Hedge fund executives have unleashed a tsunami of money the past few years aimed at getting New York’s politicians to close more public schools and expand charter schools.
They’ve done it through direct political contributions, through huge donations to a web of pro-charter lobbying groups, and through massive TV and radio commercials.
Since 2000, 570 hedge fund managers have shelled out nearly $40 million in political contributions in New York State, according to a recent report by Hedge Clippers, a union-backed research group.
The single biggest beneficiary has been Andrew Cuomo, who received $4.8 million from them.
But the direct donations don’t tell the full story.
In this era after the Supreme Court’s Citizens United case, the indirect contributions are even more astounding.
Take, for example, a group called New Yorkers for a Balanced Albany. It financed a massive advertising campaign late last year aimed at keeping the state Senate in Republican hands, largely by blasting upstate Democrats as tied to Mayor de Blasio.
That group received $3.5 million from just six hedge fund backers of charter schools.
Two other pro-charter groups, Families for Excellent Schools and the political arm of Students First New York, spent more than $10 million last year on their lobbying effort.
If you're a reader of this blog, you know that Andrew Cuomo was on the take from the hedge fund managers long before he became governor.
As the NY Times reported in 2010, Cuomo met with these same hedge fundies who have donated so much money to these pro-charter front groups in a hotel room and took a suitcase full of campaign cash and promise for even more future campaign cash back to the office with him:
When Attorney General Andrew M. Cuomo wanted to meet certain members of the hedge fund crowd, seeking donors for his all-but-certain run for governor, what he heard was this: Talk to Joe.
That would be Joe Williams, executive director of a political action committee that advances what has become a favorite cause of many of the wealthy founders of New York hedge funds: charter schools.
Wall Street has always put its money where its interests and beliefs lie. But it is far less common that so many financial heavyweights would adopt a social cause like charter schools and advance it with a laserlike focus in the political realm.
Hedge fund executives are thus emerging as perhaps the first significant political counterweight to the powerful teachers unions, which strongly oppose expanding charter schools in their current form.
After hearing from Mr. Cuomo, Mr. Williams arranged an 8 a.m. meeting last month at the Regency Hotel, that favorite spot for power breakfasts, between Mr. Cuomo and supporters of his committee, Democrats for Education Reform, who include the founders of funds like Anchorage Capital Partners, with $8 billion under management; Greenlight Capital, with $6.8 billion; and Pershing Square Capital Management, with $5.5 billion.
Although the April 9 breakfast with Mr. Cuomo was not a formal fund-raiser, the hedge fund managers have been wielding their money to influence educational policy in Albany, particularly among Democrats, who control both the Senate and the Assembly but have historically been aligned with the teachers unions.
They have been contributing generously to lawmakers in hopes of creating a friendlier climate for charter schools. More immediately, they have raised a multimillion-dollar war chest to lobby this month for a bill to raise the maximum number of charter schools statewide to 460 from 200.
The money has paid for television and radio advertisements, phone banks and some 40 neighborhood canvassers in New York City and Buffalo — all urging voters to put pressure on their lawmakers.
The financial titans, who tend to send their children to private schools, would not seem to be a natural champion of charter schools, which are principally aimed at poor, minority students.
But the money managers are drawn to the businesslike way in which many charter schools are run; their focus on results, primarily measured by test scores; and, not least, their union-free work environments, which give administrators flexibility to require longer days and a longer academic year.
It also does not hurt that the city’s No. 1 billionaire, Mr. Bloomberg, is a strong charter school supporter. He is the host of the fund-raiser for Mr. Hoyt, and at times, Democrats for Education Reform seems an extension of the mayor’s own platform.
Besides more charter schools, the group and the mayor have called for ending the use of seniority as a basis for layoffs and for granting principals more power to fire teachers they consider ineffective.
Mr. Cuomo also has expressed support for charter schools. A spokesman for Mr. Cuomo declined to answer questions about the breakfast at the Regency, but Mr. Williams said it had gone well.
“We said we were looking for a leader on our particular issue,” he said, and as a result, when Mr. Cuomo is next required to disclose his contributors, “You will see a bunch of our people on the filing.”
Same old story with Cuomo - hedge fundie cash goes into his coffers, education reform policies come out of his office and (almost always) into law.
Former Assembly Speaker Silver has been indicted for monetizing his office and taking $4 million in kickbacks and bribes.
Governor Cuomo, who has taken even more than Silver from the hedge fundies to push their privatization plans, remains free and clear to continue to push for his donors' policies.