Tag Archives: big city districts

Bankers and Teachers: Scandals and Accountability (Part 1)

Wells Fargo, a bank that made more than $80 billion in revenue  and has a market value of $277 billion, was fined $185,000,000 by federal regulators for creating 1.5 million fake credit card accounts. In the plea bargain that regulators made with bank officials, Wells Fargo admitted no responsibility for the financial misconduct. The company had fired more than 5,000 of their lowest-paid employees but neither the senior vice-president for community banking where the fraud occurred nor the CEO lost their positions. CEO John Stumpf, named in 2013 as Morningstar’s CEO of the Year and earning about $20 million a year, did face U.S. Senate Banking Committee questions about the phony accounts last week. In testimony, the CEO did say “I take full responsibility for all of the unethical practices in our retail banking business.”A member of the Banking Committee, Senator Elizabeth Warren (Dem.-Mass) said what the bank did was a “scam” and that Stumpf “should resign… and you should be criminally investigated.”

Looking back at the fallout from the Great Recession of 2008 in lost billions of investors’ dollars, millions of home foreclosures, and crushed hopes of a generation of hard-working American retirees–apart from one senior trader at Credit Suisse who was convicted and served 30 months—not one single CEO of an investment house, bank or insurance company hip-deep in deceiving and defrauding Americans was indicted or served a day in jail.  Yes, federal regulators fined other banks like JPMorgan Chase and Bank of America billions of dollars but they like Wells Fargo admitted no unlawful conduct and took no responsibility for their actions (see here, here, here, and here). Contrast that with the savings-and-loan bank failure in the 1980s when over 1,000 bankers  went to jail for fraud and similar charges. That was then, this is now.

Immunity from accountability is currently widespread in the private sector. But not in the public sector.

Take the case of the Atlanta Public Schools and the cheating scandal between 2009-2015. Superintendent Beverly Hall led the district between 1999 and 2010. In 2009, she was named Superintendent of the Year by the American Association of School Administrators. After an investigation by state officials in 2011 triggered by the Atlanta Journal-Constitution revelations in 2009 that nearly 180 teachers and officials in 44 schools raised students’ test scores, Hall  and 31 teachers and administrators were indicted and stood trial.  Most of these educators took plea deals; Hall died of breast cancer during the trial. Eleven educators accused of tampering with students’ test scores were convicted in 2015 and are now serving from one to seven years in Georgia prisons.

No immunity from accountability here.

Lawyers and historians say often that before rushing to judgment, one must become familiar with the circumstances, the organizational setting and the mind-set of those who committed the crimes. So what were the contexts for Wells Fargo’s fraud and Atlanta’s cheating scandals?

Wells Fargo

Beginning as early as 2009, individual employees, many of whom earned less than $15 an hour, were expected to sell Wells Fargo products (e.g., credit cards, over-draft protection, checking and  savings accounts) to existing customers in order to meet their monthly goals. If they  fell short, sales representatives were written up, reprimanded or let go. Managers put intense pressure on their employees to meet these targets. Rita Murillo, a bank manager who left the company said: “We were constantly told we would end up working for McDonald’s. If we did not make the sales quotas … we had to stay for what felt like after-school detention, or report to a call session on Saturdays.”

Wells Fargo quarterly profits continued to climb in the years following the Great Recession. Investors were pleased.

As the years passed, word of bogus credit cards, checking and savings accounts and angry customers leaked out. The Los Angeles Times published an expose of the practices in 2013. The intense race to meet monthly goals created a culture where sales staff were pushed again and again to meet their targets or else. Phone calls from bosses were dreaded. After newspaper articles appeared, managers fired employees. Even after the LA Times‘ revealing of these practices and the dog-eat-dog ethos at Wells Fargo, bogus credit cards and new accounts continued.  Then state and federal regulators entered the picture. Fines were levied against Wells Fargo but not one senior executive was either admonished or forced to resign.

This is the context for Wells Fargo (see here, here, and here).

The Atlanta Public Schools

The high-poverty, mostly black district had struggled for decades with low graduation and high dropout rates and state test scores near the bottom of Georgia’s public school systems. Within the segregated district–there are a few largely white schools and the rest are largely black–academic gaps between white and black have been large and persistent (e.g., majority white Grady High School graduates 82 percent of its students while majority black Douglass High School is 42 percent).

Pressure to raise state test scores and graduation rates rose and fell as superintendents came and went in the 1990s. With the appointment of Beverly Hall in 1999 and the passage of the federal No Child Left Behind law (2002), that pressure increased considerably. Rewards and sanctions accompanied goals of raising test scores across the district. All teachers in schools meeting 70 percent of their goal, for example, would receive bonus payments. The superintendent’s contract had a similar provision for increases to her salary. Sanctions for low test performance under NCLB led to closed schools, firing principals and reprimands for district office administrators not meeting state and federal goals under Adequate Yearly Performance (AYP).

