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2004-03-12

No Bush Left Behind: When You’re Barred From Banking, Why Not Bank on Education?

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After Neil Bush was banned from banking activities for his role in the Savings and Loan scandal in the late 1980s, he decided to bank on education and founded Ignite Incorporated. Ignite sells software to help students prepare to take comprehensive tests required under the No Child Left Behind act that was pushed through by Neil’s older brother–President Bush. [includes transcript]

Massachusetts Sen. John Kerry and President George W Bush have quite a few things in common. They both went to Yale. They are both members of the Skull and Bones society. Bush invaded Iraq and Kerry supported him. The President proposed the Patriot Act, Kerry voted for it. Bush pushed through the No Child Left Behind Act and John Kerry voted for that as well. In fact the things that united Kerry with Bush were the major points of contention with his former rival Gov. Howard Dean. Today on the program, we are going to take an extensive look at one of these: No Child Left Behind.

It has become one of the most contentious policies of the Bush presidency. Bush considers it to be his crowning achievement in education policy, saying it will improve Americas schools. Critics, mainly parents and teachers, who are opposed to privatizing education, say its about shifting resources from public schools to corporations. In a moment, we will have a debate on No Child Left Behind. But first, we’re going to look at who’s profiting and who stands to profit.

We’ll begin by looking at the Bush family. Everyone knows the president’s brother Jeb is the governor of Florida. But, less well known is his second youngest brother, Neil Bush. Years ago, he hit the front pages for his role in the Savings and Loan scandal. He was director of the Silverado Savings and Loan when it collapsed in 1988, costing taxpayers more than $1 billion. As a result, he was banned from banking activities. So when Neil Bush was banned from banking, he banked on education.

In October 2001, shortly after the United States began bombing Afghanistan, Neil attended an international technology conference in Dubai. He was fishing for investors for his latest business venture — Ignite Incorporated, an interactive education software company that he founded in March 1999. Ignite says its goal is to help students improve their standardized test scores. And that’s where No Child Left Behind comes into play.

Neil Bush’s company sells software to prepare students to take comprehensive tests required under "No Child Left Behind." Schools that fail the tests will face termination of federal assistance. The contracts for these test programs are very lucrative. Ignite is currently running a pilot program at a Middle School in Orlando, Florida—where Neil’s brother Jeb is governor. The company hopes to sell the software throughout Florida at $30 per pupil per year.

In mid-February, Houston school board members unanimously agreed to accept $115,000 in charitable donations that would be funneled to Ignite. The Houston Independent School District trustees had initially delayed a vote on the matter in December, saying they were concerned that Bush’s Austin-based company might be benefiting from his family name. But in February, the nine board members approved the funding without discussion.

  • Ron Nissimov, a reporter for the Houston Chronicle. He has done a number of recent articles on Neil Bush and his company Ignite!
  • Bill Berkowitz, a journalist who writes for a number of magazines and online journals. He is a columnist for Working Assets news site www.workingforchange.com.
  • Peter Carlson, a staff writer for The Washington Post. In December, he wrote an extensive piece on Neil Bush called "The Relatively Charmed Life Of Neil Bush."

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn first to Ron Nissimov of the Houston Chronicle. Can you tell us more about Neil Bush’s company, Ignite, how it got started and what is the latest?

RON NISSIMOV: Hi. One of the things that certainly raises a lot of questions about whether he’s benefiting from his family name, but he claims that he is doing this because it’s a life-long passion of his. He was a dyslexic when he attended middle school himself. He always had trouble in school, even though he ended up getting an MBA from Tulane University. And then when his youngest son, I think his name is Pierce, but I’m not sure, had similar problem with dyslexia, he decided that it was time for him to become active in this issue and he started — he formed this company in 1999. And one thing that you mention, even though the company could potentially profit from the No Child Left Behind accountability movement, he said that this company was not founded on the basis of helping students pass tests. It was founded basically as a curriculum-based software company that enhances the curriculum. Schools are using it to try to help kids pass tests, but he says that is not why he founded the company.

JUAN GONZALEZ: And obviously since he didn’t have any direct experience in this kind of educational work before, who else are partners with him or investors in the company?

