The Dianne Morales Campaign Reveals the Charter School Industry's Remarkable Reach

In 2016, Morales was inducted into a network of the industry's leading advocates and executives. Now, they're backing her campaign for mayor of New York City.

I. Free to Choose

In November 2019, the New York Times published an article chronicling the reversal of fortune faced by the charter school industry inside the Democratic Party. For decades, leading liberals embraced charters as a means of improving education for low-income, minority students, who often languished in under-resourced and underperforming school districts. Now, progressives like Bernie Sanders and Elizabeth Warren were challenging that orthodoxy, and moderates like Joe Biden weren’t eager to defend it.

Nationally, the legacy of charter schools is mixed. Better outcomes in some particularly dysfunctional districts came along with an explosion in “education entrepreneurs” siphoning money from the public till while delivering dubious results. But for the students who really had benefited, the transformation was unwelcome, and according to the Times, “left some black and Latino families feeling betrayed.”

Dianne Morales, three months into her campaign for mayor of New York City, agreed. Tweeting out the article, she commented: “We can’t abandon the families whose only choice is charter schools. Until all our public schools provide strong options and quality education, why should their options be limited?” As recently as February 2020, she was still describing herself as “a strong believer in school choice.”

Fifteen months later, much has changed. In the race for mayor, Andrew Yang and Eric Adams are competing for the reactionary vote, while the progressive candidates are split and uninspiring. Sensing that the far left lane is the most viable path to a strong performance, Morales has adopted a radical posture that’s required her to jettison her previous rhetoric and commit to limiting the power of charters should she win.

But there’s reason to doubt her sincerity. In 2014, Morales advocated for a new charter school in the South Bronx that is now the worst performing in its district. Two years later, she was inducted into a network of the country’s leading charter advocates, funded by the industry’s top profiteers. Now, the connections she made in those circles are backing her campaign, and no doubt looking for a return on their investment.

II. Mind the Storefront

Founded in 1966, Storefront Academy Harlem was a private elementary school nestled in a series of brownstones off Park Avenue in East Harlem. It charged no tuition and covered costs through charitable contributions to remain accessible to poor and working-class kids from the neighborhood. Later, SAH began attracting a large number of students from the nearby South Bronx, where it sensed an appetite for a second location. But already struggling to keep the lights on in East Harlem, administrators knew any expansion would require a more reliable benefactor with even deeper pockets - namely, the State of New York.

In 2014, SAH stood up a new entity, Storefront Academy Charter Schools, which applied to operate a charter school in the South Bronx and reached out to local leaders to solicit support for their application. One of them was Dianne Morales, then-CEO of Phipps Neighborhoods, a social services provider in the area. According to their original proposal, Morales and other South Bronx notables helped to “distribute flyers and otherwise communicate to the families they serve that a series of town hall meetings were scheduled...and they were encouraged to attend.” She also submitted a letter of support on the school’s behalf, writing:

“As Executive Director and CEO of Phipps Neighborhoods, a longstanding service provider of education and career services in the South Bronx, we recognize the strengths and challenges of the surrounding community and the need to provide effective, high quality supports to our residents. As we expand our network of partners, we seek to identify organizations that are equally committed to those values in supporting our communities...Given its history and demonstrated record of achievement, we are proud to support the Storefront Academy Charter School Bronx application to the SUNY Board of Trustees.”

The charter was approved, and Storefront Academy South Bronx opened its doors in the fall of 2015 to 100 students in kindergarten and first grade, eventually growing to more than 300 students in subsequent years.

III. Competitive Marketplace

In an article published the same month that Morales kicked off her campaign for mayor, NYU Law professor Amanda Sen recalled her time as a learning specialist at SAH from 2006-2009, and notes that for many families, “school choice” isn’t one that everybody gets to make:

”Storefront Academy does not typically serve students who have needs greater than mild learning disabilities or mild speech and language disorders. The school ‘counsels out’ students with intellectual disabilities and emotional or behavioral disorders, telling parents their child’s needs cannot be met at the school and they should seek a different educational environment.”

Sen observes that this was part of how SAH built its “record of achievement.” Public schools must accept students with all levels of disability and provide them with individualized education plans, which can be expensive and time consuming to administer. By filtering out even moderate cases of disability, SAH could invest the savings in its other students, and maintain low class sizes impossible in public schools.

