Campaign News

The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And AbuseEscalating Fraud Warrants Immediate Federal and State Action to Protect Public Dollars and Prevent Financial MismanagementDownload the report hereApril 2015Executive SummaryA year ago, the Center for Popular Democracy (CPD) issued a report demonstrating that charter schools in 15 states—about one-third of the states with charter schools—had experienced over $100 million in reported fraud, waste, abuse, and mismanagement. This report offers further evidence that the money we know has been misused is just the tip of the iceberg. Over the past 12 months, millions of dollars of new alleged and confirmed financial fraud, waste, abuse, and mismanagement in charter schools have come to light, bringing the new total to over $200 million.Despite the tremendous ongoing investment of public dollars to charter schools, government at all levels has failed to implement systems that proactively monitor charter schools for fraud, waste, abuse, and mismanagement. While charter schools are subject to significant reporting requirements by various public offices (including federal monitors, chartering entities, county superintendents, and state controllers and auditors), very few public offices regularly monitor for fraud.The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.4 billion in 2015.b 1 The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.Setting up systems that detect and deter charter school fraud is critical. Investments in strong oversight systems will almost certainly offset the necessary costs. We recommend the following reforms:

Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers. Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability. Increased transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.

State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.Download the report here

The Federal Reserve faces criticism from lawmakers and others over its record on diversity at the same time the central bank is highlighting the economic outlook for minority groups.

Several Democrats on the Senate Banking Committee questioned Fed Chairwoman Janet Yellen on Tuesday about the selection process for regional Fed bank presidents, echoing the concerns of advocacy groups who have said the system should be more open and allow more public input.

The 12 regional bank presidents are appointed by regional boards, subject to approval by the Washington, D.C.-based Fed board of governors. As heads of regional Fed branches, they are expected to keep their fingers on the pulse of their local economies and participate on decisions about interest rates. Just two of the current presidents are women and none are black or Hispanic. The last black president stepped down in 1974.

Sen. Elizabeth Warren (D., Mass.) criticized the selection process, saying Washington officials represented little more than a rubber stamp. Earlier this year, Fed governors signed off on the reappointment of most bank presidents until 2021 “without any public debate or any public discussion,” she said.

“If you’re concerned about this, why didn’t you use either of these opportunities to say enough is enough. Let’s go back and see if we can find qualified regional presidents who also contribute to the overall diversity of the Fed’s leadership?” Ms. Warren asked.

“It just shows me that the selection process for regional Fed presidents is broken,” retorted Ms. Warren, calling on Congress to consider changing the process.

The Center for Popular Democracy, a left-leaning advocacy group, has been pressing the Fed for months to increase the diversity of its leadership, as have many Democrats on Capitol Hill who signed onto a letter from Ms. Warren to Ms. Yellen on the matter last month.

Presumptive Democratic presidential nominee Hillary Clinton has also weighed in. Her campaign released a statement saying the Fed “needs to be more representative of America as a whole.”

In a June 13 response to the lawmakers’ letter, Ms. Yellen acknowledged “there is still work to be done” on diversity within the Fed ranks “and I assure you that workforce diversity remains a priority for the Federal Reserve.”

In her prepared testimony Tuesday, Ms. Yellen stressed the need to ensure that the gains from the economic recovery are widely distributed.

She noted that blacks and Hispanics are still suffering some of the effects of the recession in more pronounced ways than other groups. Black and Hispanic workers still face higher unemployment rates than the workforce as a whole, she said.

“It is troubling that unemployment rates for these minority groups remain higher than for the nation overall, and that the annual income of the median African-American household is still well below the median income of other U.S. households,” Ms. Yellen said.

Diverging economic circumstances between white and black households predate the recession but the gaps widened after the financial crisis and have only barely narrowed in the recovery.

A Fed report released alongside Ms. Yellen’s testimony found that black households, which saw their median incomes fall 16% during the recession, are only 88% of the way back to prerecession levels. White households, by contrast, saw incomes fall only 8% and are already back to 94% of prerecession levels, the report said.

It is rare for the Fed to address the economic conditions for individual demographic groups. The central bank’s congressional mandate requires that it seek to hold down unemployment and keep inflation stable for the country as a whole. In the past, Ms. Yellen has said she was sympathetic to the economic troubles of minority groups but stressed the Fed’s options for addressing them were limited.

