Crony capitalism and the inequities of NYC charter funding: Julian Robertson and the case of the billionaire scion's preschool

The portion of the NYC budget going into the pockets of charter school operators is growing fast, according to the Independent Budget Office, and will top $1 billion next school year.  See graph below.

(Source: GothamSchools from IBO data)

In addition, there are many hidden funding sources not reflected in this graph, reflecting significant  inequities between the way charters and district public schools are funded in NYC.

First of all, for the two thirds of the charters that are given space and services free in public school buildings - which we believe is illegal -- amount to many millions of dollars in additional subsidies per year, and result in these students receiving more than the average per student funding that districts public schools receive, according to the an analysis from the Independent Budget Office.

Charter school students are also twice as likely to get free busing paid for by the city -- another expense not reflected in the above graph.  Some 20% of charter students ride school buses, compared to just 9% of regular public school kids.

(Source:  Bruce Baker, Rutgers Univ.)

Because charters are not subject to the city's "fair student funding" system, but get an average per pupil funding amount set by the state no matter what the need level of their students, they also receive substantially more than their fair share than public schools.  In contrast, NYC public schools enroll  greater numbers of these at-risk students, and their funding is in part set by the needs level of their students.  (See the graph above, comparing the needs levels of some prominent NYC charter chains to district schools in the same borough, as analyzed by school finance expert,  Bruce Baker of Rutgers University; more on this here.)

In addition, charter start-ups  receive special subsidies  amounting to more than $2 million per year from the city's Department of Youth and Community Development (DYCD); and are not being required to adhere to the same costly mandates, such as the new teacher evaluation system imposed by the state.  

Many NYC charters also raise millions of dollars privately from their supporters in the hedge-fund industry, Wall street executives, and other assorted billionaires.  Eva Moskowitz' Success Academy charters recently raised $7 million in one night; despite the fact that her schools had surpluses of over $28 million.  NYC charters also receive myriad other special favors from an administration that is widely recognized as biased towards these privately-managed schools.  

One way that public schools do tend to have an advantage is that they can provide publicly-financed preK,

Spencer Robertson, preK and charter school operator

while charters cannot legally be provided with these funds, according to state law.  Yet even in this case, some charter schools have gotten around this provision in the law.

Note the example of the PAVE charter school, run by Spencer Robertson, the son of billionaire Julian Robertson, a close associate of Mayor Bloomberg's.
In order to evade this prohibition, Robertson the son set up a dummy corporation for a pre-school for PAVE called the "Henry Cooper Westendarp" school, named after PAVE's  director of  finance. This pre-school  is being funded through a separate contract with the DOE to the tune of nearly half a million dollars, and it will help ensure a steady stream of students for Spencer's charter school. 

Julian Robertson, billionaire and non-city taxpayer

Along with Chancellor Walcott, Spencer is also on the board of the NYC Charter Center, which is headed by Phoebe Boyer, who runs both of Julian's foundations, the Tiger and Robertson Foundations, which help finance the Charter Center and other pet projects of the Mayor.  

Yet Julian, whose net worth is  $2.8 billion according to Forbes, refuses to pay city taxes, and has his secretary calculate exactly how many days he must travel out of the city and schedules him accordingly, to avoid doing so. 

See below commentary by parent Jim Devor, outgoing president of Community Education Council in District 15 on the need for an investigation into how the city is providing funds to pay for PAVE's preschool. 

THIRTEEN THOUGHTS ON WHY THERE NEEDS TO BE AN INQUIRY INTO  THE "PRE-PAVE" CONTRACT AWARD BY THE DEPARTMENT OF INVESTIGATION

1)  As is widely known, there is a desperate need for pre-K space THROUGHOUT  District 15 (especially in Sunset Park and the South Slope/Greenwood Heights) EXCEPT for Red Hook.  In fact, according to the "Blue Book", local Red Hook elementary schools are "underutilized" with at least 750 "unused" and available seats.

2)  To increase pre-K capacity, the DoE funds a number of full and part time Universal Pre-K ("UPK") programs (usually - but not always - operated by community based organizations) throughout the City (including D15).

3)  The ONLY full time D15 UPK funded by the DoE (as approved by the Panel for Educational Policy this Spring) is "pre-PAVE" which will receive slightly less than a half million dollars for 54 four year olds in full time pre-K.  Coincidentally, I'm sure, this is the highest per pupil allocation of any such UPK in the entire City as approved by the PEP.

