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Monday, October 23, 2006 

Profiting From Public Education

Back in Oct 2005, the US Department of Education (ED) had published a decision that forbids educators (teacher unions) affiliated with a troubled school to offer remedial services to struggle students.
Decisions in Florida by the U.S. Department of Education, if implemented nationwide, would bar groups affiliated with school systems rated "in need of improvement" from participating in the tutoring program mandated under the No Child Left Behind Act (NCLB). Entities likely to be barred from the program--worth an estimated $2 billion a year in federal funding--include teacher unions, child-care centers, after-school programs, voc-ed or computer centers, and parents' groups.
Even since then, corporations have been profiting from a $2 billion-plus per year in federal education funds only to weaken troubled public schools at the same time as it underwrites the development of private and parochial educational services.

This weekend the Los Angeles Times reported on Neil Bush's educational software company, Ignite! Learning and his product, Curriculum on Wheels (COW) - the purple multimedia machine on wheels that offers interactive video presentations on a range of topics in social studies and science, was first created in 2005.

The Times reports that COW has been placed in 40 US school districts and at least 13 districts of them have used federal funds from the No Child Left Behind Act (NCLB) of 2001 to obtain the program.

This is not the first time Neil has been under the microscope. First, a brief history about Neil Bush.

Neil Bush
Back in 1990, Neil was ordered to pay a $50,000 fine and was banned from banking activities due to his role in the Silverado Savings and Loan scandal, which cost taxpayers $1.3 billion. The Resolution Trust Corporation Suit against Neil and other officers of Silverado was settled in 1991 for $26.5 million.

Being a Bush, Neil never paid the fine. A Republican fund raiser was set up where close friends and relatives contributed to help Neil pay his fine for in his S&L dealings. According to Jeffery St. Clair, Neil went on to run TransMedia Communications, a venture capital firm based in Houston, TX.
But Neil Bush moved on, this time to TransMedia Communications, a cable TV venture headed by Bill Daniel, a longtime funder of Neil's father's political campaigns, who had been lobbying furiously for the deregulation of the telecommunications industry. For his services, Neil was remunerated to the tune of $60,000 per year, even though TransMedia's president, Dick Barnes, later admitted that the younger Bush knew nothing about the cable business.
Then in 1994, Neil ran Houston-based Interlink Management Corp, a venture capital firm that raised and invested $60 million in high tech and biotech startups. St. Clair notes:
In 1994, he started a company called InterLink with Tom Bridewater, a Utah tycoon and rightwing politician. The plan called for Neil to act as an intermediary to help grease deals between US and Asian companies. According to his recent divorce settlement, Neil earned from $180,000 to more than a $1 million a year from InterLink alone. In fact, it is alleged that Neil was paid $1 million to arrange a private meeting in New York City with Taiwan's president Chen Shui-bian. The charge was leveled by James Soong, leader of Taiwan's opposition party. Bush admitted to meeting Chen, but denied that he received any money from the Taiwanese leader. Meetings between officials of the US and Taiwanese governments have been prohibited since 1979, when the US normalized relations with Beijing.

On July 19, 1999, Neil experienced one of his greatest triumphs. He made $171,000 in a single day by buying and selling shares of the Kopin Corporation, a display panel company, which on that very afternoon announced a surprise deal with Japanese electronics giant, JVC, causing the stock to soar. ... Kopin had been one of Interlink's early clients and Neil had recently arranged a deal where Telecom Holdings, a Hong Kong company, invested $27 million in Kopin. As a reward, Neil received stock options in the newly beefed up firm. It was merely a coincidence, Neil told the Associated Press earlier this year, that he exercised those options on that July morning and sold them later in the same afternoon, following the momentous JVC deal.
None of this would not have come out, if it wasn't for his nasty little divorce with Sharon Bush.

Ignite! Profiting From Public Education
Less than a month after Dudya took office, the Austin Business Journal published that Neil's Ignite! Inc had been "raising at least $10 million in second-round funding." According to the business newsweekly, Bush had already raised $7.1 million from 53 investors underwriting Ignite! Inc, an educational software company.

According to The Times, thirteen districts were using federal funds from NCLB to obtain Neil's program, which he was charging each school district $3,800 apiece despite that the fact there is a problem purchasing Neil's program. According to federal law, the funds are supposed to be used for disadvantaged students to improve their performance in reading and math. Neil's program does not offer reading and math instruction. In an e-mail to The Times, Neil writes:
"As our business matures in the USA we have plans to expand overseas and to work with many distinguished individuals in Asia, Europe, the Middle East and Africa," he wrote. "Not one of these associates by the way has ever asked for any access to either of my political brothers, not one White House tour, not one autographed photo, and not one Lincoln bedroom overnight stay."
True it may not be the Lincoln bedroom scandal, but it is a scandal worth looking into.

The Bush administration has championed the transfer of public funding to private bank accounts right from the outset, but in its second term, the process accelerated. Following Hurricanes Katrina and Rita, the administration used these disasters to advance their cause to transferring public school students to religious or corporate education programs.

The Con
Neil's business venture with the school district started to unravel back in March when the Houston Chronicle reported that Former First Lady Barbara Bush had earmarked donated money to the Bush-Clinton Katrina Fund with directions that it be spent on educational software created by her son Neil's company.
Former first lady Barbara Bush donated an undisclosed amount of money to the Bush-Clinton Katrina Fund with specific instructions that the money be spent with an educational software company owned by her son Neil.
To cover up the contributed funds, she instructed that the money should be sent on a non-Katrina related program, in which that program is to apply the money to purchase eight Ignite software programs for "Harris County schools with large numbers of Hurricane Katrina evacuees." This is how the con works.

The same business who "invested" in Ignite! Learning would either make grant and/or gift to the school district with the requirement that the money be used to buy Ignite! Learning products.

According to The Times, 2003 US Securities and Exchange Commission documents showed
Neil Bush had raised about $23 million from more than a dozen outside investors, including Mohammed Al Saddah, the head of a Kuwaiti company, and Winston Wong, the head of a Chinese computer firm. Most recently he signed up Russian fugitive business tycoon Boris A. Berezovsky and Berezovsky's partner Badri Patarkatsishvili.
Other investors have come from Saudi-owned Aramco Services Co, Apache Corp, BP and Shell Oil Co, and from The Washington Times Foundation, an organization backed by the Rev Sun Myung Moon, head of the Unification Church.

According the Austin Business Journal, in 2002, Neil had laid off 42% of its workforce in order to sign a $15 million deal with Grupo Carso Telecom SA allows Ignite, Inc. "to outsource software production." The Mexican telecommunications giant "would assume all nuts-and-bolts production" to "help Ignite's bottom line."
Grupo Carso is a conglomerate that owns a majority stake in CompUSA Inc. and Teléfonos de México SA and oversees MSN Latin America. Its chairman, billionaire Carlos Slim Helu, sits on the board of San Antonio-based SBC Communications Inc.
It must be noted that Ignite had been on shaky grounds before Neil inked the deal.
The current deal arose after earlier talks with Grupo Carso to form a joint venture had fallen through, Leonard says. The talks collapsed because of Ignite's precarious financial position and the shaky equity markets, he says.
The Bush strategy to education is simple, transfer federal funding out of public schools to private entities like his brothers. The ultimate outcome is predictable – Education delivered by corporations will be strengthened; education in public schools will be weakened.


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  • From Tejas, United States
  • Un Xicano who is tired of the current status quo.
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