blast from the past

Who is Dan Loeb? The billionaire investor who chairs Success Academy’s board has a checkered past

A screenshot taken from an American Enterprise Institute event published in 2014.

Success Academy’s board chairman and major charter school donor Daniel Loeb made headlines this month for posting a racially charged comment on Facebook that compared an African-American New York state senator with the Ku Klux Klan.

Loeb deleted the post, apologized, and left Success Academy and other charter school organizations scrambling to condemn his behavior — and explaining why he would remain on their boards.

Loeb represents a double-edged sword for charter schools. He is a wealthy and well-connected hedge fund manager, who has given millions of dollars to the charter school cause. But his actions force Success Academy CEO Eva Moskowitz and other charter leaders to make a calculation: Is his behavior a fair price to pay for the boost to their cause?

So far, they have apparently decided that it is. He has not yet been removed from Success’s board. Here are other things Eva Moskowitz has had to grapple with — which include a string of insensitive comments, but also his support for other progressive causes— as she has navigated her relationship with Loeb over the years:

He’s a nonpartisan ally — and antagonist. Loeb supports both Democrats and Republicans, and he also attacks candidates and lawmakers on both sides of the aisle. For example, he’s a major backer of New York Gov. Andrew Cuomo, but he has given to Republican mayoral candidate Nicole Malliotakis and supported Mitt Romney in past presidential campaigns. At the same time, he has lashed out at both Hillary Clinton and Barack Obama, often in withering and offensive terms, while also telling friends he would not vote for Donald Trump.

This isn’t the first offensive comment he’s made. Far from it, in fact. Loeb is fast-fingered on Facebook and frequently uses derogatory language to lash out at people who have made him unhappy. Here are a few of the examples that have been reported previously:

  • Another time Loeb compared the unions and their supporters to the KKK: Loeb posted the following on his Facebook page in 2016, first reported by Dealbreaker: “If you truly believe that education is the dividing line (and I concurr) then you must recognizer and take up the fight against the teachers union, the biggest single force standing in the way of quality education and an organization that has done more to perpetuate poverty and discrimination against people of color than the KKK.”
  • Using a derogatory term for people of color: Loeb once got into a fight with Fairfax Financial, a Canadian insurance company, which resulted in a lawsuit. Reported Reuters in 2011: “Fairfax’s filing quotes Loeb as saying he found the situation somewhat ironic because “the odds are much greater of being strung up by a Canadian Jew than a Canadian schwarze.” Loeb, who is Jewish, used “schwarze,” a derogatory Yiddish word for a black person, to describe Watsa, who is of Indian ancestry.”
  • Making light of domestic violence by comparing Obama to an abuser: In a 2010 letter to hedge fund managers who had supported Obama, Loeb wrote, according to CNBC: “I am sure, if we are really nice and stay quiet, everything will be alright and the President will become more centrist and that all his tough talk is just words; I mean he really loves us and when he beats us, he doesn’t mean it; he just gets a little angry.”
  • Making a xenophobic, homophobic attack against a rival: A damning 2013 Vanity Fair profile dredged up an anecdote from 1999, when Loeb was feuding with John Liviakis, a San Francisco public-relations executive. In an “imaginary monologue” in the voice of Liviakis, Loeb wrote under a pseudonym: “Then I will laugh at you fools for buying my shares and I will celebrate with a bottle of grappa, some fresh feta, and a nice young boy-just like in the old country.” Liviakis sued him for libel.

Loeb’s allies say his mean-spirited comments don’t necessarily reflect deep-seated beliefs. “I have known Dan to be a champion for underserved children who has worked tirelessly for years on their behalf,” said Jenny Sedlis, the head of StudentsFirstNY and a former deputy to Moskowitz, last week. “I know from first-hand experience the post he made does not reflect his true beliefs or the person he is.”

He has championed progressive causes in the past. Most notably, Loeb helped get gay marriage on the books in New York by throwing his influence into winning over Senate Republicans. This position put him in line with most Democrats and with Moskowitz, who has had wide support in New York City’s gay community for nearly 20 years. It also suggests that some of his internet posts, which have included seemingly homophobic comments, do not necessarily reflect the entirety of his beliefs.

