Need background on Edison Schools, like owners, etc. Jeb connections?

[madfloridian]

Very curious since my state teachers' pension fund has invested in this company with a troubled financial history.
FL Pension fund buys operator of private schools
SNIP...."In effect, the fund that provides for the retirement pensions of Florida teachers and other public employees will own a company that has played a leading role in privatizing school management.

Liberty's buyout was announced in July, but it was not until this week that the Wall Street Journal reported that the pension fund was the source of the money. The deal is expected to close this year.

Edison is the largest private manager of public schools. The company says more than 80,000 students attend the 150 schools it operates in 23 states, including Florida, under management contracts. It reports improving academic performance at its schools....."END SNIP

I have just found myself wondering who are the players behind this group. These names do not mean that much to me, but for some reason Jeb seems ok with using our money this way.
http://www.edisonschools.com/overview/ov04.html

[Cheswick2.0]

1. either Marvin or Neal bush and blowhard Bill Bennett

google it, you will find tons of links.

[madfloridian]

4. Whittle.....from TPM June 29, 2002.... well-connected

http://www.talkingpointsmemo.com/june0204.html

SNIP...."Edison is the brainchild of Chris Whittle, the current President and CEO of the company. According to the company's September 2001 proxy statement, the company lent Whittle $6.6 million on November 15, 1999 and $1.2 million on April 13, 2000 to exercise options to purchase stock in the company. In other words, the company was loaning him money to purchase stock in itself -- not an uncommon practice. By September 30th, 2001 the combined principal and interest on those two loans totalled $9.2 million....."

SNIP...."The Board also has some marquee names on it: Benno Schmidt, the former president of Yale, Floyd Flake, pastor, former congressman, all-around charter school maven, and even Bill Weld, who served as Governor of Massachusetts, before fate decreed that that post would be held only by sad-sacks. Schmidt is the Chairman of the Board and Flake is President of Edison Charter Schools...."

[LearnedHand]

2. Chris Whittle used to own Whittle Communications...

...in Knoxville TN. It went belly up, and he started Channel One, the program that put televisions and other high-tech devices in schoolrooms in exchange for using the Channel One curriculum. The program was controversial becuse it showed commercials to the kids in the classes.

[roughsatori]

3. As an investment I think it is not a wise choice

But I thought the teachers unions HATED Edison so I wonder why they would be investing money there. But as an investment, sans politics, it does not seem like a sound investment. There have been recent articles that point out the falseness of Edison's claims. They also are failing miserably in another major market: Philadelphia (Where they were sold to us as our saviors.) I think that would hurt their stock valuation in the short and long-term.

I know barely anything about the stock-market--but made enough money in it that the Philadelphia Enquirer once did a feature on me as a successfully socially conscious investor. The real reason they featured me was they thought it funny that a Buddhist had money in the market and was doing well.

[madfloridian]

5. This is the MANAGERS doing it, teachers are angry, like me.

We think they are trying to bail them out. Are these guys connected to No Child Left Behind???

Jeb is a trustee, says he is ok with it. Of course.

[roughsatori]

6. It is an outrage that the managers would put your money into this fund

They have hurt the teachers in Philadelphia and made an even worse mess of our system then it was. I just did a Google of: Edison schools + "no child left behind" some very interesting links came up.

[SharonAnn]

7. Financially, it's a very unsound company, high risk investment

It would be the last thing in the world I would think ANY retirement fund should invest in.

Their financial problems have meant that there was recent discussion about taking the company back to a private company so that they wouldn't have to meet all of NYSE's reporting and financial requirements.

One interesting thing about their thought process was that last year while they were having an Edison meeting/convention at the Broadmoor Hotel in Colorado (at least I think it was there) they were preparing to implement a policy of having students work for at least one hour a day to cut down on paid positions at the schools. You know, office work, maintenance work, cleaning work.

Just another company that wants a way to transfer the tax revenue stream through their pockets (and siphon off a percentage of it) before providing any of the services that tax money is supposed to provide.

[SharonAnn]

8. Here's more info. - Investors' ditching Edison (last year)

Edison's Failing Grade

Investors and school districts are ditching the country's leading public education privatizer

By Tali Woodward
Special to CorpWatch
June 20, 2002

A year ago, Edison Schools Inc. was flying high. With 133 schools under its control, Edison had quickly become the nation's largest for-profit manager of public schools. And the public education funding that the company was tapping into seemed to provide a potentially limitless revenue stream. Founder Chris Whittle had predicted that, by 2020, Edison would run one in ten public schools in the United States. The company was a hit with Wall Street: shares were trading at $38, up from $18 when Edison went public just over two years earlier.

