Dear Philadelphia: “We are above the law”


If there’s any question about what’s at stake regarding the lobbying complaint filed last month by Parents United, the Philadelphia Home & School Council, and the Philadelphia branch of the NAACP, read about this move by the William Penn Foundation. Last week, the Foundation announced the suspension of funding to all city agencies, stating that they could not move ahead until the city ethics complaint was resolved.

(Read City Paper’s article here)

In December after months of thoughtful deliberation and a full legal analysis by our lawyers at the Public Interest Law Center of Philadelphia, we decided to file a complaint against the William Penn Foundation based on the fact that they had solicited millions of dollars in donations for an exclusive contract with the Boston Consulting Group. William Penn Foundation and Boston Consulting Group signed off on an outlined set of “deliverables” such as identifying 60 schools for closure, mass charter expansion, and unprecedented input into labor and contract negotiations – without the School District of Philadelphia being a party to the contract. The Boston Consulting Group promised the William Penn Foundation, and by extension its donors, that they would meet with School Reform Commission members and other high-ranking District officials.

About 10 days after we sent our letter of intent to the William Penn Foundation, its new president Jeremy Nowak, who had led the BCG contract, abruptly resigned.

William Penn Foundation’s latest decision to halt funding to city agencies sent shock waves throughout the city. But should it come as a surprise? Although the complaint we filed with the City Ethics Board is legally a regulatory question (our argument is that the Foundation and BCG lobbied and therefore should have registered as lobbyists), there’s no question the ramifications of that complaint are considerable.

The Boston Consulting Group plan has been presented to the public as a plan of fiscal responsibility, of reform and rightsizing our schools and managing our expectations for a new Philadelphia. It comes from “smart people” with smart ideas. But what if the work is something completely different? What if instead of being “smart people with smart ideas” the Boston Consulting Group are hired guns of the wealthy and powerful seeking a shortcut to decisionmakers at the top, circumventing the public and democratic processes for the rest of us? What if instead of being a vision of a new Philadelphia they are merely a slick version of the same old Philadelphia – the Philadelphia of backroom deals and where public goods are treated like private favors for a privileged few? Would that not matter to us?

It matters that we are in the midst of the most controversial moment the District has seen since the state takeover. One out of six Philadelphia schools is proposed to close. The District has so far refused to release the list of 60 schools Boston Consulting Group identified for closure. Doesn’t it matter if private donors – at least one of which runs a billion dollar real estate development firm and others who support charter expansion – had influence over the list of school closings?

It matters that our complaint is the first legal challenge under the new city lobbying law, which went into effect in January 2012. Philadelphia was the last major city in the U.S. to pass a law requiring lobbyists to identify themselves. This law came out of years of efforts by government watchdogs who saw massive fracking and casino expansion in the state of Pennsylvania with no effort to identify who was advocating for such laws and who was paying them. Today, the issue is school reform.

Such a complaint deserves the fullest and fairest hearing before the City Ethics Board. The issue of lobbying in education reform couldn’t have greater consequences for us as a school system and as a city. We’re taking it seriously. We hope you will too.

(Thanks to Young Philly Politics founder Dan Urevick-Ackelsberg for this blog post headline, which was taken from his twitter feed.)

Listen to a June 2011 podcast by WHYY’s “Radio Times” on the City’s new lobbying law featuring Committee of 70 and Common Cause PA.

Read more below:

Statement by Parents United for Public Education re: William Penn Foundation’s decision to suspend funding to city agencies

We are deeply concerned and surprised to hear about William Penn’s misplaced action in suspending funding to city agencies. This action is neither a necessary nor reasonable response to our ethics complaint. The complaint says nothing about funding City and City-related agencies that the Foundation has in fact funded responsibly for years, but addresses specific violations by one of their now-former officers. It makes no sense to hold libraries and gardens accountable for improper actions for which the Foundation itself should assume accountability.

What William Penn forgets is that if in fact it had chosen to directly fund the District, instead of contract with a private third party to lobby the District, we would not have filed an ethics complaint. Our complaint focuses on the issue of lobbying, not on the responsible philanthropy the Foundation has practiced for years. The Foundation’s unnecessary and harmful responses raises serious questions about what it hopes to achieve and what message it intends to send regarding an important issue before the city ethics board.


Media coverage

Philadelphia City Paper, William Penn Foundation suspends city-related grants, cites Ethics Board complaint

Philanthropy News Digest, “William Penn Foundation suspends grants to city agencies

Chronicle of Philanthropy, “Ethics allegation prompts big grant maker to suspend grants

Philebrity, “Not cool guys. With ethics complaint filed against them, William Penn Foundation takes their ball and goes home

WHYY Newsworks: “Parkway, library projects threatened by lobbying complaint against William Penn Foundation

PlanPhilly, “Nutter: Grants requested by the city do not constitute lobbying

Philadelphia Magazine, “William Penn Foundation suspends grants to city agencies

Philadelphia Inquirer, William Penn Foundation suspends grants to city

KYW1060, “Local foundation halts grants to City of Philadelphia

Philadelphia Magazine did a profile of former William Penn Foundation president Jeremy Nowak in its February issue. Parents United’s Helen Gym is quoted in the profile, excerpt below.

Philadelphia Magazine, Jeremy Nowak’s vision for a new Philadelphia

“It was the PSP grant that caught everyone’s attention, not only because of its size but because of the structure and makeup of PSP. It’s run by an ex-journalist named Mark Gleason, and its board is packed with supporters of school privatization; one of its donors is Janine Yass, wife of hedge-fund manager and privatization advocate Jeffrey Yass, backer of the powerful Students First PAC.