4)  Notwithstanding the DoE claims that PAVE and pre-PAVE are separate entities, pre-PAVE is going to be run by Cooper Westendarp - PAVE's Chief Financial Officer (who earns over 90K per year in that capacity).

5)  Furthermore, the PAVE  Charter School has sought (and apparently received) approval to conduct its Kindergarten lottery seventeen months in advance. 

6)  As per Sonia Park, the Director of the DoE's Charter School Accountability & Support Division, those lucky winners will be "invited" (but not "required") to attend pre-PAVE this Fall.  Thus, at the very least, those lottery winners will have priority over all other applicants to pre-PAVE.  And if all lottery winners accept the "invitation", no other children will have access to that pre-K program. 

7)  In any event, according to the PAVE website, ALL pre-PAVE graduates will automatically be granted admission to PAVE.  Nevertheless, at the PEP, the Chancellor incredibly denied that applying to PAVE was a pre-condition for acceptance to pre-PAVE.

8)  The bottom line is that by creating a pre-K along with a seventeen month "advance" lottery, PAVE has effectively established a Charter School that starts in Pre-K.  That is a direct violation of the Charter School Act which prohibits pre-K grades in Charter Schools.

9)  Before the PAVE pre-K proposal was even calendared for approval by the Panel for Educational Panel, the DoE Executive Director of the Office of Early Childhood Education, Sophia Pappas, directly intervened on behalf of "PAVE pre-K" with NYC Housing Authority to personally lobby it to locate the proposed program on NYCHA property needed by Red Hood Senior Citizens. 

10)  While that maneuver was eventually foiled, one has to question why a high-level Educrat would be allowed to misuse her position to advance the pecuniary interests of a private party to the clearly unnecessary detriment of local NYCHA senior citizens. 

11)  Meanwhile, as thousands of children are being deprived access to pre-K throughout the City (30% of all applicants), the ONLY D15 public school with ANY pre-K slots available is PS 676 (Red Neighborhood School) literally located about three blocks away from PAVE. 

12)  This peculiar misallocation of NYC DoE resources can perhaps be explained, at least in part, by the ENORMOUS influence of the Robertson family.  For example, the Chancellor serves on the Board of the NYC Charter Schools Center along with PAVE founder and Director Spencer Robertson. 

13)  In addition, the Chair of said Board is Phoebe Boyer, the "Executive Director of the Tiger Foundation and Interim Executive Director of the Robertson Foundation" - both of which happen to be predominantly funded by Julian Robertson (one of the wealthiest men in the world who, of course, is Spencer's dad).

Have we connected the dots yet?

The tangled web of influence behind Klein's decision to allow the expansion of Girls Prep charter to go forward

Last week, Joel Klein disclosed he would invoke “emergency powers” to enable Girls Prep Charter School to expand within PS 94, even as it pushes out a program for autistic kids, contrary to the ruling of the NY State Education commissioner, David Steiner.

Steiner had held that Klein's actions violated state law, as Klein had refused to recognize that the autistic program was a school, any change to which required a public process occur beforehand, including informing the parents of the children who would be affected. Klein's actions in invoking emergency powers to displace a school for autistic children on behalf of a charter school has provoked much outrage from parents, elected officials, and special education advocates alike.

Mike Klonsky has pointed out that hedge fund maven Ravenel Boykin Curry IV, subject of a recent NY Times profile, is on the board of Public Prep, the charter management organization (CMO) that operates Girls Prep. But this only scratches the surface of this massively connected charter school.

Also on the board of Public Prep is Eric Grannis, husband of Eva Moskowitz, operator of the Harlem Success chain of charter schools, who has provoked her share of controversy by aggressively expanding within public school buildings, also with the aid and assistance of Joel Klein, to the extent of letting him know which public schools to close for her benefit. Grannis is a founding member of Girls Prep board and former counsel of the board:

Sarah Robertson is also on the Public Prep board and remains head of the Girls Prep board. Sarah is the wife of Spencer Robertson, the founder of PAVE charter school, installed by Klein in PS 15 in Red Hook, Brooklyn. PAVE is the subject of another complaint to the Commissioner, charging that its expansion will have damaging effects on the students with disabilities at PS 15, impacts which were omitted from the DOE's Educational Impact Statement. Unfortunately, in that case, the Commissioner did not see these effects as important enough to require them to be mentioned in the EIS.