Now shares of Edison are changing hands for about a dollar, the minimum price required to stay listed on NASDAQ. Edison has racked up $250 million in losses since it began. The company announced June 3 that it had secured the $40 million investment it needs to open school in the fall. But the futures of 74,000 kids in Edison schools from Maryland to California remain tied to a company that is financially unstable. Edison's economic troubles raise renewed questions about the wisdom of turning public schools over to for-profit corporations -- and could pose a major setback for the school privatization movement.

Edison is still reeling from a three-month inquiry into the company's finances by the Securities and Exchange Commission. Investigators determined that the company consistently misreported revenues, providing an unduly rosy picture to investors. For example, Edison reported $375.8 million in revenue in fiscal 2001. According to the SEC's May 14 order, $154 million of that never passed through the company: it was spent by school districts on salaries for teachers and other staff at schools run by Edison. The SEC also found that Edison does not have an adequate system of internal accounting controls in place.
...

http://www.corpwatch.org/issues/PID.jsp?articleid=2688

[roughsatori]

13. Fund managers have a fiduciary responsibility to avoid investments

such as Edison. It is clearly a reckless move in a pension fund. The more I've read, from what you posted, the more angry I become--and I don't have a penny in that company. Poor investment "strategies" made by "professionals" have decimated many Americans retirement funds--they must be held accountable.

[Generic Other]

9. This company has a terrible record of failures!

http://www.philly.com/mld/inquirer/business/4144048.htm

Posted on Wed, Sep. 25, 2002

Edison Schools falls short of main goal: Profit
Nearing its 10th year, the firm has yet to enrich stockholders. Critics wonder if the company will ever make money.
By Miriam Hill
Inquirer Staff Writer

With 82,000 students and 150 schools in 23 states, Edison Schools Inc. has achieved many goals, except the one that was supposed to revolutionize education: profit.

As the company approaches its 10th year in business, supporters are backing away from rosy projections about how Edison can enrich both schoolchildren and shareholders, and critics question whether the company can ever make money.

The intense scrutiny - much of it brought on by the company's contract to run 20 Philadelphia schools, the largest-ever experiment in privatizing public education - may mean this school year is do or die for Edison. With its stock trading yesterday at 33 cents per share, down from its 52-week high of $21.68, the New York company must make good on profits promised in its Sept. 5 conference call with investors.

[Generic Other]

12. Paul Allen co-founder of Microsoft

Whittle, who is president of ESI, has lined up an impressive slate of associates – at least from a business perspective. J.P. Morgan Capital Corp., Paul Allen, and others invested $161 million in ESI, which this fall will have a hand in educating 60,000 students at 108 schools across the country.


http://www.sfbg.com/News/34/42/42edisba.html

I would be VERY suspicious down there in Florida. Isn't Neil Bush and his "Ignite" Educational software is already being implemented into your schools? Do Florida teachers intend to cut their own throats for the enrichment of the Bush family? What an awful situation.

[madfloridian]

21. FL teachers did NOT do it.....fund MANAGERS did.

I am sending info on this company to my legislators. I am a retired teacher, and I am irate. Teacher groups which have learned about this deed that happened in July are also mad.

Jeb is a trustee. He and managers are the ones who make the investments, not the teachers. We have no say in investments.

[Generic Other]

36. Humble apologies

Teachers don't decide these things, of course. It's just so horrible. Your state has really been devastated by Bush policy. Does that family have a grudge against your state for some reason? I really don't understand how Jeb can show his face in public without being egged. And yet he was seemingly re-elected by you all! I'll give you the benfit of the doubt by calling the election results questionable. You need a recall process like California. Elect some celebrity to replace Bush.

Good luck stopping these jerks from draining your pension funds. It makes me sick to see.

[madfloridian]

10. Data Lacking on Edison...CNN Oct 2002

http://www.cnn.com/2002/EDUCATION/10/31/edison.data.ap/

SNIP..."The General Accounting Office cited a lack of "rigorous research" on Edison Schools and two other for-profit education companies, Chancellor Beacon Academies and Mosaica Education.

"As a result, we cannot draw conclusions about the effect that these companies' programs have on student achievement, parental satisfaction, parental involvement, or school climate," the report said.

Rep. Chaka Fattah, the Philadelphia Democrat who ordered the GAO review, called the results disappointing and said he will ask the agency to conduct its own scientific study....."

This is outrageous that they would do this. I am sending some links to our local paper. I am so tired of having to fight one outrage after another. This is what they are doing, trying to wear us down and get us too tired to fight back.