It’s also not his first ethical challenge. Loeb had an account on the marital cheating site Ashley Madison, though he later said he did not use the site to engage or meet anyone on the site. He also has garnered criticism for the way he uses online message boards, where some business insiders say he plays fast and loose with federal regulations about the ways hedge fund operators can communicate with investors. And multiple accounts have him hitting a Cuban child with his car during a vacation in 2002, although he and his friends tell different versions of that story.

His friends and investors have their own problems. At Third Point Management, Loeb manages $17 billion and has a host of high-profile investors — including someone else who landed in hot water for speaking freely this summer. Anthony Scaramucci told Vanity Fair that Loeb was “one of the best investors of his generation. . . . He is the guy that would chew through the wallboard to create a return for his investors.” At the time, Scaramucci had invested about 10 percent of his own fund’s $500 million with Loeb. Now, of course, he’s better known as the man who served for 10 days as Trump’s White House communications director before resigning after making a profanity-laden public attack on other White House officials.

IPS School Board Race 2018

Indiana teachers union spends big on Indianapolis Public Schools in election

PHOTO: Dylan Peers McCoy/Chalkbeat
IPS board candidate signs

The political arm of Indiana’s largest teachers union is spending big on the Indianapolis Public Schools board. The group donated $68,400 to three candidates vying for seats on the board this November, according to pre-election campaign finance disclosures released Friday.

The three candidates — Susan Collins, Michele Lorbieski, and Taria Slack — have all expressed criticism of the current board and the leadership of Superintendent Lewis Ferebee. Although that criticism touches on many issues, one particular bone of contention is the district’s embrace of innovation schools, independent campuses that are run by charter or nonprofit operators but remain under the district’s umbrella. Teachers at those schools are employed by the school operators, so they cannot join the union.

The trio was also endorsed by the IPS Community Coalition, a local group that has received funding from a national teachers union.

It’s not unusual for teachers unions to spend on school board elections. In 2016, the union contributed $15,000 to an unsuccessful at-large candidate for the Indianapolis Public Schools board. But $68,400 dwarfs that contribution. Those disclosures do not capture the full spending on the election. The three candidates endorsed by Stand for Children Indiana — Mary Ann Sullivan, Dorene Rodríguez Hoops, and Evan Hawkins — are likely getting significant unreported benefits.

Stand for Children, which supports innovation schools, typically sends mailers and hires campaign workers to support the candidates it endorses. But it is not required to disclose all of its political activity because it is an independent expenditure committee, also known as a 501(c)(4), for the tax code section that covers it. The group did not immediately respond to a request for information on how much it is spending on this race.

The candidates’ fundraising varied widely in the reporting period, which covered the period from April 14 to Oct. 12, with Taria Slack bringing in $28,950 and Joanna Krumel raising $200. In recent years, candidates have been raising significantly more money than had been common. But one recent candidate managed to win on a shoestring: Elizabeth Gore won an at-large seat in 2016 after raising about $1,200.

Read more: See candidates’ answers to a Chalkbeat survey

One part of Stand for Children’s spending became visible this year when it gave directly to tax campaigns. The group contributed $188,842 to the campaign for two tax referendums to raise money for Indianapolis Public Schools. That includes a $100,000 donation that was announced in August and about $88,842 worth of in-kind contributions such as mailers. The group has a team of campaign workers who have been going door-to-door for months.

The district is seeking to persuade voters to support two tax increases. One would raise $220 million for operating funds, such as teacher salaries, over eight years. A second measure would raise $52 million for building improvements. Donations from Stand for Children largely power the Vote Yes for IPS campaign, which raised a total of $201,717. The Indiana teachers union also contributed $5,000.

Here are the details on how much each candidate has raised and some of the notable contributions:

At large

Incumbent Mary Ann Sullivan, a former Democrat state lawmaker, raised $7,054. Her largest contribution came from the Indy Chamber Business Advocacy Committee, which donated $4,670. She also received $1,000 from Steel House, a metal warehouse run by businessman Reid Litwack. She also received several donations of $250 or less.

Retired Indianapolis Public Schools teacher Susan Collins, who is one of the candidates supported by the union, raised $16,422. The Indiana Political Action Committee for Education contributed $15,000. She also received several donations of $200 or less.

