S & L scammer hopes to make another killing on charter schools

[yurbud]

It is an embarrassment that Obama gave these scammers his Department of Education instead of a boot in the ass and a string of indictment to the pols that carry their water.



HALF of public money a charter got went to overhead, and 93% of overhead went to a real estate company. “The charter public schools,” says EPR’s David Brain, “offer lenders/leaseholders a dependable revenue stream backed by a government payer. It’s a very desirable equation.” Maybe for real estate scammers, but not for taxpayers.

More frightening than the scam is the author's credible scenarios for the charter bubble bursting--once parents realize the promise of charter schools was about as sincere as a Tony Robbins infomercial and start taking their kids back to the public side, the schools will be stuck: teachers will have left the professions in droves because of the even lower pay and worse working conditions of the union-less charter schools and it will be difficult to attract them back with the 10% carrot, 90% stick approach most legislators take toward school reform.

JER’s founder, Joe Robert, made his killing in the savings and loan fiasco of the 1980's. Through his connections with the Federal Savings and Loan Association, Robert was awarded the largest contract ever at the time ($120 million in assets) to manage and sell the government’s “troubled” properties. He cleaned up, moving from there to handling assets for himself and other investors. By 1986, he was managing a portfolio worth some $7.5 billion.

Soon, JER was working with Goldman Sachs and the Blackstone Group. Its profits only increased with the various mortgage and investment arrangements that helped create the real estate bubble. As a Washington Post reporter put it, "In those days … it was not unusual for Robert to double and triple his money, sometimes within a matter of months."

A high-flying investor, then, who spent some $77.5 million buying into charter schools. A November 2008 story from Las Vegas helps explain why.

Imagine ran a Nevada school called the 100 Academy of Excellence, which -- based on the local per-student cost -- received about $3 million from the state each year. Half of that, the story reports, went to running the school and half went back to the operator, Imagine. Of the $1.5 million Imagine got, it paid almost all of it -- $1.4 million -- to Joe Robert’s company to cover its lease.

http://counterpunch.com/dwolff09252009.html">FULL TEXT

[Metta]

1. Another foolish waste of our money. Did anyone vet this one?

More bullshit.

[yurbud]

3. they vet it for how much they'll get in kickbacks

[Hugin]

2. KnR