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Editorial: Who is Going to Make Money on the Flexibility Act?

By Bill Britt
Alabama Political Reporter

MONTGOMERY—Over the last three weeks one puzzling question has buzzed around the State House. That question is, why has the Speaker of the House pushed so relentlessly to secure the passage of the School Flexibility and Local Control Act of 2013?

From bullying the republican caucus in the House to threatening State Senators, Hubbard has acted like a Mafia Don in pursuit of the Flex Act’s passage.

As I often remind myself politics is about who gets what. In Alabama many times that means who gets the green light to make big bundles of cash and who in the shadows gets the kickbacks. As one Senator said, “We know the guy in the big corner office on the fifth floor is going to make money off this deal we just can’t figure out how.” This is one legislator view of why Hubbard is pushing the Flex Act so ruthlessly.

In a world where Occam’s razor can’t cut through 50 shades of gray, it often takes some digging to find, who gets what how and when. We know from his history that Hubbard, has looked for ways to divert campaign dollars back into his own companies. Is the Flexibility Act a way to ensure that education funds flow into his pockets as well?

Who stands to make a lot of money from the Flexibility Act? Actually many people, from textbook vendors to so-called specialty curriculum and of course the big one charter school, they all stand to make hundreds of millions of dollars.
The for-profit K12, Inc. is by far the most notable player in the charter school bid in Alabama.

K12 Inc. (NYSE: LRN) is a publicly traded company with headquarters the Washington DC suburb of Herndon, VA. It is reported to be the largest for-profit virtual education company in the U.S., with $522 million in revenue in 2010. The company claims that its online charters and a smaller number of brick-and-mortar schools are available to 95,000 students in 28 states and 36 countries.

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The current CEO is Ron Packard, who earned $2.6 million in total compensation, according to securities filings in late 2011. Packard has no background in public education. Prior to joining K12 Inc. as CEO and Director, Packard was an executive at software companies, and was a principal in mergers and acquisitions at Goldman Sachs & Co. and at McKinsey & Co. This is the company that wants to run charter schools in Alabama.

A seemingly little known fact is that for-profit charter schools spend millions of education dollars on advertising.

In a report in USA TODAY, Greg Toppo wrote, “If your local public high school has empty seats, the district might lay off teachers. If it’s operated by K12 Inc., the company will take out an ad on CNN, The Cartoon Network or VampireFreaks.com and fill those seats.” This is the way that for-profit charters schools work, fill the sits is the mission, profit the motivation.

In 2010, K12 spent $26.5 million on advertising according to an analysis prepared for The New York Times by Kantar Media.” [New York Times, 12/12/11]
Who do we know in Alabama who owns a media empire? Mike Hubbard has funneled millions of dollars in campaign contributions through his printing company Craftmaster Printing. He has also arranged for this Network Creative Media to make large sums of money passing campaign dollars into the company.

If Hubbard is the man who forces the legislature to pass the Flexibility Act, then who will the for-profit charter school owe their advertising dollars too? Of course this is all supposition, but Hubbard has proven time and again that creating wealth for himself has been the prime mover in his tenure in state government.

Hubbard is an apolitical man, his guiding principles are power and money. He like many others use the mantle of conservatism as a way to enrich and empower themselves. In his self aggrandizing tome Storming the StateHouse the only conservative idea he puts forward is finding, pro-business candidates. Like the poster of him at the firing range, with pistol in hand, he is promoting an image that is for public consumption not the real man at all.

Hubbard, is a man with outsized ambitions, a little Caesar. Like the character Johnny Rocco played by Edward G. Robinson, in the movie Key Largo, “he wants more,” charter schools are a way for him to get that.

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This may be one answer to the question surrounding Hubbard’s Mafioso style push for the Flexibility Act, there could be others. But beware, the fix for our troubled schools may just be a way for a few folks to make a lot of money. The Johnny Rocco’s of the world always want more.

Bill Britt
Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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