Thursday, April 21, 2011

Broad’s Oakland Financial Martial Law Massacre

Huck/Konopacki Labor Cartoons
In 2003, Oakland Unified School District was placed into receivership and bailed out by the state of California to the tune of $100 million. Accused of incompetence and financial mismanagement, a financial manager, Randy Ward, was given control over the district. From 2003 to 2006, Ward ran the district with an iron fist, and amassed over $25 million in fines and other charges from the state Controller’s Office according to the San Francisco Chronicle.

Unlike Michigan, California’s emergency financial managers are not given the authority to fire elected officials or nullify union contracts. However, their broad authority does allow them to privatize their districts, as Ward did, bringing in dozens of private charter schools. And it seems they are also allowed to run their bankrupt districts further into the ground without any oversight and then ask the district to pay for their blunders. (Ward quickly doubled OUSD’s debt).

During his tenure, no annual audits were conducted. As a result, no one knew until years later that Ward had mismanaged the district as badly as his predecessors, when he was supposed to be fixing their mistakes. Rather than addressing OUSD’s fiscal problems, Ward, went on an orgy of restructuring and reform, firing librarians and counselors, shutting down student newspapers, while further bungling district finances. He underestimated payroll liabilities and failed to reconcile cash accounts. Two years ago, when outside auditors were brought in, they discovered that records were missing or inconsistent, the Oakland Tribune reported.

Local officials, who regained control over their district in 2009, are now fighting the penalties, arguing they shouldn't have to pay for Ward's fiscal mistakes. Considering that Oakland cut $122 million from their budget last year and faces another $30 million deficit for the coming school year, it seems unlikely they would even be able to come up with an additional $25 million for the fines. East Bay Assemblyman Sandré Swanson is trying to get the district off the hook. He says he has gotten the total reduced down to about $2 million.

Broadie Toady Randy Wardy
Ward was an early graduate of the Broad Superintendent’s Academy, which trains business leaders how to manage school districts for the benefit of private companies, with heavy emphasis on the creation of private charter schools and union busting. Broad even subsidizes a portion of their salaries, making Broadies irresistible to struggling school districts, virtually guaranteeing their hiring over non-Broadie competitors. According to the Broad Report, the Broad Center was specifically called in by then Mayor Jerry Brown and then Superintendent Jack O’Connell to provide a manager to run OUSD after the state take over. Additionally, the Broad Foundation provided Ward with several Broad residents to help him run OUSD and gave him a powerful collaborator, Kevin Hall, Chief Operating Officer of the Broad Foundation. Even after Ward snuck away from the devastation he wreaked on Oakland for a better job in San Diego, he was succeeded by two more Broadies.

An Alameda County Grand Jury found that under the Broadies’ control, the district “was hampered by continuous staff turnover, particularly in the area of finance, numerous reorganizations and a succession of state administrators,” according to the Oakland Tribune. “After nearly five years of state management, OUSD's budget remains unbalanced and the district's future is unclear.”

As boss of OUSD, Ward led a restructuring of the district that fast-tracked new charter schools and shut down many neighborhood schools, leading to overcrowding and parental and community opposition. Nearly half of Oakland’s schools were privatized, shut down or converted into “small” schools. The Indy Bay wrote that Ward stonewalled negotiations with the teachers union, while giving raises to all upper level administrators. He also threatened to replace teachers with uncredentialed scabs, and used the threat of charters to help him gain “the upper hand in negotiations with teachers” (See National Model or Temporary Opportunity?).

Ward led an effort that became known as Effect Success! that attracted funding from numerous philanthropies, including Broad, Gates, Walton, Kaiser and Chlorox. Ultimately, they would raise over $25 million, in addition to the $100 million coughed up by the state to bail out the district and the discounted superintendent’s salary paid for by Broad. With all that cash and all those big guns on his side, it is remarkable that Ward could have doubled OUSD’s debt and bungled their finances so horribly that he saddled the district with $25 million in fines.

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