Ex-Intel CEO Craig Barrett stands to profit from his education advocacy

by David Safier

Don't expect ex-Intel CEO Craig Barrett, as he criss-crosses Arizona advocating for increased funding for charter schools, to talk much about how he stands to profit from his advocacy.

But the fact is, Barrett, who sits on a number of nonprofit boards and is the unpaid President and Chairman of BASIS Schools' Board of Directors, is also a board member of the for profit online education corporation, K12 Inc., as of September, 2010. K12 Inc. runs the Arizona Virtual Academy along with many similar charter schools in other states. It also sells online education to non-charters. Its third quarter revenue for 2011 was $130.3 million. It is currently trading on the NYSE at $32.85 a share.

Barrett's connection with K12 Inc. is no secret. It's in his online bios. But it's not something he talks about much.

K12 Inc. was founded by Bill Bennett, among others. Bennett was Reagan's Secretary of Education and is one of the biggest proponents of our conservative shift in education. He's no longer part of the company, however. A revelation of his gambling problem, followed by a racist remark on radio, made him terminate his involvement.

My first investigative work as a blogger was to reveal that K12 Inc. was outsourcing student essays to India to be graded, without parents' knowledge. Based on my investigation, which was picked up by Education Week and the Star among others, K12 discontinued the practice, telling its stockholders it made a mistake. "Growing pains" was the term K12 used.

K12, like most corporations, makes money on the price of each item it sells — those "items" being students who sign up for its charter schools, bringing in government funds — and volume. The more money per student and the more students, the more the corporation earns. Barrett's three-part pitch for education is, more funding per charter school student, more students in charters and more computer-based technology, including online curriculum. It fits nicely.

Barrett is currently running a dog and pony show with Ed Supe John Huppenthal and former Arizona Ed Supe Lisa Graham Keegan. When Keegan was an AZ state rep, she was the driving force behind the implementation of charter schools in the state. She advocated for vouchers as well, but didn't get that through the legislature. Keegan became Ed Supe after the charter legislation passed and in that capacity created the Arizona Wild West Charter Show, which catapulted Arizona into first place as the state with most charters per capita, a distinction I believe we still hold. She was McCain's education advisor during his 2008 presidential run.

Keegan, Huppenthal and Barrett are ramping up a proposal to change the way schools are funded in Arizona. A big part of that proposal is to raise the amount of money that goes to charter schools.

Barrett is their go-to guy when it comes to speaking on the issue. You may remember, in March Barrett blasted Arizona for the quality of its education, saying if Intel weren't currently in Arizona, he wouldn't recommend moving here because of our school system. That made him sound like a nonpartisan advocate for education.

But if you look at his 5-point plan for reforming K-12 education in Arizona, three of the points will directly benefit K12 Inc. Barrett wants more competition, by which he means more charter schools and increased charter school enrollment. And the best way to get more charters, he writes, is to give them a bigger slice of the education funding pie — more money per charter school student. He wants to increase the "intelligent use of technology," which means more computer-based education, K12's specialty. He also advocates more "private-sector involvement" — in other words, increasing the privatization of public education. That means more business for corporations like K12 Inc.

People might wonder why someone like Barrett, whose net worth was about $400 million in 1999 according to Time magazine, would be interested in making more money. It astounds me as well. But these folks believe life is a real world game of Monopoly, and they want one more hotel on Boardwalk, then another on Park Place, then another on . . . Take Dennis Bakke, the CEO of Imagine Schools, one of the biggest charter school corporations in the country. In 2005, he was listed by Forbes as the 55th richest man in the world with a $1.6 billion net worth. Yet he runs Imagine as a cutthroat operation, famous for squeezing as much profit out of each school as he possibly can, to the students' detriment. Profit is in Bakke's DNA. Though I know less about Barrett than about Bakke, it looks like this holds true for him as well.