A small followup on Gov. Mike Beebe’s appointment of Joe Black of Newport (and Helena-West Helena, he told the Democrat-Gazette) to the state Board of Education.
I mentioned yesterday that he was an officer (president) of Southern Bancorp Capital Partners, a nonprofit arm of Southern Bancorp, whose development efforts through both the bank and nonprofit have included significant spending and lending to charter schools — including KIPP, Lighthouse and eStem. Black clearly was appointed by the governor to be the charter school lobby representative on the Board, the position once held by Naccaman Williams, an employee of the Walton Family Foundation. It’s a sensitive issue because the Little Rock School District contends in federal court that the state has broken its vow not to promote segregation in Pulaski County by encouraging open enrollment charter schools that have leached white students from public schools, particularly magnet middle schools.
Black presents a potential conflict of interest question every time a charter school application comes up, not just those in which Southern has an investment. Why? The Walton Family Foundation, one of the country’s major funders of the charter school movement, put $4.6 million in Black’s organization in 2009 for “education reform” in addition to other support for the parent bank’s efforts. He’s paid out of that and other grants his employer receives — $119,000 in 2009, according to the organization’s Form 990. The Walton money apparently accounted for the bulk of Southern’s $5 million income in 2009.
Williams didn’t let a similar conflict get in the way of his charter school advocacy. The issue hasn’t tickled the fancy of the Democrat-Gazette (its publisher a major charter school booster and beneficiary), but I’m confident somebody will raise the issue if and when Black votes on pending charter school applications. They include at least one from an organization Southern Bancorp has supported in the past, the Lighthouse Academies. It’s another recipient of Walton money.
UPDATE: Speaking of investments in charter schools. In some circumstances, where tax credits come into play, they can create windfall profits for banks and other investors in both charter schools and other community developmentprojects. I haven’t dug into the use of these credits in Arkansas just yet, but check it out. Quoting Juan Gonzales, who reported on this for the New York Daily News:
And what happens is, the investors who put up the money to build the charter schools get to basically virtually double their money in seven years through a 39 percent tax credit from the federal government. In addition, this is a tax credit on money that they’re lending, so they’re collecting interest on the loans, as well as getting the 39 percent tax credit. They piggyback the tax credit on other kinds of federal tax credits, like historic preservation or job creation or Brownfields credits. The result is, you can put in $10 million and in seven years double your money.
Double your money in 7 years? When CDs are paying 1 percent? Not bad.