Ceramics studio owner and Indianapolis Public Schools parent Joanna Krumel raised $200. Her largest contribution, $100, came from James W. Hill.

District 3

Marian University Executive Director of Facilities and Procurement and Indianapolis Public Schools parent Evan Hawkins raised $22,037. His largest contributions from individuals were from businessmen Allan Hubbard, who donated $5,000, and Litwack, who donated $2,500. The Indy Chamber Business Advocacy Committee contributed $4,670 and web design valued at $330. He also received several donations of $1,000 or less. His donors included IPS board member Venita Moore, retiring IPS board member Kelly Bentley’s campaign, and the CEO of The Mind Trust, Brandon Brown.

Frost Brown Todd trial attorney and Indianapolis Public Schools parent Michele Lorbieski, who is one of the candidates supported by the union, raised $27,345. The Indiana Political Action Committee for Education contributed $24,900. She also received several contributions of $250 or less.

Pike Township schools Director of Information Services Sherry Shelton raised $1,763, primarily from money she contributed. David Green contributed $116.

District 5

Incumbent Dorene Rodríguez Hoops, an Indianapolis Public Schools parent, raised $16,006. Her largest contributors include Hubbard, who donated $5,000; the Indy Chamber Business Advocacy Committee, which gave $4,670 and web design valued at $330; and the MIBOR PAC, which contributed $1,000. She also received several contributions of $500 or less, including from Bentley.

Federal employee and Indianapolis Public Schools parent Taria Slack, who is one of the candidates supported by the union, raised $28,950. The Indiana Political Action Committee for Education contributed $28,500.

Innovation zone

Two more Denver schools win additional freedom from district rules

PHOTO: J. Zubrzycki/Chalkbeat
Alex Magaña, then principal at Grant Beacon Middle School, greeted students as they moved between classes in 2015.

Two more Denver schools this week won more flexibility in how they spend their money and time. The schools will create a new “innovation zone,” bringing the district’s number of quasi-autonomous zones to three.

The Denver school board on Thursday unanimously approved the schools’ application to operate more independently from district rules, starting in January.

The new zone will include Grant Beacon Middle School in south Denver and Kepner Beacon Middle School in southwest Denver. The two schools are high-performing by the district’s standards and follow a model that allows students to learn at their own pace.

With just two schools, the zone will be the district’s smallest, though Beacon leaders have signaled their intent to compete to open a third school in the growing Stapleton neighborhood, where the district has said it will need more capacity. The district’s other two innovation zones have four and five schools each.

Schools in zones are still district schools, but they can opt out of paying for certain district services and instead spend that money on things that meet their specific needs, such as additional teachers or aides. Zones can also form nonprofit organizations with their own boards of directors that provide academic and operational oversight, and help raise extra dollars to support the schools.

The new zone, called the Beacon Schools Network Innovation Zone, will have a five-member board of directors that includes one current parent, two former parents, and two community members whose professional work is related to education.

The zone will also have a teacher council and a parent council that will provide feedback to its board but whose members won’t be able to vote on decisions.

Some Denver school board members questioned the makeup of the zone’s board.

“I’m wondering about what kinds of steps you’re going to take to ensure there is a greater representation of people who live and reside in southwest Denver,” where Kepner Beacon is located, asked school board member Angela Cobián, who represents the region. She also asked about a greater representation of current parents on the board.

Alex Magaña, who serves as executive principal over the Beacon schools and will lead the new zone, said he expects the board to expand to seven members within a year. He also said the parent council will play a key role even if its members can’t vote.

“The parent council is a strong influence,” he said. “If the parent council is not happy, that’s going to be impacting both of the schools. I don’t want to undersell that.”

Other Denver school board members questioned the zone’s finances and how dependent it would be on fundraising. A district summary of the zone’s application notes that the zone’s budget relies on $1.68 million in foundation revenue over the next 5½ years.

Magaña said the zone would eventually seek to expand to four schools, which would make it more financially stable. As for philanthropic dollars, he said the zone would work to ensure any loss of revenue doesn’t hurt the schools’ unique programs or enrichment.

“I can’t emphasize enough that it won’t impact the schools,” he said.

Ultimately, Denver school board members said they have confidence in the Beacon model and look forward to seeing what its leaders do with their increased autonomy.