Public Employee Press

Education for profit
Klein, Murdoch and a no-bid contract
The former schools chancellor joins a media magnate in the lucrative world of education for profit

By GREGORY N. HEIRES

When media mogul Rupert Murdoch was on the hot seat in July at a parliamentary inquiry into the phone hacking scandal at his now closed News of the World tabloid in London, New Yorkers spotted a familiar face behind him - Mayor Bloomberg's former Schools Chancellor Joel Klein.

Klein, who stepped down a year ago to work for Murdoch, was among the News Corp. execs who accompanied their boss to the hearing, renewing interest here in Klein's record at the Dept. of Education and his new career in the world of education for profit.

Murdoch hired Klein as the chief of News Corp.'s education division for a reported $2 million a year - a big increase over his $250,000 salary for overseeing the city's public school system and its 1 million students.

Anti-union allies

It made good sense for Murdoch to hire Klein - politically and financially. Both are anti-union, support charter schools and share an ideological bias toward profit-making education reforms. Murdoch donated $1 million to Klein's advocacy group Education Reform Now, which opposes seniority protections for teachers and presses for more charter schools in the city.

Only 13 days after Klein said he was joining News Corp. on Nov. 9, 2010, the firm announced that it was buying Wireless Generation, an education technology firm. A few weeks later, the state began discussions with Wireless Generation on a $27 million no-bid contract for education data work.

While Klein was chancellor, DOE gave Wireless Generation a multimillion-dollar contract to work on the troubled Achievement Reporting and Innovation System, ARIS, which compiles confidential student data. DOE plans to renew its three-year $4.5 million contract with Wireless.

Murdoch eyes a $500 billion market

Wireless Generation, with a work force of 400, provides data services involving over 200,000 teachers and 3 million students around the country. For News Corp., the company is a key asset as it expands its tentacles into the for-profit education sector.

The day News Corp. announced the purchase, Murdoch called grade school education "a $500 billion sector in the U.S. alone, waiting desperately to be transformed by big breakthroughs. Wireless Generation is at the forefront of individualized, technology-based learning that is poised to revolutionize public education for a new generation of students" - as well as generate vast profits for Klein and Murdoch.

In late August, New York State Comptroller Thomas DiNapoli threw out the $27 million contract for a statewide school data-tracking system, saying it should have been put out for bids. Education, good government and parent groups, the Working Families Party and the state and city teachers unions had urged the state Board of Regents and DiNapoli to investigate the company's work and not sign the new contract.

They were alarmed that a Murdoch company where 13 have been arrested for illegally hacking into the phones of the British royal family, politicians and families of 9/11 victims would get access to data on millions of students.

"This contract was already under fire for being awarded outside the normal bidding process," state teachers union President Richard C. Iannuzzi and city teachers union President Michael Mulgrew wrote to state Chancellor Mary H. Tisch and Education Commissioner John B. King Jr., with a copy to DiNapoli.

"Furthermore, it was awarded just weeks after News Corp. brought former Schools Chancellor Joel Klein on board, raising significant questions concerning conflicts of interest," they said.

They were particularly outraged that Wireless Generation would be allowed to handle "a centralized database for personal student information even as its parent company, News Corporation, stands accused of illegal news-gathering tactics, including the hacking of private voicemail accounts."

"The controversy surrounding Wireless Generation and Klein's venture into the lucrative business of education profiteering is a sorry story about the privatization of public education and the growing reliance on consultants," said Henry Garrido, who heads DC 37's investigation of the Bloomberg administration's $10.5 billion spending on consultants and contractors.