But the PSP grant wasn’t the foun­dation’s only big move in the area of school reform. It had also begun working with a controversial company called the Boston Consulting Group. BCG has deep ties to privatization advocates. Many cities have hired it to lay out road maps for reforming their schools. In February, the School Reform Co­mmission—the state-controlled board that runs the Philadelphia School District, which is on the brink of bankruptcy—commissioned BCG to take a broad look at education in the city, generating ideas to patch the district’s budget holes and boost student achievement. William Penn contributed $1.5 million toward the tab and raised another $1.2 million.

The BCG report was drastic. It recommended closing up to 57 public schools and dramatically expanding charter schools, which it predicted would educate close to 40 percent of the city’s students by 2016. These recommendations formed the basis for the SRC’s “Blueprint for Transforming Philadelphia’s Public Schools,” released in April, which suggested closing around 40 schools. Public-school advocates were outraged, dismissing BCG’s work as “a boilerplate menu of silver bullet education reform ideas” that “make little to no mention of what it will actually take to educate our children,” according to the Philadelphia Federation of Teachers. At a May protest rally covered by the Philadelphia Public School Notebook, J. Whyatt Mondesire, president of the Philly chapter of the NAACP, said, “We at the NAACP despise the Boston Consulting Group,” and at a subsequent SRC meeting, Jerry Jordan, president of the PFT, said, “We want adequate, stable funding spent in schools and classrooms—not millions of dollars wasted on … pricey consultants.”

Public-education supporters weren’t surprised that an outside consultancy was trying to shove the city in one direction. They were surprised to see the foundation’s fingerprints. Until now, William Penn had never made itself a combatant in such a highly charged arena. But in a way, it fit a trend. In recent years, national philanthropies like the Bill & Melinda Gates Foundation and the Broad Foundations have taken a more activist, political role in urban education, using their money and clout to push for a certain kind of change. “The philanthropic vehicle allows some entities to bypass a public process and find a shortcut right to decision-makers at the top,” says Helen Gym, the co-founder of Parents United for Public Education, a group that argues for more investment in public schools. “There’s a view that holds that it’s just about how smart you are and how fast you can move things, and the public is a pain in the neck and they’re more hassle than it’s worth.”

Gym has known Nowak for a few years. She respects him as “a self-made man who has very keenly recognized the failures of government to provide much-needed services.” She says she’s disappointed, though, that Nowak “went with what the massive trend in reform was, backed by ideologues and deep pockets.” She adds, “He’s here to change the game. I guess the question we should be asking is, ‘Is this the game we want to play?’” (Nowak responds: “My personal view is that centralized control and command systems are breaking down because technology, civil society and private innovation are transforming them. The Ed debates should be viewed within this context.”)

On November 15th, Gym’s group delivered a letter to the foundation raising concerns about the BCG report. A few weeks later, Parents United filed a complaint with the City Ethics Board. The gist of it was that the foundation, by hiring the Boston Consulting Group, had lobbied the district without ever identifying itself as a lobbyist. Also backing the complaint was the NAACP.

I interviewed Nowak five days after Gym sent the first letter. Nowak didn’t mention it. When I asked him about these issues—about the alleged politicization of the foundation, about its ties to polarizing figures in the national charter-school movement, about BCG—he wasn’t feisty or defensive. He laid out his case in calm tones. No, he didn’t see himself as part of any movement. He didn’t care if a school was public, parochial or charter, as long as it closed the achievement gap: “We’ve taken a pretty agnostic view.” Yes, the foundation had hired BCG, but in Nowak’s eyes, BCG was just a tool to generate data for local decisionmakers. He asked if I had actually read the BCG report. I said I hadn’t. He stood up, left the room, came back, and placed a copy before me. BCG has become “a boogeyman,” he said, but the document is actually quite sensible. (While written in neutral prose, the report is sharply one-sided. Except for a few lines acknowledging that some charters are bad—“there is a range of performance levels across charters”—it treats the expansion of ch­arters as an unalloyed good, barely mentioning some well-documented problems. And according to the PFT, BCG didn’t interview a single classroom teacher.)

Nowak seemed mildly confused by all the blowback, even a little wounded. By his lights, he’d only done what he’d been doing for decades: getting data on a problem, then bringing private and public folks together to make a decision and execute. “I’m not sure what our choice is, as a nation,” he said. “The great thing about Americans is their pragmatism. And if we could get back in touch with our damn pragmatism in some ways, and solve problems?” He shrugged. “That’s how I’ve thought about it.”

Eight days after our conversation, Nowak and his board parted ways.”

3 thoughts on “Dear Philadelphia: “We are above the law”

  1. “What William Penn forgets is that if in fact it had chosen to directly fund the District, instead of contract with a private third party to lobby the District, we would not have filed an ethics complaint.”

    You really think the District and/or Teachers Union would put this money to good use? Really? In a city as corrupt and entrenched as Philadelphia, money given to public entities has been mismanaged and misappropriated time and time again. Besides, given the growing unfunded pension fund, the money would have to go pay for retired teachers. OR it would have gone to the $87 million windfall in rollover vacation and sick days paid out to teachers. ( I work in the private sector and have never seen such a windfall retirement perk.

    Somehow, the ‘Parents United for Public Education’ group has a one-track agenda that never discusses the gross mismanagement of funds or cushy contracts that have bankrupted our school district and education. If we want to see true change, and see these schools actually funded, we can start by creating commonsense teacher contracts that align to the 99% of us who do not get 30 year rollover vacation pay.

  2. This is the danger of public-private partnerships. Public services become beholden to private dictates. Just think! Obama wants to expand this format. It’s a destabilizing proposition.
    Another corporate funded, hostile takeover of public education brought to you by ALEC and associates.

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