T2 tilson

===

===

Not only is DFER led by Democrats who have failed to win their last elections, a number of DFER-backed candidates have lost in recent elections, as with the Colorado school board races in 2015.

On the other hand, DFER spent more than <a href="http://www.commoncause.org/states/new-york/research-and-reports/polishing-the-apple-examining.pdf" style=" text-decoration: none;">$4 million</a> on TV ads in 2010 that attempted to blame New York teachers’ unions for problems caused by the disastrous federal "Race to the Top" program. Among other things, DFER also spent $1 million on ads <a href="http://www.thenation.com/article/astroturf-activism-who-behind-students-education-reform/" style=" text-decoration: none;">attacking</a> the Chicago Teachers Union and supporting Rahm Emanuel in 2012.

<h1 style=" color: rgb(0, 0, 0); font-family: sans-serif; font-style: normal; font-variant: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; line-height: 1.5em; margin-top: 0.75em; margin-bottom: 0.75em;">Who Funds DFER? "Education Reform Now Advocacy" and Its (Hedge) Funders</h1>

<p style=" color: rgb(0, 0, 0); font-family: sans-serif; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 24px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 1.5em 0px;">DFER is actually the more <a href="http://www.edweek.org/ew/articles/2012/05/16/31adv-overview_ep.h31.html" style=" text-decoration: none;">well known</a> PAC arm of Education Reform Now, Inc. (ERN), a 501(c)(3) charitable nonprofit, and Education Reform Now Advocacy, Inc. (ERNA), a 501(c)(4) social welfare group. Their acronym not only sounds like the word "earn," but also it has the backing of some really huge earners.

DFER co-founder (and founder of the <a href="http://www.t2partnersllc.com/" target="_hplink" style=" text-decoration: none;">T2 Partners</a> hedge fund) Whitney Tilson <a href="http://www.nytimes.com/2010/11/13/business/13nocera.html/" style=" text-decoration: none;">explained</a> the hedge funders interest in education noting that “Hedge funds are always looking for ways to turn a small amount of capital into a large amount of capital.”

The Board of Directors for ERN consists almost entirely of Wall Streeters who made their fortunes through financial groups and hedge funds, such as Sessa Capital, Gotham Capital, Covey Capital, Charter Bridge Capital, Maverick Capital, Cubist Systematic Strategies, and Sanford C. Bernstein.

As the New York Times <a href="http://www.nytimes.com/2010/05/10/nyregion/10charter.html/" style=" text-decoration: none;">reported</a>: DFER's supporters have included "the founders of funds like <a href="http://www.anchorage-capital.com/" title="Anchorage’s Web site." style=" text-decoration: none;">Anchorage Capital Partners,</a> with $8 billion under management; <a href="https://www.greenlightcapital.com/" title="Greenlight’s Web site." style=" text-decoration: none;">Greenlight Capital,</a> with $6.8 billion; and <a href="http://investing.businessweek.com/research/stocks/private/snapshot.asp" title="Overview from Bloomberg Business Week." style=" text-decoration: none;">Pershing Square Capital Management,</a> with $5.5 billion."

However, ERN and ERNA do not disclose who its major donors are and how much those big donors give to fund its operations and ambitions.

It is known, though, that <a href="http://www.nytimes.com/2011/07/24/business/media/joel-klein-ex-schools-chief-leads-internal-news-corp-inquiry.html/" style=" text-decoration: none;">FOX</a>'s Rupert Murdoch gave at least $1 million to ERN. Murdoch has expressed his desire to get in on education "reforms," stating "When it comes to K through 12 education, we see a $500 billion sector in the U.S. alone...."

The most recent federal tax filings of ERN/ERNA show that it had more than $12 million available to push education reform ($7.4 million for ERN and $5 million for ERNA) in 2013. Its non-profit filings from the most recent major election year, the 2014 mid-terms, or last year are not available.

What is known from the 2013 is filings is that, in that year, ERNA disclosed that it spent $1.7 million in political expenditures, nearly all of which went to DFER. These funds were used for expenditures, like mass mailings or ads supporting particular politicians but that were "independent" and not to be coordinated with the candidates' campaigns.

