Dallas, Texas (Wikimedia Commons)

Big Dallas Plunder

Dallas business interests stacked the school board. Now, a rule change could open the door for wholesale school privatization.

BY George Joseph

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As Dallas Mayor Mike Rawlings noted approvingly, home rule creates a “blank slate” to completely transform the district’s structure and governance. ... Among the options would be for the proposal to turn some or all schools over to private charter-school operators.

Dallas school board elections are generally lackadaisical affairs. In 2011, the school board elections were cancelled for lack of interest, as all three candidates ran unopposed. But since the beginning of 2012, hundreds of thousands of Super PAC dollars from Dallas’ richest neighborhoods began flowing into nearly all of the district’s school board elections. 

Since 2011, Educate Dallas, a PAC backed by the Dallas Regional Chamber (the local Chamber of Commerce), has raised $661,953 in cash on hand for its school board war chest, and the Dallas-based education reform PAC Kids First, led by millionaire tech CEO Ken Barth, has raised $661,616. The majority of their donations come from Dallas’ famous aristocrats, including Barth, Ross Perot, Ray Hunt—an oil heir with a net worth of $5.8 billion—and Harlan Crow, a real estate heir and buddy of Clarence Thomas.

What made white businessmen from Dallas’ segregated northern enclaves, who typically donate to their children’s private academies, start caring about the plight of a low-income district? In Dallas Independent School District, 89 percent of students qualify for free or reduced lunch and 95.4 percent are students of color.

One hint may come from trips that the Chamber funded for school board and city council members. District records show that since at least 2011, the Chamber spent thousands on its so-called “best practices” tour—trips for city council and school board members to Denver, Houston and Los Angeles to better understand charter schools, publicly funded but privately operated institutions. Charters have been expanding in Dallas over the past 15 years, especially in the wake of the closure of 11 public schools in early 2012. And the Chamber boasts a number of charter-school operators among its members, including longtime affiliates Uplift Education and Texans CAN Academies, two of the city’s largest charter chains.

On the surface, however, stacking the school board in order to promote charter expansion wouldn’t make much sense. In Texas, open-enrollment charter schools can only be approved by the state, not the district or the school board. However, a new initiative to change district governance could open the door for Dallas to greenlight charter schools without going through the state..

On February 28, a 501(c)4 group called Support Our Public Schools, backed by Dallas’ business community, announced its intention to push the district to adopt a “Home Rule Charter,” a ballot-initiative proposal that would move the question of charter school conversion out of the hands of parents and into a district-wide election.

Dallas would be the first Texas school district to take advantage of the obscure state provision.  As Dallas Mayor Mike Rawlings noted approvingly, home rule creates a “blank slate” to completely transform the district’s structure and governance. Technically, it transform the whole district into a “charter district,” freeing its public schools from state regulations in the same way that open-enrollment charters are exempt. Depending on how the home rule proposal is written, the district could opt out of any number of state rules, from teacher salary minimums to start dates to having a school board at all. Among the options, according to the Texas Association of School Boards, would be for the proposal to turn some or all schools over to private charter-school operators.

The road to home rule is a lengthy one, however, and requires cooperation from the school board. First, either 5 percent of voters must sign a home rule petition or two-thirds of the school board must vote for home rule. Then, the school board must create a special home rule commission to draft a proposal. Last, the proposal is put to vote as a ballot initiative, and requires at least 25 percent voter turnout to pass.

Perhaps that’s why SOPS, the mayor, and other home-rule proponents have spoken only in generalities, and never discussed privatization or school board dissolution in connection with home rule.

But it’s not difficult to connect the ideological dots. The force behind the home rule campaign, Support Our Public Schools, is a 501(c)4 advocacy group led by Wilton Hollins, a prominent member of Regional Chamber’s Educate Dallas PAC. That’s why some critics see the new push for “home rule” as the next stage in a long game by business interests to push the district to open the floodgates to charter school operators.

NYU education historian and research professor Diane Ravitch tells In These Times that home rule in Dallas could “eliminate democracy so that those in power can privatize schools and turn them over to their allies: others who believe in [the] free market.”

A complete charter school takeover of the district, as in New Orleans, could mean hundreds of millions in revenue for Dallas’ education non-profits, including Uplift and other Chamber members. The Dallas Independent School District’s estimated tax revenue for the 2014-2015 school year amounts to $1.3 billion—which could flow to charter operators, were the district to be privatized. Charter critics warn, however, that such lucre could come at the expense of students’ educations. Among other problems, closing public schools and opening private charter schools has allowed cities like Chicago and New Orleans to cut personnel costs by letting go veteran teachers and hiring cheaper, often less experienced teachers.

Even without actually privatizing schools, home rule could achieve similar effects. The home rule proposal could jettison the protections for public-school teachers mandated under Texas law, which include salary minimums, due process for termination and discipline, minimum leaves of absence, lunch periods off, guaranteed planning and preparation time, and professional development. Additionally, home rule could do away with Dallas schools’ state-mandated obligations to offer counseling programs and meet certain counselor-to-student ratios.

