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Who’s Pulling the MPS Takeover Strings?

Wall Street hedge fund managers find a toehold in Wisconsin

Jan. 13, 2010
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National pro-privatization organizations led by former Milwaukee Journal Sentinel education reporter Joe Williams and backed by Wall Street hedge fund managers are emerging as a driving force behind the mayoral takeover of the Milwaukee Public Schools (MPS).

Williams is the executive director of the affiliated groups named Democrats for Education Reform (DFER) and Education Reform Now (ERN), based in New York City. ERN has a nine-month-old chapter in Wisconsin, and DFER has branches in Wisconsin, Colorado, Michigan, Missouri and New Jersey.

The Wisconsin state director of both groups, Katy Venskus, has been lobbying in support of the pro-mayoral takeover Senate Bill 405, authored by state Sen. Lena Taylor and state Rep. Pedro Colon.

Venskus also has organized a group of Milwaukee business leaders—including Julia Taylor of the Greater Milwaukee Committee, Tim Sheehy of the Metropolitan Milwaukee Association of Commerce and Tim Sullivan of Bucyrus International—to push for a mayor-appointed superintendent of MPS with enhanced executive powers.

But behind the public lobbying is a national network of pro-privatization elites working to radically change—some would say destroy—public education as we know it. While the pro-privatizers traditionally have been conservative Republicans and religious school supporters who back taxpayer-funded voucher schools, this group of pro-privatizers is made up mainly of conservative Democrats who see an enhanced role for the free market in public education in the form of vouchers, charter schools and mayor-led districts.

Teacher Bob Peterson, an editor of Rethinking Schools and a leader in the 28-member Coalition to Stop the MPS Takeover, said it’s “really frightening” that the pro-privatization forces have gained power within the Democratic Party.

“Democrats for Education Reform obviously have lined up with what I would call a market approach to solving social problems,” Peterson said. “As a teacher, I know that the marketplace hasn’t treated my kids very well in terms of their parents’ jobs and housing and health care. For me to think that the marketplace is going to have these solutions for education—I’m extremely skeptical.”

Milwaukee state Rep. Tamara Grigsby, who with state Sen. Spencer Coggs has authored an alternative MPS reform bill, said she is concerned that groups such as DFER and ERN are putting private interests ahead of the public good.

“Unfortunately, these so-called education reform groups are simply a veiled attempt at continuing the privatization of public education in Milwaukee,” Grigsby said. “In truth, these groups have spent more time talking about the ‘corporate role in education,’ rather than ways to improve public education itself.”

Wall Street’s Link to Education Reforms

While Wisconsinites may not be aware of the Wall Street link to a local issue like mayoral control of MPS, the New York press has begun to examine the links between hedge fund managers and Williams’ groups.

The boards of directors of both DFER and ERN are flush with Wall Street hedge fund managers who are affiliated with the New York charter school movement.

The four-person Education Reform Now board is made up of businessmen from the hedge funds Hawkshaw Capital, Gotham Capital, SAC Capital and Maverick Capital.

The board of Democrats for Education Reform also shows links between the charter school movement and “hedge fund heavies,” as TheNew York Times put it. Five of the seven board members are investors who serve on the boards of charter schools in New York. One of the charter schools, KIPP Academy, is a national network of 82 public schools in 19 states. The majority of DFER’s PAC donors are private investors.

As Williams gushed about charter schools to TheNew York Times, “If you’re at a hedge fund, this is definitely the hot cause.”

Lobbying for Mayoral Takeover and Voucher Schools

But Williams’ hedge-fund-friendly groups aren’t just focused on New York charter schools and the Mayor Michael Bloomberg-led public schools. The groups also are involved in the push to change the governance of MPS and the survival of the taxpayer-backed school voucher program.

Lobbyist Venskus, the Wisconsin state director of Education Reform Now Advocacy and the Democrats for Education Reform Wisconsin, is a former staffer to pro-voucher state Sen. Jeff Plale (D-South Milwaukee). Venskus is based in Oconomowoc and says she splits her time between Milwaukee and Madison.

“We don’t actually have an office,” Venskus said. “It’s just me right now.”

Indeed—its Dec. 16, 2009, letter to legislators backing the pro-takeover bill authored by state Sen. Lena Taylor and state Rep. Pedro Colon, features no address or phone number, just the ERN logo. Venskus herself signed the letter, identifying herself as “Democrats for Education Reform Wisconsin” without disclosing that she is a paid lobbyist for ERN, which sent the letter.

But ERN has also gotten involved in voucher school reforms. Prior to its efforts to build support for the takeover, ERN lobbied on the portions of the state budget that deal with voucher and charter schools. ERN spent $30,600 on those efforts, according to the GAB’s Web site, representing 222 hours of work on the matter. Venskus was also employed by Susan Mitchell’s pro-voucher organization, School Choice Wisconsin, to work on voucher and charter issues in the budget.

Venskus said that ERN “worked closely” with Marquette University’s Howard Fuller on the budget items. (Voucher champion Fuller has donated to the Democrats for Education Reform PAC, and serves on the board of the Education Equality Project with ex-Milwaukeean Williams.)

Stop the MPS Takeover’s Peterson said he had expected the voucher supporters to back the mayoral takeover.

“It’s clear that the voucher people are not interested in a democratically elected school board,” Peterson said. “They know that the majority sentiment in the city is for supporting the public schools. People are critical of public schools, but they know that it’s an established institution that can serve kids and there’s some public accountability.”

Rep. Grigsby was skeptical of ERN’s true motivations.

“The same special interests lobbying for Education Reform Now are those with strong ties to School Choice Wisconsin and MMAC,” she said. “I do not mean to paint all voucher advocates with the same brush, but if improving Milwaukee Public Schools was such a priority, then they should have worked with those of us committed to doing just that in the state budget. Instead, these groups were completely silent on MPS until the potential mayoral takeover became an issue.”

More Charters In the City?

Venskus said that the ERN Milwaukee coalition that signed the December letter to legislators has not taken a stand on issues such as charters and vouchers, although the national organization supports them.

“I do think there is a possibility to increase the number of high-quality charters in the city of Milwaukee with the governance change,” Venskus said. “One of the things we hope will happen is that the city will get more aggressive about seeking top-notch charter operators, finding them locally, but also recruiting from the national operators who do a good job. There are lots of folks who have looked at coming to Wisconsin, but our charter climate, particularly for independent charters, is not terribly welcoming.”

When asked if the charter allies on the board of DFER would have a financial stake in a mayoral takeover of MPS, Venskus responded, “It’s sort of an extrapolation to get there…That’s not why we’re pursuing it.”

Venskus said she can’t predict how the competing reform measures will fare in the state Legislature.

“If we can get everyone to get off of their political soapboxes and get in a room and figure out how to do this, I think we can get something done,” Venskus said.

And is Venskus herself on a soapbox?

“Umm… I’d rather not try to answer that,” she said.


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