ERN/ERNA's leader Joe Williams has been paid a for-profit like salary as its executive, with <a href="http://pdfs.citizenaudit.org/2014_12_EO/26-0596684_990O_201312.pdf" style=" text-decoration: none;">$398,500</a> in total annual compensation in 2013. He's also listed as "Executive Director Emeritus" for DFER and on DFER's board. Williams stepped down from his staff position at DFER in 2015 and also became a director at the Walton Education Coalition that year. That's Walton as in Walmart's Walton family.

Because non-profits like ERN/ERNA do not have to disclose their major donors to the public, even when ERNA is active in supporting electoral activities the public is left in the dark about which hedge funder is actually helping to fund state and local ads and mailers during the election.

Even though privately held corporations and hedge funders do not have to disclose their donations to operations like ERN/ERNA, a CEO's charitable foundations do have to disclose whom they give grants to.

That's how it is known that the Walton family, of Walmart fame or infamy, has backed such efforts. In 2011, for example, ERN/ERNA received $1.1 million from the Walton Family Foundation. The total amount from all such CEO-controlled foundations given to ERN/ERNA to date is not known.

As Matthew Fleischer noted in the Frying Pan News (reprinted by the Huffington Post) that hedge funder Tilson has followed the Waltons' lead: "in a 2010 documentary, <a href="http://www.arightdenied.org/" target="_hplink" style=" text-decoration: none;">A Right Denied</a>, Tilson suggested that DFER was created because of Walmart patriarch John Walton’s support of vouchers and "school choice.'"

It has been investigative journalists who have helped expose the billionaire network behind ERN/ERNA/DFER, despite the opacity on the surface, as noted by George Joseph in the Nation:

"[A]ccording to Steven Brill in his book Class Warfare, around this time [in 2010] the hedge-fund alliance for education reform really began to take off. <a href="https://books.google.com/books?id=xOTpx1HR580C&pg=PA325&lpg=PA325&dq=%22paul+tudor+jones%22+%23+%22dfer%22&source=bl&ots=2vcOdxd3Ud&sig=oDFfidcRxRTaLcbUxGe0WeIbkw8&hl=en&sa=X&ei=xKgHVabKMs2wsASBu4DAAg&ved=0CCwQ6AEwAg#v=onepage&q=%22paul%20tudor%20jones%22%20%23%20%22dfer%22&f=false" style=" text-decoration: none;">That April</a>, for instance, Education Reform Now’s Joe Williams and Bradley Tusk schmoozed over drinks with Paul Tudor Jones II and other hedge-fund billionaires at Home Depot founder Kenneth Langone’s Five Avenue apartment, where they planned a successful campaign to secretly spend millions through a 501(c)(4) political action fund and win the charter cap increase [in New York]. As with Families for Excellent Schools’ mostly secret financing today, Brill notes that Education Reform Now’s donations never became public, and that in May a room full of eager billionaires was able to push the legislature to authorize increased charter-school expansion."

</blockquote>

Despite or perhaps because of this reality, the DFER arm in a state where ads are run merely discloses to the state authority that it received contributions from ERNA, not the hedge funders.

So, the ERN/ERNA/DFER operation is like a shell game when it comes to the public being able to pierce through the layers of non-profits to find the name of a particular billionaire or uber-rich hedge funder whose money is propping up a particular electoral candidate being backed by DFER.

Similarly, DFER in the states has been known to partner with other groups that have similarly murky or occluded funding sources.

Take California and Colorado, for example.

<h1 style=" color: rgb(0, 0, 0); font-family: sans-serif; font-style: normal; font-variant: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; line-height: 1.5em; margin-top: 0.75em; margin-bottom: 0.75em;">DFER's Gloria Romero Joined with Koch-Connected Groups to Attack Unions</h1>

DFER's California arm was led by Gloria Romero, a former state legislator from Los Angeles, who was termed out from running for re-election after leading the state senate.

Romero failed in her bid to become the state Superintendent of Public Instruction in 2010, and then, like so many other failed politicians, she was welcomed as a leader for DFER.

DFER began filing election disclosure forms in California in 2012. Some of its most high-profile activities under Romero were in partnership with other secretive groups.