I will also email my accountant/GOP legislator, who so far has excused Jeb for all his follies. I would like to hear his opinion on this.

[AP]

11. Here are Edison's SEC filings

http://www.sec.gov/cgi-bin/browse-edgar?company=edison+schools&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany

The most recent 10-Q http://www.sec.gov/Archives/edgar/data/1089567/000095012303006136/0000950123-03-006136-index.htm

and the last 10-K http://www.sec.gov/Archives/edgar/data/1089567/000095012302009308/0000950123-02-009308-index.htm

should have most of the meat (and don't forget to look at the amendments to these filings)

[cmd]

14. I wonder about this, too

It's a slap in the face to all teachers active and retired. This appears to be another way of controlling teachers.

[SoCalDem]

27. It most deifinitely is an "In your face" move

These are the Anti-Union folks, taking money earned by union members and investing it into companies who are working to ELIMINATE the jobs of the people who invest the money..


Like asking the chickens to finance Col Sander's ventures..:eyes:

The teachers union should be on this right away, and protest like crazy :)

[bandy]

15. This is just the

tip of the iceburg as to what they are doing to our teachers and kids. I just wrote a LTTE re: this voucher schame. Hubby said he hopes I don't get sued. Jeb is channeling tax money to friends and family, fully intending to destroy the system. Education Chief Jim Horne says he stands behind the private schools. Well, I think the job description says chief of public schools. Why aren't parents, teachers and school boards raising hell about this?

[soup]

16. Links Links & Links

There was a thread in LBN, I think yesterday (how's that for short term memory loss :crazy:?) on this. My internet connections today are very iffy, so not sure if it will hold for a search and to come back and post the DU link.

One of the links I posted for Edison info was to Parents Advocating School Accountability (PASA).

Their MUST SEE huge list of links:
http://pasaorg.tripod.com/edison/edison.html

fingers crossed, and hoping my on again off again internet connection will hold so I can post this.

[madfloridian]

18. Great link, Soup! TPM just picked up on this issue. Good for him.

I have been seeing red since I read this article yesterday. If people just knew the arrogance they have toward the teachers here.

My friends who are still teaching will talk to me a lot about how stressed they are, the treatment they get, but they hush when they learn I am being outspoken on the issue.

Florida teachers are notorious for letting folks run all over them. I was guilty as well, but I see real fear now.

Every day there is another article in the paper about the school systems here that could just as easily be taken for parody.

[madfloridian]

25. Soup's link.......do not understand this part about Whittle.

From Sept. 8, 2003
http://pasaorg.tripod.com/edison/pdfs/nodreams.pdf

Meanwhile, since 2001 the publicly traded company’s stock has plunged – from a high of $38.75
to about $1.67 currently, with a low of 14 cents at one bleak point. And in July, Edison founder
and CEO Chris Whittle announced that he would buy back all the company’s stock and take it
private. The move is expected to be completed this fall, subject to shareholder approval.

(Assume they are meaning this July, when pension fund did its thing)

..."Whittle’s decision, according to the Wall Street Journal, was “driven by a desire to avoid the kind
of public criticism that had hammered (Edison’s) equity and constrained its capital-raising
efforts.” In other words, Whittle wanted to remove Edison from the spotlight, which had not
flattered the company despite the fact that Whittle’s flamboyance and aggressive publicity-seeking
put it there to begin with. As a privately held company, Edison will not function entirely in the
dark, however, since achievement data on its schools will still be public.
The arrangement also provides Whittle with a raise of $255,000 or more – to “not less than
$600,000” from his current $345,000 per year.

Question: by whom is the company held *privately*? Whittle or the FL pension fund? I gather from TPM it is Florida. The more this sinks in the madder I get.

[salin]

17. Has edison EVER turned a profit? It hadn't as of a year ago.

There model was to invest a ton in schools (they do initial big investments) - and then when the schools are profitable (supposedly after 3-5 years) they get to squeeze all of the profit out (not a percent - but all.) The problem is they have very mixed results and district after district who had long term contracts - started kicking them out. So Edison never got its "mass" of schools needed to make their shakey business model work.

Then they sold themselves as anything plus the kitchen sink - and invested tons in lobbying - esp states with new charter laws - to try to set it up that they would have favorable status in terms of getting charters over other groups. Thing is - with enough slick marketing - and money coming in the right places - these folks can be, apparently, very persuasive. I have heard directly of their dog and pony shows and how they convinced local ed folks, district folks and pols in two midwestern states.

