CPD IN THE NEWS

Hillary Clinton's support from financial institutions has always been her Achilles heel but running counter to this criticism is her pledge to end systemic racism. The two are actually closely related and if she is to make good on her promises on racial justice, she will have to test those close connections to Wall Street by directly pushing for a reinstatement of Glass-Steagall and closing the carried interest tax loophole.

The Movement for Black Lives' policy platform calls for a reinstatement of Glass-Steagall, the 1933 law that separated commercial and investment banking. The law has lately become a core focus of economic progressives. 

Groups involved with the Movement for Black Lives see it as a key way to advance economic racial justice. Hillary Clinton has hesitated to publicly talk about the policy – in no small part because Bill Clinton was the one who repealed the law under his administration. The absence of an impermeable boundary between commercial and investing functions both instigated and then accelerated the 2008 financial crisis, forcing millions to lose their homes and jobs. 

Communities of color were hit hard and recovered more slowly. Mortgage lenders like Wells Fargo systemically targeted black and brown borrowers for subprime loans, putting many at risk of foreclosure. In the years after the recession, many of these lenders settled multi-billion-dollar discrimination lawsuits years after the damage had been done. 

Also, a 2015 American Civil Liberties Union study showed that black families continued to lose wealth years after the recession – even as white families began to climb out. The average black household lost 40 percent of its non-home equity wealth.

"Hillary Clinton has hesitated to publicly talk about Glass Steagall – in no small part because Bill Clinton was the one who repealed the law under his administration."

Home ownership is one of the most stable and reliable ways to acquire wealth in America, and the massive loss of homes among black and brown communities during the 2008 crisis will take decades to recover from. A new Glass-Steagall would help prevent banks from getting bigger and riskier, stopping them from coming back to black and brown neighborhoods and destroying even more wealth.

The carried interest tax loophole is another example. Eliminating this loophole, which lets private equity firms and hedge funds avoid taxes on part of their income, could raise $180 billion. It might sound like a drop in the bucket in the context of a national budget, but when you look closer, it is money that could make a huge difference.

It is also money that could have drastic implications for cities and states around the country that claim they don't have enough funding. The City of Chicago is facing a massive school funding crisis of more than a billion dollars. The hedge fund-cozy Mayor Rahm Emanuel and Governor Bruce Rauner routinely go to the school district for more concessions to make up the gap.

In the meantime, billionaire hedge-funders use the carried interest loophole to get out of paying taxes that translates into much needed revenue. The details of closing the loophole should be worked out by economists, but one thing is clear: if we keep a loophole that costs us billions of dollars while closing schools in black and brown neighborhoods, we are making a strong statement about the level of racial injustice we are willing to accept.

If Hillary Clinton wins the election, she will enter office at one of the most racially charged moments in American history. It is also a moment of some of the greatest income inequality in history – a reality even starker for black and brown communities. If we truly want to achieve racial justice, we should look at policies that prevent a repeat of the 2008 crisis. Closing the carried interest loophole and reinstating a modern Glass-Steagall are the tip of the iceberg. It is up to us to push Clinton for more.

Commentary by Maurice Weeks, who leads the housing & Wall Street accountability campaign at Center for Popular Democracy. Follow him on Twitter @mo87mo87.

By Maurice Weeks

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Take a moment and imagine that you are on a train — let’s say a train serving wine as you traverse through picturesque Napa Valley. You are with a group of your peers. You are adults and enjoying your time of fellowship. But because of a perceived notion that you are not fit for that environment you are unceremoniously removed from the train. Can you imagine the indignity of this encounter? Think about the anxiety this situation may cause. Think about the disrespect that you would feel.

Believe it or not, this is the reality for a large portion of the African American community. According to a 2015 Gallup poll, more African American adults feel discriminated against while shopping than doing anything. This sentiment includes encounters with the police.

A report released by the Center for Popular Democracy confirms these perceptions felt by African Americans. The report found that African American consumers are seven times more likely to be targeted as potential thieves as are white customers.

However, research on shoplifting trends in retail stores found no differences by race or ethnicity. Some research even suggests that African Americans are less likely to engage in shoplifting than are other groups. That means African Americans are being overly targeted by retailers while the real criminals get away.

This form of discrimination is not new. It is an adaptation of previous forms of discrimination transformed anew due to significant gains in civil rights protections. This form of discrimination has a name: consumer racial profiling.

Consumer racial profiling is particularly troublesome because it disproportionately affects African American women, a consumer group who engages in the retail sector at significantly higher rates than men.

The image that I asked you to conjure was not of my own making. It actually happened to a group of Black women. Notwithstanding the fact these train riders reached a final settlement just last month, California and other states can do a great deal more to end the consumer racial profiling that plagues retail environments.

