Pritzker-backed school denied charter status

Local News

ILLINOIS (WCIA) — On the campaign trail and in his attack ads, Pritzker has adopted a critical stance against charter schools, claiming to support a moratorium to block their expansion. But in 2013, Pritzker spoke at Educare D.C., calling the newly launched school the “gold standard” adding, “This [school] is what I want for every child in America. Would this not be perfect?”

At the time of his remarks in July 2013, Educare was still a private school operating with the support of public funds. It’s teachers, similar to charter schools, are not union members. It’s funding, similar to charter schools, comes from taxpayers and private investors. It also had financial backing from one of Pritzker’s tax-free foundations, the Pritzker Children’s Initiative (PCI), according to a 2014 charter school application.

“Administration officials have already visited us,” Pritzker crowed, describing how his new school group was “optimizing public dollars.”

One Obama administration official would later leave the White House to join PCI as it’s director. Before taking a job at Pritzker’s nonprofit group, Rachel Schumacher helped to craft a federal block grant that provides public funding to groups like Pritzker’s. Pritzker pitched the D.C. location as a “showroom” to convince Washington lawmakers and Capitol Hill staffers to expand the program nationwide.

“Our doors are open for other policymakers here, elected officials and advocates to come and see for themselves the impact of high-quality early childhood education right here in the nation’s capital,” Pritzker said.

Schumacher not only directs Pritzker’s nonprofit, she also chairs Educare D.C. alongside fellow board member Diana Rauner, president of the Ounce of Prevention Fund and wife to Republican governor Bruce Rauner. Pritzker thanked Rauner at his 2013 “celebration” speech, addressing her as one of his “friends from Chicago.”

In 2014, Pritzker’s showcase school applied to become a charter school but was denied. Educare D.C.’s charter school application lists Diana Rauner as a prominent member of the charter school business plan. An annual report from the Ounce of Prevention group credits her for launching the first Educare school in 2000, a model which Pritzker’s campaign says he admired.  

The 2014 charter school application form also credits a committed board of directors and investors, like Pritzker and his nonprofit, for “leading the charge to convert the PK-3 and PK-4 portion of this unique program to a charter school.” At a groundbreaking ceremony in 2011, Pritzker thanks other billionaire investors like the families of Warren Buffett, George Kaiser and the Kellogg Foundation.

“Why are billionaires interested in schools? Why does a guy rob banks,” Fred Klonsky asks rhetorically. “That’s where the money is.” 

Klonsky is a retired teacher, a veteran of the classroom for 30 years, and the former president of his local teacher’s union in Park Ridge, a member group of the Illinois Education Association. 

“Schools and education are a trillion dollar operation,” Klonsky explained. “There’s money to be made off of education. These aren’t charities. Just like public employee pensions, they involve trillions of dollars.”

In campaign materials and in public speeches, Pritzker is careful to describe his backing of early childhood education as “investments” or “support,” as opposed to charitable donations. This is by design, because these programs include a taxpayer funded return on investment.

According to the Network for Public Education, “charter schools are businesses in which both the cost and risk are fully funded by the taxpayers. The initial ‘investment’ often comes from the government or wealthy individuals. And if the business fails, the ‘owners’ are not out a dime, but the customers, who are in this case children, are stranded.” Klonsky says that definition accurately describes Pritzker’s early childhood education program. 

In a political attack ad paid for by Pritzker, a narrator assails his primary opponent, state senator Daniel Biss, for his 2012 vote “to increase funding for charter schools at the expense of neighborhood public schools.” The ad also says “he’s supported by a pro-charter group who’s fought for school privatization.”

Biss campaign spokesman Tom Elliott hit back, saying, “The height of J.B. Pritzker’s hypocrisy is astounding. While he spends millions of dollars on sloppy attack ads against Daniel Biss for voting for a bill that provides funding parity for all school children in Illinois, Pritzker tries to privatize education so he can profit off the backs of underprivileged families.”

Democratic state representative Christian Mitchell, who is supporting Pritzker in the primary contest, reacted to the attack ads on Tuesday, saying, “I think demagoguing an issue as serious as education is a concern for all candidates involved. I respect the candidates involved, but it’s not what I would do.”  

Mitchell also voted in favor of charter schools in the past. He has multiple high-performing charter schools in his 26th statehouse district and continues to support them. His stance is in line with a national movement within the Democratic party that surged during the Obama era. 

“There’s sort of a ‘who are you with’ or ‘who are you against’ mentality in education right now,” Mitchell said. “For some folks, if you don’t support exclusively neighborhood public schools, forgetting high quality charters, you’re considered to be a traitor to the party. I think that’s the wrong way to look at it.”

“All of these guys are trying to claim the wing of progressivism when none of them have a record that supports that,” Klonsky said. “I don’t think there’s anybody running for statewide office as a Democrat who can make a claim that they were defenders of neighborhood public schools and that they were opponents of charter schools. If they can make that claim, show it. Before you attack someone else, show us your record.”

