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Public/Private Partner’s Perspective: Turn Public $$$ Into Private $$$ and Use as You Please

March 16, 2019

Today’s NYTimes features a heartbreaking article by Kim Barker describing a complicated scam involving Southwest Key, a charity that operated migrant shelters and operated several charter schools designed to serve children of migrants. While this charity has high-minded mission, it seems that it was really a front for several individuals to convert millions in public funds and donations into high salaries and a large bank account full of unspent money. The scheme to do this involved requirements that the non-profit charity and non-profit charter school rent properties, contract with food service, and contract with cleaning services that were run by the same individuals who operated the nominally non-profit shelters and schools.

After reading this, I concluded that whenever one reads a glowing article about public-private partnerships or charter schools that are not bound by the same regulations as public schools, they should keep this quote from today’s article in mind:

“This is public money they could turn into private money,” said Jaime Huerta, the former superintendent, who was laid off recently after repeatedly battling with Southwest Key. “And then they could use it for whatever they wanted.”

As the article expand, Mr. Huerta was “laid off” because he had the audacity to seek competitive bids for cleaning, maintenance, and food services and discovered he could save tens of thousands of dollars that could be used to remedy deficiencies in the school. Shame on him for cutting into the profits of shareholders!

And where was the board that oversaw this enterprise?

Although Promesa’s school board is supposed to be an independent watchdog, Southwest Key has effectively controlled it. For years, the board has consisted of Mr. Sanchez; another charity executive, Alexia Rodriguez; Mr. Sanchez’s longtime friend and real estate partner, Ruth Hsu; and a Latino activist and retired disc jockey. Two new members joined last month.

For those who think private enterprise will solve the problem of corruption… keep this quote in mind.

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