Look at what they did in Philadelphia. The district was hemoraging money and needed state assistance. The state may have helped once (I could be wrong) but after second approach said that they (state) would not bail out - unless a big commission was done to study the problems and possible solutions (and a part of it may have been a state take over of the district - I am not sure about that detail). So they commission... Edison????

Edison isn't a research group. Edison isn't an ed policy group. Edison isn't a business consulting group. Edison runs schools for profit - so how the hell did they get this contract? My guess is the political influence buying and heavy lobbying they have done elsewhere that I have heard of directly from some who witnessed the tactics.

Edison comes back with the recommendation that ALL Philly schools need to be run by private management companies. And that the BEST company to do this is... you guessed it... Edison. :eyes:

Okay the controversy around this - led to a scaling back of the number of schools that Edison would get to manage (for profit) in Philly (was it in the forties?)

Around the country there were murmurs of whether this would kill the company - as it would drain so many resources. Indeed some edison projects moved off the table. And Edison continued to stumble.

In the past two years Edison has faced SEC investigations (they did cute things like count $ for teacher salaries as... Revenues), they were almost delisted from NASDQ (for trading for a dollor or less for almost a month), and finally they realized that they didn't want to be a "public" company (re: have that much scrutiny).

Funny thing about the stories - they have been shopping for investors to help them go private (?? buy outstanding stock??? not sure how this is done) and have been turned down by all - as a BAD investment.

If I read correctly late last week... Florida Employee Pension Fund - is the ONLY taker/buyer?

This isn't an investment. It is a bailout. With public employees pensions. With public teacher pensions (Edison likes to try to reconstitute schools - that is fire all... hire back only after interviews - a technique used to try to break union power). Cute.

And Jeb who pushes HIGH ACCOUNTABILITY on public schools (and none it appears on private voucher schools) claims that he doesn't provide any oversight over this fund though he is a member of a board that is supposed to provide oversight?

Ridiculous.

[salin]

20. From Soup - regarding the 'business model'

of edison that I described above - re getting a critical mass of schools and then turning a "big profit".

http://pasaorg.tripod.com/edison/pdfs/nodreams.pdf

Sept. 8, 2003
San Francisco
Parents Advocating School Accountability www.pasasf.org

Edison Schools: 'dreams unrealized' Two years ago, Edison Schools was expanding rapidly and proclaiming that its model was revolutionizing education. The controversial, for-profit company predicted that it would soon be running 1,000 schools nationwide.

But as school opens this fall, Edison Schools is reduced to issuing press releases announcing wanly that it has had some contracts renewed. The company has suffered a net loss of about 25 schools since last year. The New York-based company uses fuzzy and inconsistent methods for counting the schools it runs, making it tough to determine how many client schools Edison has lost. By conventional counting methods (one site equaling one school), Edison appears to have lost 29 schools last school year, scattered among 13 severed school-district contracts, from Boston to Dallas. Edison
opened three schools this fall, counted by conventional methods. Edison’s website still states that the company runs 150 schools, the same number it gave last year based on its controversial counting method.

---------------snip

Edison operated for 10 years without making a profit, then announced that it would show its first profit in the quarter ended in June 2003. That quarter’s results, anticipated to be 20 cents per share, will be reported later this month. But analysts in a WSJ.com survey predicted a fall back to unprofitability for the subsequent quarter, ending September 2003, with the loss projected at 37 cents per share.

A July Miami Herald article covering the stock buyback didn’t let Edison off gently. “Edison Schools, the visionary company whose backers believed it would revolutionize public education in America, is hobbling into a buyout by the man who founded it, its dreams unrealized,” reporter Gregg Fields wrote. The New York Post described Whittle as “suffering a $1.9 billion wipeout of his company’s market value.”

Investors, the Miami article reported, were furious at the $1.76 offered buyout price. ''Now you know how the teachers and the kids have been treated all along,” an irate investor posted on the company’s Yahoo bulletin board, as quoted by the Herald.

And in the last week of August, eight messages were posted under the unexpurgated subject line “Shareholders are getting f****d.”

--snip (sounds like a "Sound investment for a pension fund to me) ----

Edison opened new schools this fall in Indianapolis, Ind.; Pittsburgh, Pa.; and St. Louis, Mo. – one in each city. Over the past school year, the company lost contracts in Battle Creek, Mich.; Boston, Mass.; Dallas, Texas; Hamden, Conn.; Macon, Ga.; Minneapolis, Minn.; Mount Clemens, Mich.; Nash/Rocky Mount, N.C.; Pontiac, Mich.; San Antonio/Atascosa, Texas; Trenton, N.J.; Tyler, Texas; and Wichita, Kan. The lost contracts with the 13 districts comprised at least 29 schools.

