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At long last, Michelle Rhee’s funders revealed

Her multimillion-dollar backers include top donors to the campaigns of both Barack Obama and Mitt Romney, as well as various foundations.

Michelle Rhee portrait
dol.govMichelle Rhee

Walking Rorschach test Michelle Rhee is back in the headlines this week, put there by a reporter who found a crack in the infamous wall shrouding the funding sources for her national education-reform lobbying powerhouse StudentsFirst.

Whatever you thought of Rhee five minutes ago, prepare to have it confirmed. Her multi-million-dollar backers include top donors to the campaigns of both Barack Obama and Mitt Romney, as well as foundations that back charter school proliferation, so-called parent-trigger laws and public-sector union reform.  

Also confirmed: Rhee plans to raise a whole lot of money in a short amount of time: $225 million between 2010 and 2013, according to StudentsFirst’s IRS application — much of which it will spend creating state-level branches.

A quick aside on something we’ll work our way back to: Its calls for changes to teacher staffing and layoff policies notwithstanding, the group Put Kids First Minneapolis is not one of them. The local group is one of several grassroots efforts by Minneapolis Public Schools parents and community leaders to push for major changes to the district’s contract with its teachers union.

Rhee’s rise to notoriety

Funny and sharp-tongued, Rhee was appointed chancellor of Washington, D.C.’s notorious school system in 2007 by then-Mayor Adrian Fenty, a Democrat. Her efforts to overhaul the district, which had been placed in the equivalent of a receivership, included a bureaucratic house-cleaning and the implementation of controversial teacher evaluation program that led to firings.

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In part because of her central role in the feature documentary “Waiting for Superman,” Rhee quickly became one of the most well-known names in education reform. After Fenty lost a 2010 re-election bid, she stepped down and started StudentsFirst.

Notoriety followed. A federal investigation into “Erasergate,” allegations of cheating on tests on her watch, has yet to be resolved, although Huffington Post reported that the field of inquiry has been narrowed to 35 classrooms.

In the political realm, pundits on both sides of the aisle have seen her willingness to join forces with odd education policy bedfellows as proof she is in cahoots with one or another ideological team.

Rhee is married to former basketball star Kevin Johnson, who was elected mayor of Sacramento in a nonpartisan election but who is widely believed to be a Democrat.

Like scores of other groups that spend money to influence public policy in the current no-holds-barred climate, the nonprofit StudentsFirst has both a 501 (c) 3, which must disclose its financial activities to the IRS, and a 501 (c) 4, which doesn’t. The group has drawn fire for refusing to disclose information about its funders.

A reporting loophole found

Huffington Post education reporter Joy Resmovitz found a side entrance, so to speak, to the donor list. A Pennsylvania law requires organizations that spend more than a certain amount to report the identity of any donor who gives more than 10 percent of its funding in a given reporting period.

According to Resmovitz, in response StudentsFirst named the Texas-based Laura and John Arnold Foundation and New Jersey hedge fund mogul David Tepper, who also founded and funds the group’s New Jersey offshoot.

The group also received $500,000 in startup funding from philanthropists Eli and Edythe Broad’s Broad Foundation, which has championed a host of education reforms, most of them fairly characterized as conservative efforts.

Resmovitz then looked up the donors’ track records, using Federal Election Commission records:

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Tepper has given upwards of $23,000 to the Democratic National Committee; $5,000 to Glacier PAC, a backer of Democratic Rep. Max Baucus — and $5,000 to Mitt Romney for President this December. This January, he gave $375,000 to Restore Our Future, a Romney PAC….

Billionaire John Arnold, a former Enron trader, and his wife Laura, were slated to host in their Houston home a $10,000-ticket Obama fundraiser to feature Michelle Obama last October (the event was postponed). Arnold describes himself as a libertarian, and his wife Laura identifies as a Democrat. Still, Arnold was one of Obama’s top 2008 donors, a bundler who gave the campaign between $50,000 and $100,000. According to Huffington Post’s FundRace, he has given $35,800 to the Obama Victory Fund 2012….

Arnold is currently funding efforts to have legislatures convert the pensions of public employees, such as teachers, into 401k plans. According to the Arnold Foundation’s most recent tax returns, it had $650 to $750 million in assets in 2010.

Back to Put Kids First Minneapolis: The local group was born before Rhee’s became a household name, when a handful of Minneapolis residents unhappy with the way MPS staffs schools began comparing notes. Many of the changes they seek are similar to the reforms that landed Rhee in the hot seat in the first place, although even a brief tour of their website will reveal a much more measured tone.