 2008.

The hi-tech community recognized  it a huge boondoggle and a “super mugging” when the no-bid contract was first announced in 2007.

Already, the state’s intention to grant this contract to Klein et. al. has been criticized by Susan Lerner of Common Cause: "It just smacks of an old-boys club, where large amounts of public money are spent based not on 'is this the best product?'  E.D. Kain  of Forbes writes that the decision “reeks of cronyism.”

In support of their request, SED claims that Wireless has received “national recognition from Arne Duncan.”  Of course, Duncan has also called Joel Klein, who stands to benefit financially from the deal, “a good, good friend of mine.”

The letter also reveals that the Gates Foundation, which pushed data systems and testing as part of "Race to the Top", has also selected Wireless to “build its national Shared Learning Infrastructure,”  in what is likely to prove a generous windfall for Joel Klein and Rupert Murdoch.

The SED letter requesting the waiver claims that Wireless has invested “significant time and resources in end-user research with NYC DOE educators to determine the ideal ways to display information for educators to engage in data-driven instruction…[including] focus groups of educators and administrators.” 

If so, they obviously learned nothing from any of these focus groups, as most teachers report the system is nearly worthless.  The SED letter also claims that parent find ARIS useful, while  I’ve heard mostly complaints that the system contains little more than their children’s test scores and attendance.

SED adds: “Wireless has “developed the vocabulary used throughout NY for student classification and demographic information” and, for example, “understands what ‘ELL’ (English Language Learner) means..” Wow! That should be worth a cool million there.

Finally, “New York is well aware of the risks of large-scale technology projects that to [sic] tend to run over budget, behind schedule and be under-whelming when delivered.”  Which is a perfect description of ARIS.

It is surprising that NY State Comptroller Di Napoli would provide this waiver after his 2009 audit, exposing DOE’s abuse of the no-bid contract process.  These are precious funds that should be used to benefit children, rather than line the pockets of Joel Klein and Rupert Murdoch.

More waste and mismanagement at Tweed; when will it end?

In NYC, 2400 teachers remain on Absent Teacher Reserve, with no assignments, getting paid full salaries; while class sizes are expected to swell in the fall. (GothamSchools, Post, Daily News, NY Times)

What a fiasco! Can you imagine the headlines if our schools had still been run by the old Board of Education? These teachers ought to be offered for free of charge by DOE to any principal who wants to put them to work.

Meanwhile, the financial scandals at Tweed continue. Juan Gonzalez reveals that DOE is paying the company Future Technology Associates an average of $250,000 each, for 63 consultants, through a no-bid contract– though the company has no offices, only a mail drop in Brooklyn.

The contract with FTA began in 2005 at $2.5 million -- about when the company was founded -- and has now mushroomed to over $15.7 million per year. Their contract, to align DOE’s finances with the city’s financial reporting system, which is years behind schedule, is expected to be extended for five more years at $95 million. Meanwhile, the cuts to schools next year amount to $400 million.

FTA director Tamer Sevintuna is getting $348,000 for the project, more than any city official including Deputy Mayors, while his second-in-command is getting paid $345,000 – with a portion of their salaries up to now hidden -- drawn from the schools’ capital budget.

But that’s not all. Turns out that FTA’s contract workers, many of them on temporary work visas from India, are only getting paid about $70,000 a year , while the directors are raking off the rest as huge profits:

"None of us made anywhere near $100,000," said a former FTA consultant who claims he quit the company in disgust because of all the money the DOE was "wasting on an archaic system that was always crashing."

"They had all 60 of us working in one room that was hot, dirty and absolutely not what you would expect from such a well-funded business," the former consultant said. …."Most of the 60 people I worked with at FTA were from India," he said.

"Every few months, someone was heading back home temporarily because their visa had expired. A few even got paid while they worked on the project back in India."

Meanwhile, Photeine Anagnostopoulos, the DOE's chief operating officer, told Juan that their sweetheart deal with FTA is “better than competitive".

The growth of private contracting has hugely grown under this administration – a practice ripe with abuse.

See this April testimony from the City Comptroller, showing that one out of every five DOE contracts in 2007 and 2008 went over its maximum allotted amount by 25 percent or more, sometimes by millions of dollars.

An audit from the State Comptroller released in May reported that the DOE awarded 291 no-bid contracts between FY 2005 and FY 2008, for more than $340 million, and in most instances "failed to properly document" the reason why.

And this analysis from the NY Times, showing that despite hundreds of millions of dollars awarded the city from the state and the federal government to reduce class size over the last seven years, the number of classroom teachers has shrunk by more than 1600, while high-paid administrators and out-of-classroom positions have grown by over 10,000. The number of employees making over $100,000 has quadrupled – even after adjusting for inflation.

When are the Mayor and Chancellor going to be held accountable for their huge waste of taxpayer funds; while each year, our children suffer from worsening overcrowding and rising class sizes?

No-bid contracts at DOE have reached $342 million

NY Post reports today that the $12.5 million DOE no-bid contract to All Kinds of Minds, founded by Dr. Mel Levine, trained fewer than 1/5 of teachers promised; more recently Levine has been accused of child sexual abuse.

According to the Post, since 2004, DOE's spending on no-bid contracts amounts to $342 M. (click on summary to the right, courtesy of the NY Post.)