The controversial method by which the company sometimes tallies its schools counts grade groupings, or parts thereof, as one school – K-5, 6-8 and 9-12. Thus a school comprising grades K-8 would count as two schools; a school comprising grades 5-9 would count as three. The
company has used that counting method interchangeably with a per-site method, without explanation.

----------------------------Much More-----------------------------

Wonder what the Miami herald article said, who wrote it, and what their take on this move by the pension fund is????

[JanMichael]

34. It's absurd, it really is.

The more I read about these bastards the angrier I get.

[Octafish]

19. Talking Points Memo is on the case!

Hope this helps, from Joshua Micah Marshall's TPM:

EXCERPT...

A little more than a year ago, I told you about Edison schools, the brain child of entrepreneur Chris Whittle. The company's mission was to get contracts to run public schools on a for-profit basis and to do it better and more cheaply. The company was the toast of the Republican establishment and got tens of millions of dollars of start-up capital back in the go-go 90s.

SNIP...

When we last noted Edison in June 2002, Whittle was hollowing out the company to cover personal debts by having the company loan him about $9 million to buy stock in itself. That's not all that uncommon. The only problem was that Whittle had collateralized the loan with the stocks themselves. And by then Edison's stock, which had traded as high as $23 a share in the glory days of 2001, was chugging along at 85 cents a pop.

In other words, the $9 million was gone and so was the collateral. And this supposedly public company was making no effort to get its money back --- because it was controlled by Whittle. For more details on these innovative shenanigans, see TPM's June 27th, 2002 post on the matter.

SNIP...

Things looked awfully bad until last week when Florida's state employee pension fund announced it was buying up all of Edison's stock and taking the company private --- for a cool $174 million. That's got to be the shrewdest investment the fund has made since it bought millions of shares of Enron just as the company entered its death spiral --- including 1.3 million shares just two weeks before the company declared bankruptcy.

CONTINUED...

http://www.talkingpointsmemo.com/

[salin]

22. not good at the site - but can you look at state elections in opensecrets?

might be interesting to see if there were donations between the principles and jeb.

[madfloridian]

23. A little more

Edison's Dim Bulbs
http://slate.msn.com/id/2070329/
SNIP...."Edison also spends a substantial amount of cash on its 11-person board of directors, which includes such luminaries as former New York City Schools Chancellor Ramon Cortines, former Congressman Floyd Flake, former Massachusetts Gov. (and Edison investor) William Weld, and Kennedy cousin Tim Shriver. Each of the eight outside directors is paid $22,500 per year plus $2,000 for each board meeting and $5,000 for each committee on which he or she serves. Given that the board met 13 times in fiscal 2001, each of the outside directors probably received more than $50,000. Now, public-school boards are notoriously wasteful—I bet your local board has been nailed for ridiculous perks or junkets. Even so, it's demoralizing that Edison has to spend so much money on its board that could have gone into classrooms....."

[salin]

24. You should call in to Guy James this afternoon

his local listeners (Florida) may have missed the story or not have given it that much thought. Check out JanMichael's thread on the show. GoMadfloridianGoMadfloridian....

[Dudley_DUright]

26. I posted Madfloridan's thread

over on JM's Guy James show thread, and JM himself brought it up at the end of the show. It even prompted a caller from California to call in to comment about it!

[salin]

29. Very cool

I had a phone call come in and had to stop listening. Glad it made it on the air!

[madfloridian]

30. All right! Thanks so much. We have had storms all afternoon......

I did not get to listen. I could get on computer maybe 5 minutes, and then the wave of electrical storms.

That is much appreciated.

I am so tired of their arrogance. All I want now is for the national news to pick up on some of the stuff going on here.

Thanks, I will visit the archives and listen later.

[JanMichael]

31. Thanks for prompting me to talk about it.

It's a huge issue.

[jiacinto]

28. Well

Edison's track record has been at best mixed and at worst horrible. I haven't heard good things about the company. Its track record has been less than stellar.

[blondeatlast]

32. BIG, FAT,

:kick:

GETTHIS FORKING STORY OUT THERE!

[JanMichael]

33. The more threads the better!

I want theses people arrested eventually, then tried, then placed naked in cages where people can taunt and spit on them every day for a year, after that...Siberia.

[blondeatlast]

35. Kicking this mofo AGAIN!

Ask me if I'm pissed.

HELL YEAH, I'm pissed!

Where is Skittles???

[blondeatlast]

37. kick