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How to waste another $2 million... Despite protests, at its December 14, 2011 meeting, the Chicago Board of Education approved wasting another $2 million on 'virtual' schools even after two months of investigative exposes, including a major story on the front page of The New York Times

George N. Schmidt - December 19, 2011

When all was said and done after the protests that postponed the business of the Chicago Board of Education at its December 14, 2011 meeting, the Board voted to waste several million dollars of the taxpayers' money by expanding charter schools that are failing (even by CPS measures) and by adding another $2 million to its costs for so-called "virtual" learning experiments. This latter came as part of an omnibus vote on a number of motions, including Board Report 11-1214-PR8, which was entitled: "Approve Agreements with Various Vendors for Virtual Learning Online Courses and Support Services." The specific content of the Board Report (which is one CPS calls a motion to the Board) stated that CPS would pay $1,942,000 to Illinois Virtual Learning (of Peoria Illinois) and K12 Virtual Schools LLC (or Herndon, Virginia).

DECEMBER 14, 2011. Above, the members of the Chicago Board of Education and executives pack their papers for what many are now calling "The Great Scurrying..." (following a Chicago Tribune headline that was later suppressed). After Board member Mahalia Hines made a hasty motion to go into Closed Session as the Mic Check continued, the Board members were quickly advised not to leave any papers out for the masses to purloin. Above, back tow, Board members Jesse Ruiz (a downtown lawyer), David Vitale (a miliionaire banker), and Penny Pritzker (a billionaire plunderer who helped pioneer predtatory lending — via her Superior Bank — in Chicago a decade before it became the norm with groups like Washington Mutual and other banks) quickly pack their stuff. Front roe, Board Attorney Patrick Rocks, and Board "Chief Education Officer" Noemi Donoso. The Board's student members, at left, was almost abandoned, but ultimately scurried with the Board and bureaucrats, rather than stay with the students, teachers and parents. Substance photo by George N. Schmidt. Although reporters who remained for that part of the meeting heard the "Quickies" the Board was approving, as of the morning of December 19, 2011, the Board's Website (www.cps.edu) still had refused to publish the "Agenda of Action" (which lists everything that was actually approved from the public agenda), so there may have been Board members who abstained on the vote. Also worth noting is that all discussions the Board holds during "Executive (Closed) Session" have been kept secret by the Board since July 1, 1995, in violation of just about every ethics proposal made in Illinois and Chicago, and of course of all the "ethics" talk from Mayor Rahm Emanuel, who appointed the current members of the Board.

But it is worth quoting the New York Times investigation that was published the day before Chicago's school board voted to dump another $2 million into virtual schools, most notably K12.

"The New York Times has spent several months examining this idea [of virtual learning as a cost effective way of providing education], focusing on K12 Inc," the Times reported in its December 13 print edition. "A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed... Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards."

DECEMBER 14, 2011. The Great Scurrying in progess. Board members Jesse Ruiz, Penny Pritzker, David Vitale, and Andrea Zopp, arms full of documents, head for the lifeboats as the Mic Check continues. In the foreground, aides help Board Secretary Estale Beltran pack for the evacuation. Substance photo by George N. Schmidt.CPS, for all of the recent talk about "transparency," asked nothing of K12 at the time of its December 14, 2011 vote. The Board Report was signed, as a recommendation, by Chief Executive Officer Jean-Claude Brizard and approved, thereby becoming policy, by a vote of the Board on the afternoon of December 14, 2011. Since June 15, 2011, when the new Board of Education first met (and voted that it was too poor to pay contractual raises for union workers) talk about "transparency" from the administration of Mayor Rahm Emanuel and, at CPS. The talk has been by Jean-Claude Brizard, the CEO, by other officials during public events and at Board meetings, and by Board members, most notably David Vitale, the Board President, who constantly talks about basing policy on "data" and "evidence."

Yet it is impossible to find anywhere in the Board's materials a reason, beyond the boilerplate, for hiring these two outfits, especially given the scandals that are growing around K12. But the motion passed, spending nearly $2 million (additional) dollars on more "virtual learning" without discussion or debate. The six members of the Board of Education who voted vote it were: Henry Bienen, Mahalia Hines, Jess Ruiz, Penny Pritzker, David Vitale and Andrea Zopp. None had anything to say (in public at least) about the scandals surrounding virtual learning. But everywhere else in the USA, "virtual" schooling is becoming a synonym for corruption, and no outfit in the "virtual" field is more corrupt, according to recent news investigations, than "K12".

Following the Great Scurrying, parents, teachers, and community leaders conducted a Peoples Board of Education meeting, telling their stories to the empty seats at CPS headquarters. By the rules of democracy, no one with an important story to tell was cut off abruptly and rudely by the Board after a mere two minutes, reflecting the fact that the people at the podium knew more about the realities of Chicago's communities and public schools than the millionaires and billionaires on the Board. Substance photo by George N. Schmidt.During the six weeks prior to the Board of Education's December 14, 2011, vote, three major exposes on the corruption of virtual learning have been published in the nation's major or local media. The longest, an almost unprecedented Page One story which jumped across two full inside pages, appeared in The New York Times in print on December 13, 2011. The others were in New Jersey online (during a debate in New Jersey over paying more money for virtual schools) and in The Nation. All are reprinted below here. All were available to the members of the Chicago Board of Education prior to their December 14 vote.

NEW YORK TIMES INVESTIGATION OF VIRTUAL LEARNING. FIRST PUBLISHED IN PRINT EDITION OF DECEMBER 13, 2011, THE DAY BEFORE CPS VOTED TO SPEND ANOTHER $2 MILLION

Profits and Questions at Online Charter Schools, By STEPHANIE SAUL, Published: December 12, 2011 (on line) and in the print edition December 13, 2011.

Nearly 60 percent of its students are behind grade level in math. Nearly 50 percent trail in reading. A third do not graduate on time. And hundreds of children, from kindergartners to seniors, withdraw within months after they enroll.

By Wall Street standards, though, Agora is a remarkable success that has helped enrich K12 Inc., the publicly traded company that manages the school. And the entire enterprise is paid for by taxpayers.

DECEMBER 14, 2011. Although he missed The Great Scurrying, Board member Henry Bienen (above) showed up to vote in favor of all the charter school and virtual learning scams on the Board's agenda. Bienen, unlike most of the Board members and the six-figure bureaucrats he has voted to appoint, devotes his time to cleaning his glasses and fidgiting while people speak. The majority of the Board members and executives devote their time while ignoring the public to their Blackberries and to educational activities such as Angry Birds. Substance photo by George N. Schmidt.Agora is one of the largest in a portfolio of similar public schools across the country run by K12. Eight other for-profit companies also run online public elementary and high schools, enrolling a large chunk of the more than 200,000 full-time cyberpupils in the United States.

The pupils work from their homes, in some cases hundreds of miles from their teachers. There is no cafeteria, no gym and no playground. Teachers communicate with students by phone or in simulated classrooms on the Web. But while the notion of an online school evokes cutting-edge methods, much of the work is completed the old-fashioned way, with a pencil and paper while seated at a desk.

Kids mean money. Agora is expecting income of $72 million this school year, accounting for more than 10 percent of the total anticipated revenues of K12, the biggest player in the online-school business. The second-largest, Connections Education, with revenues estimated at $190 million, was bought this year by the education and publishing giant Pearson for $400 million.

The business taps into a formidable coalition of private groups and officials promoting nontraditional forms of public education. The growth of for-profit online schools, one of the more overtly commercial segments of the school choice movement, is rooted in the theory that corporate efficiencies combined with the Internet can revolutionize public education, offering high quality at reduced cost.

The New York Times has spent several months examining this idea, focusing on K12 Inc. A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed.

Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.

Board Attorney Patrick Rocks (foreground) is one of the few survivors of the Board administration that slavishly followed the whims of former Mayor Richard M. Daley. The others in the photograph above had nothing to do with CPS as late as April 2011. They are, left to right, Penny Pritzker, Noemi Donoso, and Andrea Zopp, who is carefully studying her Blackberry while people plead for their schools and their children's lives. Substance photo by George N. Schmidt.Current and former staff members of K12 Inc. schools say problems begin with intense recruitment efforts that fail to filter out students who are not suited for the program, which requires strong parental commitment and self-motivated students. Online schools typically are characterized by high rates of withdrawal.

