From Washington Post reporter Lyndsey Layton:
Pearson Charitable Foundation, the nonprofit arm of educational publishing giant Pearson Inc., has agreed to pay a $7.7 million settlement to New York Attorney General Eric T. Schneiderman after he determined that the foundation had created Common Core products to generate “tens of millions of dollars” for its corporate sister.
“The law on this is clear: non-profit foundations cannot misuse charitable assets to benefit their affiliated for-profit corporations,” Schneiderman said in a statement Thursday.
According to the settlement, Pearson used its nonprofit foundation to develop Common Core products in order to win an endorsement from a “prominent foundation.”
The latter entity is the Bill and Melinda Gates Foundation, which helped fund the creation of the Common Core standards and announced in 2011 that it would work with the Pearson Foundation to create reading and math courses aligned with the new standards. Four of those courses would be offered to the public free of charge, it said.
Pearson Charitable Foundation is a major sponsor of Jeb Bush’s Foundation for Excellence in Education. It’s reasonable to conclude that Pearson has essentially been paying Bush’s foundation to do advocate for their products in Florida and elsewhere. In just two states where Bush has personally lobbied, Texas and Florida, Pearson has contracts that bring them close to $1 billion. In August of 2012, Osceola school board member Jay Wheeler wrote that the FLDOE had “abdicated its role for accountability to a sole source for profit testing company for all public school FCAT testing to Pearson Education.”
How close does Pearson get to admitting they’ve been operating in improper manner? This close:
In a statement, the Pearson Foundation denied any legal wrongdoing.
“We have always acted with the best intentions and complied with the law,” the foundation said. “However, we recognize there were times when the governance of the Foundation and its relationship with Pearson could have been clearer and more transparent.”
The foundation said it has added “independent directors” to its board who will review any foundation transactions that could benefit Pearson Inc. It said it has also adopted “stronger operational systems.”
You can be sure Florida AG Pam Bondi won’t be bringing any lawsuits against the Bush Foundation’s financiers. To do so would effectively end her political career. This doesn’t eliminate the fact that the same thing that happened in New York is on steroids in Florida.
Does the ruling further imperil corporations who’ve been operating similarly? The New York AG pointedly said that “the law on this is clear: non-profit foundations cannot misuse charitable assets to benefit their affiliated for-profit corporations.”
The blurred lines that have existed between non-profit and for-profit in the education reform movement just got a little more clear.