In 2009, the worst economic year for working people since the Great Depression, the top 25 hedge fund managers walked off with an average of $1 billion each. With the money those 25 people "earned," we could have hired 658,000 entry level teachers. (They make about $38,000 a year, including benefits.) Those educators could have brought along over 13 million young people, assuming a class size of 20. That's some value.
And so it is heartwarming to see the deep generosity of these grand thievers going to fund the pay-per-score plan that the Billionaire Boys Club has sold to DC teachers, who have not had a pay raise in 3 years. Of course, the IRS is paying them for their generosity. From Bill Turque:
A Houston foundation created by a billionaire hedge fund manager who began his career as a trader for Enron would finance part of the proposed contract between DCPS and the Washington Teachers' Union. The Laura and John Arnold Foundation would provide $10 million of the $64.5 million Rhee has assembled to pay for teacher raises and performance bonuses under the tentative agreement announced this week.
While a couple of the names in the private funding mix, Eli and Edythe Broad and the Walton Family Foundation, are highly recognizable brands in the world of educational philanthropy, the Arnolds are relatively new players. Their IRS Form 990 for 2008 lists a $5 million donation to Baylor College of Medicine and another $5 million to Texas Children's Hospital. Published reports say they provided $10 million for a major expansion of the KIPP and YES public charter schools in Houston.
Their money for the teachers' contract would be limited to underwriting the merit pay program that Rhee plans to initiate this fall, according to Cate Swinburn, president and executive director of the D.C. Public Education Fund, the non-profit that will manage the private grants for DCPS. The same restriction applies to the $10 million pledged by Broad. The $44.5 million from the Walton and Robertson foundations could be used for both bonuses and the 20 percent salary increase that is also built into the contract.
The Arnold Foundation's executive director, Natasha Kamrani, is former executive director of the Houston office of Teach for America, the organization where Rhee began her educational career.
If the contract is approved by union members and the D.C. Council, District teachers will be underwritten in part by one of the more remarkable business stories of the last few years. Arnold, 35, is the second youngest multi-billionaire in the U.S., behind Facebook's Mark Zuckerberg, according to Fortune. His hedge fund, Centaurus Energy, which manages more than $5 billion in assets, has never returned less than 50 percent in seven years of business. Hired by Enron out of Vanderbilt, he became a star trading natural gas contracts. When the historic scandal brought Enron down--Arnold had nothing to do with it--he founded Centaurus. Fortune said he earned $1 billion a few years ago by betting that natural gas prices would go down, and they did.A phone mssage to his foundation Thursday was not returned.