Teachers have had to take on more and more students, relaxing rigor and achievement along the way, according to interviews. While teachers do not have the burden of a full day of classes, they field questions from families, monitor students’ progress and review and grade schoolwork. Complaints about low pay and high class loads — with some high school teachers managing more than 250 students — have prompted a unionization battle at Agora, which has offices in Wayne, Pa.

A look at a forthcoming study by researchers at Western Michigan University and the National Education Policy Center shows that only a third of K12’s schools achieved adequate yearly progress, the measurement mandated by federal No Child Left Behind legislation.

Some teachers at K12 schools said they felt pressured to pass students who did little work. Teachers have also questioned why some students who did no class work were allowed to remain on school rosters, potentially allowing the company to continue receiving public money for them. State auditors found that the K12-run Colorado Virtual Academy counted about 120 students for state reimbursement whose enrollment could not be verified or who did not meet Colorado residency requirements. Some had never logged in.

“What we’re talking about here is the financialization of public education,” said Alex Molnar, a research professor at the University of Colorado Boulder School of Education who is affiliated with the education policy center. “These folks are fundamentally trying to do to public education what the banks did with home mortgages.”

The online companies can tailor their programs by reducing curriculum and teachers. During a presentation at the Virginia legislature this year, a representative of Connections explained that its services were available at three price points per student:

Option A: $7,500, a student-teacher ratio of 35-40 to 1, and an average teacher salary of $45,000.

Option B: $6,500, a student-teacher ratio of 50 to 1, with less experienced teachers paid $40,000.

Option C: $4,800 and a student-teacher ratio of 60 to 1, as well as a narrower curriculum.

Despite lower operating costs, the online companies collect nearly as much taxpayer money in some states as brick-and-mortar charter schools. In Pennsylvania, about 30,000 students are enrolled in online schools at an average cost of about $10,000 per student. The state auditor general, Jack Wagner, said that is double or more what it costs the companies to educate those children online.

“It’s extremely unfair for the taxpayer to be paying for additional expenses, such as advertising,” Mr. Wagner said. Much of the public money also goes toward lobbying state officials, an activity that Ronald J. Packard, chief executive of K12, has called a “core competency” of the company.

In all, for-profit educational management companies run 79 online schools around the country, according to the study by researchers at Western Michigan University.

Many educators believe there is a place for full-time virtual learning for children whose pace is extremely accelerated or those with behavioral or other issues, like teenage mothers who need to stay home with their babies. But for most children, particularly in the elementary grades, the school experience should not be replaced with online learning, they say.

“The early development of children requires lots of interaction with other children for purposes of socialization, developing collaboration and teamwork, and self-definition,” said Irving Hamer Jr., deputy superintendent of Memphis city schools.

In an interview at K12’s headquarters in Herndon, Va., Mr. Packard said, “We’re here to help children, and that is our overriding purpose and we want to do it as well and efficiently as possible.”

He acknowledged what he called a “degradation” in K12’s test scores, but he argued that they are an inaccurate measure because many students are already behind when they arrive. “The type of child now coming to an online school, 75 percent of those kids coming in are behind more than one grade level,” Mr. Packard said.

He said K12 continues to invest in its curriculum and has developed interventions, like a remedial math program, to help struggling students.

“Kids have been shackled to their brick-and-mortar school down the block for too long,” Mr. Packard has said repeatedly, adding that for the first time, every child, regardless of where he or she lives, has a choice.

Some educators are questioning its value. “It’s choice,” said Thomas L. Seidenberger, superintendent of the East Penn School District in Pennsylvania, which is outperforming Agora and other online schools its students attend. “What about a bad choice?’”

The Cost

William Bennett (above), former U.S. Secretary of Education, helped begin K12 but ran into trouble when racist comments he made went viral on the Internet and he had to withdraw as the "public face" of K12. Bennett was one of the originators of the current attack on public education. During the 1980s, he declared a number of urban public schools — most notably Chicago's — as "America's Worst." Following Bennett's memorable quote, the Chicago Tribune dispatched a group of reporters to prove Bennett's charge and launch the current corporate "school reform" movement which the Tribune still dictates much of. In 1988, the Tribune published its only book of the decade, entitled "Chicago's Schools: Worst in America." After the Tribune and the right wing got mayoral control in place in Chicago with the passage of the Amendatory Act in 1995, Bennett came to Chicago and joined then CEO Paul Vallas for a discussion of "school reform" at Jones High School. When asked by a Substance reporter whether Chicago's schools were still "America's Worst", Bennet answered of course not. Once CPS had mayoral control under Richard M. Daley and former Democratic Party functionary Paul Vallas (who had never run a business anywhere beyond a small family restaurant), Bennett immediately declared that CPS had been saved from being "America's Worst." When asked for the evidence, Bennett's response, sitting next to Vallas, was that it was obvious. The original pitchman for K12 was William J. Bennett, the former education secretary who helped found the company in 2000. At the time, Mr. Bennett said he viewed online schools as a haven for shy children, those worried about being exposed to drugs and even those with “terrible acne.”

The company planned to sell an education package directly to parents who wanted to home-school their children. But within months, K12 had decided to tap into public education dollars.

As the company’s product has become more popular, the cost has soared.

Mr. Bennett, who left the company in 2005, originally said a home-schooling package would cost about $1,000 per student per year. Parents who wanted teacher support would pay more.

Today, K12 receives an average of $5,500 to $6,000 per student from state and local governments. The schools also receive money for federal programs.

Because online schools do not collect every type of financing that goes to traditional public schools, Mr. Packard contends that his company’s schools, on a national average, cost taxpayers 40 percent less per student.

But online schools have negligible building costs and cheaper labor costs, partly because they pay teachers low wages, records and interviews show. Parents, called “learning coaches,” do much of the teaching, prompting critics to argue that states are essentially subsidizing home schooling.

“Any high school student taking economics could immediately recognize the fundamental flaws in their pricing structure,” said John E. Freund III, a Pennsylvania lawyer who represents a number of districts who are losing students to the online schools and the public financing that goes with them.

Because many states prohibit for-profit public education, the management companies for virtual schools run schools under contract with public districts or nonprofit charter schools, which also receive public money. But companies like K12 are almost fully in charge — devising curriculum, hiring teachers and principals and evaluating student performance.

Another way K12 maximizes its income is to establish schools in poor districts, which receive larger subsidies in some states. The company administers one of K12’s newest schools from Union County, Tenn., a mountainous Appalachian enclave where nearly a quarter of the residents live in poverty.

The Tennessee Virtual Academy is technically part of the local school district, which receives more per pupil from the state than most other districts in Tennessee. But of the school’s 1,800 pupils, few are actually from Union County.

Out of the state money, the Union County schools will get an administrative fee of about $400,000. K12 stands to collect almost $10 million to staff and manage the school. Dozens of other Tennessee counties, however, lost state financing when some of their students elected to go to the virtual school.

The online schools have enabled entrepreneurs like Michael R. Milken, whose company Knowledge Universe started K12 a decade ago and who remains an investor, to use education as a source of government-financed business, much as military contractors have capitalized on Pentagon spending.

Mr. Packard reports to investors every year with higher enrollment numbers and sales. On Nov. 15, he announced that the company’s online schools had enrolled more than 94,000 students. “I think online schools are becoming more mainstream,” said Mr. Packard, who was paid $5 million this year.

A sizable portion of the public money collected by K12 is rolled back into generating more business, a common practice by for-profit companies that nevertheless raises questions when the money is intended to educate schoolchildren. K12 spent $26.5 million on advertising in 2010, according to an analysis prepared for The New York Times by Kantar Media.

“Some of the cyber charter schools have fairly aggressive recruitment campaigns,” said Jim Buckheit, executive director of the Pennsylvania Association of School Administrators. “They have vans, billboards, TV and radio ads. They set up recruitment meetings in area hotels and invite parents to come.”

K12 has run thousands of the sessions, where part of the pitch is supplying computers and subsidized Internet connections for qualifying families. Dr. Seidenberger said he was surprised to see ads for online schools in the outfield at Coca-Cola Park, the stadium of the Lehigh Valley IronPigs minor league baseball team.

The Churn

Parents who become interested in K12’s schools can follow up by calling 866 numbers, which connect them to a call center in Herndon.

School employees who have visited the center have described a high-pressured sales environment aimed at one thing: enrollment.

Some workers, called “enrollment pals,” are paid bonuses based on the number of students they sign up, according to former employees knowledgeable of the operations. Mr. Packard’s annual bonus is also partly tied to enrollment.