Ultimately, it turned out that Romero was not just fronting for the ERN/ERNA/DFER hedge funders but also for non-profits closely tied to the controversial billionaireKoch brothers. And as the Center for Media and Democracy has documented, Charles and David Koch's <a href="http://www.prwatch.org/news/2014/07/12527/his-dad-charles-koch-was-bircher-new-documents" style=" text-decoration: none;">antipathy</a> toward public schools and unions runs deep and is part of their multi-decade agenda to re-shape America.

To try to win Prop 32, DFER's Romero worked with a group called "Americans for Responsible Leadership" (ARL), which received more than 97% of its $24 million in funding from another group called the "Center for Protect Patient Rights" (CPPR).

As <a href="http://www.opensecrets.org/news/2013/12/americans-for-responsible-leadership-wholly-funded-by-koch-linked-group/" style=" text-decoration: none;">noted</a> by Open Secrets, ARL:

"<a href="http://www.opensecrets.org/outsidespending/detail.php?cmte=Americans+for+Responsible+Leadership&cycle=2012" style=" text-decoration: none;">spent nearly $9.8 million</a> in the 2012 elections, including $3.2 million against President Obama’s re-election bid, according to reports it filed with the Federal Election Commission. The rest was spent supporting Obama’s rival, GOP nominee Mitt Romney, and 20 other Republican candidates, most of whom were running for Senate seats ... ARL also gave $11 million to a group working on a California ballot measure and nearly $1.4 million to organizations fighting two Arizona ballot initiatives," including one on redistricting.

</blockquote>

At the time of the election in 2012, the full extent of the connections to the Koch network's CPPR was not known to the public.

As Open Secrets stated, "the state of California ... demanded to know, under state law, who donated the $11 million that ARL sent to the Small Business Action Committee, a group that was fighting a tax-hike initiative and supporting a measure to cut the influence of labor unions. Under order from a state judge ARL eventually revealed that it received the funds from CPPR; CPPR in turn got the money from Americans for Job Security, another dark money group."

As Open Secrets detailed: "The state of California wound up <a href="http://articles.latimes.com/2013/oct/24/local/la-me-pc-california-koch-arizona-campaign-finance-20131024" style=" text-decoration: none;">fining ARL and CPPR a total of $1 million</a> and requiring the Small Business Action Committee to disgorge the $11 million to the state."

(The Kochs denied any wrongdoing and were not themselves fined. It is not clear, however, whose funds actually paid the fines; it was paid b certified check. Meanwhile, the Kochs' Americans for Prosperity is now hotly contesting long-standing state requirements that major donors of non-profits that are exempt from paying taxes be disclosed to the state, which AFP is claiming could chill its <a href="http://www.law360.com/articles/762688/koch-bros-group-s-ceo-defends-donor-secrecy-at-trial" style=" text-decoration: none;">seven-figure</a> donors.)

Even before that historic fine after the election, however, some in California had traced at least some of the money fueling the fight for Prop 32 to the network of Koch front groups--before the voting started. (During the investigation, the state was able to identify only some of the direct donors and the Kochs have said they did not write a check to fund the proposition fight. But there is zero doubt that the Kochs' Freedom Partners directed $115 million to CPPR in 2011-2012; the Kochs told the press that they did not indirectly support Prop 32. That's how the shell corporations and non-profits operate to allow secret donors to deny any responsibility for how their funds are used. The amount the Kochs gave to their Freedom Partners group remains hidden, but it was their operatives who redirected the funds raised to select non-profits aligned with their agenda in that election cycle.)

DFER's Gloria Romero appeared in ads backing both of the Koch network-backed propositions.

So she was asked by Matthew Fleischer, before the election, "about her political alliance with the Koch brothers and other wealthy supporters of Proposition 32, and she conspicuously avoids bringing up their names."

As he noted, “I have sat in the belly of the beast,” she says. “I have seen the realities of money and its influence.”

Fleischer also reported: "'Money is the mother’s milk of politics,' Gloria Romero tells me on the phone. 'It’s flowing to both sides. Government isn’t about drawing lines. It’s not about saying you’re on that side and you can’t come over.'”