A 2014 rejection letter from the D.C. Public Charter School board spells out how Pritzker’s school fell short of meeting the qualifications required to become a charter school. Educare DC’s denial letter cited a lack of financial transparency or a clear plan on how the group would spend public funding, a lack of local leadership, and insufficient evidence that the program would provide proper instruction for students with disabilities. The denial letter also pointed to “inconsistencies” in their capacity to serve special education students. The rejection letter also found the Pritzker-backed group had set their academic goals “lower than the charter sector average.”

The Pritzker campaign would not directly answer whether or not he or any of his foundations have given money to other charter schools. Instead, the campaign acknowledged one donation in particular for $2 million to Educare West DuPage, an early childhood learning center in the Chicago suburbs that has not transitioned over to a charter school. A review of a federal education database shows the school had 77 students enrolled in the 2015-16 school year. The Educare D.C. location has 157 pre-schoolers enrolled.  

“J.B. has been a national advocate for quality early childhood education and care for over 20 years and last year he released a five-point plan that includes a focus on expanding programs that educate parents and children from birth through age five, like Educare, which gives children and their parents the tools they need to thrive,” campaign spokeswoman Galia Slayen said in an email. 

“JB was praising the Educare model for early childhood learning and supports a moratorium on charter schools. As governor, JB will invest in early learning and care so that every child in Illinois gets the right start and the quality education they deserve.”

The Pritzker campaign said any attempt to compare the Educare D.C. charter program to the charter program Biss voted for would not hold up because the Educare D.C. program was not officially a charter school at the time of his remarks in 2013. But that response does not account for the decision to apply as a charter school, nor does it explain how the tax structure of this public-private school model, albeit it for pre-school children, is materially different than a licensed charter school.

In fact, a federal law signed by President Bill Clinton created a lucrative tax incentive for hedge fund investors seeking a safe bet to set up public-private schools in underserved areas. According to Hofstra University social studies professor Alan Singer, hedge funds “love charter schools” because they “are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend out.”

Pritzker’s older sister Penny Pritzker, a former Treasury Secretary for President Obama, heads up Pritzker College Prep, a Noble charter school in Chicago. Bruce Rauner sponsored an affiliated school called Rauner College Prep. The Noble network scored a federal grant worth nearly $11 million from ex-Obama Education czar Arne Duncan, who also supported Pritzker’s early childhood program.

The website for the Pritkzer Children’s Initiative, a group backed by the Pritzker Family Foundation, also entices potential investors for the “high returns” they can expect from their Social Impact Bond program, another taxpayer funded education program for young children. The campaign admits the primary reason these social impact bonds attract investors is because they can get a solid return for their money.

In partnership with Goldman Sachs and Chicago Mayor Rahm Emanuel, Pritzker invested in a $16.9 million social impact bond for Chicago Public Schools with a “Pay for Success” model that could deliver a return of up to $9,100 per student plus interest. He lists the investment in his economic disclosure forms filed with the Illinois Secretary of State’s office. As the subordinate lender, Pritzker couldn’t collect that payout from CPS until after Goldman Sachs is paid out, at which time his campaign says he will direct the returns back into his family foundation.

“Those are contradictory motivations,” Klonsky said, raising questions about a candidate who is running for governor on a platform to overhaul education. For instance, how exactly would a governor juggle the competing priorities of repairing a chronically underfunded, underperforming Illinois school system with the temptation to preserve a nest egg revenue stream for himself or his own children?

Critics raise other concerns with the “Pay for Results” system, namely the exorbitant expense. $9,100 plus the interest accrued over several years is a much higher total cost than a typical pre-school. Advocates for the program point to studies that suggest a long-term savings for the state if it can ultimately help students stay on the academic track longer, avoid the criminal justice system or other costly detours. But those “savings” are structured to be paid right back to the investors, in this case, out of the coffers of Chicago Public Schools. Other education experts argue the results of this specific investment scheme are not yet borne out, so they lack the evidence to justify the cost to taxpayers.

A 2016 article in the Los Angeles Times detailed Pritzker’s investment in an identical program in Utah, which said the new class of bonds was based in fuzzy math. 

In 2017, a review of Pritzker’s social impact bond program found the Chicago system underperformed expectations, resulting in only a partial return for investors. 

Klonsky says, “aside from the cost, it’s bad for kids with special needs because special needs covers a range of issues. Some of the problem kids take with them into schools are not curable. It’s who they are. If you’re a kid with autism, that’s who you are.”

Investors get a higher payout when students pass standardized tests or grade out of costlier long term programs, which can sometimes include special needs programs.

“Wall Street investors get a return on their investment for each kid that does not receive special ed support,” Klonsky explained. “You use a business model of investment in a program of identifying special needs kids? I taught in a small school. We would concentrate our attention on kids with autism. Those kids are going to need special ed support the entire time they’re in our school. They’re not going to be ‘fixed.'”

“To reward an investor for not having that kid receive the services, it just flies in the face of what counts as good practice,” Klonsky says. 

The Pritzker campaign disputed that notion, saying the goal of helping students avoid special education aims to prepare them for kindergarten, and is not to be applied to the context of autism. 

Klonsky says Pritzker’s political attacks against charter schools is evidence of a larger nationwide shift in the political conversation around privatizing education. 

“After nearly 20 years of corporate-driven education reform, they have nothing to show for it.”

*This article has been updated to include a response from the Biss campaign. 

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