Under Investigation and Other Reform Practices Questioned

June 20 UPDATE: There are now two investigations of the U.S. DOE underway. According to the Daily Caller, Republican U.S. Representative Issa is planning an investigation into the recent new regulations for how non-profit schools do business. Read the Daily Caller reports here and here.

The Project on Government Oversight (POGO) reports that U.S. DOE Inspector General Kathleen Tighe is conducting an investigation of the U.S. DOE to determine if "officials reporting to Secretary Arne Duncan leaked market-sensitive material to short sellers--including a non-public audit from her own office. Did anyone trade on the confidential information?"

Among other things, Tighe will examine whether confidential DoED information and draft documents, including one produced by her own office, were transferred to Wall Street short-sellers seeking informational advantage in their bets on the future of the $35 billion for-profit education industry. Beyond the propriety of the Education Department's conduct, the phenomenon raises broader questions about the integrity of government decision-making in the face of relentless Wall Street scrutiny.

The investigation will conclude sometime this summer. We will have to wait until then, but I wonder if the report will indicate any inappropriate communications between government officials and representatives of the testing, publishing, and computer testing industries in relation to Common Core initiatives.

Forbes reported on a New York cozy relationship in the educational marketplace. Last November, Robert Murdoch's News Corp hired New York State Chancellor Joel Klein to develop an education division. Two weeks later Murdoch purchased Wireless Generation, a company that develops software and data systems to track student progress. The company currently is a contractor for the New York city school system. Murdoch purchased the company for $360 million saying this of his investment:

Education in the U.S. is a $500 billion sector “waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching,” said Murdoch in a statement, and Wireless Generation is at the “forefront” of individualized, tech-based learning.

Murdoch is an astute businessman and clearly sees a business opportunity.
Forbes announced that Wireless Generation just was awarded a $27 million no-bid contract funded by Race to the Top grant money. Forbes comments that this no-bid contract "smacks of cronyism" and ends with:

"ARIS may indeed be a useful tool for educators and administrators, but you have to question the very real conflicts of interest in all of this."

Murdoch added Kirsten Kane and Peter Gorman to the new education division:

- Kristen Kane is the former chief operating officer of the New York City Department of Education, will become the COO of the News Corp unit.

- North Carolina Charlotte-Meckleburg Superintendent Gorman announced his resignation to become Senior VP News Corps new education division this summer. Gorman had a rocky end of school year with vigorous protests by parents over the surprise piloting of tests covered on Grumpy Educators here.