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Wall Street ♥ charter schools

By Laurie Bennett

May 5, 2013 at 9:37am

Call them cynical, but the widespread involvement of financial firms in the charter school movement raises suspicion among many public school advocates.

The map below illustrates just a few entanglements of big league investors in national school-choice organizations.

Many hedge funders and financiers contribute to state-level groups or to individual schools. Billionaire Carl Icahn founded the Bronx charter school named for him. Spencer Robertson, son of billionaire Julian Robertson, started PAVE Academy in Red Hook, NY.

Hedge funder John Arnold, founder of Centaurus Advisors, is one of the most generous advocates for school choice.

His foundation has given millions of dollars to charter school networks such as KIPP and YES Prep.

New Markets Tax Credit

One of the perks of investment in charter schools came with passage in 2000 of the New Markets Tax Credit, a federal tax break for investors in community development projects.

Big banks have seen the allure. The map below shows banks and other organizations that have put money into community development organizations funding charter schools since 2009.

JPMorgan Chase, one of the investors, created a $325 million fund for charter schools in 2010.

“Many charter schools have expanded access to academic opportunities for students in all types of communities, so we shouldn’t let tough economic times bring them down,” Chairman and CEO Jamie Dimon said at the time. “Improving educational opportunities is a cornerstone of JPMorgan Chase’s philanthropic giving.”

The politics of school choice

One side effect of the growth of charter schools is the weakening of public-school unions, long a major source of support for Democratic candidates.

Yet school choice, despite its solid support among conservatives, is not just a Republican issue.

Liberal icon George Soros has supported charter schools, as has Bruce A. Karsh, a frequent Democratic donor shown in the top map above.

Indeed, there is even an organization called Democrats for Education Reform, which advocates for charter schools. Not surprisingly, its board is dominated by people from the financial sector.

The most current example of the blurring of party lines is probably Chicago, where Democratic Mayor Rahm Emanuel has endorsed more charter schools. Funding for some of the schools came from the Walton family, the Wal-Mart heirs who generally back Republicans.

While not a Wall Street firm, Walmart is certainly a favorite of many investors. The map below provides a glimpse of the heirs’ longtime support for school choice:

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