The two teachers’ unions battling to defeat the ballot question to expand charter schools are demanding the advocates for the initiative take down a television ad that features Governor Charlie Baker, claiming it is being funded by donations from executives from eight financial firms that manage the state’s pension funds.
The union leaders say that as much as $620,000 raised from those wealthy financial executives may violate federal so-called pay-to-play laws which place sharp restrictions on managers of public funds from donating to elected officials who have influence over pension portfolios.
Tom Gosnell, president of the American Federation of Teachers Massachusetts, said the promoters of Question 2 should cancel the ad – which plays heavily on Baker’s popularity with voters – until questions raised by the unions are solved.
The union leaders also announced Monday that they have filed an official complaint with the federal Securities and Exchange Commission, alleging that the donations may violate the law. While the money was not donated directly to the governor, Baker is a central figure leading the ballot initiative, and the money provides him political support, the unions argue.
“Until this investigation is concluded, the television ad featuring the Governor should be removed from the air,” Gosnell added. “It should be taken down immediately.”
It is highly unlikely the SEC would resolve the issue before the Nov. 8 election – and not clear the agency would investigate it at all.
Baker aides have scoffed at the unions’ complaints, noting that the governor has steered clear of fundraising for the pro-charter efforts.
On Monday morning, Baker adviser Jim Conroy described union’s request to take down the ad as “desperate.”
“This is a desperate attempt by special interests that want to deny families in urban area the ability to choose a better school for their kids,” he said. “The law is quite clear on this matter, but the special interests opposing Question 2 seem intent on doing everything in their power to distract from what really matters: the fact that 32,000 kids are desperate to get into public charter schools and are being shut out by protectors of the status quo.”
Baker, likewise, called the unions’ argument “a distraction.”
“I wasn’t aware of who gives or who doesn’t give on this stuff,” the governor told reporters at the State House Monday. And, he noted, the firms involved with the pension board have done business with the state “for a long time, certainly before our administration even took office.”
In an election year in which spending on ballot questions is shattering all records, the donations to Question 2, the proposal to allow 12 new or expanded charter schools annually, are setting the pace with raising $21 million, much of it coming from wealthy, out-of-state donors.
The governor, who is expected to run for re-election in 2018, has three seats on the Massachusetts Pension Reserves Investment Management Board: He or his designee is an ex-officio member, and he appoints two members.
“Although their more than $620,000 in contributions have not been made to Governor Baker’s re-election campaign committee, the recipient ballot committees have paid for television ads and other public communications that either prominently feature Governor Baker or may have been developed with his involvement,’’ the complaint to the SEC alleges. “Those contributions are ‘things of value’ that could influence his re-election, and, if so, are subject to the (pay to play) Rule,” the unions allege.
“Governor Baker’s political fortunes are clearly tied to the fate of Question 2, and it is appalling that ads starring him are being financed by donations from Wall Street fund managers who have an interest in currying favor with the administration,” said Barbara Madeloni, president of the Massachusetts Teachers Association.
According to a spokesman for MassPRIM, which manages over $62 billion in assets, the agency’s contracts with the eight investment firms – Apollo Capital Management, Bain Capital, Berkshire Capital Management, Centerbridge Partners, Charlesbank Capital Partners, Charles River Ventures, Highfields Capital Management and Summit Partners – were awarded before Baker was elected governor in 2014.
The spokesman, Eric Convey, said that of the 20 funds managed by those firms for the pension board, only two were approved by the board when it included Baker appointees.
“PRIM has investments in 20 individual funds managed by these eight firms spanning 18 years,’’ Convey said.