RON NISSIMOV: He seems to have assembled a pretty good team of educational experts. The president of his company is somebody named Ken Leonard, who’s done a lot of educational work in Austin, Texas. He was a principal of a private institution, I think. The investors are certainly a different matter. He has gotten quite a bit of investment from overseas people, oil magnates, the Taiwanese, the software company tycoon who also gave him $2 million to be a consultant for the software company. You know, I have talked to other software developers who say they would have no ability to raise money like that from people not connected directly to the educational industry. So, it certainly raises a lot of eyebrows as to why these people are donating money to Bush and whether they’re trying to get some kind of access to the White House and also he’s graced money from some GOP Investors as well — and also from the first President Bush and his wife, Barbara.

AMY GOODMAN: We’re going to break for stations to identify themselves. We’re talking to Ron Nissimov of the Houston Chronicle and we’re talking about the "No Child Left Behind Act" with a particular focus in this segment on the younger brother of George Bush. Not as well known as Jeb Bush, his Florida governor brother, but Neil Bush, who runs Ignite. Stay with us.

AMY GOODMAN: "Subject in School" Burning Spear here on Democracy Now! I’m Amy Goodman with Juan Gonzalez as we look at the No Child Left Behind Act and now look at Ignite, George Bush’s younger brother, Neil Bush’s, company. We are joined by Bill Berkowitz, columnist for workingforchange.com. You have been following Neil Bush’s company, Ignite. Can you fill out what Ron Nissamov of the Houston Chronicle was just telling us?

BILL BERKOWITZ: Well, good morning. Neil Bush is, I think, one of the bounce-back boys of the Bush brothers. He, along with Jeb and George W. Was — before Silverado, had intended to run for governor of Colorado. But that was, of course, put aside when Silverado happened. The Ignite experience is, I think, fascinating because it grows out of several trips to the Middle East and raising money there in the Middle East for the venture.

AMY GOODMAN: Can you talk about that?

BILL BERKOWITZ: Well, he — in January, 2002, he visited Saudi Arabia and a visit that was sponsored by the Saudi Bin Laden construction group and also the Prince Alwaleed bin Talal, he was the fellow that offered $10 million to help the victims of the World Trade Center that Mayor Rudy Giuliani turned down. And he had made several trips to the Middle East throughout the early 90’s. In fact, after his father left office, he went and lobbied the Kuwaitis for some Enron dealings. So, he’s — and, in fact, just the other day, when he recently remarried last week, there was several Saudi Arabian guests at the wedding.

JUAN GONZALEZ: Well, we’re also joined on the phone by Peter Carlson, a staff writer with the Washington Post who wrote a very interesting article late last year on Neil Bush. Welcome to Democracy Now!

PETER CARLSON: Hi. How are you?

JUAN GONZALEZ: Peter, can you tell us a little more about this trip out to the Middle East that Neil took and also why would companies or investors in Saudi Arabia, China, other places want to invest in a United States software company?

PETER CARLSON: That’s a very good question. I’m not sure they’re rushing to invest in anybody else’s American software companies. He’s been to the Middle East many times as a guest of the Saudis, guests of some high-ranking Egyptians. The Bush family has a lot of friends in the Middle East and Neil has no compunctions about trading on those friendships to get investments for his company.

AMY GOODMAN: Can you talk further about these relationships? Of course, we know that the Bush family, in general, George Bush, Sr., as well as the President have very close ties to Saudi Arabia, have actually gotten hundreds of — well, have gotten millions of dollars from the Saudis. But Neil Bush goes beyond with China as well.

PETER CARLSON: Yes. For Ignite, Neil bush has gotten investments from Kuwait, the United Arab Emirates, the British Virgin Islands, from Taiwan, from Japan. He’s got a lot of contracts all over the world and they treat him very well over there. As has been widely publicized during his trips to the Far East and Hong Kong and Thailand. He would be sitting in his hotel room minding his own business when there would be a knock at the door and a lovely young lady would be there and come in and have sex with him. He testified he had no idea who they were or why they came or who sent them. They obviously treated him very well overseas.

