Sara Roos

Board Has Wall Street Wolves Guarding LAUSD Henhouse

It’s high time to be paying closer attention to the $14.7b (p. 31) of taxpayer’s money that Covid19 has left in essentially the sole charge of our LAUSD Superintendent, Austin Beutner.

On March 10, 2020 under Covid19, the LAUSD’s publicly elected school board signed over sweeping authority for fiscal and management decisions to Superintendent Beutner, a former investment banker who remarks that the “guiding principle in my career, … is to put myself in uncomfortable positions and take risks.”

The emergency powers relinquished the board’s fiduciary responsibility to stakeholders regarding oversight and regulation, policy and budget, with no sunset date attached. The breathtaking subrogation was to a Superintendent appointed by a former board, chaired at the time by a member charged with and subsequently convicted of felony campaign misconduct, indebted to a different, neoliberal and privatizing ideology of public education.

At next Tuesday’s LAUSD board meeting some more fallout from this power shift will become evident. To date a tremendous amount of emergency spending has been brought to the board as simply courtesy, for ratification rather than actual approval. And the circumstances of this spending is fraught; criticism – even questioning – is awkward at best, difficult in practice. Feeding the hungry during this health and economic emergency is crucial; keeping our community safe is vital. But what happens in the long term? Should permissions for emergency operations be extended to systemic operations?

On the docket (tab 6) for discussion and for waivers of important public-interest oversight mechanisms, is the sale of LAUSD’s central administrative headquarters downtown. Known eponymously for its location at 333 S. Beaudry Ave, “Beaudry” is a building with a history of construction defects and shady real estate deals. LAUSD purchased the building in 2001 under circumstances so fraught as to attract investigation by then-District Attorney Cooley. And in 2017 District staff found “there would be no financial benefit to selling the… building at this time.” The real estate market under Covid19 is uncertain, and downtown office vacancies are climbing. It is hard to envision how the sale or lease-back of this vexed building could be in the best interests of the taxpayer. But under cover of Covid19, the taxpayer has been disenfranchised, represented instead by the former hedge fund manager of distressed assets.

What are distressed assets?

Simply something on the market for below its estimated value. If the seller is under pressure for any of a number of reasons – say, poor cash flow, inability to maintain or repair a property, bankruptcy, or market bubble – a seller might offset a low sale price in exchange for mitigating this pressure – say, via liquid cash, indemnity from repairs, etc.

And the proffering of Beaudry at firesale prices not only follows from complicated current finances resulting in budgets which are good and full even while feeling so fragile as to be on the verge of collapse, but also from an insidious, long-term narration that erroneously undervalues the commodity.

This world of distressed asset (and debt) management is the world orbiting our LAUSD. It is the true major business of local education “philanthropist” Eli Broad (not merely home-building), and it is the world of his favored acolyte, Austin Beutner. It is the world of many of the plutocrats surrounding our District – e.g., Howard Marks and Bruce Karsh and so many other investors from the private distressed assets venture fund, Oaktree Capital, run by the former personal assistant of Eli Broad.

These so-called “vulture capitalists” encircle LAUSD serially. While we arrive at the present day where the curiously-installed Superintendent with zero education experience, now moves to enact the “portfolio plan” long-signaled by Beutner.

As it happens, offering sales and distressed sales of public goods is a well-worn stratagem of Beutner’s. In approximate reverse order there was:

“Accreting” southern California news outlets for intended privatization and sale (2015). Beutner was fired from his publishing post for this impertinence.
More market softening via the City of Los Angeles’ (CoLA) 2020 Commission (2014) cultivating a landscape of doom and distressed selling. A conceptual trap of disruption without solution.
Partnering with Eli Broad to purchase and reorganize (2013) the LATimes as a private company. Beutner was promoted following the unsuccessful purchase to Publisher, a job for which he was as supremely unqualified as his subsequent recent appointment to Superintendent.
Selling the public LADWP headquarters (2010), another distressed sale proposal quashed by considerable public concern and absence of appropriate conditions.
Softening the LA market for development, height and density through forced updating of CoLA’s “Community Plans” (2010). Such atmospherics were enabled through former mayor Riordan’s and then-mayor Villaraigosa’s engineering of a position crafted expressly for Beutner: first deputy mayor of CoLA’s economic and business policy.
Partnering with longtime Clinton associate Mickey Kantor and deputy treasury secretary Roger Altman to co-launch the private hedge fund, Evercore (1996), specializing in leveraged buyouts (distressed assets) from out of the personal ash-proceeds of privatizing Russia (below).
Participating in the privatization of Russia (1994-96), eventually leading the US Russia Investment Fund, a private investment vehicle backed by the US government – the acme of distressed assets markets.
Conducting 16 leveraged buyouts of distressed assets as a 20-something trader at Blackstone Group (1980’s).
Meanwhile as prelude to Mr. Beutner’s subsequent mono-focus on the sale of distressed assets he was mandated to protect, was Eli Broad’s own first repeated attempts at a “public” leveraged buyout of the LATimes (2007).