Because the online schools are public, students cannot legally be denied enrollment. But former K12 employees said the aggressive and impersonal enrollment process lures students who are not a good fit.

“When you have the television and the Xbox and no parental figure at home, sometimes it’s hard to do your schoolwork,” said one Agora teacher, who asked not to be identified because of concerns over job safety.

The constant cycle of enrollment and withdrawal, called the churn rate, appears to be a problem at many schools. Records Agora filed with Pennsylvania reveal that 2,688 students withdrew during the 2009-10 school year. At the same time, K12 continued to sign up new students. Enrollment at the end of the year — 4,890 — was 170 students more than at the beginning, obscuring the high number of withdrawals.

Gary Miron, a professor of education at Western Michigan University who researches for-profit school management companies, called the turnover troubling. “The kids enroll. You get the money, the kids disappear,” he said.

A review of K12 management contracts reveals that the company may still benefit from students who end up leaving. Under its contracts with some charter schools, K12 charges “upfront” fees for books and other supplies.

According to an Agora price list for the 2009-10 school year, K12’s upfront billings for elementary and middle school students were $60 a course for online services, $75 a course for materials and $75 per student for computers. With students frequently enrolled in six courses, the fees could surpass $800.

Under some of K12’s contracts, only a portion of the fees would be returned if students withdrew quickly. Mr. Packard has said the company does not make money if students leave because of the cost of the materials and shipping.

The state audit of the Colorado Virtual Academy, which found that the state paid for students who were not attending the school, ordered the reimbursement of more than $800,000.

With retention a problem, some teachers said they were under pressure to pass students with marginal performance and attendance.

Students need simply to log in to be marked present for the day, according to Agora teachers and administrators.

For most students, attendance is recommended but not mandatory at what are called synchronous sessions — when they can interact online with the teacher. A new grading policy states that students who do not turn in work will be given a “50” rather than a zero. Several teachers said assignments were frequently open for unlimited retakes.

Agora records from last year show that failing students were told they could make up their work. “All students with a course average of 40 to 59 percent were called and told all assignments past due could be made up without penalty,” according to minutes from a school board meeting. Similar calls were going out to students with averages of 0 to 39 percent.

Theresa Henderson, an Agora teacher until June 2010 and the mother of four of its students, said she was among faculty members who requested a stronger policy to dismiss students who were not doing their work.

Several current and former staff members said that a lax policy had allowed students to remain on the rolls even when they failed to log in for days. Officials of the Elizabeth Forward School District in western Pennsylvania complained that Agora had billed the district for students who were not attending.

One of them was a girl who had missed 55 days but was still on the school’s roster, according to Margaret Boucher, assistant business manager at Elizabeth Forward.

The school has cracked down on disengaged students, according to a statement by its director, Sharon Williams, who said a policy adopted last December mandates attendance at online classes for those students who do not log in, repeatedly fail to complete lessons or are failing three courses. She said the school follows state law by removing students who are absent for 10 consecutive days.

Poor attendance and disengaged students have been such a problem that Agora dismissed 600 students last year for nonattendance, 149 of them just before state tests were administered, according to school board minutes.

The Students and Parents

With K12 estimating the market for its schools as high as $15 billion, the company’s manifest destiny is to expand across the United States. Its newest conquest is Tennessee, where the company got legislative approval last May and began holding information sessions in July.

By fall, 1,800 students had enrolled in the Tennessee Virtual Academy.

About 75 of them came from the struggling Memphis city school system, including the children of Denita Alhammadi.

In a neighborhood teetering on the edge of middle class, Ms. Alhammadi has converted her living room into a classroom. Two desks are for her children, Romeo, 13, and Yasmine, 8. Another is for Ms. Alhammadi, a former Army supply officer who is also studying online, through Kaplan University.

Within weeks of attending a K12 information session, Ms. Alhammadi had become parent and teacher, wrapped into one. She spends as much as six hours a day as the official “learning coach” for her children.

Like many parents who move their children to online schools, she had worried about violence. But no single reason leads families to make the switch. The students are a broadly diverse group, ranging from entertainers and athletes in training to children with cancer, seizure disorders, peanut allergies or behavioral problems. Some have been expelled from regular schools. In many cases their parents are simply dissatisfied.

Kathryn Ubiarco, whose son and daughter are also enrolled in Tennessee, said that her daughter’s school in Memphis had not been teaching her to read. “There’s no way to come up with the B that she got in reading last year,” Ms. Ubiarco said. “The child can’t read.” She believes the virtual school curriculum is more rigorous.

A lesson from a middle school world history class focuses on the history of the calendar and the recording of time. Intended to take one hour, the lesson opens online with an illustrated introduction. A video explains how time zones vary around the globe. After reading from a textbook, students define terms in a written journal. Then, the parent helps chart a timeline of the student’s own life.

The student can click on other online resources — flashcards, three timelines, two games and links to more than 20 other Web sites.

Students say the games are fun. They may encounter problems, though, when navigating the links. Of more than 20 links in the history lesson, five were not working on a recent day. Several linked to commercial sites including the History Channel and Yahoo Kids.

Students must score an 80 on an online assessment to move to the next lesson.

Some teachers have complained that it can be difficult to determine whether students are actually doing the work, or getting help from their parents or others. “Virtual schools offer much greater opportunity for students to obtain credit for work they did not do themselves,” said a report in October from the National Education Policy Center, which receives financing from the National Education Association.

Ms. Alhammadi, who runs her tiny school like boot camp, has hidden Romeo’s computer login so she has control. Otherwise, he would skip the lessons and move straight to the online test — a habit cited by critics of K12’s curriculum.

As two frisky cats run back and forth, Romeo raises his hand — a formality required by his mother — and asks to leave the room. He returns with headphones and plugs them into his computer. As he lip syncs Rihanna’s hit “Umbrella” it becomes clear that Romeo is not listening to any lesson. “I concentrate better with my music,” he says.

On his computer screen, a series of multiple choice questions ask him to select the correct answer to algebraic equations using negative numbers. Romeo scores a 67 percent.

When Romeo moves to science, he misses a question on the definition of matter.

“Romeo, Romeo,” his mother says. “If you had been studying appropriately, you would have found out that there are lots of properties of matter. And you got to take all those elements to build matter. Because elements are gas, solids, liquid.”

Romeo is scheduled for a virtual session with his assigned teacher and class at 1 p.m. But when he signs into the class, no one else is there. “Wow, the room is completely empty,” he says. He types, “Anyone here?” There is no response.

The Teachers

The monthly meeting of the Agora Cyber Charter School board of trustees is live on Blackboard, the same platform students and teachers use for class. During the November meeting, an elementary teacher, Jessica Long, placed a checkmark by her name, indicating she wanted to speak. Then she challenged school figures showing its student-to-teacher ratio is 49 to 1.

“I know on the elementary level we have anywhere from 70 to 100,” Ms. Long said. “I don’t know anyone who has 50 students.”

Some teachers said they were initially attracted to K12 by the flexibility of working from home, in some cases allowing them to take care of their own children while teaching.

Gwen Schwartz, an Indiana University graduate who teaches for the Tennessee Virtual Academy, works from her home in a remote area of eastern Tennessee while her children are next door with their grandparents. In addition to saving on child care, Ms. Schwartz can save on commuting costs and clothing.

But many teachers said the job had become less desirable as the company increased enrollment, particularly because pay at many K12 schools starts in the low 30s — low even for online schools. Some class sizes have become unwieldy, they said, requiring 60-hour weeks and compromising instruction.

At Agora, enrollment has reached 8,836, up from 6,323 in May, according to figures released by the school. As of late November, the total number of staff members — 408 — was lower than last year. Some high school teachers said they were managing as many as 270 students, even though they had been told they would have 150. Agora officials said last week that they hired 25 teachers in the past couple of weeks.

Some Agora teachers have been asked to take on extra students at the rate of $1 per student, per day, according to a newsletter from the Pennsylvania State Education Association.

In interviews, former teachers at Ohio Virtual Academy and Colorado Virtual Academy also complained of bigger class loads, with elementary teachers who once handled 40 to 50 pupils now supervising 75. A teacher with an elementary class that size and a 40-hour workweek could devote little more than 30 minutes a week to each student.

Mary Ravanelli, a former teacher at Ohio Virtual Academy, said she oversaw more than 70 students at a time, answering calls from 8 a.m. to 5 p.m., updating parents on students’ progress and attending various school outings. “We’d actually meet our students several times a year,” she said.

