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Posted at 04:47 PM ET, 07/19/2011

Calls grow for scrutiny of Murdoch’s education division

Calls are growing in New York for government officials to review and reject multimillion-dollar no-bid contracts let by the state and New York City education departments to Rupert Murdoch’s beleaguered News Corp.

The contracts either have gone or are set to go to Wireless Generation, an education technology company that became a subsidiary of News Corp. last November when Murdoch’s firm purchased 90 percent of it for about $360 million. The sale made news in part because Wireless Generation had financial ties to the New York City public school system, and just a few weeks earlier, the school system’s chancellor, Joel Klein, had resigned to become executive vice president at News Corps.

Murdoch recently appointed Klein, once the country’s chief antitrust enforcer at the Justice Department, to serve as his adviser on the scandal over alleged phone hacking and other illegal newsgathering at the now-closed News of the World tabloid.

On Tuesday, Klein sat next to Murdoch’s wife, Wendi Deng, as Murdoch and his son, James, testified about the scandal before a British parliamentary committee.

Klein, who was New York City schools chancellor for eight years, signed on to News Corp to advise Murdoch on building a business in the education marketplace, company officials said at the time. Murdoch had said in a Nov. 2010 statement about the Wireless Generation purchase that “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.”

When Klein announced that he was moving to News Corp., he said, according to a statement released by the company: “I’ve long admired News Corporation’s entrepreneurial spirit and Rupert Murdoch’s fearless commitment to innovation. I am excited for the opportunity to be part of this team — and to have the chance to bring the same spirit of innovation to the burgeoning education marketplace.”

The Huffington Post quoted a Wireless Generation spokeswoman, Joan Lebow, as saying:

“Wireless Generation has absolutely no involvement in the events in question — which took place years before the transaction with News Corp. Wireless Generation is an independent subsidiary and does not share student data with News Corp. or any other News Corp. subsidiary or entity. As for our own business, especially as it relates to data security and personal privacy, we have a long and successful track record of safeguarding user data, in accordance with the highest standards and industry regulations, in New York and nationwide.”

In New York, critics are urging state and city officials to stop contracts from going to Wireless Generation, which, among other things, builds large-scale data systems that centralize student data.

Before it was sold, Wireless Generation had partnered with New York City’s Education Department to build the Achievement Reporting and Innovation System (ARIS) and for work on another project, the online School of One.

The New York City Comptroller’s office recently approved a $2.7 million extension of the School of One contract between the state Education Department and Wireless Generation, the Huffington Post reported. According to the Daily News, the contract was initially rejected in June by the comptroller because the application package did not include basic information, including a letter from Klein saying he had recused himself from any involvement. Once the letter was received, the contract was approved.

The state education department has also awarded a $27-million contract for student data systems to Wireless Generation, but the state comptroller has until this fall to decide whether to approve it.

The New York Daily News, in a story about how the media scandal could affect News Corp.’s new education division, quoted Patrick Sullivan, a parent leader on the city’s Panel for Educational Policy, as saying that it was “really disturbing” that education officials had “hired a Murdoch company to work on our children's data.”

And now, Class Size Matters, a New York-based education advocacy nonprofit organization, has organized a petition drive asking the state and the New York City comptroller to reject no-bid contracts with Wireless Generation. [Correction: The original version of this post gave the incorrect name of the advocacy organization. Class Size Matters is correct.]

The petition says that its signers have concerns about a number of issues regarding the contracts, including the fact that they were no-bid, and questions whether there were any “troubling conflict of interest” issues concerning the timing of Klein’s move to News Corp. and the purchase of Wireless Generation.

Tim Knowles, director of the University of Chicago's Urban Education Institute, told the Huffington Post that he couldn’t say whether News Corp’s. education division would be financially affected by the scandal in the company’s media division, but he predicted that Murdoch’s reputation would be harmed in the education world.

“There will be fewer people who want to hear from Rupert Murdoch on questions that run right to the heart of student learning,” he was quoted as saying.

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By  |  04:47 PM ET, 07/19/2011

 
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