Spencer Robertson, husband of Sarah, is the son of the hedge fund billionaire, Julian Robertson, who controls two influential and deep-pocketing foundations, the Tiger Foundation and the Robertson Foundation, both of which support Bloomberg's agenda to the tune of millions of dollars, through the Fund for Public Schools and other vehicles.

The Robertson Foundation is also among the largest contributors to Education Reform Now, the aggressive pro-charter school organization, and is one of the main funders of the NYC Charter Center, on whose board Joel Klein sits. The head of the board of the NYC Charter Center is Phoebe Boyer, the Executive Director of the Tiger Foundation and Interim Executive Director of Robertson Foundation.

Julian Robertson is in the news recently, not about his efforts on behalf of NYC charters, but because he took the Gates/Buffett billionaire’s pledge to give away most of his money to charity. Why that couldn’t include finding space for the charter schools run by his son and daughter-in-law, so that they wouldn’t have to push out autistic and other high-needs kids from critical space in their public schools is hard to figure out.

Perhaps contributing to his reluctance is the fact that these billionaire hedge fund privateers are intent on “leveraging” their private contributions as much as possible, as one of them, Whitney Tilson, pointed out in the NY Times article:

“It’s the most important cause in the nation, obviously, and with the state providing so much of the money, outside contributions are insanely well leveraged,” he said.

Julian Robertson is also a philanthropist who is awfully good at avoiding to pay NYC taxes, even to the extent of hiring a social secretary to keep track of how many days he should stay out of the city each year.

Why did Girls Prep want to expand in the first place? See the SUNY charter center fiscal dashboard, which shows that this school had recently moved into dangerous territory fiscally speaking, and most likely wanted an infusion of taxpayer funds generated by higher enrollment, without having to dip into the hefty pockets of their board members or Spencer’s generous father.

Hearing on the extension and expansion of PAVE charter inside PS 15K

Excerpts from last night's hearings on the administration's intention to allow the PAVE charter school to stay and expand in PS 15 in Brooklyn, well beyond their original agreeement.

For more on this issue, see our blog here, Juan Gonzalez' column, InsideSchools, and the CAPE website. Thanks to Norm Scott as always for the video.

Charter schools: the new polo ponies of the wealthy

It appears from an article in the Brooklyn Paper that the PAVE charter school board has been put on the defensive by DOE's proposal to give them a five year extension on staying at PS 15 -- and allowing them to take more space from the school each year as they expand, instead of the two year extension they originally requested.

A member of the board revealed that they have already been provided $26 million of city taxpayer funds from the NYC Department of Education for their own facility, and have raised $6.2 million more. Apparently they lack only $6 million to make this new building a reality.

Unmentioned in the article is that Spencer Robertson, the founder of PAVE, is the scion of Julian Robertson -- former hedge fund manager and according to Forbes, the #147 wealthiest person in the US, with an estimated fortune of $2.2 billion.

Julian Robertson is one of many hedge fund operators who have taken up charter schools as their new hobby, according to an article in the Style section of the NY Times. Robertson owns vineyards and golf courses in New Zealand, as well as homes in Locust Valley, the Hamptons and Sun Valley, as well in New York City.

He and other financiers are especially enthusiastic about the cause, because they their contributions are more than matched by hefty subsidies from state and city taxpayers. According to Whitney Tilson, another hedge fund operator and charter school supporter:

“It’s the most important cause in the nation, obviously, and with the state providing so much of the money, outside contributions are insanely well leveraged."

And yet Julian Robertson himself is careful not to pay NYC taxes , by making certain to spend under 183 days in the city. The state recently brought a lawsuit against Mr. Robertson senior for failure to pay taxes, but Robertson won this case, by proving that he had carefully worked out the minimum number of days he would reside in the city and having his scheduler keep records of this:

"...Mr. Robertson designated an assistant, his scheduler Julie Depperschmidt, to keep a careful count of where the Robertsons were from day to day in 2000 and to make sure they did not spend 183 days or more in New York City."

Spencer Robertson's wife Sarah is Director of Talent Recruitment at PAVE , and head of the board of Girls Prep Charter School, which has caused considerable controversy of its own by seeking to expand within a District 1 public school building. See the photo below, courtesy of the NY Times, of a recent District 1 meeting about the expansion of this school.