With teacher salaries and benefits the biggest cost to K12, increasing student-to-teacher ratios is an easy way for the company to increase profits. Ms. Henderson, the former Agora teacher and mother of four students, said the ultimate losers are the children.

“What has happened now in honors literature courses, the teachers are not able to keep up with 300 students, so they’ll just cut curriculum. The kids are losing out,” she said. “This past week my son was exempted from ‘The Great Gatsby’ because of the workload of the teacher.”

Politics

“Choice” is a mantra of the charter school movement, which promotes competition as a way of compelling traditional public schools to improve. The for-profit companies that operate some charter and online schools take the idea a step further by arguing that private business models are more efficient than public school systems.

Together, the groups have formed a lobbying juggernaut in state capitals.

In Pennsylvania, where K12 Inc. collects about 10 percent of its revenues, the company has spent $681,000 on lobbying since 2007. The company also has friends in high places. Charles Zogby, the state’s budget secretary, had been senior vice president of education and policy for K12. In a statement, Mr. Zogby said he still owned a small number of K12 shares, but did not make decisions specifically affecting online schools.

An analysis by the National Institute on Money in State Politics concluded that K12 and its employees had also contributed nearly $500,000 to state political candidates across the country from 2004 to 2010.

One of the industry’s most persuasive promotional tools has been the young children who show up en masse at hearings to support online-school legislation. They are mobilized by groups tied to online schools. Records show that at least some receive industry funding.

When Karen Beyer, then a Pennsylvania state representative, sponsored a bill in 2007 to cut financing to online schools, about 700 people turned out for one hearing. Mr. Freund, the Pennsylvania education lawyer, said the room was “packed with kids.”

“They had on different colored T-shirts representing their cyber schools,” he added.

One of the organizers of such turnouts has been the Pennsylvania Families for Public Cyber Schools. Records show that the group, which gets money both from K12 and Connections Education, has spent about $250,000 on lobbying in the past five years.

Similar family organizations have cropped up across the country.

Former State Representative Stephen Dyer became suspicious when members of the benignly named organization My School, My Choice paraded through his northeastern Ohio district carrying signs attacking him: “Why Won’t Rep. Stephen Dyer let parents choose the best education for their kids?”

The protest was prompted by questions Mr. Dyer had raised over the state’s financing formula for charter and online schools. The group describes itself as a coalition of parents, teachers and employees of the schools. But Mr. Dyer said that his wife questioned the people carrying the signs and found out they were paid temp agency workers.

A telephone call to a toll-free number on the Web site for My School, My Choice was returned by Mark Weaver, a Columbus lawyer and political consultant with Republican ties dating back to the Reagan administration.

Mr. Weaver said the group’s crowning achievement was a 2009 rally against legislation in Ohio that would limit school choice. “We put 4,500 people on the statehouse lawn,” he said. But he declined to answer questions about the group’s leadership and financing.

Documents incorporating the organization provide clues. The forms name one of the group’s founders as Tim Dirrim, a Huntington National Bank employee who serves as board president of the Ohio Virtual Academy, which is managed by K-12 and receives more than $60 million a year from the state. Mr. Dirrim said he knew little about My School, My Choice and was not aware of the campaign against Mr. Dyer.

Much of the Ohio Virtual Academy’s money goes through an account at Huntington National, according to the Ohio auditor’s office. Mr. Dirrim said the banking arrangement was made before he joined the board and that he did not make decisions relating to the bank’s account with the school.

The Results

Mr. Packard has repeatedly delivered upbeat assessments to Wall Street about the progress of K12 Inc. students, even as many schools were performing poorly on state tests.

In a conference in March sponsored by the investment firm Morgan Stanley, Mr. Packard said that “our kids are doing as well or better than the average child in a brick-and-mortar school.”

During an investment analysts call in October, Mr. Packard boasted about results at Agora, calling them “significantly higher than a typical school on state administered tests for growth.” Weeks earlier, data had been released showing that 42 percent of Agora students tested on grade level or better in math, compared with 75 percent of students statewide. And 52 percent of Agora students had hit the mark in reading, compared with 72 percent statewide. The school was losing ground, not gaining it.

Mr. Packard said in a recent interview that he was not aware of the data at the time he made the comments. A spokesman said Mr. Packard was relying on older data.

A Stanford University group, the Center for Research on Education Outcomes, tracked students in eight virtual schools in Pennsylvania, including Agora, comparing them with similar students in regular schools. The study found that “in every subgroup, with significant effects, cyber charter performance is lower.”

Devora Davis, the center’s research manager, said the group’s analysis of Pennsylvania online schools showed that students were slipping. “If they were paired with a traditional public schools student, the public school student kept their place in line, and the cyberstudent moved back five spots,” she said.

An analysis by the Carroll County Public School District in Virginia shows that the 400 students in the virtual program there performed worse than the regular students in 19 of 26 categories on the state assessment test.

The Carroll County superintendent, James Greg Smith, said he was particularly concerned about scores in middle school math, history and social sciences. In seventh-grade math, for example, only 35 percent of the online students passed a state assessment; 68 percent of the traditional students did.

It will be a while before test results are available for students at the new virtual school in Tennessee. Back in Memphis, Ms. Alhammadi is worried that her daughter, Yasmine, is moving too quickly. A computerized analysis shows that, at the rate she is going, Yasmine will be finished with all but one of her classes by March.

Red flags go up if a student is “zapping through like a rocket, lesson by lesson,” according to Tom DiGiovanni, K12’s senior director of product planning. “The teachers are instructed to drop in (by phone) and do a little quiz to kind of test students” to make sure they understand the concepts.

Five miles from Ms. Alhammadi’s home, Ms. Ubiarco has also turned her living room into a classroom. Her daughter Sabrina, 10, is in the fifth grade and her son, K.C., 6, is in kindergarten at the Tennessee Virtual Academy.

Ms. Ubiarco is giving Sabrina a math lesson — about the distributive property — on a white board in the family’s living room.

While his mother focuses on his sister, K.C. is doing his own thing — lying on the carpet crashing cars into Spider-Man and Batman action figures.

For the most part, Mrs. Ubiarco said the switch to online had gone smoothly, although she was initially stumped when she first got the K12 curriculum.

“I called the teacher the other day to find out what a simple predicate is,” she said. “She said it’s the verb. I said why don’t they just say that?”

This article has been revised to reflect the following correction:

Correction: December 14, 2011

A picture caption on Tuesday with an article about the operations behind the online-school business K12 Inc. misidentified, in some editions, the woman seated between her two children, both students at the K12 program Tennessee Virtual Academy. She is Denita Alhammadi — not Kathryn Ubiarco, another mother whose children are also enrolled in the Tennessee program.

A version of this article appeared in print on December 13, 2011, on page A1 of the New York edition with the headline: Profits and Questions at Online Charter Schools.

INVESTIGATIVE REPORT FROM THE NATION PUBLISHED NOVEMBER 16, 2011 ON LINE AND IN PRINT IN THE DECEMBER 5, 2011 EDITION OF THE NATION. IT IS November 16, 2011 BELOW HERE:

How Online Learning Companies Bought America's Schools, BY Lee Fang November 16, 2011 | This article appeared in the December 5, 2011 edition of The Nation.


If the national movement to “reform” public education through vouchers, charters and privatization has a laboratory, it is Florida. It was one of the first states to undertake a program of “virtual schools”—charters operated online, with teachers instructing students over the Internet—as well as one of the first to use vouchers to channel taxpayer money to charter schools run by for-profits.

But as recently as last year, the radical change envisioned by school reformers still seemed far off, even there. With some of the movement’s cherished ideas on the table, Florida Republicans, once known for championing extreme education laws, seemed to recoil from the fight. SB 2262, a bill to allow the creation of private virtual charters, vastly expanding the Florida Virtual School program, languished and died in committee. Charlie Crist, then the Republican governor, vetoed a bill to eliminate teacher tenure. The move, seen as a political offering to the teachers unions, disheartened privatization reform advocates. At one point, the GOP’s budget proposal even suggested a cut for state aid going to virtual school programs.

