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Chicago Teachers Strike: Wealthy Donors Changed Education Policy Landscape In Illinois

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Chicago Teachers Union members strike against a proposal put forward by Mayor Rahm Emanuel.
Chicago Teachers Union members strike against a proposal put forward by Mayor Rahm Emanuel.

WASHINGTON -- As the Chicago teachers strike edges toward its close, both sides of the education reform debate are trumpeting arguments for or against the strike and the policies put forward by Chicago Mayor Rahm Emanuel. Beneath the rhetoric lies a stream of fundraising aimed at influencing lawmakers and the public on education policy that has, in recent years, shifted away from the teachers union and toward education reformers backed by some of the wealthiest members of Chicago's elite.

Stand for Children is a non-profit education reform group advocating for the inclusion of standardized test scores in teacher evaluations, charter schools and decreased teacher union power. Over the past three years, the group's political action committee has raised more than $4 million and doled out more than $1 million to politicians, political parties and other political committees in Chicago and around Illinois. That's more than double the $460,000 the Chicago Teachers Union PAC has given to political campaigns and other committees over the same period of time. While contributions from the Illinois Federation of Teachers bring the two sides into closer competition, much of IFT's contributions went to a Supreme Court race in 2010.

All of that money -- raised from billionaires in hedge funds, private equity and real estate -- has been used to push Stand for Children's aggressive, hard-charging agenda, which assumes unionization often runs counter to the interest of education. Part of that agenda was attempting make it impossible for the Chicago Teachers Union to strike, though it only made the union more defiant.

The biggest victory for this new monied coalition came in 2011 when Gov. Pat Quinn signed Senate Bill 7, which made teacher tenure and layoffs contingent on achievement and rearranged teachers' salary schedules to align with evaluations instead of seniority. The bill also took certain topics, such as class size, off the table in collective bargaining negotiations. The bill actually had the support of the Chicago Teacher's Union until the last second, when its president, Karen Lewis, realized that the bill also made it harder for the union to call a strike. Previously, the CTU only needed a simple majority of assent from its members to walk out; it now needs 75 percent.

In comments to The Huffington Post made prior to the current strike, Jonah Edelman, Stand for Children's co-founder and CEO, hailed the bill as a key stepping stone toward preventing a future strike. "Going forward, [Senate Bill 7] will prevent the threat of the strike precluding progress for students."

"A year ago in Illinois ... these types of reforms would have been considered absolutely impossible," Edelman said at the time.

That possibility was made a reality thanks to the huge injection of money by wealthy Chicagoans from the worlds of high finance and real estate.

In a widely circulated speech to the Aspen Institute last summer, Edelman explained how their contributions to Stand -- and the subsequent support for certain candidates in the 2010 elections -- helped push Michael Madigan, speaker of the Illinois House, into their column on Senate Bill 7.

"I'm being quite blunt here," Edelman declared. "The individual candidates were essentially a vehicle to execute a political objective, which was to tilt toward Madigan. The press never picked up on it. We endorsed nine individuals -- 6 Democrats, 3 Republicans. That was really an indication to him that we could be a new partner to take a place of the Illinois Federation of Teachers. Luckily it never got covered that way. That would never work well in Illinois. Madigan's not particularly well liked. It did work."

Those contributions came from a handful of billionaires and multi-millionaires who have a history of giving to both Republicans and Democrats.

The biggest donor to Stand's efforts over the past three years in Illinois has been Paul Finnegan, of the Chicago private equity firm Madison Dearborn Partners, who contributed $700,000. Finnegan is a big donor to Republicans at the national level, having given tens of thousands to Mitt Romney's presidential campaign, the Republican National Committee (RNC) and Restore Our Future, the super PAC supporting Romney's campaign, among other GOP candidates and committees.

The Crown family, owners of Henry Crown & Company, make up the second biggest group of donors. The family, in charge of the private investment group built by the late billionaire Henry Crown, has contributed a combined $630,000 to Stand for Children's PAC in Illinois. The Crowns are major Democratic donors and have given tens of thousands to the Democratic National Committee (DNC) and to the reelection campaign of President Barack Obama.

Matthew Hulsizer, co-founder of the trading firm Peak6 Investments, has given $574,000 to Stand for Children over the past three years. Hulsizer is one of many investors to switch their political giving over the past four years. In 2008, he gave to the campaign of then-candidate Barack Obama, but this election he has given $30,000 to the RNC and $5,000 to the leadership PAC run by Republican vice presidential nominee Paul Ryan.

Another powerful Chicago investor giving to Stand for Children is Ken Griffin, the billionaire head of the powerful hedge fund Citadel. Griffin gave $500,000 to Stand's PAC in 2010. A major Republican donor, and one of the top donors to national super PACs, Griffin made headlines earlier this year when he stated that the wealthiest Americans have "an insufficient influence" in government.

Other notable Chicagoans funding Stand's efforts include the billionaire Pritzker family ($250,000), billionaire former Chicago Tribune owner Sam Zell ($100,000), DRW Holdings executives Donald Wilson ($270,000) and Kenneth Brody ($120,000) and Madison Dearborn Partners head John Canning ($250,000).

Fifteen of the big dollar donors to Stand's efforts also contributed to Rahm Emanuel's mayoral campaign. The top givers were Griffin and his wife, with $200,000 in contributions, while the Crowns gave $115,000 and Hulsizer chipped in $100,000. In total, Stand for Children donors gave $720,000 to Emanuel's campaign.

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