Such a plan might be a difficult sell to voters, given the anti-charter sentiment in Dallas. Observers speculate that this is why the main advocates of home rule have been quietly pushing to make the proposal about mayoral control over the district, through an appointed (rather than elected) school board or elimination of the school board entirely. That allows the mayor to play a long game: Even if the initial charter doesn’t propose wholesale privatization or go after teacher salaries, Texas law allows amendments to be made to the passed home rule proposal after a year, by either a ballot amendment or the school board. And if Dallas’ mayor, Mike Rawlings, were to win control of the school board, there’s reason to believe he’d push charter-friendly amendments. In 2012, he told the the Dallas Morning News, “I welcome [charters] with open arms” and went on to praise Uplift’s Dallas schools as a “success.”

Three inside city sources told the Dallas Morning News that the mayor and school board trustee Mike Morath, a major force behind the home rule effort, view home rule as best chance to replace the elected school board with complete mayoral control or at least an appointed school board. One source claimed the mayor’s spokesperson told him that “the mayor would run DISD or oversee it. You wouldn’t have trustees. If you did, they wouldn’t be making decisions.”

Rawlings and Morath denied they’re seeking mayoral control in the home rule effort—or any particular outcome. However, Morath cited New Orleans, where state control over the district led to complete privatization, as a governance model worthy of considering—a stance which would seem to favor both mayoral control and charter expansion.

For Rawlings to win mayoral control, he would need a school board that would install commission members willing to take away the board’s own power. On the face of it, such an expectation would seem absurd, yet the Dallas Morning News report suggests that Rawlings and Morath were pursuing this path—even preemptively coming up with a list of names for the commission that they were sure the board would rubberstamp.

Such a swayable board would be difficult to generate overnight, so it’s fortunate for the mayor that the board is full of members backed by the Dallas Regional Chamber.

School board for sale

Dallas business PACs Educate Dallas and Dallas Kids First began pouring money into school board elections in early 2012. Their first target was board member Bruce Parrot, who had recently opposed a five-year $3 million district contract for Teach For America, a non-profit that staffs school districts with college recruits, who have studied teaching for five weeks and promise to stay for at least two years. Teach For America is funded by just about every anti-union foundation or corporation because TFA weakens teachers’ employment premiums by replacing veteran teachers, who have accumulated healthcare and pension benefits, with temps, 80 percent of whom burn out after three years. In Dallas, the school board voted 6-2 for the TFA contract the same year that a $110 million dollar funding cut pushed 700 teachers to retire and cost over a 1,000 support staff employees their jobs.

As the Dallas Observer noted in 2012, votes like this made Parrot “unpopular with business groups.” In a candidate “grading” assessment, for example, Dallas Kids First gave Parrot a D- overall, citing his rejection of Teach For America’s contract and refusal to support measures that would tie teacher compensation to standardized test performance.

So when Parrot was up for re-election in 2012, Educate Dallas and Dallas Kids First poured resources into his challenger, then-unknown candidate Dan Michiche. The two PACs contributed $20,239.97 and $26,470, respectively, to his campaign—record amounts for a school board race. In total, Michiche raised $54,479.57, a slam-dunk in the face of Parrot’s $950. Unable to compete with this funding, which went into mass negative leafleting and door-to-door campaigning by Dallas Kids First, Parrot was easily defeated.

If Parrot’s trials represent the Dallas Business community’s stick, the story of Bernadette Nutall features the carrot, dipped in greasy campaign contributions.

When Nutall first won her seat in 2009, her campaign was funded mostly by the American Federation of Teachers union’s Dallas arm, Alliance-AFT, along with small donations from district business owners, who supported her for professional experience leading summer enrichment programs for low-income students. At the beginning of her school board tenure, Nutall was a strong critic of former superintendent and education reform darling Michael Hinojosa, who was as strong advocate of TFA and was among those district officials that received free trips from the Dallas Regional Chamber to explore charter school options across the country.

But the longer Nutall has been in office, the closer she has aligned herself with the Dallas business community’s agenda. In 2011 district expense reports reveal that the Dallas Regional Chamber subsidized trips for Nutall to learn more about charter schools in Houston and Los Angeles. On January 27, 2012 she made a highly controversial decision to vote for 11 school closures, including five in her own district. Thirteen days after her vote, Educate Dallas donated to Nutall’s campaign for the first time, with a $10,000 gift. By the end of 2012, Educate Dallas and Kids First had, respectively, given Nutall $20,239.97 and $25,413.09; overall, reported contributions to the Nutall campaign nearly quadrupled from the previous year, to $54,527.06

The money helped Nutall trounce her opponent Damarcus Offord, a recent high school graduate. He demanded to know (during the campaign) if there was a connection between her highly controversial decision to vote the school closures and the sudden corporate support. In an interview with In These Times, Nutall claimed she had no conversations with Educate Dallas at any point, saying, “I don’t play that way, my vote is not for sale.”

