The Head Start Enron Trader Initiative: The Arnold Foundation in Indiana, Louisiana, NYC, Texas, and Beyond

By Doug Martin

The national news has painted Enron’s retired trader and hedge fund manager John Arnold as a Jesus figure since he and his wife announced they were going to cover the government costs of funding Head Start during the government shutdown (better known as the good cop/bad cop ploy by both parties to throw senior citizens, kids, and the poor and middle class under the bus), but the Laura and John Arnold Foundation's main goal is school privatization.

The Arnolds, dishing out the couch-change of $10 million for Head Start, say this money is a loan and they will want the money back.  But the whole thing was merely a publicity stunt meant to digress from the shady things John Arnold has been up to lately.

When the news broke on the Head Start deal, a few attuned people were seeing through the smoke and mirrors.  As David Sirota points out, John Arnold, worth a mere $2.8 or $3.8 billion (depends who you talk to and when, and as if the difference matters), is a major con-man:

What do you do after a week’s worth of embarrassing revelations about your craven effort to slash the pensions of unsuspecting middle-class retirees? If you are a billionaire former Enron trader, you manufacture a self-congratulatory spectacle by offering a bit of pocket change to low-income kids – and you get to rest assured that the national media will suddenly ignore your pension-looting ways and dutifully portray you as a benevolent hero.

Such is the breathtakingly cynical P.R. strategy of John Arnold. After a week of revelations about his scheme to help Wall Street and the conservative movement loot public pensions, the former Enron trader made headlines yesterday by handing over a rounding error of his billion-dollar fortune to the federal Head Start program ostensibly to help float it through the government shutdown.

Theresa Rosado, the illustrator for my forthcoming book Hoosier School Heist and a fine researcher, was onto the Head Start funding trail from the get-go, emailing me to let me know that Walmart scholar Stuart Buck worked for the Arnold Foundation. Josh McGee, an economist in the Dept. of School Reform at the University of Arkansas, too, crunches numbers at the Arnold shop because economists know nothing about education but everything about making the big bucks.  For his work for the Arnolds, McGee was paid $122,501 in 2011 (see page 40 in PFD).

Here are a few corporate schoolers who pocketed Arnold Foundation money in 2011 (see page 44 in PFD):

$100,000 to hedge fund-operated Education Reform Now, Democrats for Education Reform’s sister.

$118,000 to the venture capitalists and billionaires at the NewSchools Venture Fund

$2.1 million to Stand for Children, who used hedge fund money to buy Illinois Democrats and Bain Capital to attack teachers in Massachusetts.

$7 million to Students First

$1.1 million to Teach for America Houston

$5 million to Teach for America’s national branch

$75,000 to the Texas Charter Schools Association

$2.5 million to The  New Teacher Project, imported to Indiana (and other states) with Mind Trust and Bill Gates money.  

$52,500 to the Thomas Fordham Institute, the rightwing outfit set to help the Center for American Progress  eliminate elected school boards across the country.

The Arnold Foundation also backs KIPP Schools and last year funneled $15 million into the school privatization movement in New Orleans, giving cash to the Bradley/Walmart front group the Black Alliance for Educational Options, the Louisiana Association of Public Charter Schools, New Schools for New Orleans, and the NYC Relay Graduate School of Education, which takes teacher evaluation to a new level, so that Masters degrees are only given to teachers in training who show that their students from low-income communities can do well on standardized test scores.  

The Arnolds must gush over NYC’s Relay Graduate School of Education, which was founded by KIPP, Achievement First, Uncommon Schools, and Larry Robbins, the owner of Glenview Capital hedge fund.  Just a month before Relay School of Education was accepted by the Board of Regents, Robbin’s Amy and Larry Robbin’s Foundation donated $500,000 to the Regents Research Fund, with help from Bill Gates, the National Association of Charter School Authorizers, and others, to help the State Education Department through a new “Fellows” program to implement Race to the Top evaluation guidelines for teachers and principals, curriculum, and other things the Business Roundtable first called for in 1989.  Many of these “Fellows” were recruited from Teach for America, the College Board, and other corporate-friendly groups, and were paid upwards of $189,500, as was the case of Kristen Huff, who spent seven years doing assessment design and product development for the College Board, which in 2006 made $500 million from products dealing with testing, as Jim Horn has noted.

Filthy rich hedge fund managers out to privatize education and make more money off of loans to charter schools and stealing from teachers pensions love to help each other out in the name of “benefiting children.”

And the Arnold Foundation is out for Hoosier kids, too. In Indiana, the Arnolds joined billionaire Obama supporter Eli Broad, the racist and poor-bashing Bradley Foundation, rightwing Gleason Foundation, and Dell to fund the Teacher Prep Review, which is highly endorsed by the former mayor of Indianapolis and Eli Lilly official Bart Peterson’s Mind Trust and the hedge fund supported Democrats for Education Reform Indiana. In October 2012, along with Eli Lilly, the Joyce Foundation (the school privatization outfit where Obama used to work), and the Lumina Foundation, the Arnolds financed Indy Mayor Ballard’s corporate school blueprint What’s Possible. 

What is the Lumina Foundation?  It’s a private outfit that promotes the skills-gap myth nonstop so that the public schools at all levels can be turned into corporate workforce training grounds so the filthy rich don’t have to pay their own money to train workers.  The group’s leader is John Mutz.  A past trustee for the Hudson Institute, former Republican lieutenant governor of Indiana, previous Conseco official, and one-time president of PSI Energy, John Mutz was Lilly Endowment’s president from 1989-1993. He was also a director at the GEO Foundation’s 21st Century Charter School, an Indianapolis Charter Schools Board member, and co-chair of the billionaire Betsy DeVos-run front-group, All Children Matter, in Indiana.

John Mutz and the Arnolds must really get along well. The Arnold Foundation loan money will be used to keep Head Start open in six states: Florida, Mississippi, Connecticut, South Carolina, Georgia, and Alabama, as his Teach for America/New Teacher Project money allows real teachers to get the axe around the country and kids to be shipped off to charter school factory farms to be shot up with test bubbles then placed into a society that is already too sick to function.