Specifically in California, a piece of legislation I have authored (AB 2707—the Stop Consumer Racial Profiling Act of 2016) will amend our state’s civil rights statute to include the definition of this demeaning practice and require the state’s civil rights watchdog to investigate reported incidences of the practice. It is my hope that this legislation would pass a vote of my colleagues and be signed by the Governor. But more important than the passage of a bill is the transformation of behaviors by retailers that violate the civil and human rights of African American consumers.

Corporate loss prevention schemes must be reformed, executives, managers and rank-and-file employees must be awakened, and people of goodwill must demand that the targeting of consumers by racial characteristic is factually and morally wrong. It must end.

A new civil rights consciousness has gripped a great deal of the country. Maybe we can address some of the challenges that still occur on the basis of race by turning the tide against consumer racial profiling and letting it be a thing of the past.

By Sebastian Ridley-Thomas

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 (LOS ANGELES – Oct. 26) More than 100 progressive elected officials from across the United States are gathering in Los Angeles today through Wednesday for a three-day convention to discuss key planks of the progressive agenda like workers’ rights, racial justice, and public education.

Council members, school board members, and mayors flew in from around the country for the Fourth Annual Convening of Local Progress, the network of progressive elected officials. Los Angeles First Lady Amy Elaine Wakeland opened the convening, which Los Angeles Mayor Eric Garcetti is co-hosting with Local Progress, with a welcome address.

New York City Mayor Bill de Blasio, a member of the network, sent a video message to the attendees encouraging them to continue their good work fighting for progressive policy that improves the lives of their cities’ residents.

Elected officials will join the nation’s leading policy experts, organizers, and advocates to learn about and share best practices on a range of policy areas including police reform, the fight for $15, and equitable development and affordable housing. The full agenda is here. 

Sarah Johnson, Co-Director of Local Progress, released the following statement: “Today, cities are the great hope for the progressive movement. In order to achieve transformative victories at the local level, we need elected officials who are integrated into our movement, strategizing and working with the organizations who are fighting for a pro-worker, pro-immigrant, racial justice agenda. Local Progress is building spaces for creating those collaborations and relationships, and for driving trans-local victories. By collaborating across cities – like we’ve done on paid sick days and the minimum wage – we can transform the national dialogue and build towards a country in which everybody is able to live a dignified life.”

San Francisco Supervisor John Avalos, Chair of the Board of Directors of Local Progress, released the following statement: “Across the country, the elected official members of Local Progress are passing crucial legislation to create a more just and equitable society. From $15 minimum wages to fighting climate change to laws reforming police practices, from programs to create affordable housing to policies that protect immigrant families from the destructive force of deportation, cities are leading the way forward. Our convening this week was a special opportunity to bring together these leaders from around the country to share best practices, build solidarity with one another, and plan for the important fights ahead in 2016.” 

Mary Kay Henry, President of the Service Employees International Union, released the following statement: “SEIU’s members recognize the need to build a broad progressive movement for social justice. We are fighting to build a country where every family is able to give their children a dignified life. SEIU members across the country are proud to partner with their local elected officials to advance crucial public policies that promote economic and racial justice. We helped found Local Progress because we know that our movement needs sustainable, long-term infrastructure so that cities can innovate important policies that lift up working families and, like the Fight for $15 campaign led by courageous fast food workers, change the national political dialogue. We are excited by the growth of the network and eager to build, hand-in-hand with community-based organizations and elected officials, for our movement’s collective long-term success.”  

Tefere Gebre, Executive Vice President of the AFL-CIO, released the following statement: “If we are going to raise wages in America, we need cities to lead the way. Local elected officials must stand side-by-side with the workers who are fighting for dignity on the job. The AFL-CIO and our affiliates are proud to partner with local elected officials from around the country who are advancing a pro-worker, pro-immigrant, racial justice agenda. Together, we know that we can build a society where everybody who wants to can find a living wage job, and where families can raise their children in economic security and dignity.“ 

For interview opportunities with Sarah Johnson, John Avalos, Mary Kay Henry, or Tefere Gebre, or any of the elected officials attending the Local Progress convening, please contact Anita Jain at ajain@populardemocracy.org, 347-636-9761 or Sofie Tholl at stholl@populardemocracy.org, 646-509-5558. 

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www.populardemocracy.org

The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.

Philadelphia Inquirer - October 1, 2014, by Martha Woodall - A new report from a trio of activist groups says Pennsylvania charter schools have defrauded taxpayers of more than $30 million because oversight is so lax.

The researchers call for a temporary moratorium on new charter schools, contending agencies are not able to adequately monitor the 186 charters that already exist.

The study by the Center for Popular Democracy; Integrity in Education; and Action United of Philadelphia and Pittsburgh was to be released Wednesday.

