Jesse Kelly has no college loans, so . . .

June 6, 2012

by David Safier Ask a question Jesse Kelly doesn't like, and his answer is he's focused on some combination of jobs, energy, lower taxes and the national debt. So when MSNBC's Chuck Todd asked Kelly if he would vote to keep student loan interest rates from doubling, his answer was, wait for it . . … Read more

Imagine Schools: The Dennis Bakke model

June 5, 2012

by David Safier

NOTE: Since Imagine School at Superstition made news by firing 11 of its 14 teachers, I've been writing about it, reading up on Imagine Schools and talking to people who know more than I do. This is the first of what will be a few posts trying to make sense of the nation's largest charter school corporation which has drawn more controversy for its practices and low student achievement scores than any other. What I write may be incomplete or incorrect in places. If you have information to add, please leave comments or email me at safier@schooltales.net. I keep all email correspondence confidential.

The corporate philosphy of Dennis Bakke, founder and CEO of Imagine Schools, can be summed up in three words: Deregulate. Decentralize. Expand. He uses fancier words, but that's what his model looks like on the ground, and it's a good way to understand the workings of Imagine Schools. Bakke saw a deregulated arena in public education, charter schools, bought an existing charter company, left the nuts and bolts of running the schools to others, and expanded like crazy. When Imagine Schools took over Chancellor Beacon Academy in 2004, it had 4 campuses in Arizona housing 7 schools. By 2008, it had 14 campuses with 22 schools. The collapse of the economy slowed Bakke down, or he would have continued his breakneck pace of school expansion. He has 71 schools nationwide and is still trying to expand, though his empire is in danger of shrinking or even going bust.

Dennis Bakke's philosophy — Deregulate. Decentralize. Expand — didn't appear out of nowhere when he founded Imagine in 2004. He had been developing it since he worked in President Carter's Federal Energy Administration, where he was instrumental in the deregulation of the U.S. energy markets. Soon after, he founded Applied Energy Services (AES), a company that took advantage of deregulation and built power plants around the world with a decentralized corporate structure, taking out loans to pay for its explosive growth. Managers of the individual plants were given an unusual amount of latitude in the way they ran their organizations with little guidance from the top.

AES wasn't alone in taking advantage of the economic possibilities of the recently deregulated energy environment, of course. ENRON used the anything-goes market to create a vast empire built out of paper and promises. When ENRON went down in flames, AES's stock tumbled with it, plunging from $70 to $1 a share. Bakke left with AES in a mess, but as so often happens in the corporate world, he took a large fortune with him.

Here's what the man who picked up the pieces after Bakke said about AES:

"We really did test the limits of how fast a company can grow before things start to fray around the edges."

Growing fast and fraying around the edges. There's no better way to describe Imagine Schools, which Bakke founded when he left AES using the same model of degegulation, decentralization and expansion.