Ms. Yellen’s comments Tuesday suggest a rising recognition within the Fed that the racial gaps in the economy are becoming more pronounced and that there is a role for monetary policy to play in shrinking those gaps.

“It’s important for us to be aware of those differences and to focus on them as we think about monetary policy and work that the Federal Reserve does in the area of community development,” she said.

Ms. Yellen is set to address the House Financial Services Committee on Wednesday and could face many of the same questions.

By  David Harrison

Source

Truthout - March 2, 2015, by Dean Baker - There is an enormous amount of political debate over various pieces of legislation that are supposed to be massive job killers. For example, Republicans lambasted President Obama’s increase in taxes on the wealthy back in 2013 as a job killer. They endlessly have condemned the Affordable Care Act as a jobs killer. The same is true of proposals to raise the minimum wage.

While there is great concern in Washington over these and other imaginary job killers, the Federal Reserve Board is openly mapping out an actual job killing strategy and drawing almost no attention at all for it. The Fed’s job killing strategy centers on its plan to start raising interest rates, which is generally expected to begin at some point this year.

The Fed’s plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fed’s current 2.0 percent target, if the Fed doesn’t slow the economy with higher interest rates.

Higher interest rates slow the economy by discouraging people from borrowing to buy homes or cars. They will also have some effect in discouraging businesses from investing. With reduced demand from these sectors, businesses will hire fewer workers. This will weaken the labor market, which means workers have less bargaining power. If workers have less bargaining power, they will be less well-situated to get pay increases. And if wages are not rising there will be less inflationary pressure in the economy.

The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fed’s rate hikes would have cost the economy more than 200,000 jobs in this scenario.

For comparison purposes, we are having a big fight over the Keystone pipeline. The proponents of the pipeline point to the jobs created by building a pipeline as an important justification, even if the oil being pumped through the pipeline may cause enormous damage to the environment. According to the State Department’s analysis, building the pipeline would create 21,000 for two years. This pipeline related jobs gain has been widely touted in the media and is supposed to make it difficult for many members of Congress to go along with President Obama in opposing Keystone.

Yet, the Fed can easily destroy ten times as many jobs with a set of interest rate hikes this year with its actions passing largely unnoticed. In fact, the impact of Fed interest rate hikes on jobs can easily be far larger than this 200,000 number. If the Fed decides that the unemployment rate should not fall below a certain level (5.4 percent is a number is often used), then it could be costing the economy millions of jobs if the economy could actually sustain a considerably lower level of unemployment as it did in the late 1990s.

To be clear, Federal Reserve Board Chair Janet Yellen and her colleagues on the Fed’s Open Market Committee (FOMC) that determines interest rates are not evil people sitting around figuring out how to ruin the lives of American workers. The Fed has a legal mandate to control inflation, in addition to its mandate to sustain high levels of unemployment. If they raise interest rates it will be because they fear inflationary pressures will build if they let the economy continue to grow and unemployment to fall.

But this is inevitably a judgment call. The call is based on both their assessment of the risk of inflation and also the relative harm from higher rates of inflation as opposed to higher rates of unemployment. It is likely that the members of the FOMC, who largely come from the financial industry, are much more concerned about inflation than the population as a whole. They are also likely to be less concerned about unemployment. These are people who tend to read about unemployment in the data, not to see it themselves or among their friends and family members.

This is why it is important that the public be paying attention to the Fed’s interest rate policies and let them know how they feel about raising interest rates to kill jobs. The Center for Popular Democracy has organized an impressive grassroots campaign around the Fed’s interest rate policies. Those who don’t want to see the government deliberately trying to kill jobs might want to join in.Source

Object Action: The "F" Word in a Post-Truth Eramarks the inauguration of Collect For Change-an initiative which collaborates with artists across disciplines, offering artwork with a portion of sales benefiting a charity personally selected by each artist. As a feminist response to the one-year anniversary of the current administration, the group exhibition highlights "objects" and works by female artists "objecting" to a dominant paradigm through innovative media in the feminist realm.

Featured artists Ana Teresa Fernández, Chitra Ganesh, Michelle Hartney, Angela Hennessy, Nadja Verena Marcin, Sanaz Mazinani, and Michele Pred will donate a portion of all artwork sales to Art & Abolition, The Center For Popular Democracy's Puerto Rico Rebuilding Fund, Girls Garage, Girls Inc., NARAL Pro-Choice California, Planned Parenthood, and 350.org.

Read the full article here.