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Records show powerful, wealthy funders outside Idaho back school choice campaign

Kelcie Moseley-Morris - 02/03/2023

The national special interests groups who have poured millions of dollars into efforts to make education savings account programs a reality in states like Arizona, Utah, Wyoming, Wisconsin and New Hampshire are the same donors who spent hundreds of thousands of dollars during Idaho’s midterm election to ensure school choice-friendly legislators occupied as many seats as possible in the Idaho Legislature, records show.

The American Federation for Children and the State Policy Network are two of those groups that are coordinated and funded by millionaires and billionaires dedicated to conservative policy positions across the U.S. — and now in Idaho. Sen. Tammy Nichols, R-Middleton, introduced an education savings account bill Tuesday for parents to use per-pupil funding from state funds at the institution of their choice.

The Federation is focused on school choice, while State Policy Network’s affiliates also demonstrate opposition to unions, a reduction in public services, opposition to climate change efforts and advocate for school choice.

The State Policy Network’s donors are largely not known to the public, but investigations have determined donors include foundations run by David and Charles Koch and large corporations such as Microsoft, Verizon, GlaxoSmithKline and Kraft Foods.

The State Policy Network recently credited its think tanks across the country, which include the Idaho Freedom Foundation, for a string of successes in states adopting education savings account programs. One of its affiliates is the American Legislative Exchange Council — better known as ALEC — a corporate-backed organization that drafts and disseminates model legislation geared toward conservative policies. The model legislation on ALEC’s websites for education savings accounts is similar in structure and wording to the education savings account bill introduced by Nichols on Tuesday, which was modeled after Arizona’s Empowerment Scholarship Program. A 2019 investigation showed Arizona’s version was even closer in wording and structure to ALEC’s model.

The program would cost Idahoans about $20 million if passed. The proposed amount that would be given to parents is less than Idaho’s per-pupil spending, at about $6,000. As of May 2022, Idaho’s per-pupil spending was nearly $8,400.

Lawmakers have been attending American Federation for Children dinners, events

According to Idaho Secretary of State records, the American Federation for Children has three registered lobbyists in Idaho this year: Jeremy Chou and Charlotte Cunnington, both attorneys at Givens Pursley in Boise, and Bill Phillips, who is listed as senior director of charter policy and school choice advocacy on the Federation’s website.

A 2022 annual lobbyist report filed Tuesday showed four lawmakers attended a dinner at Capitol Cellars with Chou on Dec. 1, including Rep. Wendy Horman, R-Idaho Falls, who is also co-chair of the powerful budget-setting Joint Finance-Appropriations Committee; Sen. Lori Den Hartog, R-Meridian, who is a member of the Senate Education Committee; Rep. John Vander Woude, R-Nampa; and Rep. Judy Boyle, R-Midvale, who is a member of the House Education Committee. The report lists a $164.04 expenditure for each legislator, and a total expenditure of $1,004 on entertainment, food and refreshments for the year.

The lobbying subject areas indicated on the report were education and children and youth.

Chou and two of the legislators could not be reached for comment Thursday. Horman and Den Hartog confirmed to the Sun by email that they attended the dinner with the other legislators and “multiple organizations” and that the topics were general school choice issues, including charter schools. Den Hartog added that the group also discussed how best to encourage and empower parental involvement.

The Mountain States Policy Center and several lawmakers also attended an event on Jan. 26 with American Federation for Children Senior Fellow Corey DeAngelis, who posted a video on Twitter from the event and tagged Horman and Den Hartog, who were in attendance, as well as Sens. Brian Lenney, R-Nampa, and Scott Herndon, R-Sagle. Lenney and Herndon also sit on the Senate Education Committee of the Idaho Legislature.

Influential school choice group is funded by billionaires, including DeVos family

During the 2022 primary election in Idaho, a group called the American Federation for Children Action Fund gave $200,100 to an entity called the Idaho Federation for Children. It gave the entity another $140,500 in contributions between September and Dec. 28.

It is unclear how much the entity is connected to Idaho. It is not registered as an entity with the Idaho Secretary of State, and campaign finance records do not indicate any Idaho individuals or companies have donated to the PAC. Records show the Idaho Federation for Children’s street address is the same as the American Federation for Children’s offices in Washington, D.C., although the “state” section of the address says “ID” rather than D.C.