Operatives funded or directly employed by the Kochs have made similar claims in their efforts to destroy clean election law limits on corporate influence and the coordination of election groups funded by dark money tied to corporations or CEOs.

Romero's comments echo the Team Koch mantra.

As Pro Publica noted, the key Koch operative in that election was Sean Noble:

"Plucked from obscurity by libertarian billionaire brothers Charles and David Koch, Noble was tasked with distributing a torrent of political money raised by the Koch network, a complex web of nonprofits nicknamed the Kochtopus, into conservative causes in the 2010 and 2012 elections. Noble handed out almost $137 million in 2012 alone-- all of it so-called dark money from unnamed donors--from his perch atop the Center to Protect Patient Rights, a group run out of an Arizona post office box...."

</blockquote>

<p style=" color: rgb(0, 0, 0); font-family: sans-serif; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 24px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 1.5em 0px;">That story also highlighted this telling excerpt: "I must tell you that Sean Noble from your group has been immensely helpful in our efforts,' a California multimillionaire <a href="https://propublica.org/documents/item/810105-russo-miller-documents#document/p52/a128460" style=" text-decoration: none;">wrote to Charles Koch</a> in October 2012 about Noble's help for Prop 32 in an <a href="https://www.propublica.org/documents/item/810105-russo-miller-documents#document/p52/a128460" style=" text-decoration: none;">email</a> to Charles Koch" asking for him personally to write a check for more money. That email surfaced after the election.

In fact, it was not until nearly a year after the 2012 elections that the general public learned that the Koch brothers and their operatives had created a behemoth that injected more than $200 million into the 2012 elections, called the "Freedom Partners Chamber of Commerce." CMD detailed the Freedom Partners' shell game <a href="http://www.prwatch.org/news/2013/09/12247/breaking-new-list-dark-money-shell-game-groups-connected-kochs" style=" text-decoration: none;">here</a>.

Noble's group, CPPR, received money from Freedom Partners and TC4 Trust, which was disclosed in IRS filings made public well after the election was over. (Those Freedom Partners' documents also reveal that TC4 funded "PRDIST," which are the David Koch operations that go by the name "Americans for Prosperity" for the public.)

<p style=" color: rgb(0, 0, 0); font-family: sans-serif; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 24px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 1.5em 0px;">For those keeping score, that's like at least four layers of Koch-hood: Freedom Partners to TC4 to CPPR to ARL to Prop 32. That proposition--the proposition these very special interests tied to the billionaire Koch brothers and their network of billionaires were underwriting--was actually branded the  "Stop Special Interest Money Now" proposition.

And it was DFER's Romero who appeared in ads for Prop 32 that were paid for by the special interest money behind that proposition.

In the meantime, the Los Angeles County Democratic Party asked DFER to <a href="http://www.lacdp.org/wp-content/uploads/2012/05/LACDP-2012-DFER-Cease-Desist-Final.pdf" style=" text-decoration: none;">stop using the word "Democrats"</a> in its name, and the state Democratic Party passed a similar <a href="http://d3n8a8pro7vhmx.cloudfront.net/craig/mailings/7/attachments/original/CDP_Fracking.pdf?1371135169" style=" text-decoration: none;">resolution</a> of condemnation.

<p style=" color: rgb(0, 0, 0); font-family: sans-serif; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 24px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 1.5em 0px;">So, to recap, DFER routinely funnels out-of-state hedge fund money into state political fights and, in 2012, the leader of DFER-California was working with another murky group funded by yet another group--one operating out of an Arizona mail drop box--funded by still other groups that were part of the Koch network of big secret money in elections.

To be clear, Romero was not working for the Kochs technically; she was working with the Koch network on the DFER effort that appears to have taken much of her time in 2012.

But that may be a distinction without a difference when it comes to sharing a political agenda--even though Romero and the Kochs failed in their 2012 quest in California.

DFER's California leader, its public face, was the public face of key components of that joint but unsuccessful proposition campaign.

In 2013, Romero left DFER's employ to create the "California Center for Parent Empowerment," named after the bill she gained fame pushing into law: the "Parent Empowerment Act," which is better known as "Parent Trigger."