Hall was determined to improve Atlanta’s student performance. And the numbers rose over the years. Bonuses went to many schools and the superintendent. Rumors of tampering with test scores circulated and were dismissed. A number of teachers reported principals fiddling with test score results. Nothing happened except strong district office messages to be quiet or leave. A culture of fear blanketed schools. Then the Atlanta Journal Constitution investigated the rumors and published their startling report in 2009 on how much adult cheating occurred on district tests. State officials then completed their investigation in 2011 (see here).

The results of that investigation led to charging the superintendent, principals and teachers in over three dozen schools with changing student test scores. The report pointed to the high-stress placed on raising test scores and the pervasive fear among school employees of retaliation if anyone reported abuses. Some quotes from the state inquiry:

*“Throughout this investigation numerous teachers told us they raised concerns about cheating and other misconduct to their principal or SRT [School Reform Team] … only to end up disciplined or terminated.”

*“[T] message was: ‘Get the scores up by any means necessary;’ in Dr. Hall’s words, ‘No exceptions and no excuses.’”

*“In sum, a culture of fear, intimidation and retaliation permeated the APS system from the highest ranks down.”

At both Wells Fargo and in the Atlanta public schools hard-driving managerial pressures created fear-strewn workplaces where success-filled data became the goal. Similar contexts in a public and private institution turned up.

Yet accountability for fraud in these two institutions differed greatly. How come?

Part 2 tries to answer that question.

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Charter Schools: 25th Anniversary and More to Come (Part 1)

Charter schools are here to stay. Since 1991 when Minnesota became the first state to charter new schools free of most state education regulations, 43 states and the District of Columbia have now authorized 6400 charter schools run by non-profit and for-profit organizations. As of 2014 charters house nearly three million students or about six percent of the U.S. public school enrollment. These charters are public schools governed by separate boards of parents, teachers, entrepreneurs, etc. Charters receive state funds for each student enrolled equivalent to state funds for a regular public school next door. These new and largely autonomous organizations are accountable to their boards (not the  elected school board of the district in which they are located) to fulfill the aims stipulated in the charter they received.

From zero to six percent of total U.S. students in charter schools in 25 years doesn’t sound like a cat video going viral but in institutional terms it is a solid sign that charter schools have become part of daily scene in U.S. public schools and are here to stay. Released from most state regulations and  unionized teachers, charter schools have been expected to create innovative curriculum, instruction, and organization and compete with traditional public schools for students. From that innovation and competition, state legislators expected across-the-board improvement in all public schools.

Publicly-funded charter schools have found a special niche among urban districts. Two-thirds of charter school students are minority (across the country the percentage is half); 56 percent of all charters are located in cities; the rest are in rural and small town districts–many of which are poor with only a tiny percentage found in affluent suburbs (see here and here).

Currently, in New Orleans, Detroit, and the District of Columbia charter schools are a majority (or near majority) of their public schools from which parents choose (14 districts have at least 30 percent of their enrollment in charter schools).  As long as there are urban and suburban schools that fail their students (as measured by test scores, graduation rates, well-being of students, etc.), expanded parental choice that now includes magnet schools, alternative schools, districts with portfolios of options, and yes, charter schools will become as familiar as the morning Pledge of Allegiance in the nation’s classrooms.

Expanded parental choice through vouchers and charters (the former has existed since the 1970s but is largely absent from most school districts while the latter has slowly and steadily grown over the past quarter-century) has become one of the planks in a reform platform to bring innovation and improvement to what critics call a moribund and failed traditional system of schooling. Major foundations such as Walton, Gates, Broad, and the Doris and Donald Fisher Fund have contributed hundreds of millions to promote charter schools and organizations that manage clusters of schools–Charter Management Organizations or CMOs which are not-for-profit and Educational Management Organizations or EMOs that are for-profit (see here). Donors see charters as a way of ridding the nation but especially big city schools of an obsolete model of schooling that fails to prepare U.S. children and youth for either college or an ever-changing workplace. Foundation officials, many urban parent groups, and civic and business leaders support the expansion of charters. Opponents have been teacher unions, groups of parents railing at loss of funds for regular public schools, and other groups who see a lack of accountability to dump those charters who are fiscally and academically failing (here and here).

Warring research studies from camps promoting and opposing charters have unceasingly argued for the past quarter-century whether charters are academically outperforming traditional public schools. It has become a trivial question because there is so such diversity among charter schools.  Some charters (e.g., KIPP and Summit Schools) send nearly all graduates to college ; others are close to closing their doors or have been shut down ; some charters are for-profit such as cyber schools, and dozens of other models. Lumping them altogether  to answer a generic question: which form of public schools is better academically?—is not only goofy but unanswerable. What is clear, however, after 25 years is a lack of  systemic oversight and accountability of charters for poor fiscal and academic performance in various states (see here).

What is also clear is that the promised autonomy to become innovative and competitive with other public schools, the promise of the original mandate for charters, has yet to appear in charter schools and classrooms (see here and here).