It’s not clear that decentralizing LAUSD’s administration and selling Beaudry is a poor plan. That it was not cost-effective three years past does not make it so today. For example it is now just one year from the time when tax limitations on rental of the building sunset. Cost::benefit analyses change with time.

But along with the proposal is a suggested waiver of public sector rules convening a committee to advise on the use or disposition of District “surplus property”. These are rules meant to protect the public, its money and its trust. It doesn’t help that an additional waiver is requested for a private real estate professional. Public asset management employees are evidently incapable of such a sale in the public’s interest. Or has a combination of inestimable corporate campaign funds, the undue tacit influence of corporatists, and unmitigated emergency powers rewritten some power imbalance on the board irreversibly?

Watch Tuesday’s BOE meeting live at 1pm, 11/10/20, here.

Split Decision on Board Elections Reverses School Board Alignment – EdX News from Election 2020

Seventeen hours from the close of polls in LA County (LAC) leaves a mixed set of results – from polar opposite wins, to hopeful-anticipation.

While 100% of LAC’s precincts have reported partial results, VBM (Vote By Mail) ballots continue to be delivered to ballot counting facilities statewide, including LAC’s Norwalk, where the count is on-going. Updates to LAC counts will not come before the close of day and starting next week, only twice per week.

When registration for delivery of VBM ballots closed last month, 5,709,853 were registered to vote in LAC. Registrations at Vote Centers since that time, including right up through the close of election day, remain unreported.

Big money for pro-charter school board candidates, picks George Gascón for DA

Los Angeles’ school district used to have sleepy school board races. But those low budget, pedestrian races – like that for LA County’s District Attorney – are bygones. Between the SCOTUS Citizens United ruling codifying limitless lobbying and independent campaign support, and the ascendency of “school choice” as a stalking horse for privatization of the public sector within the education arena, LAUSD’s school boardroom has become a surrogate battlefield for neoliberalism, public-private partnerships and the leveraging of public goods for private gain.

So, too, it would seem might the race for LAC’s District Attorney (LAC-DA) signal a new incursion on privatization in criminal justice.

And given such a grand ideological tussle, it is little wonder that formerly obscure school board elections of local and narrow interest should have become worth astonishing amounts of money to a select few with special interest in (eg, profit, systemic change, ROI extracted from) the political insurgency. Such an influx could concern underlying motivations surrounding next Tuesday’s LAC-DA race.

Think your vote doesn’t matter? Uneven early voting across LAUSD Districts means it may count more than ever.

Are you wondering whether the vote is effectively all over. Whether so many early ballots have been returned there’s, say, little point still in advocating for Schools And Community First (prop 15)? For community college board members? For Schools local bond measure RR? For your LAUSD BD3 (Schmerelson v Koziatek) or LAUSD BD7 (Castellanos v Franklin) board member?

The TL;DR is Your vote is still needed! Your advocacy is crucial. At best 4 in 5 ballots have not yet been counted as returned. Students are needing their voters’ support.

Who’s already gotten their VBM in? Who votes in the districts electing a school board member?

“When you find hypocrisy in the daylight, look for power in the shadows”

-Sen. Sheldon Whitehouse, 10/13/20

Senator Whitehouse laid out beautifully on Tuesday the context surrounding Amy Coney Barrett’s confirmation hearings in Washington as the pushing and pulling of ‘actors inside the frame of a puppet theater.’ He argues that not only are outside forces controlling these actors in the main show but they are integral to the narrative of it. And some of the evidence for broadening focus beyond the proscenium is when characters in the drama adopt “the practice of claiming … moral standards or beliefs to which [their] own behavior does not conform”: hypocrisy.

Just so has Marilyn Koziatek – or the independent expenditure committee (IEC) from which she proudly accepts endorsement of her West San Fernando Valley campaign for school board in the LAUSD3 board district – swerved from insinuation of responsibility for scandals that occurred before his tenure, to antisemitism to anti-LGBTQ and anti-choice bigotry. Schmerelson’s defeated opponent who has endorsed Koziatek, has even hypocritically alluded to Scott Schmerelson’s former republican registration. Meanwhile, swearing brand new allegiance to a political party is precisely the maneuver employed by her endorsed-candidate, Koziatek. The hypocrisy is not without irony, because Koziatek’s unacknowledged switch is in suspicious temporal proximity to her bid for this non-partisan office. Schmerelson’s, on the other hand, is in sharp ethical contrast since in concealing nothing, he has redeemed his revision of four years’ resistance, as ideological repudiation of today’s GOP.