The group’s chairman as listed on Idaho’s campaign finance portal is Tommy Schultz, CEO of the D.C.-based organization.

What’s the difference between an ESA and 529 accounts?

Education savings accounts are different from the existing 529 education savings accounts, named after Section 529 in the federal tax code. Those are investment accounts with tax benefits, and are meant to be used for postsecondary education such as college or trade school. Education savings accounts typically take the per-pupil spending allocated by a state’s student funding formula and distribute that money to parents for use at a private school or for homeschooling.

The American Federation for Children is a 501(c)(4) nonprofit founded in 2010 with a stated mission to advance alternative options for education, including vouchers, education savings accounts and tax credits. It is an extension of the 501(c)(3) nonprofit called Alliance for School Choice.

The nonprofit has a political action committee, or PAC, registered with the Federal Election Commission, but no contributions or expenditures are reported there.

Instead, the Federation has a 527 group called the American Federation for Children Action Fund. A 527 is an IRS designation of a group organized for the purpose of influencing an issue, policy or election, according to Open Secrets. Under federal law, the group can accept unlimited contributions. It must disclose those contributions and expenditures to the IRS but is not necessarily required to report them to the Federal Election Commission.

Nathan Cunneen, a communications strategist for the Federation who is based in Florida, told the Idaho Capital Sun in an email that the Idaho PAC seeks to elect candidates who favor school choice policies.

“It is affiliated with the American Federation for Children Action Fund, a national political organization that works to support the election of state-level candidates in states across the country who stand with educational freedom. AFC Action Fund or its state affiliates engage in states based on candidates’ support for expanding school choice opportunities,” Cunneen said.

Over the past two years, former U.S. Secretary of Education Betsy DeVos and her husband, Richard, have contributed $2.5 million to the Action Fund, representing about 36% of the $7 million in contributions over that time period.

Jeff Yass, a Pennsylvania-based billionaire who founded Susquehanna International Group, gave $2 million in that time period, and Cleveland Browns football team owner Jimmy Haslam and his wife, Dee, donated $750,000. James A. Haslam, who appears to be Jimmy Haslam’s father, donated $1 million.

Former State Policy Network employee: ‘It’s all about undermining and destroying collective power’

Not everyone who has been involved in the campaign to pass education savings account legislation has stayed committed to the cause over the years.

Charles Siler is a public relations professional in Arizona who managed external relations at the Goldwater Institute in Phoenix for a year in 2013, then worked for another State Policy Network organization called the Foundation for Government Accountability from 2014 to 2016. After spending those years pushing for education savings account programs, Siler now works with Save Our Schools Arizona to fight against them.

But as he dug into the work and examined the issues he was promoting, the outcomes weren’t lining up with what he expected, including in the voucher space, if the data was available to the public in the first place.

“Coming from an economics background, I was very excited about digging into the data and showing everybody how great these ideas were, and it was basically like, ‘What data?’”

Siler said Goldwater is the organization that developed the concept of education savings accounts and advocated for it nationwide. The concept works, he said, because the funding is given to parents instead of distributed to the schools. He said that stipulation will likely subvert the Blaine Amendment, a clause included in nearly 70% of all state constitutions, including Idaho, that prohibits the Legislature and any other public entity from allocating money to support religious organizations, from a legal perspective.

On Monday, state Rep. Brian Lenney, R-Nampa, introduced legislation that would repeal the Blaine Amendment in Idaho’s Constitution, a clause that states no public entity — including the Legislature — shall appropriate funds that support religious organizations, including schools.

Siler said his job often involved meeting with legislators to persuade them to support a certain policy ideal, which included welfare reform, efforts to fight subsidies for public transportation and ballot access restrictions, along with education programs.

Siler said the policies are aimed at disrupting the political power of regular people.

“It’s all funded by people who have a world view that’s really in opposition to any kind of collective action to resolve inequities in our society,” Siler said. “It’s all about undermining and destroying collective power, because it’s the only opposition that wealthy people actually face.