Lamenting this series of defeats, Patricia Levesque, a top adviser to former Governor Jeb Bush, spoke to fellow reformers at a retreat in October 2010. Levesque noted that reform efforts had failed because the opposition had time to organize. Next year, Levesque advised, reformers should “spread” the unions thin “by playing offense” with decoy legislation. Levesque said she planned to sponsor a series of statewide reforms, like allowing taxpayer dollars to go to religious schools by overturning the so-called Blaine Amendment, “even if it doesn’t pass…to keep them busy on that front.” She also advised paycheck protection, a unionbusting scheme, as well as a state-provided insurance program to encourage teachers to leave the union and a transparency law to force teachers unions to show additional information to the public. Needling the labor unions with all these bills, Levesque said, allows certain charter bills to fly “under the radar.”

If Levesque’s blunt advice sounds like that of a veteran lobbyist, that’s because she is one. Levesque runs a Tallahassee-based firm called Meridian Strategies LLC, which lobbies on behalf of a number of education-technology companies. She is a leader of a coalition of government officials, academics and virtual school sector companies pushing new education laws that could benefit them.

But Levesque wasn’t delivering her hardball advice to her lobbying clients. She was giving it to a group of education philanthropists at a conference sponsored by notable charities like the Bill and Melinda Gates Foundation and the Michael and Susan Dell Foundation. Indeed, Levesque serves at the helm of two education charities, the Foundation for Excellence in Education, a national organization, and the Foundation for Florida’s Future, a state-specific nonprofit, both of which are chaired by Jeb Bush. A press release from her national group says that it fights to “advance policies that will create a high quality digital learning environment.”

Despite the clear conflict of interest between her lobbying clients and her philanthropic goals, Levesque and her team have led a quiet but astonishing national transformation. Lobbyists like Levesque have made 2011 the year of virtual education reform, at last achieving sweeping legislative success by combining the financial firepower of their corporate clients with the seeming legitimacy of privatization-minded school-reform think tanks and foundations. Thanks to this synergistic pairing, policies designed to boost the bottom lines of education-technology companies are cast as mere attempts to improve education through technological enhancements, prompting little public debate or opposition. In addition to Florida, twelve states have expanded virtual school programs or online course requirements this year. This legislative juggernaut has coincided with a gold rush of investors clamoring to get a piece of the K-12 education market. It’s big business, and getting bigger: One study estimated that revenues from the K-12 online learning industry will grow by 43 percent between 2010 and 2015, with revenues reaching $24.4 billion.

In Florida, only fourteen months after Crist handed a major victory to teachers unions, a new governor, Rick Scott, signed a radical bill that could have the effect of replacing hundreds of teachers with computer avatars. Scott, a favorite of the Tea Party, appointed Levesque as one of his education advisers. His education law expanded the Florida Virtual School to grades K-5, authorized the spending of public funds on new for-profit virtual schools and created a requirement that all high school students take at least one online course before graduation.

“I’ve never seen it like this in ten years,” remarked Ron Packard, CEO of virtual education powerhouse K12 Inc., on a conference call in February. “It’s almost like someone flipped a switch overnight and so many states now are considering either allowing us to open private virtual schools” or lifting the cap on the number of students who can use vouchers to attend K12 Inc.’s schools. Listening to a K12 Inc. investor call, one could mistake it for a presidential campaign strategy session, as excited analysts read down a list of states and predict future victories.

Good for Business; Kids Not So Much

While most education reform advocates cloak their goals in the rhetoric of “putting children first,” the conceit was less evident at a conference in Scottsdale, Arizona, earlier this year.

Standing at the lectern of Arizona State University’s SkySong conference center in April, investment banker Michael Moe exuded confidence as he kicked off his second annual confab of education startup companies and venture capitalists. A press packet cited reports that rapid changes in education could unlock “immense potential for entrepreneurs.” “This education issue,” Moe declared, “there’s not a bigger problem or bigger opportunity in my estimation.”

Moe has worked for almost fifteen years at converting the K-12 education system into a cash cow for Wall Street. A veteran of Lehman Brothers and Merrill Lynch, he now leads an investment group that specializes in raising money for businesses looking to tap into more than $1 trillion in taxpayer money spent annually on primary education. His consortium of wealth management and consulting firms, called Global Silicon Valley Partners, helped K12 Inc. go public and has advised a number of other education companies in finding capital.

Moe’s conference marked a watershed moment in school privatization. His first “Education Innovation Summit,” held last year, attracted about 370 people and fifty-five presenting companies. This year, his conference hosted more than 560 people and 100 companies, and featured luminaries like former DC Mayor Adrian Fenty and former New York City schools chancellor Joel Klein, now an education executive at News Corporation, a recent high-powered entrant into the for-profit education field. Klein is just one of many former school officials to cash out. Fenty now consults for Rosetta Stone, a language company seeking to expand into the growing K-12 market.

As Moe ticked through the various reasons education is the next big “undercapitalized” sector of the economy, like healthcare in the 1990s, he also read through a list of notable venture investment firms that recently completed deals relating to the education-technology sector, including Sequoia and Benchmark Capital. Kleiner Perkins, a major venture capital firm and one of the first to back Amazon.com and Google, is now investing in education technology, Moe noted.

The press release for Moe’s education summit promised attendees a chance to meet a set of experts who have “cracked the code” in overcoming “systemic resistance to change.” Fenty, still recovering from his loss in the DC Democratic primary, urged attendees to stand up to the teachers union “bully.” Jonathan Hage, CEO of Charter Schools USA, likened the conflict to war, according to a summary posted on the conference website. “There’s an air game,” said Hage, “but there’s also a ground game going on.” “Investors are going to have to support” candidates and “push back against the pushback.” Carlos Watson, a former cable news host now working as an investment banker for Goldman Sachs specializing in for-profit education, guided a conversation dedicated simply to the politics of reform.

Sponsors of the event ranged from various education reform groups funded by hedge-fund managers, like the nonprofit Education Reform Now, to ABS Capital, a private equity firm with a stake in education-technology companies like Teachscape. At smaller breakout sessions, education enterprises made their pitches to potential investors.

Another sponsor, a group called School Choice Week, was launched last year as a public relations gimmick to take advantage of the opportunity for rapid education reforms. Although it is billed as a network of students and parents, School Choice Week is one of the many corporate-funded tactics to press virtual school reforms. The first School Choice Week campaign push earlier this year featured highly produced press packets, sample letters to the editor, a sign in Times Square and rallies for virtual and charter schools organized with help from the Koch brothers’ Americans for Prosperity. The blitz got positive press coverage, providing “grassroots” cover for newly elected politicians who made school privatization their first priority.

A combination of factors has made this year what Moe calls an “inflection point” in the march toward public school privatization. For one thing, recession-induced fiscal crises and austerity have pressured states to cut spending. In some cases, as in Florida, where educating students at the Florida Virtual School costs nearly $2,500 less than at traditional schools, such reform has been sold as a budget fix. At the same time, the privatization push has gone hand in hand with the ratcheting up of attacks on teachers unions by partisan groups, like Karl Rove’s American Crossroads and Americans for Prosperity, seeking to weaken the union-backed Democrats in the 2012 election. All of this has set the stage for education industry lobbyists to achieve an unprecedented expansion in for-profit elementary through high school education.

From Idaho to Indiana to Florida, recently passed laws will radically reshape the face of education in America, shifting the responsibility of teaching generations of Americans to online education businesses, many of which have poor or nonexistent track records. The rush to privatize education will also turn tens of thousands of students into guinea pigs in a national experiment in virtual learning—a relatively new idea that allows for-profit companies to administer public schools completely online, with no brick-and-mortar classrooms or traditional teachers.

Like many “education entrepreneurs,” Moe remains a player in the education reform movement, pushing policies that have the potential to benefit his clients. In addition to advising prominent politicians like Senator John McCain, Moe is a board member of the Center for Education Reform, a pro-privatization think tank that issues policy papers and ads to influence the debate. Earlier this year, the group dropped $70,000 on an ad campaign in Pennsylvania comparing those who oppose a new measure to expand vouchers to segregationist Alabama Governor George Wallace, who blocked African-American children from entering white schools.

Media

Moe isn’t the only member of the Center for Education Reform with a profound conflict of interest. CER president Jeanne Allen doubles as the head of TAC Public Affairs, a government relations firm that has represented several top education for-profits. Allen, whose clients have included Kaplan Education and Charter Schools USA, served as transition adviser to Pennsylvania Governor Tom Corbett on education reform.