The report urges the state Attorney General's Office to review all Pennsylvania charters for potential fraud. It asks the legislature to require charters to undergo regular fraud-risk assessments and fraud audits. And it suggests that until the law is changed to require such actions, charters should voluntarily undergo them and make the findings public.

Researchers said most of the $30 million in fraud that has been detected since the state's charter law was passed in 1997 was not uncovered by charter-oversight offices but by whistle-blowers and the media, including The Inquirer. They said the total amount of misspent funds was likely far larger.

"The current oversight system in Pennsylvania falls miserably short when it comes to detecting, preventing, and eliminating fraud," said Kyle Serrette, education director at the Center for Popular Democracy in Washington.

The center receives funding from foundations, including $990,000 this year from the Ford Foundation. It also receives a small amount of support from teachers' unions, and Randi Weingarten, president of the American Federation of Teachers, is on the organization's board.

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said that while his group supports accountability, the report makes "sweeping conclusions about the entire charter sector based on only 11 cited incidents in the course of almost 20 years."

". . . Fraud and fiscal mismanagement are wrong and cannot be tolerated, but to highlight them in one sector and ignore them in another indicates a motivation to target one type of public school for a political agenda," he said in a statement.

Pennsylvania school districts paid $1.5 million to charters that enrolled 128,712 students in 2012-13. More than 67,000 Philadelphia students attend 86 city charters.

Sabrina Stevens, executive director of Washington-based Integrity in Education, said: "With over $1 billion going to charter schools in Pennsylvania, it's time for charter schools to be held to the same standards of transparency and oversight that public schools are held to."

State Auditor General Eugene DePasquale said it's "good that they put this together," adding that Serrette's group had testified at a charter-oversight hearing his office held in March. "To me, the more voices on this, the better. I think in the next term in the legislature, there is going to be a charter-reform bill move forward."

City Controller Alan Butkovitz said the report echoed concerns he raised in 2010, when his office released its own oversight study that highlighted several problems his office found at city charters.

"We certainly agree with the need for greater oversight and auditing," Butkovitz said. "That's been one of our constant themes."

The instances of fraud cited in the new report include cases where charter officials were indicted or pleaded guilty and instances uncovered in state audits.

Examples include Nicholas Trombetta, founder and former CEO of the Pennsylvania Cyber Charter School in Midland, who is awaiting federal trial in Pittsburgh on charges that he diverted $8 million in school funds for personal use.

The tally also includes $6.3 million that federal prosecutors allege Dorothy June Brown defrauded from the four Philadelphia-area charters she founded.

But the authors give special attention to another recent case involving a city charter: New Media Technology Charter School in the city's Stenton section. The former CEO and founding board president went to federal prison in 2012 after admitting they stole $522,000 in taxpayer money to prop up a restaurant, a health-food store, and a private school they controlled, and for defrauding a bank.

From 2005 to 2009, when the crimes were occurring, third-party auditors hired by New Media failed to spot the fraudulent payments.

"Fraud detection in Pennsylvania charter schools should not be dependent upon parent complaints, media exposés, and whistle-blowers," the authors wrote. Rather, they urged, the system should be proactive and use forensic accounting methods.

According to the report, Pennsylvania's charters are vulnerable to fraud and financial mismanagement because school districts and state offices charged with overseeing them lack resources and staff.

For example, although the cash-strapped Philadelphia district has about half of the state's charters, it has only two auditors and a small office to monitor 86 schools, the report said.

"We agree in the need of greater oversight and a deeper look into the health of charter schools," district spokesman Fernando Gallard said, "and we have taken steps to do so."

Although the district's charter office at times had only two or three staffers, Gallard said, it now has six and is seeking an executive director.

Researchers also said that charters lack strong internal fiscal controls and that their boards have not adopted strict management policies.

And even though the charters are required to have annual audits performed by outside firms, researchers said, those audits rely on general accounting techniques and are not designed to detect fraud.

"The current system of oversight relies heavily on information provided by charter schools themselves and traditional audits that are designed to check accuracy rather than detect and prevent fraud," the report said.

The report said taxpayers cannot afford to lose another $30 million in misspent charter funds. "While the reforms proposed will require additional resources," the authors said, "they represent a smart investment in our communities and in our future."

Researchers said the study was the first in what would be a state-by-state investigation of oversight of charters in the 42 states that have them.

Serrette said researchers decided to begin with Pennsylvania because the timing seemed right. He pointed out that both DePasquale in Harrisburg and Butkovitz in Philadelphia have highlighted the fraud risks in charter schools. And State Rep. James R. Roebuck Jr. (D., Phila.), minority chairman of the House Education Committee, introduced a bill last year to tighten charter controls.

Said Serrette: "The stars are aligning."

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