As a charter school receiving public funds, SASB couldn’t do this itself. Nevertheless, an initial review of the school’s performance found that after three years of operation, SASB was failing to prioritize the needs of students with disabilities, English-language learners, and students struggling academically:

“Storefront does not have clear procedures for identifying at-risk students. The school identifies ELLs using the Home Language Identification Survey and subsequent administration of the New York State Identification Test for English Language Learners. School leaders report suspicion that families do not always complete the HLIS truthfully and were unaware the school could implement additional strategies for identifying these students. The Institute corrected this misunderstanding during the visit.

Storefront relies on teachers to refer students struggling academically for RTI intervention. However, the school has not established written guidelines that define what level of performance indicates concern....Because the school does not adequately equip teachers to identify struggling students, it is unclear whether the school accurately identifies all students with disabilities.”

The review also found that SASB’s intervention programs, monitoring systems, and professional development opportunities were all inadequate to meet the needs of at-risk students and their teachers. When inspectors returned in October 2019 to conduct a follow-up, they determined that SASB had made some progress, but noted persistent problems with special education:

“For students with disabilities, the school has two teachers in each classroom, but staff members are not clear as to which classroom in each grade is an integrated co-teaching classroom. For students who require special education teacher support services, the school only uses its Title I teachers to provide these services, none of whom are special education certified...Also, while the school's special education coordinator has deep counseling experience, she is not certified as a teacher of students with disabilities, in violation of the charter agreement.”

Unsurprisingly, the share of students with disabilities at SASB declined every year prior to the renewal review. By 2019, its share of students with disabilities had fallen to almost half that of the surrounding district, even as the district’s share of disabled students rose every year. Not only was SASB enrolling fewer students with disabilities, its retention rate for them was more than 30 points lower than the district target.

Unlike at SAH, shortchanging students with disabilities didn’t produce better outcomes at SASB. In 2018, the school began administering state-mandated testing in English/Language Arts and Mathematics. Although the percentage of students scoring at or above proficiency in ELA was higher than in the rest of the district that year, in 2019 that percentage fell below the district’s percentage, despite a smaller share of SASB’s student body being non-native English speakers. And while the percentage of students scoring at or above proficiency in mathematics at SASB was higher than in the rest of the district in 2018, by 2019 that percentage had fallen by nearly a third and was barely above the district’s percentage.

Test scores at SASB were lower than at all five of the other elementary charter schools in the district in all years prior to their renewal. It was also the only one whose students had ever underperformed the district. No doubt this was a factor in SASB being the sole charter school in the district to be approved for only a limited three-year renewal, as opposed to a full five-year term.

IV. Creative Destruction

All this has cost New York $12 million and counting. The amount of public money transferred to SASB each year climbed from $1.7 million in 2015-16 to $4.2 million in 2018-19. It received another $2 million in supplementary state and federal grants in the same period. Where was all this money going? A decent chunk went to Storefront Academy Harlem. Audited financial statements reveal that SASB retained SAH to provide “academic, management and other administrative support services” in exchange for 15% of SASB’s per-pupil operating revenues, plus reimbursements for part of the salaries and benefits of SAH personnel. SASB also leases properties owned by SAH, so they were paying them rent too - or more accurately, we were. In 2016, SASB began receiving hundreds of thousands in rental assistance from the NYC Department of Education.

Although SASB’s financial statements describe SAH as an “unrelated nonprofit organization,” both schools shared an Executive Director, had overlapping members on their Boards of Trustees (including the chair of each serving on the board of the other), and advertised themselves as basically identical in every way. Between services fees, reimbursements and rent, SAH charged SASB over $2 million from 2015-2019.

Setting up a new client that could make guaranteed payments with government cash had been a profitable gambit, but eventually SAH realized it could cut out the middle man. In 2018 it closed the school and reinvented itself as a nonprofit concerned with childhood brain development. Storefront Academy Charter Schools, the charterholder for SASB, then applied to open a second school back in East Harlem - and was approved! Storefront Academy Harlem, now reconstituted as a charter, opened its doors anew in the fall of 2019, but it was the same faculty and staff opening the doors of the same building they were in before. Only this time, they didn’t have to sing for their salaries to private donors. Taxpayers were picking up the tab.