Corbett, a Republican who rode the Tea Party election wave in 2010, supports a major voucher expansion that is working its way through the state legislature. The expansion would be a windfall for companies like K12 Inc., which currently operates one Pennsylvania school under the limited charter law on the books. According to disclosures reported in Business Week, Pennsylvania’s Agora Cyber Charter School — K12 Inc.’s online school, which allows students to take all their courses at home using a computer — generated $31.6 million for K12 Inc. in the past academic year.

Thirteen other states have enacted laws to expand or initiate so-called school choice programs this year. Indiana Governor Mitch Daniels has pushed the hardest, enacting a law that removes the cap on the number of charter schools in his state, authorizes all universities to register charters and expands an existing voucher program in the state for students to attend private and charter schools (in some cases managed by for-profit companies). Critics note that Daniels’s law allows public money to flow to religious institutions as well. Twenty-seven other states, in addition to Pennsylvania, have voucher expansion laws pending. And states like Florida are embracing tech-friendly education reform to require that students take online courses to graduate. In Idaho this November, the state board of education approved a controversial plan to require at least two online courses for graduation.

“We think that’s so important because every student, regardless of what they do after high school, they’ll be learning online,” said Tom Vander Ark, a prominent online education advocate, on a recently distributed video urging the adoption of online course requirements. Vander Ark, a former executive director of education at the influential Bill and Melinda Gates Foundation, now lobbies all over the country for the online course requirement. Like Moe, he keeps one foot in the philanthropic world and another in business. He sits on the board of advisors of Democrats for Education Reform and is partner to an education-tech venture capital company, Learn Capital. Learn Capital counts AdvancePath Academics, which offers online coursework for students at risk of dropping out, as part of its investment portfolio. When Vander Ark touts online course requirements, it is difficult to discern whether he is selling a product that could benefit his investments or genuinely believes in the virtue of the idea.

To be sure, some online programs have potential and are necessary in areas where traditional resources aren’t available. For instance, online AP classes serve rural communities without access to qualified teachers, and there are promising efforts to create programs that adapt to the needs of students with special learning requirements. But by and large, there is no evidence that these technological innovations merit the public resources flowing their way. Indeed, many such programs appear to be failing the students they serve.

A recent study of virtual schools in Pennsylvania conducted by the Center for Research on Education Outcomes at Stanford University revealed that students in online schools performed significantly worse than their traditional counterparts. Another study, from the University of Colorado in December 2010, found that only 30 percent of virtual schools run by for-profit organizations met the minimum progress standards outlined by No Child Left Behind, compared with 54.9 percent of brick-and-mortar schools. For White Hat Management, the politically connected Ohio for-profit operating both traditional and virtual charter schools, the success rate under NCLB was a mere 2 percent, while for schools run by K12 Inc., it was 25 percent. A major review by the Education Department found that policy reforms embracing online courses “lack scientific evidence” of their effectiveness.

“Why are our legislators rushing to jump off the cliff of cyber charter schools when the best available evidence produced by independent analysts show that such schools will be unsuccessful?” asked Ed Fuller, an education researcher at Pennsylvania State University, on his blog.

The frenzy to privatize America’s K-12 education system, under the banner of high-tech progress and cost-saving efficiency, speaks to the stunning success of a public relations and lobbying campaign by industry, particularly tech companies. Because of their campaign spending, education-tech interests are major players in elections. In 2010, K12 Inc. spent lavishly in key races across the country, including a last-minute donation of $25,000 to Idahoans for Choice in Education, a political action committee supporting Tom Luna, a self-styled Tea Party school superintendent running for re-election. Since 2004, K12 Inc. alone has spent nearly $500,000 in state-level direct campaign contributions, according to the National Institute on Money in State Politics. David Brennan, Chairman of White Hat Management, became the second-biggest Ohio GOP donor, with more than $4.2 million in contributions in the past decade.

The Alliance for School Choice, a national education reform group, set up PACs in several states to elect state lawmakers. According to Wisconsin Democracy Campaign, American Federation for Children spent $500,000 in media in the lead-up to Wisconsin’s recall elections. AFC shares leaders, donors, and a street address with ASC. Bill Oberndorf, one of the main donors to the group, had been associated with Voyager Learning, an online education company, for years. A few months ago, Cambium Learning, the parent company of Voyager, paid Oberndorf’s investment firm $4.9 million to buy back Oberndorf’s stock. Cambium currently offers a fleet of supplemental education tools for school districts. With the recent acquisition of Class.com, a smaller online learning business, the company announced its entry into the virtual charter school and online course market.

Allies of the Right

Lobbyists for virtual school companies have also embedded themselves in the conservative infrastructure. The International Association for Online Learning (iNACOL), the trade association for EdisonLearning, Connections Academy, K12 Inc., American Virtual Academy, Apex Learning and other leading virtual education companies, is a case in point. A former Bush appointee at the Education Department, iNACOL president Susan Patrick traverses right-leaning think tanks spreading the gospel of virtual schools. In the past year, she has addressed the Atlas Economic Research Foundation, a group dedicated to setting up laissez-faire nonprofits all over the world, as well as the American Enterprise Institute in Washington.

Two pivotal conservative organizations have helped Patrick in her campaigns for virtual schools: the American Legislative Exchange Council and the State Policy Network. SPN nurtures and establishes state-based policy and communication nonprofits with a right-wing bent. ALEC, the thirty-eight-year-old conservative nonprofit, similarly coordinates a fifty-state strategy for right-wing policy. Special task forces composed of corporate lobbyists and state lawmakers write “template” legislation [see John Nichols, “ALEC Exposed,” August 1/8]. Since 2005, ALEC has offered a template law called “The Virtual Public Schools Act” to introduce online education. Mickey Revenaugh, an executive at virtual-school powerhouse Connections Learning, co-chairs the education policy–writing department of ALEC.

At SPN’s annual conference in Cleveland last year, held two months before the midterm elections, the think tank network adopted a new push for education reform, specifically embracing online technology and expanding vouchers. Patrick opened the event and led a session about virtual schools with Anthony Kim, president of the virtual-school business Education Elements.

SPN has faced accusations before that it is little more than a coin-operated front for corporations. For instance, SPN and its affiliates receive money from polluters, including infamous petrochemical giant Koch Industries, allegedly in exchange for aggressive promotion of climate denial theories. But SPN’s conference had less to do with policy than with tactics. Kyle Olson, a Republican operative infamous in Michigan and other states for his confrontational attacks on unionized teachers, gave a presentation on labor reform in K-12 education. Stanford Swim, heir to a Utah-based investment fortune and head of a traditional-values foundation, ran a workshop at the conference on creating viral videos to advance the cause. He said policy papers wouldn’t work. Tell your scholars, “Sorry, this isn’t a white paper,” Swim advised. “You gotta go there,” he continued, “and it’s because that’s where the audience is.” “If it’s vulgar, so what?” he added.

Since the conference, SPN’s state affiliates have taken a lead role in pushing virtual schools. Several of its state-based affiliates, like the Buckeye Institute in Ohio, set up websites claiming that unions—the only real opposition to ending collective bargaining and the expansion of charter school reforms—led to overpaid teachers and budget deficits. In Wisconsin, the MacIver Institute’s “news crew” laid the groundwork for Governor Walker’s assault on collective bargaining by creating news reports denouncing protesters and promoting the governor. In March, while busting the teachers unions in his state, Walker lifted the cap on virtual schools and removed the program’s income requirements.

State Representative Robin Vos, the Wisconsin state chair for ALEC, sponsored the bill codifying Walker’s radical expansion of online, for-profit schools. Vos’s bill not only lifts the cap but also makes new, for-profit virtual charters easier to establish. As the Center for Media and Democracy, a Madison-based liberal watchdog, notes, the bill closely resembles legislative templates put forward by ALEC.

Although SPN’s unique contribution to the debate has been clever web videos and online smear sites, the group’s affiliates have also continued the traditional approach of policy papers. In Washington State, the Freedom Foundation published “Online Learning 101: A Guide to Virtual Public Education in Washington”; Nebraska’s Platte Institute released “The Vital Need for Virtual Schools in Nebraska”; and the Sutherland Institute, a Utah-based SPN affiliate, equipped lawmakers with a guide called “Thinking Outside the Building: Online Education.” SPN think tanks in Maine, Maryland and other states have pressed virtual school reforms. Patrick visited SPN state groups and gave pep talks about how to sell the issue to lawmakers.

