Dark Money and the Charter Campaign

Want a Halloween fright? Peel back the curtain and look at the dark money behind Question 2.


 

If you want to know who is funding all those commercials for lifting the cap on charter schools in Massachusetts, you’ll need a good pair of binoculars.

Just like grainy, horror-movie TV campaigns ads, the commercials you’re seeing in favor of lifting the cap are made by PACS and superPACS, organizations whose names often suggest the exact opposite of the position they support.

This is the proverbial dark money: Individual investors give money to organizations that don’t have to disclose donors’ names, but use the money to fund ads for candidates and causes under the organizations’ names.

In this case, we know that Alice Walton and Jim Walton each forked over big bucks to create committees to raise money for Massachusetts charter schools. In turn, those committees raised bigger bucks from out of state investors, including many New York hedge funds and investment banks.

But the Waltons needed a Massachusetts resident to create the committees.

Frank Perullo of Sage Systems and Novus Group contributed $100 to establish one of the committees. He is also a consultant to Democrats for Education Reform (DFER), a pro-charter player that is founded and funded by Wall Street aces.

Thanks to Maurice Cunningham of WGBH News’s MassPoliticsProfs blog we also know that Great Schools Massachusetts has funded much of the $18 million that has been spent on pro-charter TV ads, but most of their money comes from Families for Excellent Schools, a New York-based hedge fund.

Why are these investors hell-bent for more Massachusetts charter schools? For the same reason bank robbers rob banks. That’s where the money is.

A bill called the New Markets Tax Credit Act, which was established in 2000, ensures that certain investors can double their money in about seven years with virtually no risk. And there’s money to be made in the real estate that charters end up owning, too.

As Juan Gonzalez wrote on shadowproof.com, “Charters are just another investor playground for easy money passed from taxpayers to the wealthy.”

Why from taxpayers? Those credits from the government to the charter school investors are from your federal tax dollars. 

Closer to home, Massachusetts will send approximately $450 Million to charter schools in fiscal year 2017. That is state tax revenue that would go to cities and towns to fund public schools.

Shortfalls in any part of the cities’ and towns’ school budgets are also made up by you through your local real estate and other taxes. And if not, your public schools will end up cutting vital staff like librarians, reading specialists, and school psychologists, which is what happened in Boston.

That makes all of us investors in charter schools, but we have no voice in how that money is spent or how the schools are run. In some cases, we also have given charter schools -- or the people in the organizations that run the schools -- real estate in our towns and cities. 

So charter schools turn out to be a wonderful way for people we’ll never meet, many of whom don’t live in Massachusetts, most of whom have no experience in or apparent interest in education, to make enormous amounts of money from all of us.

There are many reasons to vote against lifting the charter cap in Massachusetts that have to do with charter schools themselves. But for me, this is a scam fueled by dark money to siphon away our precious tax dollars under the guise of educating our children.

As Maurice Cunningham pointed out, Justice Louis Brandeis was prescient about Question 2 on the Mass ballot when he said, "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."


D.B. Reiff is a member of Progressive Massachusetts 

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