V. Private Equity

Dianne Morales was not personally involved in any of these decisions. But it’s no small irony that her stamp of approval appears on a school whose mismanagement reveals the failures of an industry she spent the rest of the decade immersed in. While all this was going on, Morales was being inducted into a network of activists and investors working toward public school privatization - and the profits that it makes possible.

In 2016, Morales was named as one of 23 recipients of that year’s Aspen-Pahara Education Fellowship. Founded in 2012, the Pahara Institute is one of the leading actors in the charter school industry, and its fellowship program is a training camp to equip pro-charter professionals with research and talking points to push for the privatization of public schools.

The fellowship itself predates the institute. An earlier incarnation was launched in 2008 by the Aspen Institute and NewSchools Venture Fund. The Aspen Institute is another key player in the charter school industry, funded to the tune of more than $100 million over 20 years by the Gates Foundation, a major pro-charter grantmaker. NewSchools Venture Fund is also a grantmaker but with even more disreputable funders, such as Jonathan Sackler, former scion of the Purdue Pharma OxyContin fortune. For many years, Sackler also served on NewSchools’ board of directors. When the Pahara Institute was established in 2012 to house the fellowship program and broaden its reach, NewSchools founder Kim Smith was named as Pahara’s CEO.

Perhaps because of its obvious connections to corporate profiteers, the charter school industry has sought to cast its activities in a better light by claiming a more civically minded motive: “equity.” Equity has its own tab on the Pahara website, where it delivers a very illuminating piece of analysis:

“While we are committed to eradicating all types of inequity, we center issues of race and racism as first order priorities...It has been posited that centering race is insufficient as a means to fighting inequity and that centering and prioritizing wealth, or economic equity would, in fact, be the greatest lever for positive change.

Given the disproportionate economic outcomes in America based on race, we adhere to a different theory and order of operations. We believe that eradicating racism is perhaps the most powerful thing we can do in service of economic equity.”

That will come as a relief to Reed Hastings, the billionaire founder and CEO of Netflix, who serves on Pahara’s board. He can rake in the obscene wealth he pours into pro-charter advocacy without worrying that any will be confiscated until racism has been extirpated from the hearts and minds of a sufficient number of his fellow Americans. It’s not bad for Pahara either. Hastings is personally bankrolling the construction of its new home on a 2,100-acre luxury ranch in Colorado to serve as the permanent retreat location for its fellowship. No wonder they’re so interested in catering to “leaders identifying as right-of-center politically.”

VI. Long-term Investments

Every Pahara fellowship kicks off with an initial retreat but continues for two years of programming thereafter, a design intended to strengthen the relationships between fellows over time. Campaign finance disclosures show that in the case of Morales’ cohort, Pahara is having its intended effect. Of the 22 other people in her fellowship year, nine have donated to her campaign. Some highlights:

  • Doug McCurry was CEO of the Achievement First charter network, which ignited controversy in March 2019 when security camera footage emerged from an Achievement First school in Connecticut showing its white principal aggressively shoving a Black student. McCurry was criticized for failing to take the incident seriously and for allowing the principal to resign instead of terminating him. Five months later, he donated $250 to Morales in the first week of her campaign.

  • Chris Cerf was president of Edison Schools when it was the world’s largest operator of for-profit public schools. In 2015, Chris Christie installed him as Superintendent of the Newark City School District, where he worked to entrench the role of the charter industry by shepherding a massive infusion of corporate money into the school system. In April 2020, he donated $250 to Morales, and his son Nate gave $250 in September 2019.

  • Jorge Lopez was CEO of Amethod Public Schools, a charter network in Oakland. Rumors of improper treatment of students at Amethod schools have long circulated online. In 2018, a Bay Area school district revoked the charter of an Amethod school after concluding it had mistreated students, falsified records, lacked properly credentialed teachers, and failed to provide legally required services to students with disabilities. Lopez donated to Morales in the first month of her campaign.

  • Andrew Furedi is president and CEO of Para Los Niños, a charter network in Los Angeles. PLN attracted controversy when it took federal COVID-19 relief despite not experiencing a decline in revenue. Furedi was formerly an official in the LA Unified School District, where he pushed teacher evaluation metrics opposed by the teachers’ union, and an executive at The New Teacher Project, where he implemented similar evaluation regimes across the country. He’s given $700 to Morales.

