Local charter school makes a shift Three years ago, NUVO reported how Perry Township awarded Edison Schools Inc. a no-bid contract to manage two brand new schools. Since then, Edison was slapped by the Securities and Exchange Commission for overstating revenues, its stock tanked, 10 class action lawsuits were filed against it and one-quarter of its contracts were cancelled.
But this year, local millionaire Christel DeHaan hired Edison to run her troubled charter school.
Edison Schools Inc. has been touted as the leader in the business of managing public schools for over 12 years. Founded in 1992 by Christopher Whittle, Edison became the darling of anti-government, union busting, market-worshipping entities. Whittle claimed that by injecting market values into education he could educate children better and more cheaply than wasteful, unionized public schools. Edison was soon running dozens of public schools around the nation.
Even with all the contracts, Edison was unable to make a profit and in 1999 a desperate Whittle took the company public with a stock offering. At the time, New York business writer Chris Byron wryly noted in TheStreet.com, “Edison Schools [is] a deal underwritten by Merrill Lynch that seeks to raise ... $172.5 million so that a smooth-talking media hustler named Chris Whittle won’t have to throw in the towel on his back firing business jalopy.”
Edison’s stock soared to $36 before crashing to 14 cents a share. Running public schools wasn’t the cakewalk Whittle had envisioned and, according to SEC filings, by last year the floundering company had lost $354 million. By then a leading education investment firm and early Edison backer, Leeds Weld & Co., had completely lost faith in school privatization. Leeds announced in August that it would no longer invest in education businesses like Edison due to the “political risks.”
Edison was saved with $182 million from the Florida Retirement System (FRS). FRS is a pension fund for public employees, nearly half of whom are the very teachers Edison has been striving to privatize. According to an article in The Nation by David Moberg, “A network of GOP contributors, lobbyists and investment managers had an interest in pleasing Jeb Bush and saving Edison.” Jeb Bush has been a strong advocate of privatization and school vouchers — he is also one of only three Florida state officials who oversee the retirement system.
With a $4.6 million grant from Lilly Foundation, Perry Township hired Edison in October 2001 to manage two brand new schools. Since the township is spending $839 (17 percent) more per Edison student than on the other students, much was expected of the experiment.
When asked in a phone interview about Edison’s performance, Max Oldham, associate superintendent of Perry Township, said, “It’s been terrific ... high parent satisfaction and test scores appropriate for the socioeconomic mix of the schools.” While Oldham later admitted that those scores were among the lowest in the district, he relentlessly defended Edison, and he went on to predict, “After two or three years when Edison’s approach really takes effect ... I’ll put the Edison kids up against anyone else’s.” Rosa Parks had indeed just opened but the other Edison school, Jeremiah Gray, was in its second year and its scores were all “below predicted” or “far below predicted.” The Lilly grant runs out this year so the school district will be paying the entire $1.3 million for Edison’s annual services. Nancy VanMeter of the American Federation of Teachers said most school districts have been unwilling to shortchange other children to “enhance Edison coffers.” In spite of Edison’s uninspiring record in Perry Township and elsewhere, Perry officials handed them an additional $300,000 contract to do “diagnostic assessments” for the district. Which brings us to the most recent Edison contract in Marion County.
Christel DeHaan recently announced she is hiring Edison for $3 million to operate her charter school, Christel House. Opened in the fall of 2002 and subsidized with public funds, Christel House is on its third principal, has experienced low test scores and multiple teacher firings. Michelle Thompson, global education director for Christel House, said that Edison is “aligned very closely with our philosophical beliefs.” She notes that charter schools like Christel House provide an alternative to the “challenges public schools face bureaucratically and with teacher unions.”
Christel House/Edison teachers have opted out of the union and will subsequently work 24 more days per year than their public school colleagues. Thompson said Christel House will have a longer school day and school year and teachers will make comparable wages to public schools.
It’s been shown repeatedly that what passes for bad government is, in fact, bad contracting. Indianapolis has been a brimming petri dish of privatization experiments for years but have these market solutions improved life for residents? A recent university study shows that since 1991, Indianapolis has invested less public money in roads, schools and other infrastructure than the rest of the nation. The study’s author, Sam Nunn, predicts that “quality of life” here could slide if the trend continues.
Jack Miller is a freelance writer and co-author of To Market, To Market: Reinventing Indianapolis. He is the coordinator for the Indiana Alliance for Democracy and past president of the Hoosier Environmental Council.