”If they’re really opposed to the idea of education choice, then they should stay focused on the issues, present their research and data and have the debate.– Amber Gunn, senior policy analyst at Mountain States Policy Center

School choice PAC spent large amounts to support specific Idaho candidates

During the primary, the Idaho Federation for Children PAC spent the following on broadcast advertisements to support these “school choice proponents,” according to a June 2022 press release:

  • Attorney General Raúl Labrador: $45,818

  • Rep. Sage Dixon, R-Ponderay: $21,310

  • Rep. Jordan Redman, R-Coeur d’Alene: $15,701

  • Rep. Judy Boyle, R-Midvale: $45,068

  • Rep. Jaron Crane, R-Nampa: $12,754

  • Former Rep. Gayann DeMordaunt, R-Meridian, who lost her primary election: $20,541

  • Rep. John Vander Woude, R-Nampa: $18,824

  • Former Rep. Terry Gestrin, R-Donnelly, who lost his primary election: $19,984

“Idaho Federation for Children PAC supported 12 Idaho candidates in the 2022 primary and general elections based on their support of expanding school choice opportunities for Idaho families,” Cunneen told the Sun. “We believe that parents in every state deserve to know which candidates want to empower them to make the best education choices for their families.”

During an Idaho Public Television debate in late October, Labrador said he would “strongly defend” legislation related to school choice if lawmakers passed a version of the law that allowed money to follow students to private or religious schools.

On his campaign website, Dixon wrote it is necessary to make all forms of education available in Idaho, including public, private, charter, online and homeschool, and that money should follow the child wherever they are receiving their education.

Vander Woude has proposed similar programs in past legislative sessions, including a 2019 bill that would have created a scholarship fund for use at private schools or tutoring facilities.

Boyle has voiced support for similar legislative proposals in the past, such as the Hope and Opportunity Scholarship Program that failed to advance in an 8-7 committee vote during the 2022 legislative session. At a recent luncheon hosted by the Mountain States Policy Center, a free market-focused nonprofit organization that launched in October, Boyle said school choice is about “raising the bar” for children.

“Why should we just continue funding a system that has failed a lot of our kids? We should remember that the kids come first, not the system,” Boyle said.

In the general election, the Idaho Federation for Children PAC focused on specific competitive races with brochures and broadcast ads to:

  • mary sheaSupport Rep. Dustin Manwaring, R-Pocatello: $15,438

  • Support Rep. Dori Healey, R-Boise: $18,425

  • Support former Rep. Codi Galloway, R-Boise, who lost her race: $27,981

  • Oppose Sen. Rick Just, D-Boise: $9,106

  • Support Rep. Brandon Mitchell, R-Moscow: $15,204

  • Oppose Mary Shea: $15,088

  • Oppose Jeff Nafsinger, Democratic candidate who ran against Healey: $12,142

Manwaring stated on his campaign website that Idaho parents should have education savings accounts, but added that accountability and detailed reporting of performance should also be included.

Mary Shea, the Democratic candidate who ran against Manwaring in the Pocatello area and lost in a 47% to 52% vote, said she received one of the Idaho Federation for Children mailers at her home two weeks before the general election and the subject matter was not about school choice.

The mailer included a picture of Shea and said “Idaho families can’t afford Mary Shea,” and said she supported a “reckless plan to increase state spending by more than $300 million.” It then said, “Say no to higher taxes. Say no to more inflation. Say no to reckless spending. Say no to Mary Shea!”

The mailer said it was paid for by the Idaho Federation for Children, with a return address to a location in Dallas, Texas, that is listed on the American Federation for Children’s main website.

A citation at the bottom directed the recipient to a Facebook post of Shea’s from Aug. 15, which was a link to an Idaho Press news article that said Reclaim Idaho’s ballot initiative to increase education funding would not increase taxes.

“It was simply an attack ad against me with a lie that said I was out to raise people’s taxes,” Shea told the Idaho Capital Sun.

It’s all about undermining and destroying collective power, because it’s the only opposition that wealthy people actually face.

– Charles Siler, former employee of the Goldwater Institute

Up until that point, Shea said school choice had not been a topic of conversation in the race for the Idaho House seat. After the Idaho Legislature passed a bill in a one-day special session in September, Shea said school choice became a bigger subject.

The American Federation for Children was also heavily involved in efforts to pass Arizona’s education savings account program, which expanded from students from certain demographics to all 1.1 million Arizona students. The PAC continues to give large donations to the Arizona chapter, with a $300,000 disbursement in October and $160,000 in August, according to Arizona Secretary of State records.

“The American Federation for Children believes strongly that every child deserves school choice, no matter their income, background, or zip code. We work with advocates and allied organizations in states across the country, as well as in Idaho, to elevate the voices and stories of the children and parents who will be most affected by the opportunity to choose the school that is right for them,” Cunneen said. “We are happy to talk with anyone who shares this goal and prioritize working alongside organizations that are dedicated to working productively with elected officials to advance it.”

