Attack of the hedge-fund managers
Jun 3, 2010 12:11 PM
Why do they care about schools? It’s all about money
Education Reform Now, which spearheaded a $2 million media campaign to lift the charter school cap without reforms, paid for this mailer attacking the UFT.
Who paid for the recent mass mailing of the glossy flier attacking the UFT? In two words: hedge funds.
In the corner of the back page of the flier is the note “Paid for by Education Reform Now” and a Manhattan return address.
Education Reform Now is an arm of Democrats for Education Reform, started by former Daily News education reporter Joe Williams and boasting a board of major hedge-fund managers. Education Reform Now also promotes charter schools, mayoral control of schools and school choice (including vouchers for private and parochial schools) in New York, Michigan, Rhode Island and several other states.
But what they have is a business plan, not an education plan.
Who’s who?
John Petry, a partner at Gotham Capital Management, chairs the board of Education Reform Now. Petry’s Gotham Capital LLC, founded in 1985 with $7 million from junk-bond king Michael Milken, is a privately owned hedge fund that manages investments for wealthy clients, investing in equities as well as spin-offs, restructuring and takeovers.
The other board members are Sidney Hawkins Gargiulo of Hawkshaw Capital, founded in 2002 by a former Lehman Brothers analyst; John Sabat of SAC Capital, a Stamford, Conn.-based private investment firm; and Brian Zied of Maverick Capital, a Dallas-based investment advisor managing hedge funds and private investment funds.
Tracing their philanthropic interests leads quickly to New York City’s charter schools. Petry and Gotham Capital founder Joel Greenblatt fund Eva Moskowitz’s Harlem Success Charter Network and paid her $371,000 salary in her startup year. Goldblatt is chairman of Harlem Success’ board as well as chair of two of her individual schools. Petry sits on the boards of the Harlem Success Charter Network plus two schools. SAC Capital’s Sabat is a board member of two Harlem Success schools, Hawkshaw’s Gargiulo is a member of another, and Maverick Capital founder Steve Galbraith chairs yet another.
Education Reform Now spearheaded a $2 million media campaign this spring to try to lift the New York State charter cap without reforms. Its chapter in Milwaukee is lobbying for a mayoral takeover of the Milwaukee schools and for the survival of that city’s school voucher program. And the group recently campaigned for a slate of school board candidates in Buffalo pushing a charter school agenda.
The money trail
The latest public filing available for Education Reform Now shows it received contributions and grants of $1.3 million in 2008, up from $173,500 the year before. (Without doubt, the level of donations has skyrocketed since then.) The filing does not list the group’s benefactors, but one is the Robertson Foundation, the private foundation of Julian Robertson, the