LOS ANGELES—For a financial whiz-kid, Los Angeles Unified School District (LAUSD) Superintendent Austin Beutner seems strangely uncomprehending of numbers and inordinately fond of trumped-up figures.
Monday morning last he floated the patently absurd hypothesis that “…3,500 people were taking part in pickets at the schools.” Considering that United Teachers Los Angeles-UTLA is 34,000 strong (in LAUSD; that figure seems a little hard to pin down though so call it 32,000 +/- 2000), and 98 percent of the 81 percent voting members elected to strike, that makes for approximately 25,000 (+/- 2000, see above) union members alone as a base for Monday’s strike, and that number’s only risen since then. Beyond that minimum is a small army of ancillary supporters– students, families, numerous allied local unions, even charter school union members. They’ve all been pounding the pavement in “support” of our teachers. Which in itself is a bizarre concept considering there ought to be no antagonists at the table here.
So who’s this money maven helming LAUSD’s ship as it has careened toward calamitous closure?
He’s exactly the sort of guy feared when the term “Wall Street” is invoked. An “econ” major from Dartmouth’s class of 1982, he’s one of those “Smartest Guys in the Room,” a financial “whiz-kid,” a “vulture capitalist,” and venture philanthropist who essentially swings from one corporate liana to the next, leveraging buyouts into IPOs and sticking the rest of us with his hundred-million-dollar landings.
Beutner’s résumé is not an educator’s, it’s a Wall Street Wolf’s. From Dartmouth, he graduated to Smith Barney and by age 29 became the Blackstone Group’s youngest partner. Blackstone Group is known recently for engineering the largest leveraged buyout in history. Founded by a pair of Lehman Brothers alumni, it has always been heavily involved with real estate, profiting massively from the foreclosure crisis of 2007 and sinking millions of dollars last fall into the defeat of Prop 10, California’s recent rent control initiative.
From Blackstone, Beutner co-founded an investment bank named Evercore. One of his partners was Roger Altman, a Deputy Treasury Secretary under Bill Clinton associated with some of his higher-profile doings (NAFTA, Whitewater). Like this mentor, Beutner has periodically augmented his own investment career with “public service.”
Austin Beutner has fashioned a career of availability affecting the neoliberal dream. He is a gun for hire executing an agenda of austerity for politicos and plutocrats. His specialty is to take a corporate entity, parse it into constituent components, and then “leverage” these, one against another, to benefit some bits at the expense of others, lose the losers and sell off the winners at a fabulous profit. That’s the game plan and he’s done it over and over. That’s the “service” he offers his public. When he engages in “public service,” it’s this private leveraging game-plan that he’s offering up among the public sector, for the expense of the private. It’s a fail for the public, like his performance in that sector has been.
Three years into the Clinton administration, Beutner leveraged his Wall Street credentials into an appointment with the State Department running a USAID-funded gig privatizing the Soviet Union’s breakup. Beutner was intentionally and disruptively entrusted with “the attempt to bring the Russian economy out from the ruins of communism into the promise of Western-style capitalism.” While his predecessor proved too preoccupied with deliberative risk-management, it fell then to Beutner, as “Best And Brightest,” to preside over the austerity playbook of neoliberal privatization.
Swinging out from underneath this international financial swashbuckling, the millennium found Austin Beutner opening up Evercore’s new branch office in Los Angeles. After netting multi-millions on its IPO, reverse-profiteering in the private-public interface, a serious mountain-bike accident in 2007 spurred another round of public service and public policy philanthropomorphizing.
His first huddle was with Mayor Antonio Villaraigosa, who hired Mr. Beutner in 2010 for $1/annum to be his “jobs czar.” Asserting immunity from “adult supervision,” Beutner’s task was to oversee and facilitate (read: deregulate) big business opportunities in L.A. during the Great Recessionary slump. One of the prodigal venture capitalist’s reflexive suggestions was to sell off bits and pieces of the public’s water utility, LADWP, just as any Acquisitions and Mergers manager would propose for his portfolio.
The subsequent rounds of serial leveraging public off private and vice-versa all include similar components. Beutner’s the guy who “gets the job done,” gets brought in to impose a sweeping new agenda, with brash proceeds for him and his friends. This financial reboot was coincident with a new thinking about money, giving, and philanthropy. And while his pivot to public service was actually very haute, still the overlap of Big Money with political influence is fundamentally troubling.
Mr. Beutner is nothing if not about influence via money. Failing to attract enough of it for a mayoralty bid in 2013, he dropped out of that running and went back to financing. But not before huddling with another former politico, Commerce Secretary Mickey Kantor. Co-chairing the 12-member “LA2020 Commission,” the pair sounded a clarion call of distress, chaos, and disruption—the better to inveigle austerity measures. Its Olympics prospectus may still be kicking but the rest is DOA, successful only at leveraging personal influence and association.
His next huddle leveraged association with Los Angeles’ master orporate puppeteer, Eli Broad. After the failures downtown, Beutner made public a joint venture with pal Eli Broad to purchase the Los Angeles Times. A week later, the Tribune Company appointed “well-associated” Austin Beutner the L.A. Times’ publisher, a job seemingly unrelated to his expertise. Beutner defended his suitability as “…a logical extension of his civic undertakings….” And two months later, the historically Republican San Diego Union-Tribune was spun into his group.
But a logical extension of publishing to the greater world of politics may well have caused his next failure, the loss of that job. For example, Broad’s wife Edythe is reportedly close friends with the now-ex-wife of Villaraigosa, whose mentor is the former Mayor Riordan. Those pools of politics, power sharing, and also, apparently, publishing are seemingly interconnected, and all quite shallow. When Austin Beutner and Eli Broad partnered to purchase the L.A. Times-San Diego Union-Tribune group, Mr. Beutner was unceremoniously escorted from his place of employment, as befitting any corporate double agent. His tenure as publisher was unqualified, unsuccessful, and angling always for privatization.
And then the pattern continues with his next unqualified job: as LAUSD Superintendent. Once again, through close association with the Villaraigosa/Riordan/Broad axis of power and money, Mr. Beutner was vaulted into office, this time as LAUSD Superintendent, and without public hearing. Mr. Beutner was brought on by those who contend a narrative of failure and crisis in LAUSD, as an excuse to run the script of his expertise.
The modus operandi of “vulture”/venture capitalism is: 1. Buy distressed entities (take over an LAUSD well-prepped through the advance narrative of failure); 2. Offload (or manufacture) debt (e.g., close schools/empty classrooms by raising class size thereby justifying charter school co-location); 3. Offload leaner entity at high profit (enact transfer of 50 percent of LAUSD—and its real estate—to charter schools).
Do not look to Austin Beutner’s LAUSD to negotiate any sort of fair settlement with the defenders and practitioners of public education. Our city’s establishment did not elevate him to this position to manifest a lifetime’s achievement of good educational practice. He is installed to play out his life’s work of financial chicanery. That’s the basis of his own education, it’s what got him his fortune, and it’s what will be the demise of ours.
Now is the time to demand Austin Beutner’s resignation. He’s not here to fix what’s broken in public education. He’s here to profit from turning public education private. We the public need to fund our children’s education properly, collectively and equitably, and we need to vote in accountable public officials (personally I favor Jackie Goldberg 4 LAUSD5) to do so. Call your school board member and tell them like it is: 1-213-241-1000.
Reposted in People’s World (revised to follow PW style) by permission of the author. The original blog published Jan. 16, 2019, also includes a good number of responses and questions.
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