Wednesday, June 14, 2006

Southern Baptists Consider Exit Strategy from Public Schools = Wallet Fattening for Political & Corporate Heavyweights

(AP) A committee of the Southern Baptist Convention will report on a resolution encouraging the denomination to develop an exit strategy from public schools in favor of home schooling or private education.

Little do they know they are playing into the same hands that count on their votes at election time! Behind the Republican Party’s religious front lies a framework of interconnected business interests. Do the Southern Baptists know how many leading Republicans are involved with for profit education companies?

Bill Bennett (of fallen morals fame) co-founded K12, Inc. which “delivers comprehensive learning programs that include curriculum, tools, materials, and an innovative lesson delivery system”. That it is owned by Knowledge Universe, a for profit investment company specializing in education is not mentioned. In addition to K12, KU owns Kinder Care Learning Centers and LeapFrog. Launched with public fanfare, Knowledge Universe has become a shadowy, secretive organization.

President George H. W. Bush and many members of his administration worked for a Washington, D.C. based investment house. The Carlyle Group even has a Pennsylvania Avenue address for its corporate headquarters. Carlyle just signed a deal to purchase Oriental Trading Company the largest direct marketer of party supplies including school supplies and children’s arts and crafts. It outsources product manufacturing to China, where Carlyle has a fast growing presence. The company specifically mentions individual consumers, teachers, schools and churches as key customer groups.

Carlyle has in its portfolio BlackBoard, Inc. which allows education providers to put their services online and Varsity Group, Inc a leading retailer of textbooks. In 2005 the company purchased Wall Street Institute from Laureate Education, formerly Sylvan Learning Centers. WSI is a global provider of English language instruction services. The company’s press release noted “Founded in Italy in 1972, WSI has become a global operator and franchisor of English language instruction services with more than 285 centers and operations in 24 countries.” Might they in a position to benefit from the mandatory English training for newly legal immigrants?

Carlyle also owns Comark Building Systems which manufactures modular buildings for military, government, and education markets. Might the private sector be able to provide to an interested church the whole package for a new private, faith based school? From curriculum to textbooks to school supplies to the building itself, American for profit corporations are ready to serve.

Mr. Lou Gertsner, the Chairman of the Carlyle Group, has a strong interest in education. His press announcement from Carlyle announcing his employment included the following, “A lifetime advocate of the importance of quality education, Mr. Gerstner co-chairs Achieve, an organization created by U.S. governors and business leaders to drive high academic standards for public schools in the United States.” Two of Achieve’s Board members are in severe legal trouble, Governor Bob Taft of Ohio and Governor Ernie Fletcher of Kentucky. Gov. Taft is in trouble for not reporting thousands of dollars in free golf games and other gifts and is currently under the microscope for his role in mismanaging state investments. Gov. Fletcher is under indictment for giving protected state jobs as political favors.

Apparently that effort did not please Lou Gertsner as shortly after the press announcement he started his own initiative to improve education. His bio states “A lifetime advocate of the importance of quality education, Mr. Gerstner created in 2003 The Teaching Commission to develop specific policy recommendations to deal with the teaching crisis America is facing.” One of the people Lou selected for the Commission, Mrs. Barbara Bush, the President’s mother. She is founder and honorary chairman of the Barbara Bush Foundation for Family Literacy.

In soliciting venture capital proposals Carlyle is only seeking education deals in the U.S., not in Europe or Asia. What makes the U.S. education market ripe for venture capitalists to make money? Is the trend toward non public education, the wave the Southern Baptist Convention appears ready to surf?

Since when did education become big business one might ask? Sylvan Learning Centers was sold to Laureate Education, Inc. Laureate decided to focus on worldwide higher learning spinning off the secondary and elementary education to Educate, Inc in 2003. The primary owner of Educate is Apollo Advisors, L.P. described by Hoover’s as a vulture investment house. Apollo owns over 22.5 million shares of Educate, traded as EEEE. The company includes The Learning Center, Sylvan Online, Hooked on Phonics and Catapult Learning, a tutoring service.

While the Carlyle Group is full of ex-Republican political insiders, other investment houses have their connections. An Apollo subsidiary recently appointed ex-Senate Majority Leader, Tom Daschle to their board in March of 2006. Tom happens to share lobbying office space with Senator Bob Dole and ex Medicare chief Tom Scully in the offices of Alston & Bird in Washington, D.C. Despite spending significant time rubbing elbows with conservative Republicans in the workplace, Mr. Daschle has indicated he is ready to re-enter the fight, throwing his name in the Presidential ring for 2008. Or maybe he missed the corporate money trough, constantly filled by lobbyists and corporate contributors.

It appears lots of people are making money off the government’s shifting of education functions to the private sector. One company, Kaplan saw its revenue grow from $494 million in 2001 to almost $1.5 billion in 2005.

That the faithful are helping fatten the wallets of those in power is a time honored tradition. That our “feuding leaders” can get together outside the halls of government to make money is another time honored tradition.

While they appear to be on different sides, it appears both Republicans and Democrats have but one backer, one benefactor and it is not the common man, much less the average citizen.

P.S. The AP at the beginning of the post represents the author's initials

Update 11-15-14:  Eight years later finds profiteers have exited (cashed in) on the K12s and actual performance fell short of promises.  

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