Monday, April 03, 2006

Two Cheers for Bureaucracy

Two stories in this morning's New York Times deal with very different topics, but share a common theme. The first describes how a significant fraction of charter schools around the country are collapsing due to financial and educational mismanagement, using one school in the Bronx as an illustrative example.

The ReadNet Bronx Charter School was founded by Robin Hubbard, described as "an Upper East Side architect known for her charm, enthusiasm and prominent friends"--in other words, not an experienced or trained educator. The school used "a curriculum developed by the ReadNet Foundation, which Ms. Hubbard had started several years earlier, after helping her own son struggle with learning problems."

Today the school is being shut down, leaving hundreds of students and families stranded for the coming school year. The Times spoke with a lawyer named Neil M. Frank, whom Hubbard hired to try to get a handle on the school's management problems:

Mr. Frank said he was never able to get to the bottom of where the school's money had gone. He said that consultants, including ones affiliated with ReadNet Systems, a business founded by Ms. Hubbard, were hired without contracts or board approval. Clear lines were not drawn, he said, between the school, Ms. Hubbard's ReadNet Foundation, and ReadNet Systems (now called Smart Learning Systems). He described the relationship among the three as "a bowl of spaghetti."

Mr. Frank said he did not suspect that anyone had personally profited from the school. But he insisted that a "forensic audit" be conducted, and ultimately resigned from the board.

The other story deals with a charity called Tuesday's Children, founded by Chris Burke, brother of a bond trader killed in the 9/11 attack on the World Trade Center. The organization provided treats and morale-boosting outings to kids who lost parents on 9/11. But today, like the ReadNet school, Tuesday's Children is falling apart. It seems that Burke diverted at least $311,000 in charitable donations to unaudited purposes (including some personal expenses), using secret bank accounts known only to himself. Burke's parents are stepping in to repay the stolen monies.

What do these two stories have in common? Both deal with people who I think were--at least at the outset--well-meaning, even idealistic. Hubbard and Burke were enthusiastic amateurs eager to do something good and impatient of bureaucratic constraints. Charter schools, of course, are deliberately designed to bypass the ordinary systems for regulating education. And the Times describes the story of Tuesday's Children as

. . . the story of a leader who came to feel frustrated by the kind of "red tape" he had set out in 2001 to cut through. . . . [Burke] was, he said in a telephone interview last week, "relentless in the pursuit of the positive for these families."

"I twisted arms," he said.

But people--including well-meaning, energetic amateurs--are only human. And when you give them millions of dollars to spend on complex projects they don't really know how to run, and then provide minimal oversight (i.e. "red tape"), they can easily get tempted to cut corners--not just bureaucratic corners but also legal and ethical ones. What's the harm in hiring consulting firms run by your friends? Why not spend some of the charity's money to keep your personal finances afloat? No one's going to know--how can we get into trouble?

We all love to mock and complain about bureaucracy. Politicians on the right, in particular, find it's an easy target for cheap "populist" rhetoric. A pencil-pusher in a government office is a lot easier to attack than someone with real power, like the CEO of a corporation. And calling for the creation of charter schools is a quick way of burnishing your credentials as a pro-education politician without spending any money. Promising to "cut red tape" is an uncontroversial, cost-free, and ultimately content-free campaign pledge.

The truth is that, as I've written before, bureaucracies exist for a reason. Most government bureaucracies were created in response to massive scandals or failures on the part of the private sector. Of course bureaucracies tend to become sclerotic. They need constant monitoring and periodic reform. But bypassing them, shredding them, slashing their budgets, and constantly denigrating them isn't "reform," any more than disbanding the police force would be "law enforcement reform."

Go ahead and make fun of bureaucrats if you like. But when it's your money, you damn well better hope a few smart, well-funded bureaucrats are in place to make sure it's not getting stolen.

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