  • Michelle Molitor is a former charter executive who now leads Equity Lab, an anti-racism consultancy whose trainings are based on the theory that “individuals' mindsets will serve as the primary engine for disrupting and positively changing the organizations, institutions, structures, and systems that maintain racism and oppression.” Pahara is definitely getting its money’s worth out of her in particular. She gave to Morales in March of this year.

The others are Oliver Sicat, CEO of Ednovate, another charter network in Los Angeles; Simeon Schnapper, an investor in for-profit education ventures; Gerald Richards, an education consultant based in the UK; and LaShawn Chatmon, Executive Director of the National Equity Project, another anti-racism consultancy serving charter networks and public school systems across the country.

And that’s just Morales’ own cohort. Lisette Nieves, another Pahara alumna, has given $1,750 since October 2019 and sits on the board of Stand for Children, a lobbying group responsible for anti-teachers union legislation across the country. Stand for Children’s executive director Jonah Edelman is also a Morales donor, giving $250 in May 2021. Edelman is not a Pahara alumnus, but he was a panelist at the Aspen Ideas Festival, hosted by Pahara’s partner organization the Aspen Institute. While there, he described how his group led a campaign to make it easier to fire teachers in Illinois and severely restricted their right to strike.

Morales is also backed by figures in the so-called “no excuses” movement, which emphasizes harsh discipline and high-stakes testing for their mostly poor Black and brown students. Achievement First is one of the top practitioners of this model. After the video of an AF principal shoving a student came to light, many Black parents started to speak out against its punitive approach. As one mother observed: “I get calls for him slouching, he gets detention for apparently not focusing, he gets demerits for being late for class during the first two weeks of school...This whole system is a school-to-prison pipeline.” 

Current AF president Richard Buery gave Morales $425. Sara Keenan is Senior Director of AF’s Charter Accelerator Network, which provides consulting services to other charter schools to help them expand. Keenan gave to Morales twice this year. Chi Tschang is a regional superintendent at AF, and before that he founded a charter school in California, where he was forced out after an investigation found he’d been abusive toward students. Examples include physically striking students, verbally degrading them, and forcing them to sit outside in the cold. When one student later threatened to commit suicide, Tschang never notified his parents, prompting Child Protective Services to investigate. Tschang gave to Morales twice in 2020.

Other networks known for the “no excuses” approach are KIPP, the largest charter system in the country, and Uncommon Schools. Under pressure from racial justice activists last year, both networks were forced to disavow their most punitive practices, such as enforcing “silent corridors” and requiring students to observe the SLANT technique (“Sit up; Listen; Ask and answer questions; Nod your head; Track the speaker”) during classes. KIPP executives Lee Flanagan and Jane Dowling gave Morales $1,000 and $400, respectively. Uncommon Schools Chief of Staff Laura Lee McGovern, another Pahara alumna, gave Morales $250.

VI. The Invisible Hand

Last week, The City published an exposé revealing that 20 years ago, Dianne Morales engaged in a low-level bribery scheme to clear up a likely mistaken $12,000 water bill she received. While good government advocates were wringing their hands over this penny-ante act of “corruption,” they neglected to mention the more interesting fact revealed by the article: at the time of this alleged scandal, Morales was employed by New Visions for Public Schools, a major charter management organization. Two decades after she worked there, six employees of New Visions are now donors to Morales’ campaign, including Jennie Soler-McIntosh, a member of its executive leadership and yet another alumna of the Pahara Institute.

This suggests Morales didn’t develop her interest in the charter industry just in the past few years. It seems to be a much longer standing commitment, one that makes her appointment to Bloomberg’s Department of Education easier to understand. “How is it that a radical left-wing mayoral candidate was also a senior Bloomberg official?” is a less puzzling question when you consider that she was just one of many charter school advocates brought on by an administration committed to the expansion of charter schools in New York City.

So is Morales a trojan horse for the charter industry, actively lying to her supporters while secretly harboring a privatization agenda she plans to aggressively pursue if elected? I think the truth is much more banal and much worse than that. More than anything, Morales is just reflecting the views of the people she’s surrounded herself with on her campaign, who are helping to craft a message that appeals to the constituencies she thinks will give her the strongest performance on Election Day. To understand what kind of mayor she’d really be, voters should ask who she’d surround herself with in City Hall. Will it be the campaign staff she’s known for a year and a half calling the shots in a Morales Department of Education, or the ready-made networks of education professionals she’s worked alongside for years?

You can put two and two together.