Individual’s campaign contributions reflect ideological, not candidate, loyalty

Table 1 shows contributions to and between these campaigns directly: from individuals, from PACS (union, individuals and political), and from commercial special interests, as well as government entities (and “unitemized” entries). Individuals with campaign contributions to this set of candidates that totals $500 or below is suppressed in the interest of space; available on request.

Outflanking CTA From The Left: How Anti-Racist Demands Are Captured By Privateers

The death of George Floyd in custody of the Minneapolis City Police has roiled our nation. There can be no tolerance of murder, which is all the more abominable at the hands of authority. As citizens everywhere rise – and continue to rise – to protest injustice, and we collectively contemplate systemic and institutional racism, prejudice and bias, our school community reflects these politics and the raising of consciousness in microcosm.

On the last day of its fiscal year, the nation’s largest school district with a democratically elected school board (LAUSD BOE) voted to decimate its school police department (LASPD).

The LAUSD Budget Under Covid: An “Economy of Care” or of Institutional Protection?

Now we have seen manifest the power of budgets.

In the wake of the profoundly inequitable calamity of Covid19, has grown an international paroxysm that Black Lives Matter. In Los Angeles Mayor Garcetti is calling for “$250 million in cuts from city departments, including the LAPD, … steer[ing] the funds to invest in job programs, health initiatives and other services supporting the Black community and other communities of color.” And since it is the city council that is in charge of the purse, more weighty still is a resolution from Council President Martinez co-introduced with CD10’s Wesson and CD9’s Price instructing identification of least $100m-$150m to be cut specifically from LAPD’s budget.

The teacher’s union board, UTLA, has voted to reallocate school police funding.

So it is that a budget is proverbially “a political document”: what politics are reflected in Superintendent Beutner’s Revised May 2020 Budget for LAUSD?

Portfolio Management At LAUSD: Private Security, Promotional Hats, Outsourced Instruction, No-Bid HighTech Contracts

In mid-May, 2020 the LAUSD board reviewed the Deputy Superintendent’s weekly lists of purchases and contracts for March 16-May 8, 2020, part of “the $540m in expenditures for Covid19” approved through the LA County Office of Education (LACOE).

That $314m is detailed below, authorized under the emergency conditions declared two months earlier at the board’s special meeting of March 10, 2020. This is also when last the board met in regular session prior to 5/19/20; three days later the District shuttered ordinary operations on March 13, 2020.

Under this “Emergency Resolution” the Superintendent may “…enter into necessary contracts to respond to emergency conditions.” That is, these expenditures are subject to neither venerable bidding protocols that control waste, fraud and abuse, nor oversight by the school board, which sets District policy. LACOE now approves these expenditures but according to what directives?

Houston, We Have A Problem: Digital Liftoff Without Direction

In his March 11, 2020 weekly address, LAUSD Superintendent Austin Beutner misleadingly refers to the emergency effort transiently supporting disrupted schoolsite instruction with internet applications (e.g., Zoom for conferencing, online worksheets and textbooks for resources), as an explicitly sanctioned “transition to online learning.” In the logical sleight-of-hand at 2:52m, Beutner considers the technological “transition” a foregone conclusion and proclaims efforts to achieve it a “moonshot”. Varnishing the de facto pedagogical revolution with declarative assurance (known colloquially as “fake news”), he deadpans that “the rockets have been built and liftoff has occurred.”

But while technology certainly is being utilized, online learning is less assuredly a thing.

The emergency imperative of social distancing may compel the district’s efforts, but no shift in fundamental policy has been declared by its policy-setting school board (BOE). On March 10, 2020 the BOE authorized “the Superintendent to take any and all actions necessary to ensure the continuation of public education and the health and safety of District students and staff….” However there has been no accordance on equating emergency public education measures with a new normal in public education consisting of online instruction.

Bain And Company Arrive At LAUSD

While families have been scrambling to homeschool and accessorize their 20 million+ LAUSD GrabNGo meals, the District’s Superintendent and improbably employed former investment-banker, Austin Beutner, has sought guidance from his own comfort-sector, the world of corporate management consulting.

Last Wednesday, May 6 2020, LAUSD announced that Bain & Company will work on a pro bono basis “to evaluate and implement strategies to help teachers, students and families in remote, online learning.” Meanwhile the firm of Bain & Company itself announced a very different mandate to “identify and prioritize potential initiatives [based on research and insights by education experts, key district stakeholders and Los Angeles Unified personnel…] that have a tangible impact, are fiscally responsible and can be implemented quickly. Based on agreed-upon priorities, Bain will then design a high-level plan of action for Los Angeles Unified to consider. … At Bain we are committed to investing in high impact education initiatives.”

That is, notwithstanding direct authorization from LAUSD’s elected, policy-setting schoolboard, the Superintendent has invited activist, business management consultants to filter LA’s Unified School District through a sieve of market efficiency – not educational –strategies.