More recently, the number of official no-bid contracts has lessened somewhat, to “only” $12 million last year, but one wonders if this is in name only. There is little or no accounting or explanation of the 944 contracts that last year that cost the taxpayer $1.9 billion. During the budget hearings, City Council Speaker Quinn asked the DOE to cut back or limit these contracts, but they continue to soar upwards each year.

For example, see the recent DOE announcement that the NYC Leadership Academy “was selected from among multiple vendors through a competitive procurement process” to receive a five year contract. Yet how competitive this process is questionable, given the fact that the Leadership Academy was founded by the Chancellor, is run by his appointee, and he was chair of the board until just weeks before he granted it this $50 million, five year contract.

IT'S ALL A GAME

As recently reported in the NY Times and the NY Sun, there is so little interest among parents in running for seats on Community Education Councils -- primarily because of their lack of power and the scant respect given them by Tweed -- that parent coordinators were offered bribes to recruit candidates. Here is an update from GBN News:

May 1, 2007 (GBN News): Schools Chancellor Joel Klein, struggling to keep up the appearance of parental involvement in the face of parents' widespread refusal to participate in the Community Education Councils, has reportedly commissioned a new game involving the CEC’s. The Chancellor was said to have felt that a game would generate greater enthusiasm among parents than the actual parent councils, and would be seen as more meaningful. The game, still in the production stages and as yet untitled, would be one of the more unique games ever developed. According to sources at the Department of Education, this would be the first game ever in which the object of the game would be to get people to play it.

Choosing a company to develop and produce the game proved to be a major dilemma for the Chancellor. Given the wide popularity of the game, “Children First: A Game of Irony”, based on the NY City schools, all of the major game companies were interested in vying for the contract for this one. However, the Chancellor, with no experience whatsoever in dealing with contract bids, was unable to cope with this competition. With all of the experienced companies engaged in a bidding war, the Chancellor had to find someone to whom he could grant the sort of no-bid contract with which he is comfortable. Fortunately for Mr. Klein, Deputy Chancellor Chris Cerf had just finished reading the recent best seller, “No-Bid Contracts for Dummies”, and the Chancellor immediately tapped him to produce the game.

Few details about the game have been revealed, given the DOE’s penchant for secrecy. All that is known is that parents will have no role in developing the game, but will be consulted after the game comes out. And, it is rumored that it features a large role for Parent Coordinators, who can win lavish prizes for succeeding in persuading parents to play the game.

Who are the real special interests when it comes to our schools?

On Monday, Mayor Bloomberg held a press conference where he castigated critics of his risky restructuring and funding proposals, calling them "a small chorus of people who are calling for a return to the good old days", who represent "special interests," like the National Rifle Association.

"You always do have the problem of a very small group of people who are single-issue focused having a disproportionate percentage of power," he said. "That's exactly the NRA."

Others might think, on the other hand, that it is he and the Chancellor -- a very small group with almost dictatorial powers over our schools -- who are the real problem.

Given the fact that among the many critics of their proposals are parents legitimately concerned about what these funding cuts might mean for their children, in terms of the loss of experienced teachers, class size, or essential services, I don't know how he can call us "special interests."

For an excellent critique of these funding proposals, and how they treat public education differently from all other municipal services, see this discussion from the Educational Priorities Panel.

Can you imagine if the city funded firehouses or police stations based not on the actual salaries of the employees, but on average salaries citywide – essentially forcing police captains to try get rid of their most experienced officers?

The attitude reflected here – seeing teachers as disposable resources -- goes against everything that the administration pretends to say about respecting them and honoring their profession.

I am also frankly sick and tired of the Mayor and Chancellor attempting to label any critics of their half-baked, risky schemes as defenders of the status quo. As I told the Staten Island Advance yesterday:

"We want smaller classes, we want more arts funding, we want less testing, we want more input from real stakeholders on the ground....We have been asking for real changes for six years and they have kept their ears shut to us."

In fact, many of us have been calling for real change in our schools long before Bloomberg even thought of running for Mayor, and Joel Klein was still a prosecutor living in DC.

On the other hand, the Mayor surrounded himself yesterday with people who had signed onto a letter of support - with none representing either parent or mainstream education groups. Most of the organizations represented had financial interests with DOE or had received funding from the city or Bloomberg's own charitable donations.

Several had applied to be a partnership support organizations. Many of the news articles, including the NY Sun and the NY Post, pointed out how many of these organizations were dependent on Tweed's largesse and thus were clearly reluctant to bite the hand that feeds them.

What was not pointed out, though, is how many had been the recipients of large no-bid contracts from DOE.

Last spring, CityYear (which contributed not one, but two signers to the letter) received a five year, no-bid contract for $11 million through 2012, “to help children learn to read, encourage children to stay in school and to care about their communities.” (The sixth year, and more millions of dollars, are to be contingent on follow-up questions “to be asked of CityYear.”)

Or what about the New Teacher Project, whose director also signed onto the letter of support? Last April, Tweed officials submitted a two year, $2.2 million no-bid contract for the Project, based at the University of Santa Cruz in California, to provide training for teacher mentors. Yet the internal DOE committee rejected it. The reasons listed? "Insufficient justification for request" and "Should be competitively bid."

So the contract was re-submitted for even more money in May, and this time was approved, for $2.8 million! There's accountability for you.

And parents are the special interests, according to the Mayor!

In any case, the fact that the administration asked its contractors to sign onto such a letter shows how isolated and desperate they have become, to resort to an ethical and PR blunder almost as bad as New Visions asking their grantees for kickbacks.