News & Politics

How Rupert Murdoch Could Get His Hands On Your Kid's Information--And It's Legal

Rupert Murdoch hired former NYC schools chancellor Joel Klein to help him profit off of "school reform"--but progressive groups are raising the alarm.

Earlier this week, Rupert Murdoch’s testimony before a committee of the UK Parliament riveted audiences and sent ripples of outrage, disbelief and revulsion to viewers worldwide. Now, in yet another dramatic twist, the multifaceted scandal has managed to make its way across the Atlantic, rearing its head in the New York State Education Department with former New York City schools chancellor Joel Klein.

The background story involves the award of a $27 million no-bid contract by the New York State Education Department to Wireless Generation, an education technology company purchased by Murdoch’s News Corp. in November 2010. The allotted $27 million will enable Wireless Generation to produce a statewide data system that gathers both the academic and personal information of students throughout the state in order to track their academic progress. The contract comes from a chunk of New York State’s $700 million Race to the Top grants, a product of the American Recovery and Reinvestment Act (ARRA), signed into law by President Obama in February 2009. Race to the Top, according to the Department of Education, is “a competitive grant program designed to encourage and reward States that are creating the conditions for education innovation and reform.”

Murdoch’s acquisition of Wireless Generation came shortly after News Corp. hired Joel Klein, the controversial former schools chancellor, as executive vice-president and CEO of News Corp’s Education Division.

Klein, notorious for his harsh demeanor and polarizing rhetoric, implemented numerous reforms during his reign as chancellor from 2002 to 2010, including emphasizing data-driven initiatives, and closing schools and opening charter schools in their place. Now, in News Corp’s Education Division, he aims to create tools and strategies he believes will transform the field of education.

Klein’s goals run consistent with those of Murdoch’s Wireless Generation, a New York-based company that develops software and tools that track student test scores and modernizes assessment data available to administrators and teachers. According to News Corp, “The Company is a key partner to New York City's Department of Education on its Achievement Reporting and Innovation System (ARIS) as well as on the City's School of One initiative, named by TIME Magazine as one of the Best Inventions of 2009.”

While Murdoch and News Corp may hail the ARIS system one of Wireless Generation’s innovative and successful initiatives, many educators found the program to be faulty and ineffective. In an interview with Democracy Now! on July 19, Leonie Haimson, the executive director of Class Size Matters, said that the ARIS system “cost us already $80 million and is widely believed and discussed openly as an inferior product. There are many other data systems that are much better, and principals and teachers have said that this is a very inferior product, it’s not useful, and it was a really big waste of money…Why was this contract awarded Wireless Generation, when in New York City the data system is so widely regarded as being a failure?”  

Ever the business and marketing mogul, Murdoch has zeroed in on the burgeoning field of for-profit education technology, a market worth billions of dollars a year just in the United States.

"When it comes to K through 12 education, we see a $500 billion sector in the U.S. alone that is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching," said Murdoch in a November 22, 2010 press release.

Critics of Wireless Generation contest that the state education department should overhaul the no-bid contract, and find issue with the company’s ability to access to data about city students, including age, name, ethnicity, and test scores. The contract, if approved under the state review process, would give the company access to such information on students across the state, in order to track down student test scores. Even though using private information for the company’s own purposes is illegal, the prospect of a Murdoch-owned enterprise perched atop a wealth of private student information was deeply concerning to many parents, especially in lieu of the recent privacy violations allegedly committed at Murdoch’s News of The World.

Many critics have scoffed at Murdoch’s transformative education rhetoric and his goals to “extend the reach of great teaching.” Is this “philanthropic” initiative to evaluate teachers and students through standardized test scores a testament to his commitment to “great teaching,” or might it reveal a different sort of dedication—one to earning great profit?  

A number of teachers and advocates, concerned about the increasingly ominous presence of private companies in schools, point to the fact that Murdoch-style education reform has done very little to redeem our public school system. In a November 2010 article, Valerie Strauss of the Washington Post noted, “The loyalty of for-profit companies is to the bottom line and investors, not necessarily to the general good of public schools and kids. And they get their return on investment with public money.”

Given the recent allegations against News Corp and Murdoch’s media conglomerate, it doesn’t seem entirely unlikely that Murdoch’s newfound interest in education technology might be explained by his longstanding interest in revenue. To many education loyalists, the Wireless Generation presence in public schools appears to be yet another way for big corporations to gain access to public funds and grants such as Race to the Top, and create a lucrative enterprise out of “the education marketplace” for the eventual profits of their shareholders.

The insider aspects of this no-bid contract to the recent chancellor have also drawn fire.

In a June 9 media release, New York State United Teachers Union vice-president Maria Neira voiced concern that the State Department attempted to minimize publicity surrounding the contract. “The Regents chancellor and state Education Department leaders demand ever-increasing transparency and accountability from teachers, but pay lip service to transparency and accountability when it comes to awarding lucrative contracts to their friends and political allies,” said Neira.

Both Klein and Murdoch’s demonstrated interests in manipulating the education marketplace for profit-making business opportunities may not have come under such harsh scrutiny had it not been for the recent developments of the Murdoch hacking scandal.  

“People are waking up to the fact that the Murdoch empire is too powerful…this is a small problem, but it won’t be the last one. A lot of people in New York will be beginning to focus on this,” Dan Cantor, executive director of the New York Working Families Party told AlterNet.

Following the hacking allegations, on June 6, Murdoch created a commission to conduct an internal investigation of the scandal, to “provide important oversight and guidance” and “fully cooperate with the police in all investigations,” according to Peter Hutchinson of the Telegraph. The head of the commission is none other than Joel Klein. Many expressed amazement about Murdoch’s insider choice. “He’s not suited to be the person who’s internally charged with looking at the Murdoch mess,” said Cantor.

Cantor and the Working Families Party are calling on the FBI, the Department of Justice, the Federal Communications Commission, and Congress to investigate the Murdoch empire, as well as reports that News Corp reporters hacked into the phones of 9/11 victims. The WFP has also released a petition imploring Governor Cuomo, Attorney General Eric Schneiderman, and Comptroller Tom DiNapoli, to “stop New York from giving $27 million to Rupert Murdoch.”

“Murdoch has shown that he’s not a good corporate citizen, and we want our officials in Albany to look extra carefully at this contract, especially since it’s being done on a no-bid basis,” said Cantor.

Cantor writes in his petition:

“The possibility that Murdoch money was used to hack the phones of 9/11 victims takes your breath away. More must be done. The Department of Justice should pursue an investigation into any violations of the Foreign Corrupt Practices Act, and Congress should initiate hearings. Meanwhile, former New York schools chancellor Joel Klein was hired by Murdoch to run a subsidiary education business.  And now there’s a report that Klein is about to get a $27 million no-bid contract for his new boss from the state. This cannot be allowed.”

Joel Klein, after accepting his News Corp. job, revealed that he’s "long admired News Corporation's entrepreneurial spirit and Rupert Murdoch's fearless commitment to innovation." One could certainly make the case that Murdoch’s fearless entrepreneurial spirit earned him precisely the spot he deserves—in court. After years of unscrupulous and apparently illegal media tactics, perhaps Murdoch won’t be writing the final chapter of this educational story.

To sign the New York Working Families Party’s petition,click here.

Erica Hellerstein is a contributor to AlterNet and a freelance writer.
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