Meanwhile, ALEC has continued to slip laws written by education-tech lobbyists onto the books. In Tennessee, Republican State Representative Harry Brooks didn’t even bother changing the name of ALEC’s Virtual Public Schools Act before introducing it as his own legislation. Asked by the Knoxville News Sentinel’s Tom Humphrey where he got the idea for the bill, Brooks readily admitted that a K12 Inc. lobbyist helped him draft it. Governor Bill Haslam signed Brooks’s bill into law in May. The statute allows parents to apply nearly every dollar the state typically spends per pupil, almost $6,000 in most areas, to virtual charter schools, as long as they are authorized by the state.

SPN’s fall 2010 conference featured the man perhaps happiest with the explosion in virtual education: Jeb Bush. “I have a confession to make,” he said with grin. “I am a real policy geek, and this is like the epicenter of geekdom.” Bush shared his experiences initiating some of the nation’s first for-profit and virtual charter school reforms as the governor of Florida, acknowledging his policy ideas came from some in the room. (The local SPN affiliate in Tallahassee is the James Madison Institute.)

Bush: Man Behind the Virtual Curtain

Jeb Bush campaigned vigorously in 2010 to expand such reforms, with tremendous success. About a month after the election, he unveiled his road map for implementing a far-reaching ten-point agenda for virtual schools and online coursework. Former West Virginia Governor Bob Wise, a Democrat, has barnstormed the country to encourage lawmakers to adopt Bush’s plan, which calls for the permanent financing of education-technology reforms, among other changes. In one promotional video, Wise says it is “not only about the content” of the online courses but the “process” of students becoming acquainted with learning on the Internet.

The key pillar of Bush’s plan is to make sure virtual education isn’t just a new option for taxpayer money but a requirement. And several states, like Florida, have already adopted online course requirements. As Idaho Republicans faced a public referendum on their online course requirement rule last summer, Bush arrived in the state to show his support. “Implemented right, you’re going to see rising student achievement,” said Bush, praising Idaho Governor Butch Otter and school superintendent Tom Luna, who was elected with campaign donations from the online-education industry. Bush also claimed that making high school students take online classes would “put Idaho on the map” as a “digital revolution takes hold.” Bush was in Michigan in June to testify for Governor Rick Snyder’s suite of education reform ideas, which include uncapped expansion of virtual schools, and he was back in the state in July to continue to press for reforms.

In August, at ALEC’s annual conference in New Orleans, the education task force officially adopted Bush’s ten elements agenda. Mickey Revenaugh, the virtual school executive overseeing the committee, presided over the vote endorsing the measure. But when does Bush’s advocacy, typically reported in the press as the work of a former governor with education experience advising the new crop of Republicans, cross the threshold into corporate lobbying?

The nonprofit behind this digital push, Bush’s Foundation for Excellence in Education, is funded by online learning companies: K12 Inc., Pearson (which recently bought Connections Education), Apex Learning (a for-profit online education company launched by Microsoft co-founder Paul Allen), Microsoft and McGraw-Hill Education among others. The advisory board for Bush’s ten digital elements agenda reads like a Who’s Who of education-technology executives, reformers, bureaucrats and lobbyists, including Michael Stanton, senior vice president for corporate affairs at Blackboard; Karen Cator, director of technology for the Education Department; Jaime Casap, a Google executive in charge of business development for the company’s K-12 division; Shafeen Charania, who until recently served as marketing director of Microsoft’s education products department; and Bob Moore, a Dell executive in charge of “facilitating growth” of the computer company’s K-12 education practice.

Like other digital reform advocates, the Bush nonprofit is also supported by Microsoft founder Bill Gates’s foundation. The fact that a nonprofit that receives funding from both the Gates Foundation and Microsoft pressures states to adopt for-profit education reforms may raise red flags with some in the philanthropy community, as Microsoft, too, has moved into the education field. The company has tapped into the K-12 privatization expansion by supplying a range of products, from traditional Windows programs to servers and online coursework platforms. It also contracts with Florida Virtual School to provide cloud computer solutions. Similarly, Dell is seeking new opportunities in the K-12 market for its range of desktop products, while the Michael and Susan Dell Foundation, the charitable nonprofit founded by Dell’s CEO, promotes neoliberal education reforms.

Through Bush, education-technology companies have found a shortcut to encourage states to adopt e-learning reforms. Take his yearly National Summit on Education Reform, sponsored by the Foundation for Excellence in Education.

At the most recent summit, held in San Francisco in mid-October, a group of more than 200 state legislators and state education department officials huddled in a ballroom over education-technology strategy. Rich Crandall, a state senator from Arizona, said to hearty applause that he had developed a local think tank to support the virtual school reforms he helped usher into law. Toward the end of the discussion, Vander Ark, acting as an emcee, walked around the room acknowledging lawmakers who had recently passed pro–education tech laws this year. He handed the microphone to Kelli Stargel, a state representative from Florida, who stood up and boasted of creating “virtual charter schools, so we can have innovation in our state.”

Throughout the day, lawmakers mingled with education-technology lobbyists from leading firms, like Apex Learning and K12 Inc. Some of the distance learning reforms were taught in breakout sessions, like one called “Don’t Let a Financial Crisis Go to Waste,” an hourlong event that encouraged lawmakers to use virtual schools as a budget-cutting measure. Mandy Clark, a staffer with Bush’s foundation, walked around handing out business cards, offering to e-mail sample legislation to legislators.

The lobbying was evident to anyone there. But for some of those present, Bush didn’t go far enough. David Byer, a senior manager with Apple in charge of developing education business for the company, groaned and leaned over to another attendee sitting at the edge of the room after a lunch session. “You have this many people together, why can’t you say, ‘Here are the ten elements, here are some sample bills’?” said Byer to David Stevenson, who nodded in agreement. Stevenson is a vice president of News Corporation’s education subsidiary, Wireless Generation, an education-technology firm that specializes in assessment tools. It was just a year ago that News Corp. announced its intention to enter the for-profit K-12 education industry, which Rupert Murdoch called “a $500 billion sector in the US alone that is waiting desperately to be transformed.”

As attendees stood up to leave the hall, the phalanx of lobbyists surrounding the room converged, buttonholing legislators and school officials. On a floor above the main hall, an expo center had been set up, with companies like McGraw-Hill, Connections Academy, K12 Inc., proud sponsors of the event, providing information on how to work with politicians to make education technology a reality.

Patricia Levesque, a Bush staffer speaking at the summit and the former governor’s right hand when it comes to education reform, does not draw a direct salary from Bush’s nonprofit despite the fact that she is listed as its executive director, and tax disclosures show that she spends about fifty hours a week at the organization. Instead, her lobbying firm, Meridian Strategies, supplies her income. The Foundation for Florida’s Future, another Bush nonprofit, contracts with Meridian, as do online technology companies like IQ-ity Innovation, which paid her up to $20,000 for lobbying services at the beginning of this year. The unorthodox arrangement allows donors to Bush’s group to avoid registering actual lobbyists while using operatives like Levesque to influence legislators and governors on education technology.

Levesque’s contract with IQ-ity raises questions about Bush’s foundation work. As Mother Jones recently reported, the founder of IQ-ity, William Lager, also founded an education company with a poor track record. Lager’s other education firm, Electronic Classroom of Tomorrow, is the largest provider of virtual schools in Ohio. ECOT schools have consistently underperformed; though the company serves more than 10,000 children, its graduation rate has never broken 40 percent. The company was fined for billing the state to serve more than 2,000 students in one month, when only seven children logged on during the same time period. Nevertheless, after Levesque spent at least two years as a registered lobbyist for Lager’s firm, Bush traveled to Ohio to give the commencement speech for ECOT. “ECOT proves a glimpse into what’s possible,” Bush said with pride, “by harnessing the power of technology.”

Levesque is no ordinary lobbyist. She is credited with encouraging the type of bare-knuckle politics now common in the wider education-reform movement. In an audio file obtained by The Nation, she and infamous anti-union consultant Richard Berman outlined a strategy in October 2010 for sweeping the nation with education reforms. The two spoke at the Philanthropy Roundtable, a get-together of major right-wing foundations. Lori Fey, a representative of the Michael Dell Foundation, moderated the panel discussion.

Rather than “intellectualize ourselves into the [education reform] debate…is there a way that we can get into it at an emotional level?” Berman asked. “Emotions will stay with people longer than concepts.” He then answered his own question: “We need to hit on fear and anger. Because fear and anger stays with people longer. And how you get the fear and anger is by reframing the problem.” Berman’s glossy ads, which have run in Washington, DC, and New Jersey, portray teachers unions as schoolyard bullies. One spot even seems to compare teachers to child abusers. Although Berman does not reveal his donors, he made clear in his talk that the foundations in the room were supporting his campaign.