The Mountain States Policy Center has touted the benefits of education savings accounts through the launch of a campaign on its website promoting education savings accounts called “Education Choice Improves Outcomes,” with data provided by the American Federation for Children showing largely positive effects from the policy choice in other states.

Mountain States also released a report with the same title that was written by Amber Gunn, a senior policy analyst for the center. Gunn said in the report that she has homeschooled her five children in Wenatchee, Washington, for the past four years, but receives no financial support from the state for her education efforts. She said her research showed school choice is good for everyone involved.

“The money doesn’t belong to the state, it belongs to the student,” Gunn said. “You shouldn’t be punishing families because they’re opting out.”

Gunn added that even states that start out with restricted education savings account programs eventually open the eligibility to all students.

“Parents love it, students love it — the people that don’t love it are the unions,” Gunn said. “They’re a very powerful political arm in every state, and that’s the theme across every state.”

Gunn argues in her research that recent U.S. Supreme Court rulings related to public scholarships and tax credits for religious schools clear the way for Idaho to have an education savings program. The court ruled 5-4 in the case of Espinoza v. Montana Department of Revenue in 2020 that a state-based scholarship program that provides public funds to allow students to attend private schools cannot discriminate against religious schools under the U.S. Constitution. In June 2022, the court ruled 6-3 in Carson v. Makin that Maine’s prohibition on vouchers for religious schools was unconstitutional.

Both lawsuits were filed by the Institute for Justice, a libertarian nonprofit law firm that was founded with money from Charles Koch and is listed as an associate member of the State Policy Network.

ED Choice Final Study

“Idaho’s Blaine Amendment would likely not be recognized by the Supreme Court as a legal barrier to universal school choice. The scholarship or tax credit would go to the student’s family, who would then choose the education option best suited to that student regardless of religious content,” Gunn’s report said.

The report cites a 1971 Idaho Supreme Court case that established what’s known as the Epeldi test to determine the validity of a statute as it related to the Blaine Amendment. A 1997 Idaho attorney general’s opinion said that an income tax credit for parents who enrolled their children in religious schools would not violate the Epeldi test because the benefit would extend to the taxpayer or parent and not directly to the school.

“In other words, even setting aside the Espinoza and Carson rulings, Idaho’s Constitution and case law would support a system that awards education benefits to parents,” the report said.

Ties back to State Policy Network have no bearing on research, Idaho center’s CEO says

Gunn previously worked for the Freedom Foundation in Washington state and knew Mountain States Policy Center’s CEO Chris Cargill from his work with the Washington Policy Center. Cargill asked her to help produce research for his new organization with her background in policy work.

Gunn’s and Cargill’s former organizations are affiliates of the State Policy Network, and the State Policy Network is part of the American Legislative Exchange Council.

The Mountain States Policy Center report on education choice includes four studies that highlight benefits or public support for voucher-like programs. All of the organizations that published the studies — the Reason Foundation, EdChoice, ALEC and the Goldwater Institute — are State Policy Network affiliates or associates.

Gunn told the Idaho Capital Sun in a phone interview that the State Policy Network gives grants to regional groups on a competitive basis and the funding does not control the research.

“All of the research that the individual analysts do speaks for itself, and it can easily be fact checked,” Gunn said. “I’m happy to have the policy debate, which is what I think people on the other side should do. If they’re really opposed to the idea of education choice, then they should stay focused on the issues, present their research and data and have the debate.”

Cargill said Mountain States Policy Center is funded locally by contributions received from people across the region, and it has not received funding from the State Policy Network, ALEC, the Kochs or DeVos families or any other national group.

“This is a typical distraction from the issue at hand — to improve educational outcomes for children,” Cargill told the Idaho Capital Sun via email. “That’s what we should be talking about. All of our research and recommendations are backed up by actual data, footnoted throughout our studies and linked to on our website. We stand by them 100%.”

What’s next in Idaho?

A joint resolution that would repeal the Blaine Amendment in Idaho’s Constitution was introduced in the Senate Education Committee on Monday, and a bill that would create Idaho’s first education savings account program was introduced on Tuesday. Both could receive a full hearing in the coming weeks of the legislative session.

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