JUAN GONZALEZ: He is not the first president’s relative to cash in on connections to the presidency. Obviously, Bill Clinton’s brother, and there was the famous Jimmy Carter’s brother. This is a long-time tradition of relatives cashing in on their proximity to the presidency. Is this — is his any different from some of these past examples?

PETER CARLSON: Well, he has managed to do something that no other presidential relative has ever done before and that is embarrass two presidential relatives. He embarrassed his father with his shenanigans in the Silverado Savings and Loan scandal, and now he is managing to embarrass his brother with these activities overseas. So, nobody’s ever done that before. He’s also a little more of a slick businessman than Billy carter. Billy Carter took $200,000 from the Libyans for god knows what, but Neil has taken much more than that from a wide variety of sources.

AMY GOODMAN: Can Maybe if we could go back to Silverado, this idea of banned from banking, now banking on education, Bill Berkowitz, if you could take us back to look at Neil Bush’s record and then forward with this educational company and his involvement with the whole educational software lobbying in Washington.

BILL BERKOWITZ: Well, the Silverado case was — both George and Neil have been the products of failed business deals with high-powered connections. Only with Neil it cost the taxpayers well over $1 billion. His relationships with a couple of Denver real estate high-rollers, Bill Walters and Ken Goode, wound up costing the taxpayers over $1 billion and that was followed by, interestingly enough, by a deal with — when he — after Silverado, he started up a company called Apex Energy and that wound up costing the taxpayers money also because one of the investors, which — who was a Bush family friend, Louis Marx, wound up getting money from the Small Business Administration. So, not only did Neil fail in several business deals earlier in his career, but those failures wound up costing the taxpayers money. This time, one of the deals that he’s got, that one of the guests referred to, is this arrangement with Grace Semiconductor through a Chinese company that is controlled, in part, by the son of the former Chinese president, Jiang Zemin. Here, Bush — Neil claims that he hasn’t yet received any of the $2 million that he has been promised because supposedly it comes after he attends these board meetings and he hasn’t yet done that. I think what one of your guests previously said, he’s managed to leverage all these different relationships and pull them together with Ignite. Now someone — an educational official has said that thus far there have not been any connections to Ignite from the federal government in terms of contracts. But as Neil has said, and as you know, the Bush family is a family that never bothers to say you’re sorry about nearly anything, he says, well, George W. is his brother and he doesn’t — he is not beholding to that relationship and anything that he gains will be done on his own merit.

JUAN GONZALEZ: I’d like to get back to this issue of Ignite and you mentioned — actually, the Houston Chronicle reporter that spoke with us before mentioned that although Ignite is basically a software company, it is not related to the testing systems that are now being triggered by No Child Left Behind. It is clear that President Bush’s policies are having an enormous impact on the ability of both testing companies and software companies to get into the public schools with huge contracts. And that’s why I’m a little puzzled about why — all these foreign corporations are suddenly taking an interest in public education or in using software for public education. Would you comment on that?

BILL BERKOWITZ: Well, I think we can only speculate and as Peter, I think, said pretty clearly, god knows why these companies want to get involved. But this is a family that, as Kevin Phillips has written about in American Dynasty, that is so tied up with Middle East interests that it took his book and it will take several more to unravel the puzzle here. But it’s clear that Neil Bush has traded in on the family name as has his brother, Jeb, and has George W. and managed to, in this case, channel the money into Ignite. I don’t know that these folks in Saudi Arabia or Dubai have any particular interest in Neil Bush or even in his expertise. As I said, they keep inviting him over there to speak at conferences. But I think it is more the question of what kind of favor they can curry with the current administration and maybe future administrations if Jeb chooses to run.

AMY GOODMAN: Can Can you talk about the unusual circumstance of Neil Bush lobbying the Bush administration?

BILL BERKOWITZ: Well, that is an unusual circumstance. And he claims that that’s not what he is doing—that the company will rise and fall on its own merits. But if you look at his history, his companies have never risen. They fell. But they’ve never risen on their own merits. And so those are, I think, dubious claims that Neil makes. One thing about Neil Bush, I think, that separates him from the other brothers, at least in my research about it, is that he is quite a silver-tongued fellow and that when he talks, people tend to listen. So, although he was — early on in his life, he suffered from dyslexia and he claims Ignite is partially about, he has been able to convince people through both his conversational abilities and his family connections to move forward with him in various and sundry business activities.

