Don't Be Fooled: For Investors, Charter Schools Are Cash Cows
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Charter schools are cash cows feeding at the public trough. Oh, there are a few good ones here and there, to be sure. But if there was ever any doubt that charter schools have become Big Business, take a look at the list of the largest campaign contributors in Pennsylvania. Three of the top ten on a new “Power Players” report are throwing hundreds of thousands of dollars into state politics to gain favorable legislation for charter schools and we need to be asking why.
Weighing in at #5 is Van Gureghian, who founded Charter School Management Inc. back in 1999 to run a school in Chester, PA, a struggling former industrial town near Philadelphia. Today Gureghian’s company operates 150 charter schools in nine states, and that first school now has half of the district’s student enrollment and is the state’s largest charter school. Gureghian was Gov. Corbett’s single largest campaign donor and served on his education transition team. This is the same guy who is fighting the state’s Right to Know laws to keep from disclosing his salary – which is public knowledge for other public school administrators – while he recently bought two Florida beachfront lots for $28.9 million. He and his wife, another Charter School Management Inc. employee, plan to build a 20,000 square foot “French-inspired Monte Carlo estate.”
At #8 and #10 on the list are Joel Greenberg and Arthur Dantchik. Public Source, which put together the report, notes that these two “act as one when making political contributions,” and that if we “consider them as a contributing team, you must include Jeff Yass,” who would be #11 on this list. Greenberg, Dantchik, and Yass went to college together and are founding partners of Susquehanna International Group, a financial broker-dealer in Philadelphia.
Greenberg is on the board of American Federation for Children, a national group with mega-billionaire backers supporting state vouchers for private school students. Dantchik is on the board of the Institute for Justice, a law firm that promotes school choice and Yass is on the board of the Cato Institute, a think tank dedicated to limited government and free markets. In 2010, these three men started Students First PAC to channel millions of their dollars, plus those from out of state donors, into races of pro-voucher candidates. (For more on the American Federation for Children and the Students First PAC, see “ It’s All About the Money, Money, Money”.)
For those of you keeping track, that makes four of Pennsylvania’s biggest campaign donors so far this year with school privatization at the top of their to-do lists. Why? Lest you think these men are dabbling in education for the sake of students, take a closer look at the Big Business of charter schools. Back in August, CNBC interviewed the CEO of a major investment company who clearly explained why charter schools are such a great moneymaker. David Brain heads Entertainment Properties Trust, which owns movie theaters, destination recreation sites, and charter schools in 34 states.
When the interviewer asked why people should add charter schools to their investment portfolios, he replied:
“Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product. There’s 400,000 kids on waiting lists for charter schools … the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer … if you do business with states with solid treasuries, then it’s a very solid business.”
The anchor also asked if he could buy one type of real estate asset right now, what would it be, and Brain answered: