The Denver Post’s editorial board recently published a piece endorsing four candidates running for the Denver school board, all of them in support of reforms that employ some basic principles of for-profit businesses to the running of nonprofit public education. The editorial calls their opponents “anti-reformers” (as if they oppose making things better for students) and says they “enjoy plenty of money and energy.” (That, apparently, includes a 19-year-old “anti-reformer” candidate who just graduated from high school.)
Here’s what it doesn’t mention: the big out-of-state money behind the editorial board’s chosen candidates. This is a phenomenon that we’ve seen for years now, one in which some of America’s wealthiest citizens back school board candidates — even in states in which they don’t reside — to push their view of how public schools should operate. It has happened in Louisiana, California, Minnesota, Arkansas, Washington, etc.
This is a detailed post explaining the flow of dark money — funds donated to nonprofit organizations that spend the money to influence elections but do not have to disclose where they got it — by looking at the Denver school board race. There are four open seats on the seven-seat board and a total of 10 candidates.
The following was written by Darcie Cimarusti, a New Jersey public school activist who blogs at Mother Crusader and is communications director at the Network for Public Education; and Carol Burris, a former award-winning New York high school principal who is executive director of the Network for Public Education, a nonprofit advocacy group. Burris was named the 2010 Educator of the Year by the School Administrators Association of New York State, and in 2013 the same organization named her the New York State High School Principal of the Year. Burris has been chronicling problems with modern school reform and school choice for years on this blog.
By Carol Burris and Darcie Cimarusti
It’s a delightful name — Raising Colorado — perhaps a play on the title of the 1987 zany crime comedy, “Raising Arizona,” starring Nicolas Cage and Holly Hunter. Raising Colorado, unlike the movie, however, is nothing to laugh about.
Raising Colorado is the name of a super PAC that spends money in Colorado elections. According to the Office of the Colorado Secretary of State, Raising Colorado is run by Jennifer Walmer from an office in Littleton, Colo. Its stated purpose is to support Colorado candidates who “advocate for high-quality public education” through “uncoordinated, independent expenditures.”
The reality of Raising Colorado, however, is something far more complex. Walmer is not a lone activist collecting donations to support candidates who advocate for public schools. The real action happens at Raising Colorado’s true address: 325 Gold Street in Brooklyn, New York. At that same address, in the same suite, you will find: Democrats for Education Reform-Arizona, Philadelphia 30 PAC and Fairness for Colorado.
In 2014, that same address housed a “charitable nonprofit” called Education Reform Now Advocacy (ERNA), from which Wolmar received part of her salary. ERNA listed its 2015 address as 222 Broadway, 19th Floor in NYC, the same address as the New York City branch of the PAC Democrats for Education Reform (DFER). Walmar is also the Colorado director for Democrats for Education Reform, a group founded and supported in large part by hedge fund managers that was formed before the 2008 presidential election and that embraced corporate reform and school choice. Apparently, she has lots of jobs and wears many hats. Are you beginning to connect the dots?
Raising Colorado, whose formal designation is an independent expenditure committee (IEC), is not a grass-roots organization. It is part of what looks like an elaborate shell game intended to hide the identities of wealthy out-of-state donors who want to overwhelm races with their contributions, but do not want their identities known. It supports candidates that support charter schools, shutting down traditional public schools, evaluating teachers by test scores and all of the other “reforms” dear to the hearts of those who want to corporatize public education. And through this shell game, donors secretly funnel money from afar to “reform candidates” across the country.
Political contributions and transparency
Who contributes to a political campaign is supposed to be known to the public. Transparency allows voters to be well-informed consumers of the campaign literature they read and the advertising they watch. Most important, transparency allows the public and the press to be watchdogs, making sure that the financial interests of donors are not favored by those they help elect.
That is why donors to political action committees (PACs) are public information. Many people become uneasy when they see money flooding into their community from rich folks who live far away and are not personally affected by the election’s results.
Independent expenditure committees such as Raising Colorado, commonly known as super PACs, are also supposed to be transparent. They exist, in theory, so that like-minded individuals and small PACs (with all donations publicly reported) can pool their money and weigh in on candidates and issues, independent of candidates’ campaigns.
However, Raising Colorado, is not directly funded by small PACs and individuals. It is funded primarily, and so far in 2017 exclusively, by the nonprofit organization Education Reform Now Advocacy (ERNA), a 501(c)(4) organization. A 501(c)(4) is referred to as a “social welfare” group because its purpose is to promote causes that serve the public good. Your local volunteer fire department, for example, is most likely a 501(c)(4). Such organizations can involve themselves in politics, but political activity, according to the IRS, cannot be their primary purpose. Despite IRS guidance, some have become conduits of “dark money” — through which billionaires can secretly influence elections.
Raising Colorado and Education Reform Now Advocacy
Let’s take a look at the present election cycle. Raising Colorado has received only two donations — on Oct. 2 it reported a $325,000 donation from Education Reform Now Advocacy and on Oct. 17 it reported a second donation of $300,000 from the same organization.
Raising Colorado has reported spending, to date, of about $165,000 supporting four candidates for the Denver School Board: Barbara O’Brien, Angela Cobián, Mike Johnson and Rachele Espiritu. And before the race is over, more cash can still flow in and flow out of this local school board race.
This is not Raising Colorado’s first Denver rodeo. According to its 990 tax form, ERNA contributed $465,000 to Raising Colorado in 2014 and about another $100,000 to other similar organizations in the state. In 2015, ERNA added an additional $375,000. That year, Raising Colorado spent nearly $236,000 to support three school board candidates. It paid off. The billionaire-backed “reform candidates” grabbed complete control of the Denver School Board. This year’s election is about keeping that control.
ERNA’s reach and interests go well beyond Denver. In 2014, the group spent more than $5.7 million in political expenditures, with over $3 million going to Newark First, a PAC listed at ERNA’s own Broadway address. The purpose of Newark First was to get Shavar Jeffries elected mayor of Newark, N.J.. That effort failed, in part, because the citizens of Newark became aware of the involvement of big New York City money flooding into their mayoral race. Jeffries is now president of both ERNA and Democrats for Education Reform.
Yet despite the millions of dollars flowing in and out of ERNA, if you search the Web to learn about it, you will not find a website. How exactly does one learn about the “social welfare” work the organization does, or how to contribute? For the average citizen, that is unknown.
Whose money is bankrolling ERNA and, by extension, its PACs, such as Newark First and Raising Colorado? ERNA, DFER and all related DFER PACs and nonprofits were started by Wall Street hedge-funders who still sit on and control their boards. According to Alternet, Rupert Murdoch gave at least $1 million to ERNA. We also know that the Broad Foundation gives to Education Reform Now (ERN) a 501(c)(3), which supplies some financial support to Education Reform Now Advocacy. While we are not allowed to see ERNA’s list of funders, I bet those of us who follow the billionaires who are hijacking elections can make some pretty good guesses.
Stopping dark money
As liberal as the 501(c)(4) Internal Revenue Service guidance is when it comes to dark money spending, there are rules, and in 2014 ERNA broke them. That year the political spending of ERNA was so out of control, ERNA admitted it on its own 990. In noting that it well exceeded the 50 percent threshold for political spending (over 77 percent of its spending went to support political campaigns), it said, “management will continue to monitor future political expenditures to ascertain compliance with the IRS.”
Earlier this year, another pro “education reform” 501(c)(4), Family for Excellent Schools Advocacy, (FESA) was forced to dissolve itself, paid over $425,000 in settlement money and had to publicly reveal its donors. FESA had solicited checks to support a ballot initiative that would raise the cap on Massachusetts charter schools.
All in all, the group raised $15 million, according to the Boston Globe, which was given directly to Great Schools Massachusetts to support the pro-charter ballot initiative. That disclosure resulted in scandal for the governor’s office when it was revealed that the group had anonymously received checks from members of Gov. Charlie Baker’s administration.
That same Boston Globe article quoted Maurice Cunningham, a political scientist at the University of Massachusetts, who explained the “cloak of secrecy” that FESA used to project its grass-roots image:
“You can’t say, ‘We’re Billionaires for Excellent Schools,’” said Cunningham.
Now let’s go back to ERNA. When donations to ERNA spiked to nearly $7 million in 2014, and even more than that amount was spent on political activities, are we to believe that the hidden donors had no idea how their money would be spent? How does ERNA solicit donors without a website? Why was ERNA not sanctioned when it exceeded IRS limits in 2014?
Stopping the flow of dark money is difficult but not impossible. The public should demand that:
- States do a better job, like Massachusetts did, investigating political expenditures whenever dark money goes to a PAC from a 501(c)(4).
- The IRS better monitor the activities of 501(c)(4) organizations, removing their nonprofit status when they exceed political activity thresholds.
- Whenever a 501(c)(4) spends more than 20 percent of its spending on political activities, it should be required to list all donors.
Meanwhile, the voters of Denver need to know that Raising Colorado is not a grass-roots organization, but rather part of a New York-based, billionaire-supported effort to support four candidates in their school board race. If contributions are hidden, voters should ask why. The public must demand some sunshine. No excuses.
Asked about the funding of Raising Colorado, Jennifer Walmer sent an email that said:
Raising Colorado is an Independent Expenditure Committee that has received contributions from Education Reform Now Advocacy and the Colorado Education Association. We are the Colorado chapter of a national organization that supports progressive reform candidates, and raises money both locally and nationally.We also have the DFER Colorado Small Donor Committee, that accepts only small contributions of $50 or less, and the DFER Political Action Committee, which have both been active in these races as well. The public reports[tracer.sos.colorado.gov] on donations details the large number of local contributors.
UPDATE: Darcie Cimarusti, one of the authors of the above post, noted the following in response to Walmer’s email:
From 2015-2017, Raising Colorado, according to Tracer, the official site for tracking donations in Colorado races, had NO other donors other than Education Reform Now Advocacy.In 2014, only, there was one other donor, CEA [Colorado Education Association], which made a $50,000 contribution. The total contributions to Colorado Raising from Education Reform Advocacy in New York City is $2,135,000.