Levesque ended the strategy discussion with a larger strategic question. She pointed to the example of Facebook founder Mark Zuckerberg donating $100 million to Newark schools. She then asked the crowd to imagine instead raising $100 million for political races where we “could sway a couple of seats to have more education reform.” “Just shifting a little bit of your focus,” she added, noting that new politicians could have a greater impact.

Levesque’s ask has become reality. According to author Steven Brill, ex–DC school chancellor Michelle Rhee’s new group, StudentsFirst, raised $100 million within a few months of Levesque’s remarks. Rhee’s donors include Rupert Murdoch, philanthropist Eli Broad and Home Depot founder Ken Langone. Rhee’s group has pledged to spend more than $1 billion to bring for-profit schools, including virtual education, to the entire country by electing reform-friendly candidates and hiring top-notch state lobbyists.

A day before he opened his education reform conference to the media recently, Bush hosted another education meeting. This event, a private affair in the Palace Hotel, was a reconvening of investors and strategists to plan the next leg of the privatization campaign. Michael Moe, Susan Patrick, Tom Vander Ark and other major players were invited. I waited outside the event, trying to get what information I could. I asked Mayor Fenty how I could get in. “Just crash in, come on in,” he laughed, adding, “so what company are you with?” When he learned that I was a reporter, he shook his head. “Oh, nah, you’re not welcome, then.”

An invitation had billed the exclusive gathering as a chance for “philanthropists and venture capitalists” to figure out how to “leverage each other’s strengths”—a concise way to describe how for-profit virtual school companies are using philanthropy as a Trojan horse.

DEBATE IN NEW JERSEY REPORTED THE SUNDAY BEFORE THE CHICAGO BOARD VOTE. FROM THE BERGEN COUNTY RECORD OF DECEMBER 11, 2011. NEW JERSEY VOTE EXPECTED IN JANUARY ON EXPANDING VIRTUAL CHARTER SCHOOLS...

Online schools are largely untested, SUNDAY, DECEMBER 11, 2011, BY LESLIE BRODY, STAFF WRITER, THE RECORD

A proposed virtual charter school based in Teaneck has led to a roiling debate about academic rigor and oversight of a new breed of schools where laptops replace most in-person interactions with teachers and classmates.

Education researchers say these full-time cyber schools are so new there is scant independent evidence on their outcomes for students. The founder of the proposed Garden State Virtual Charter School says he aims to provide a high-quality option for children statewide whose lives don't fit the traditional school setting, but skeptics argue much is lost when students attend all their classes sitting at home.

Even so, virtual public schools are growing fast. Evergreen Education Group, a consultant, estimates 250,000 students in K-12 attend them full time nationwide, up 40 percent in the last three years. At least 27 states had at least one full-time virtual school last year, and most were charters. Two virtual charters are slated to open in September in New Jersey.

It is common these days for students in regular schools to take some courses online, but virtual schools present their full curriculum via computer, with Web conferencing, e-mails and videos. Some, such as the Garden State Virtual Charter proposal, require a parent or other "learning coach" to supervise children at home, while promising face-to-face tutoring by teachers when students struggle.

How well these schools succeed is unclear. "Nobody has looked at what happens to kids who spend the bulk of their educational experience on the kitchen table on a laptop," said Gene Glass, co-author of a new report on K-12 online schooling, released in October by National Educational Policy Center at the University of Colorado, Boulder. "They kill you with basic skills, drill and kill. You take a science course, but is there a lab? Do you do a dissection or see a video of one? It's shallow, a sad joke being played on the public."

But supporters counter that these charters give an innovative option to students who need flexibility due to severe illness, sports training, incarceration, trouble socializing and other issues. Some are gifted, some at risk of failure. Jason Flynn, lead founder of the Garden State Virtual Charter, said, "Families have come to us to try to save their children."

Certain type of student

Karen Ryd of Denver, who believes the choice should be available, speaks from experience. Both her sons went to Colorado Virtual Academy last year. She said the charter helped her older son graduate last spring; he needed to work at his own pace and required her one-on-one help for about three hours a day. Her younger son returned to regular high school because he missed friends and activities.

"I wouldn't think it would be a real good option for a student that had a lot of behavior problems," Ryd said. "Maybe they need professionals, not just their mom. I would recommend it for kids who are struggling academically if they have a parent at home who can help them, or kids who really just can't fit in socially."

One of the most rigorous examinations of virtual charters came from Stanford University's Center for Research on Education Outcomes. Its April 2011 study compared students in virtual charters in Pennsylvania to similar children in traditional public schools that fed into the charters, matching the groups by such factors as race, income and prior test scores. It found that cyber students had significantly smaller gains in reading and math than their traditional-school peers.

The reasons for the disparity were unclear, said Dev Davis, researcher on the study. The typical cyber students were white and did not quality for subsidized meals; she said their schools' mission may have been more mixed or vague than the goals of urban charters, for example, where the focus is squarely on getting disadvantaged children into college.

Virtual charters are "a promising idea that we don't have enough information about yet," she said.

Accountability an issue

Cyber charters often buy curriculum and management services from for-profit companies. The proposed Garden State Virtual Charter plans to use its consultant, Connections Academy, one of biggest firms in this field (though if approved, the charter must put such service contracts out for public bid, so that might change).

The charter's plan has fueled protest as some Teaneck residents worry their tax dollars will be drained from regular public schools. Charters are paid a per-pupil rate by the local districts of the students attending.

Academic value is also at issue. According to the application, Connections Academy's public school students passed state exams and Advanced Placement tests at higher rates than peers in home states. It notes, however, that four of 16 affiliated schools failed to meet federal benchmarks for progress in 2009-10, and 16 percent of seniors didn't graduate.

Difficult to confirm

Some researchers have raised red flags about the challenge of confirming such data.

Gary Miron, a professor in the College of Education at Western Michigan University, said virtual charters often sign up students but it's hard for the state to check whether they are actually participating, or verify who is taking state tests used to track progress. He said some students who quit don't resurface in the regular public system, and officials don't realize they dropped out – and that's after the charter has been paid taxpayer dollars for them.

"It's very difficult to hold these schools accountable for the students they enroll," Miron said.

Garden State Virtual Charter aims to open next fall with 36 teachers and 1,000 students in K-12. Flynn, its lead founder, said it would have sophisticated software to document attendance. Teachers would keep an eye on students through two-way secured Web conferencing similar to Skype. "There is constant interaction," he said. "It's not like kids get e-mailed 30 sheets on Monday and submit them next Monday."

He said he was mulling options for proctoring state tests, perhaps by having students take them in rented space or district facilities. "There's more fraud and cheating right now in brick-and-mortar buildings," he said.

Many questions about tutoring sites and after-school activities can't be answered, he said, until it is clear what grade levels, if any, are approved by the state, where students live, which districts might be willing to share facilities, and how much per-pupil funding will be available. So far, he plans one drop-in center in Teaneck for student-teacher meetings.

Who grades the work?

It's also unclear who might grade student work. In 2008, a virtual charter in Arizona drew criticism for reportedly outsourcing reviews of English essays to readers in India.

"For us to say if a teacher is doing the grading, or it's outsourced to a third party in New Jersey, the U.S. or out of country, is premature," Flynn said. "Once we get approved we have to go out for public bid."

If approved in January, his school would be the state's third planned virtual charter. Last January, the Education Department approved the New Jersey Virtual Charter, to focus on remediation for 150 dropouts in Paterson and several cities. The other is the New Jersey Virtual Academy Charter, based in Newark, for 1,200 K-12 children. Both plan to open next fall.

Acting education chief Christopher Cerf declined to comment on the Garden State application but said high-tech options deserve careful consideration. He said he was more familiar with "blended" or "hybrid" schools, which mix online activities and face-to-face classes.

"My own bias is that the really interesting area is in so-called hybrid schools as opposed to purely virtual schools, but I am committed to learning as quickly as we can about which technologies work best for kids," Cerf said. "You can't do that by taking absolutist positions that we ought to continue in the model of seat time … as opposed to competency-based learning."

During a week that opponents of the virtual charter held protests and flooded Cerf with e-mails, he made a plea for civil discourse. "We have to have a reasoned conversation about this rather than a politically charged, instinctive [reaction that] anything different is therefore bad."

E-mail: brody@northjersey.com

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