Free backpacks in Union come from politically active group

UNION – Questions continue to surface about the company that handed out 1,500 backpacks to first- through third-grade students and their parents last week.

LocalSource looked into whether Better Education for Kids actually is bankrolled by two hedge-fund managers using cash to help elect candidates who agree with its ideas on education, tenure reform, voucher programs and teacher merit pay.

Results showed the group is very active in New York and New Jersey and has been since 2011, working against the New Jersey Education Association.

For example, a June 23, 2011 Wall Street Journal reporter Lisa Fleisher reported a new group on the scene at the time called Better Education for Kids wanted to end the use of seniority in teacher-hiring decisions, implement an effective teacher-evaluation system and weaken tenure.

Much of what Better Education for Kids was promoting in 2011, and in 2014, conflicts with the policies of the New Jersey Education Association, which represents approximately 200,000 teachers, retirees and education professionals.

Better Education for Kids was started by New Jersey residents David Tepper and Alan Fournier, who founded the Appaloosa Management hedge fund and the Pennant Capital Management hedge fund.

In New York, hedge fund managers and employees have been active in education circles for years as support for charter schools was surfacing.

Forbes Magazine estimated in 2011 Tepper had a net worth of $5 billion, ranking him at No. 60 on that year’s 400 richest Americans.
Hedge funds are an investment vehicle that pools capital from a number of investors and invests in securities and other investment interests. It is administered by a professional management firm and often structured as a limited partnership.

However, because hedge funds are not sold to the general public or retail investors, managers have historically been exempt from some of the regulation that governs other investment managers with how the fund is structured.

In 2011 Better Education for Kids launched a $1 million advertising campaign in New Jersey with not only an eye towards the fall election that year but also the 2013 legislative elections.

It was an unusual cycle during that period of time because 120 lawmakers were up for election in two straight cycles.

Better Education for Kids, according to information obtained by LocalSource, hired two high-profile political consultants, Mike DuHaime, a Republican and former top advisor to Gov. Christie, and Fox & Shuffler, a lobbying firm whose founders were in top positions with former Democratic governors.

Christie, who spent a good portion of his first year in office attacking the teachers union and tearing down the practice of deducting dues to help fund the NJEA’s more than $100 million annual budget.

In 2010 the NJEA went into overdrive, spending a record $6.6 million on ads targeting the governor’s budget cuts, layoff of teachers, police officers and firefighters, according to records and bills obtained by LocalSource.

In 2011 the union launched several ad campaigns, including one saying Christie was protecting millionaires at the expense of public schools. DuHaime shot back saying the NJEA spent at least $7 million on this ad campaign.

In 2010 a group called Reform Jersey Now, padded with Christie advisors and associates, spent more than $500,000 on advertisements, direct mailing and phone calls in districts with lawmakers blocking or speaking against the governor’s goals, according to documents obtained by LocalSource.

In November 2011, Better Education for Kids handed out 40,000 backpacks filled with school supplies in Camden and other low-income areas. They also promised to bail out an after school program that was set to close after state funding cuts.
The group’s political action group has also spent money in four competitive school districts in the state.

Better Education for Kids, according to sources at the state house, is the latest advocacy group formed in New Jersey that is pushing for issues that align with Christie’s agenda.

Susan Lipstein, president of the Township of Union Education Foundation, who spoke out last week on behalf of the foundation saying their goal was to strengthen and improve the schools, also had a personal opinion about Better Education for Kids.

“Having parents provide personal information to Better Education for Kids for a free backpack without explaining to them that the information would be given to a third party is dangerous,” said Lipstein, who said the advocacy group also was allowed to hand out business cards to parents when they picked up the backpacks Aug. 20 and get mailing list information.