Romero spearheaded that controversial bill when she was in the state legislature but, as CMD has <a href="http://www.prwatch.org/news/2012/09/11763/wont-back-down-film-pushes-alec-parent-trigger-proposal" style=" text-decoration: none;">noted</a>:

* "[T]hat California law was based on a <a href="http://www.time.com/time/nation/article/0,8599,2077564,00.html" target="blank" style=" text-decoration: none;">proposal</a> from Ben Austin, a policy consultant for a small non-profit education organization called Green Dot Public Schools, which manages <a href="http://www.greendot.org/page.cfm?p=1646" target="blank" style=" text-decoration: none;">charter schools</a> for the city of Los Angeles."

* "Austin subsequently formed Parent Revolution, which promotes these laws across the country. But this is not your local PTA. Parent Revolution is <a href="http://parentrevolution.org/content/our-funders" target="blank" style=" text-decoration: none;">backed</a> by big money, including receiving funding from the conservative <a href="http://parentrevolution.org/content/our-funders" target="blank" style=" text-decoration: none;">Walton Family Foundation</a> (think Wal-Mart), which has spent over a billion to promote school privatization."

* "The rabid pro-privatization <a href="http://www.sourcewatch.org/index.php/Heartland_Institute" target="blank" style=" text-decoration: none;">Heartland Institute</a> quickly took up the Parent Trigger idea in 2010. The <a href="http://heartland.org/policy-documents/parent-trigger-model-transforming-education" target="blank" style=" text-decoration: none;">Heartland version of the bill</a> (PDF) went a step further and gave parents the authority to trigger a school's restructuring regardless of whether it is 'failing' or not."

The Heartland Institute has spent untold sums promoting "education reforms" that undermine public schools in America, though it is more infamous for its <a href="http://www.forbes.com/sites/stevezwick/2012/05/06/heartlands-unabomber-fiasco-is-par-for-the-course/#1f57494d7139" style=" text-decoration: none;">extremism</a> in climate change denial--even equating those who recognize that climate change is happening with the Unabomber, Ted Kaczynski.

Heartland took the California parent trigger bill to the 2010 meeting of the <a href="http://www.alecexposed.org/" style=" text-decoration: none;">American Legislative Exchange Council</a>, whose biggest funder is the Koch fortune in myriad ways. The corporate-backed ALEC adopted the bill as a national model for other states. (The Heartland Institute has also received funding from the Koch family foundations.)

In 2013, Romero began collaborating with the state affiliate of ALEC's sibling group, the State Policy Network (SPN), and also helped it pull the trigger in other communities.

That SPN affiliate, the California Policy Center (CPC), has promoted Romero's help with Parent Trigger. SPN has also <a href="https://www.spn.org/publications/detail/spn-state-labor-policy-exchange-volume-2-issue-38" style=" text-decoration: none;">touted</a> Romero its publications. Romero has also been a featured speaker for another SPN affiliate, the Cascade Policy Institute in Oregon.

SPN has received funding from the Koch family foundations. Although SPN distributes some of the funding it receives to its 60+ state affiliates, it is not known if the CPC has directly received any Koch cash.

Meanwhile, Romero's new group, whose website is parentempowerment.org, was granted non-profit status in 2015, but because it is so new, any tax filings about its revenues and expenses are not public. However, its donors would not be revealed in such filings, so it is not known who is now funding Romero or what she is paying herself for education reform.

And just last year, SPN's CPC--the California Policy Center--announced that Romero had joined it as its "Director of Education Reform," in addition to her work at her own organization. CPC advances the ALEC/SPN agenda and opposes a progressive Democratic agenda in almost every way.

Democrats for Education Reform-California, meanwhile, continues on without Romero, with Steve Barr of Green Dot as board chair.

<h1 style=" color: rgb(0, 0, 0); font-family: sans-serif; font-style: normal; font-variant: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; line-height: 1.5em; margin-top: 0.75em; margin-bottom: 0.75em;">DFER's Jen Walmer Used Out-of-State Cash for Election Materials Dubbed "Raising Colorado"</h1>

==