AMY GOODMAN: We’re also joined by Stan Karp, who is editor of the magazine, Rethinking Schools, has been a teacher for 28 years, currently teaches at John F. Kennedy High School in New Jersey. Can you put this all in the context of the bill, No Child Left Behind and where educational software, where these private companies fit into this education bill? This law that has been passed?

STAN KARP: Sure. No Child Left Behind Act was passed a few months after 9-11 with overwhelming bipartisan support in congress, both houses of congress. And it’s a dramatic change in federal education policy. Technically it was a re-authorization of the Elementary and Secondary Education Act of the 1960’s, which represented the historic federal policies of trying to expand access in equity in education. This bill is a dramatic change in federal policy in a number of ways. In some ways, it sort of marries the privatization agenda of the conservatives and standards and testing the agenda of the business round tables and the governor’s education summits of the past 10 years, and it imposes — it is a dramatic extension of federal control over local schools through a testing regime that does open up many holes to the education market, which is a $500 billion market, even though the federal government only supplies about 7% of all education funding and even though this law is under-funded on its own terms and falls very short of what would be needed to reach its unrealistic and under-funded mandates, it does in a number of ways provide opportunities for profiteering by corporations.

JUAN GONZALEZ: And, Stan, historically the republicans have always represented getting the government out of local education and, in fact, at one point several years back, wanted to eliminate the Federal Department of Education. Yet now we have President Bush leading an unprecedented extension of federal power into what the local schools in the country are doing.

STAN KARP: Right. And that is one of the reasons the law is running into an incredible amount of blowback because of the breadth of the constituencies who have been alienated by this law. It is a bad law for schools and teachers and in many respects for parents and certainly a bad law for states who are facing hard budget times and are now facing very strict mandates that would be costing billions of dollars more to meet than they could possibly fund at the levels at which they are currently funding education. There are a number of places where corporations, in particular, have attempted to profit from the law. One is simply the publishers of the tests, this law dramatically increases the number of tests that schools may give. And the educational implications of that are actually much more serious than the corruptive corporate influence implications of that. But it is true that, for example, the McGraw-Hill company, which has very close and historic ties to the Bush family, in particular, benefited in Texas from the Bush education plan which required certain reading curricula to be adopted that included McGraw-Hill products like the "Open Court Reading Series" and the "Distar Reading Series". There is an estimated increase of almost 200 tests, state tests that would have to be given as a result of No Child Left Behind, which could cost as much as $7 billion in terms of the testing profits to be made from that. And then there are certain aspects of the law which open the door to privatization. There are ways in which the testing sanctions open up schools to requirements to allow supplemental tutorial funders services to be provided by private companies and similar other kinds of privatization steps.

AMY GOODMAN: We’re also joined by Bill Graves, who is a republican legislator from Oklahoma, who is opposed to the No Child Left Behind Act. It passed overwhelmingly, republicans and democrats in the congress. Why are you opposed?

BILL GRAVES: Well, for one thing, the constitution makes no — gives congress no power to legislate as to education. That’s not part of the new rated powers of congress under article I. And the founding fathers saw fit to leave that — all that matter to the states. And, you know, I oppose having, you know, people or bureaucrats in Washington dictate how we run our schools and that is what we’re getting the point to and it’s increased education spending tremendously. In 2001, the Department of Education is spending $29 billion, in 2004 it’s $62 billion. And it’s proposed — it’s foreseen it is going to be, by 2005, $64 billion. So, we’re spending a lot of money and we ought to leave all that matter to the states, in my opinion. That’s what — you know, I’ve also heard, even though not only spending the money, a lot of states aren’t getting the money they’re supposed to and that’s why a lot of them are wanting to get out of No Child Left Behind.

AMY GOODMAN: Can We have to break for stations to identify themselves and we’ll come back with this discussion. We’ll also be joined by Howard Fuller, who is with the Black Alliance for Education Options in Milwaukee, distinguished professor of education at Marquette University. Stay with us.

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