Privatization of Public Education: A Joint Venture of Charity and Power

The Roles of CSF and CEO America – a Two-Pronged Campaign

CSF and its largest allied organization, CEO America, are interlocking national organizations created to link private philanthropists to efforts to promote the privatization of America’s public schools. They are affiliated with and share board members and common funders with similar local and statewide groups all over the country. CEO America and CSF were both founded as national expansions of local private voucher programs in San Antonio, Texas,1 and Washington, D.C. respectively.2 These local programs have multiple ties to pro- voucher lobbying efforts.

While CEO America was the first to be founded, and originally provided private scholarships, CSF, which received a founding $50 million gift from CEO America founder John Walton, has now stepped to the forefront. Generally, CSF raises money and does the private grantmaking, and CEO raises money and does the lobbying. The overlaps between the two organizations reach down into their local affiliates, and into right-wing foundations, think tanks, and campaign financing efforts and donor bases – all of them working toward the goal of redirecting public funds to private and religious schools.

Voucher proponents, including some major participants in CSF and CEO, make use of the various parts of the right wing apparatus for fighting for public vouchers. For example, they use the State Policy Network, an affiliation of state-based conservative and free- market think tanks, to provide support and model legislation for state legislators and academic validation for their ideas. The State Policy Network, which is active in 35 states, includes national groups such as the Heritage Foundation, Grover Norquist’s Americans for Tax Reform, J. Patrick Rooney’s Golden Rule Insurance Co. and CEO America as associate members.3

Early Inspirations for Public Vouchers – the Economic Model

Economist Milton Friedman is generally credited with the idea of publicly funded school vouchers as a free-market education fix in the 1950s. Politically minded religious leaders adopted the idea, because it would steer funds to the sectarian schools and causes they were promoting.

As the Religious Right became a powerful political force, vouchers became a centerpiece of their political agenda. Vouchers carry an additional benefit for many of these leaders because public schools are a particular target for ideological reasons. As Pat Robertson said to his followers at the Christian Coalition’s national conference in 1993, “You give every parent a voucher of $2,500 or $3,000 or whatever the cost of education is, and you say to them, ‘You may spend this on the best education you can get for your child, you pick the school.’ And if the public schools do not deliver quality education, let them go out of business and nobody would miss them.”4 Jerry Falwell is similarly frank: “I hope I live to see the day when, as in the early days of our country, we won’t have any public schools. The churches will have taken them over again and Christians will be running them.”5 In fact, some Religious Right leaders, including Robert Simonds of Citizens for Excellence in Education and D. James Kennedy of Coral Ridge Ministries, are now promoting two separate efforts – Rescue 2000 and Exodus 2010 – to encourage all Christian parents to withdraw their students (and their support) from public schools nationwide; vouchers would represent a major step toward that goal.

Rooney & Golden Rule

The concept of leveraging private voucher and scholarship programs to build support for publicly supported vouchers and tuition tax credits – the idea behind CEO America and CSF – is the brainchild of right-wing billionaire J. Patrick Rooney. He is active in several influential conservative think tanks, including those belonging to the State Policy Network. He serves on the board of the National Center for Policy Analysis in Texas and CEO America, both State Policy Network members. Rooney also sits on the Private Enterprise Board of the conservative American Legislative Exchange Council (another associate member of the State Policy Network).6

Rooney is a major funder of conservative causes. He is also chairman of the American Education Reform Foundation, which has advocated for voucher proposals in many key areas, including California and Washington, D.C.7

Rooney began his voucher work in 1991 in an effort to get the Indiana state legislature to funnel public money to private schools.8 Having failed at that strategy, he and his company, Golden Rule Insurance Co., began providing private scholarships to 500 students.9 Since that time, likeminded individuals across the country have adopted the strategy that private voucher money could leverage public money, a strategy that is finding its latest and largest expression in the CEO-CSF phenomenon.

Texas Takes the Lead

Rooney’s ideas were picked up by James Leininger, a wealthy Texas physician who supports much of the Religious Right’s social agenda and has helped to make Texas an active battleground in the debate over publicly funded voucher debate. Newspaper reports estimate that he has spent at least $5.6 million on politically oriented nonprofits both in Texas and nationally, including the American Family Association, Family Research Council and Focus on the Family. His contributions prompted the San Antonio Current to call Leininger “God’s Sugar Daddy.”10

In 1989, Leininger established and funded the Texas Public Policy Foundation (TPPF), which he modeled after the Heritage Foundation.11 He and TPPF in turn created CEO San Antonio, the precursor to the national group, CEO America.12 Then in 1994, with the help of a $2 million gift from the Walton Family Foundation, CEO America was born as the national clearinghouse for privately funded voucher programs.13 Former Wal-Mart executive Fritz Steiger, whom Leininger had hired to run TPPF, went over to CEO America and now serves as the group’s president. The Texas think tank also belongs to the State Policy Network.14

In addition to soliciting Walton Foundation funds to help create CEO America, Leininger persuaded voucher supporter John Walton to give $100,000 to Leininger’s A+ PAC for Parental School Choice, which contributes campaign funding to state and local candidates who support taxpayer-funded vouchers.15

The A+ PAC, formerly called Texans for Governmental Integrity, helped elect three of the six Religious Right-backed members of the Texas State Board of Education.16 In 1998, Leininger secured loans of $1.1 million and $950,000 to pro-voucher candidates Rick Perry for lieutenant governor and Carole Keeton Rylander for comptroller, respectively; many believe the loans made the difference in their victories over pro-public education candidates.17

A+ PAC was the most active education political action committee in Texas in the 1996-97 cycle, contributing $452,306 between 1995 and ‘97 – with Leininger personally contributing $326,100 – to candidates to promote publicly funded vouchers.18 A+ PAC eventually became Putting Children First (PCF) and its treasurer, James Mansour (now chairman of CEO America), became PCF’s chairman. John Walton’s continued contributions sustained PCF.19 The public relations firm that was hired by PCF told the Texas Observer that PCF “had one purpose and still has one purpose,” that is, contributing to candidates who support voucher legislation.20

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