National education reform group's spending shown

(Reuters) - The national education reform group StudentsFirst, which has set out to transform U.S. schools by introducing more free-market principles to public education, raised $7.6 million in its first nine months - and spent nearly a quarter of it on advertising - according to partial tax records released on Monday.

Michelle Rhee, the former chancellor of the Washington, D.C. public schools, launched StudentsFirst in the fall of 2010 with the stated goal of raising $1 billion over five years. Among the reforms it advocates: abolishing teacher tenure; permitting more teachers without formal education training to take charge of classrooms; evaluating teachers in large measure by their students' growth on standardized tests; and expanding charter schools, which are publicly funded but typically run by private corporations, including for-profit management firms.

Rhee has pressed her agenda in states from Connecticut to Alabama to Michigan, spending millions on TV and radio ads, public rallies and lobbying as well as campaign donations for friendly candidates.

In each state, Rhee has drawn ferocious opposition from teachers unions, which say her policy prescriptions have not been shown to improve student learning.

Rhee, a political lightning rod since she closed scores of schools and laid off hundreds of teachers during her tenure in Washington, has refused to discuss her funding or her donors. The IRS forms released by her organization on Monday cover only the first several months of her work, through July 31, 2011. Updated filings are not expected until the end of the year, though Reuters has confirmed that recent donors include New York Mayor Michael Bloomberg and hedge fund managers David Tepper and Alan Fournier, who have pledged substantial resources to a StudentsFirst partner organization in New Jersey.

The Laura and John Arnold Foundation, funded by hedge fund manager John Arnold, has also pledged $20 million to Rhee's organization over five years, a donation that does not appear to be reflected in the IRS forms released on Monday.

The IRS forms do not detail Rhee's spending, except for a previously undisclosed donation of $100,000 to Partnership for Ohio's Future, a campaign run by the state's Chamber of Commerce to push for passage of Republican Governor John Kasich's 2011 budget. That budget, which passed and was implemented, included deep cuts to public education funding. Separately, Kasich pushed for restrictions on public-sector unions, including teachers unions; Rhee did not support that bill.

Rhee's critics, led by teachers unions, have criticized her for working closely with Republican governors who have slashed education funding, including Kasich, Michigan's Rick Snyder and Florida's Rick Scott. Rhee responds that schools don't necessarily need more resources; they need to spend what they have more wisely. Among her prescriptions: eliminating the union contract provisions that protect the most veteran - and often the highest-paid - teachers from layoffs. Instead, Rhee argues that pink slips should go first to the least effective teachers - as determined, in large measure, by students' scores on standardized tests.

WINING AND DINING

The tax forms show that Rhee was paid $62,500 for nine months of work as the chief executive officer of StudentsFirst, which is organized as a political advocacy organization, and the affiliated StudentsFirst Institute, which focuses on public education. She also travels the country giving lectures, some of which bring her as much as $35,000 in speaking fees.

Other expenses documented in the IRS forms include $1.7 million in advertising and promotion, more than $100,000 for public opinion research and $337,000 to develop lists of potential donors and members.

Rhee has recruited many of her more than 1 million members through online petitions, which call for widely popular policies such as putting an excellent teacher in every classroom. People who sign the petitions become members unless they opt out. Last week the liberal website Change.org, under pressure from union backers who consider Rhee's group anti-union, said it would wind down its relationship with StudentsFirst once their contract ends in several months.

While Rhee's more recent spending is not documented, Reuters has tracked about $3 million in advocacy expenditures since last fall, much of it funneled through StudentsFirst's network of political action committees. Among the line items: $790,000 on advertising and lobbying in Connecticut; $6,700 to wine and dine lawmakers in Missouri; and $120,000 in donations to candidates and political caucuses in Tennessee.

In Michigan, StudentsFirst spent $955,000 last fall to lobby state lawmakers for an education package that included evaluating teachers primarily by student test scores and restricting union bargaining rights, so issues like the new evaluation system would not be subject to negotiation. (The reforms were passed by the legislature.) In California this spring the organization spent $770,000 to back two Democratic candidates in primary races for state Assembly seats; one won, the other fell just short.

Last week, Rhee joined more than a dozen other education and business advocates with similar agendas in asking the teachers unions to work with them, rather than fighting them, on school overhaul bills in several states. Randi Weingarten, president of the American Federation of Teachers, took to Twitter to repeatedly dismiss the pitch for cooperation as a public-relations stunt.

Nancy Zuckerbrod, a spokeswoman for StudentsFirst, said the organization could not match the resources of the teachers unions, which have spent $150 million on state politics and lobbying since 2008. "However, we have raised enough through our grassroots and fundraising efforts to be competitive and make a major difference in reforming our nation's education system," Zuckerbrod said.

(This story is corrected in paragraph 2 to "growth" instead of "scores"; paragraph 11 to remove "later" as one can opt out at signing, and to show Change.org did not pull Rhee?s online petitions but has said it will wind down the relationship once their contract ends)

(Editing by Douglas Royalty)

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