Tuesday, July 14, 2009
Shelton Brings Wall Street Accountability to Duncan's Office of Innovation and Improvement
The news of hefty profits and bonuses at Goldman Sachs shouldn't come as a surprise given the investment bank's involvement in various sectors of the financial system. In what is certainly not solely a Democratic or Republican conspiracy - but rather a bipartisan example of the ruling elites' love of neoliberal economic principles - multiple Goldman Sachs employees have hopped into high-level regulatory or policy divisions without any serious concerns being raised. Under the guise of a Harvard academic program, Jeffery Peck advocated for Wall Street interests while operating as a lobbyist for the Wall Street-funded, Hank Paulson-approved Committee on Capital Markets Regulation - a misnomer rivaling NCLB or Bush's compassionate conservative. But this kind of corruption - the private sector using government posts and academic institutions to grease the wheels of the for-profit secotr - extends into the Department of Education as well.
Take Jim Shelton as a prime example. He was tapped to run the Bush-created Office of Innovation and Improvement under President Obama and Secretary of Education Arne Duncan. Prior to being selected by Duncan to run part of the DOE, Shelton started a for-profit education management organization that was bought by the Edison Schools. He headed the East coast division of the NewSchools Venture Fund, worked at the Gates Foundation, and dabbled in for-profit education yet again at Mike Miliken's Knowledge Universe. McKinsey, Edison, NSVF, Gates, Knowledge Universe: and now he gets $650 million to drive reform.
The various MBA schools that teach education entrepreneurship (mostly Stanford and Harvard) publish their studies about start-up organizations in the for-profit and non-profit field. Wanna know what happened with Shelton's creation, LearnNow? A Stanford case study (for academics, not to be viewed by the general public: here is a link to purchase the article for $6.95) discusses the fiasco. LearnNow had received some funding from the NewSchools Venture Fund back in 2000. NSVF quickly realized they were way in over their heads in attempting the for-profit model (Knowledge Universe was the original funder). LearnNow wasn't making any money and the need for expansion (and profits) left the company on the brink of collapse. NSVF came to the rescue less than a year after their initial investment to help the group raise more funding. NSVF couldn't let the EMO fail because it would hurt the NSVF brand and the charter school movement as a whole (always good to have deep pockets behind you). They recruited Dan Pianko - a former Goldman Sachs employee, I kid you not - to work out the finances and agreed to have regular contact with NSVF regarding budgets, etc. In the end, NSVF realized it was best to exit the for-profit EMO market. They sold their LearnNow stock to the Edison Schools crew (making a little profit despite the model's failure) and have not invested in for-profit schools ever since. Shelton managed to climb the corporate ladder after this dramatically unsuccessful "innovation." He had the backing of corporate America and the philanthrocapital world in his previous work; now he gets a hefty chunk of taxpayer dollars.
Posted by Ken Libby at 2:38 PM