Another member of the Girls Prep board is Eric Grannis, husband of Eva Moskowitz, who makes more than $300,000 a year, operating another string of charter schools and who herself has been eager to expand her schools even further into the buildings of existing public schools in Harlem.

See this article about a "secret" meeting that took place last May, between Bloomberg, Bill Gates, Eli Broad, Julian Robertson and other members of the Billionaire Boy's club, about how to coordinate their charity "efforts".

I suppose that didn't include a measly $6 million for a building for PACE, since DOE has now given them carte blanche to keep squatting in PS 15 for at least five more years-- which presumably would also allow the school to keep collecting interest from the $26 million of taxpayer funds they already had been given for school facilities.

(I wonder what the reaction of these hedge funds operators might be if a charter school was allowed to take up space and expand within the private schools where their own children attend school. )

Finally, everyone must read this brilliant Diane Ravitch piece about how the Obama administration's "Race to the Top" program, with its emphasis on charter school expansion is antithetical to the whole concept of equal opportunity and public responsibility for education. She puts it within a historical context, as only Diane can do:

Having written the history of the New York City public schools, I was reminded of the origins of free schooling in certain northeastern cities in the early 19th Century, when wealthy men decided that it was their civic duty to help civilize the children of the poor. In their view and in their day, they were doing good deeds, but their schools were stigmatized as charity schools for children of paupers and were avoided by children of the middle class. Outside of big cities, public education emerged as a community response to a community's need to school its children, not as a charitable venture.

Today, with the proliferation of charter schools, we may be seeing a resurgence of the historic pattern as public schools are privatized and taken over by very rich men (and women) who see themselves as saviors of the children of the poor. Naturally, you find this a repellent portrait because it undermines the democratic foundations of public education. It means that our society will increasingly rely on the good will of wealthy patrons to educate children of color. It means that education is seen as a private charity rather than as a public responsibility. Let's hope that the new owners who have taken over these schools are able to sustain their interest. After all, having 500 children in your care is not the same as having a stable of polo ponies or a vineyard in Napa Valley. If the children don't produce results that make the sponsors proud, they may pick a different hobby.

Charter schools: the billionaire's boys club?

There were public hearings last night about the proposed move of the PAVE charter school into the building of PS 15 in Red Hook, the Patrick Daly school – where there is much parent and staff opposition to the move, including Daly’s widow herself, who justifiably fear an increase in class sizes and a loss of cluster rooms as a result.

Emily Brown, a parent at PS 15 was told by DOE to stop blogging about the controversial move until after the hearings. Today in her blog, she describes how a bunch of people showed up last night with PAVE tee shirts, some of whom are really operators of other NYC charter schools.

Meanwhile, I’ve learned a little about the background of the charter school’s founder, Spencer Robertson. According to his wedding announcement in the NY Times, Spencer is a former program officer at the Tiger Foundation, founded by his father, the hedge-fund manager Julian Robertson. Julian Robertson’s current wealth is estimated to exceed $3 billion. (That’s Spencer on the right of the photo above, with his brothers and his mom, Josie.)

According to the PAVE charter school application,

In Year One PAVE anticipates total revenues of $1,780,819 and expenses of $1,481,626. The anticipated Year one surplus is $289,193.

· During the Start-Up phase and Year One, PAVE anticipates receipt of non per-pupil revenues from the Walton Family Foundation ($250,000), the City of New York ($124,408), Federal Charter School Program, Grant ($150,000), and fundraising/board contributions ($150,000).

· There are no loans associated with the Year One budget.

· PAVE anticipates being located in a New York City Department of Education building. The Lead Applicant is engaged in conversations with the New York City Department of Education to secure such a space.

· The School has provided a contingency plan and budget for securing a facility over the term of the charter. If space in a Department of Education building is not a viable option, PAVE has identified a 20,000 square foot facility to lease located in the target community. The applicant asserts the potential value of the site includes: proximity to public transportation, public parks and playing fields. The proposed facility is also newly constructed.

So why doesn’t Joel Klein and others at DOE encourage Robertson to lease this facility, when he clearly can afford it, rather than give him valuable space for free in the PS 15 building?

I guess it’s for the same reason they insist on giving away precious public school space to Courtney Ross, the billionaire widow of Steve Ross, for her charter school, in the middle of one of the most crowded school districts in the entire city. Just because they can.