“I'm not sure why I received so much in 2012. In 2009, I didn't really garner any support from the North Dallas sector,” Nutall tells In These Times. “My message didn't [change], and hasn't changed. I put the needs of all children above those of any special interest groups. I am careful to list all contributions to my campaign so everyone knows who supported me, and my message.”

But Nutall’s ideology did apparently shift during her term on the board. It’s not only her votes to close down public schools and bring in TFA recruits; for the Citizens Budget Review Commission, set up in 2011 to ensure district contracts were necessary purchases rather than nepotistic gifts, Nutall selected Todd Williams, a clear conflict of interest, given his positions as Teach For America’s Dallas regional advisor and former board member of Uplift Education, one of Dallas’ prominent charter chains.

Community opinion on Nutall remains mixed. Hobie Hukill, a current DISD librarian, argues to In These Times, “At first she thought they [the business leaders] were harmless, but she’s definitely trying to do the right thing.”

According to Joyce Foreman, a recently elected trustee, once Nutall started questioning the district’s firings of principals she knew, the business community cut her off. Indeed, in the last two years, Nutall has received no more contributions from Educate Dallas or Dallas Kids First.

Yet overall, eight of the nine current board members have received lucrative endorsements from Educate Dallas over the last two years.

Enter the leviathan: Support Our Public Schools

SOPS, the group campaigning for home rule, presents itself as an independent grassroots advocacy organization. An investigation of who started, leads and funds SOPS leaves little doubt, however, that it is an ally or even an extension of the Dallas business community. One unnamed official said to the Dallas Morning News, “It is orchestrated. I hate to see stuff that’s not grassroots being portrayed as it is.”

SOPS’ leaders are all are affiliated with the Dallas Regional Chamber or its PAC, Educate Dallas, of which SOPS president Wilton Hollins is a prominent member.

No one knows who exactly funds the group. As a 501(c)4, SOPS, unlike Super PACs, does not have to disclose its donors and can spend as much as it wants on political projects, as long as 50 percent of its spending is not expressly political. SOPS has attracted local controversy because of its refusal to disclose its financial backers. Thus far, only the billionaire former Enron executive John Arnold has been open about his support for the group, which his foundation lists as having received somewhere between $100,000-$499,999.

According to a searing Rolling Stone profile by Matt Taibbi, Arnold retired at 38, after a successful career looting Enron’s pension fund and making about $3 billion as the world’s foremost natural gas trader, in order to pursue his true passion in life: public sector pension reform. Since his retirement, with Tea Party friends like Dick Armey, Arnold has funded efforts to weaken public sector workers’ pensions from San Jose to Rhode Island.

But his passion for privatization goes beyond his pension lobbying efforts. An In These Times review of Arnold’s foundation expenditures finds that he has spent $20,223,700 on Teach For America, $7,000,000 on Michelle Rhee’s Students First, and $2,167,349 on KIPP charter schools—education reform groups that have spearheaded the massive charter school expansion in Arnold’s native Houston.

Though Arnold is just one of SOPS’ small circle of donors, the rest of whom have refused to disclose their identities or intentions, his public and financial support for charter schools gives a strong hint as to SOPS’ leanings.

Morath: The mastermind

Mike Morath is often understood as the bridge between the Dallas Regional Chamber’s education reform initiatives and Support Our Public Schools. As a district trustee, Morath represents North Dallas and Lakewood, the city’s wealthiest areas, where he has held office unopposed since 2011. Though he did not come from Dallas’ old money clans, Morath emerged in Dallas as a successful entrepreneur and quickly became close with the Dallas Regional Chamber, which saw potential in him for his passion for corporate efficiency and teacher evaluation. According to the Dallas Morning News, the Chamber introduced him to top school district officials as part of a Chamber-organized “leadership class.” Morath’s initial run for school board in 2011 coincided with the creation of the Chamber-backed PAC Educate Dallas, and despite running uncontested, he received the PAC’s first-ever contribution, a gift of $3,000. He’s had the PAC’s endorsement ever since.

Buoyed by such powerful business interests, Morath has worked tirelessly behind the scenes to push through home rule.

In 2011, Morath was the first to call attention to the Texas Education Code’s home rule provision. At first Morath claimed he had “nothing to do with Support Our Public Schools,” but three days after a Dallas Morning News report revealed he was working with the Mayor behind the scenes to prearrange the home rule commission’s membership, he issued a statement saying he had encouraged its creation. But his role seemed to constitute more than encouragement. Morath has admitted to coming up with the home rule idea and suggesting it to the founders of SOPS. He was also the one to introduce SOPS to both Mayor Mike Rawlings and the billionaire who would become a key funder, John Arnold.

According to inside city sources, Morath advocated a home rule charter that would reform the trustee system, allowing for voter recalls and making some trustee positions appointed rather than elected. Later, he backed off that stance, claiming he sought no specific results through home rule. But according to one of the unnamed officials in The Dallas Morning News investigation, Morath and Rawlings “should be straightforward that they are coming after the trustees.”

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George Joseph is a reporter focusing on education and labor issues in New York City. Follow him on Twitter at @georgejoseph94.

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