These charter school wars will ease over time.  More CMOs will regulate their schools. More state charter laws will increase oversight of school performance. More state caps on the number of charters that can be authorized will disappear. Charters will become a familiar dot in the U.S. educational landscape. Part 2 explains why charters will stick as a reform.

 

 

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Insider or Outsider? : Superintendents in Big Cities

In Los Angeles Unified School District, the school board appointed an insider–Michelle King–superintendent earlier this year after a string of prior superintendents came from outside the district.

In New York City, Mayor Bill De Blasio appointed an insider–Carmen Farina– Chancellor in 2014 after Mayor Michael Bloomberg had appointed three outsiders since 2000.

These appointments of insiders to big city districts, people who spent their careers within the district as teachers, principals, and district office administrators, are the exception, not the rule. For large urban districts the rule has been appoint outsiders who promise major changes in course to solve serious problems.

Why is that?

Outsiders have been appointed time and again in these districts because the unspoken and strong belief was that the serious educational, social, and political problems besetting the schools needed an innovative, energetic, outsider, unbeholden to those inside the district. An outsider, policy elites assumed, would shake the system by the scruff of its neck in turning around a failing district–disrupt is the fashionable word today. Insiders who had risen through the ranks would prize stability while looking for incremental improvements. Insiders have been immersed in a network of relationships with peers and subordinates would be reluctant to disturb bureaucratic procedures, rules in effect for decades, and bonds of affection and respect for long-time peers and subordinates. Insiders would be loath to importing new staff and  innovations from elsewhere. They would rather seek new ideas and programs from sharp, knowledgeable insiders.

These strongly held beliefs about insiders and outsiders have shaped the appointment of superintendents to big city posts for well over a half-century.

In brief, the folk wisdom surrounding superintendents or chancellors heading urban districts says to appoint insiders if you like what has been happening in the system under the exiting superintendent in order to extend and protect what is working well for students, teachers, and the community. Stability and tweaking what works is the order of the day when insiders are appointed school chiefs. However, if you dislike what has been happening in the system, the dysfunctions, mediocre performance, the proliferation of problems, and the accompanying disarray, for heaven’s sake, appoint an outsider.

Washington, D.C. Schools

This situation now faces the mayor of Washington, D.C. who has to replace exiting Chancellor Kaya Henderson who has served six years. Her predecessor outsider Michelle Rhee who brought in Henderson with her was Mayor Adrian Fenty’s first mayoral appointment; she served 2007-2010. Now with the departure of Henderson,  Mayor Muriel Bowser who recently announced a national search for a successor to Henderson is faced with a similar issue of appointing an insider or outsider after the search is completed (see here) The Mayor knows well that the District of Columbia schools have had a long string of school-board appointed outsiders. To be specific,  over nearly sixty years, there have been 14 superintendents (excluding interim appointees) of whom 11 were outsiders (including Rhee and Henderson). The three insiders were Vince Reed, 1975-1980, Floretta McKenzie,  1981-1988, and Andrew Jenkins, 1988-1990. Reed and McKenzie served with distinction; Jenkins was fired.

What Does The Research Say on Insider and Outsider School Chiefs?

Scholars who have written about “superintendent succession”–the academic phrase for picking the next district leader–have studied this issue for over a half-century. Looking at insiders and outsiders who school boards appoint to the highest district post has produced a growing body of literature on a series of questions arising from who follows whom in a school district. Such questions as:

*Do outsider or insider superintendents outperform one another?

*Do insiders or outsiders stay longer?

*Does superintendent succession resemble succession in corporations and other organizations?

*What does matter when decision-makers (e.g., school boards, mayors)  in choosing an insider or outsider?

 

The answer is the first two questions is no. To the third question, the answer is yes. The last question I answer with more than one word.

On performance, thirty years of research have determined that neither outsider or insider school chiefs perform better because of where they come from. Sure, how one defines performance is important and will vary. But on various measures of the district’s  student outcomes,  teacher and parental satisfaction, relationships with community and unions, there is no substantial difference between districts appointing insiders or outsiders (see here, here, and here).

As to length of service for insiders or outsiders, studies of big cities show little difference also (see here and here)

Superintendent succession, researchers have found, similar to  CEOs and other top leadership posts in non-school organizations (see here, here, here, and here).

So D.C.  Mayor Muriel Bowser doing a national search to replace Kaya Henderson–such a search already tilts toward appointing an outsider–should at the very least consider what researchers have found out about superintendent succession.

Were she to do so, she should also consider the factors that come into play in influencing how either an insider or outsider appointee will perform. Such factors as the fit between school boards’ or mayors’ goals and the candidate’s experiences with, for example, the political decision-making that occurs in making educational policy and the features of the organizational setting and community and their match with the knowledge and skills of the applicant. These and other factors have to be considered in deciding whether to pick an insider or outsider to head a district. Simply picking one or the other because it is time to do so,  is a mindless way of making the most important decision for a major city’s schools.

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