United Front: Teachers Unions Quietly Spend Millions on ‘Grassroots’ Groups
In the late morning of a rainy weekday in February, a group of excited young individuals entered the Waldorf Astoria Hotel in New York City through a back entrance without attracting attention. Though they were dressed in hoodies and knit caps, underneath their outerwear, they all wore either red or white T-shirts with the slogan "Hedge Funds = Inequality" printed on them. They held up red protest signs against their bodies as they made their way to the grand ballroom of the hotel. There, they raised their signs and began shouting chants demanding economic justice, temporarily disrupting an exclusive investment conference attended by some of the wealthiest individuals in the world.
At the protest, some of the investors present may have recognized the red scissors insignia associated with Hedge Clippers – a group that formed just over a year ago to counteract "billionaire-driven politics." Hedge Clippers gained prominence in the New York protest scene through its frequent demonstrations against fund managers, held outside their offices, at their charity events, and even near their residences.
Despite the grassroots vibe of the protest, not many would suspect that Hedge Clippers’ organizers have received millions of dollars in funding from teachers unions. Furthermore, the group is led by a teachers union lobbyist and is based at the United Federation of Teachers (UFT) headquarters in Broadway, New York City.
In total, the UFT, along with its upstate counterpart New York State United Teachers, and their national affiliate, have directed $5.5 million over the past five years to the organizations responsible for creating and collaborating with Hedge Clippers. They contributed $2.5 million to Strong Economy for All, a coalition of labor and advocacy groups that frequently work with Hedge Clippers. In the past year alone, the unions provided $800,000 to fund political activities by Strong Economy for All.
The remaining $3 million went to individual organizations within the coalition, including $1.1 million to the Alliance for Quality Education, $340,000 to Citizen Action of New York, and $1.5 million to New York Communities for Change, a restructured version of the now-defunct community organizers ACORN. Other unions and foundations have also contributed to the coalition.
These groups, which have been involved in various causes, share leadership and collaborate on Hedge Clippers’ campaigns. They help publicize the group’s initiatives and participate in organizing protests. The directors of these organizations are often described as leading figures within Hedge Clippers.
Understanding the funding dynamics between these groups can sometimes be complex. Although Strong Economy for All is an independent organization, it does not collect contributions or cover many of its expenses. Instead, the UFT handles those responsibilities.
This setup allows unions to create front groups, according to Dick Dadey, the executive director of Citizens Union, a non-partisan good-government organization. Dadey explains that this arrangement presents Strong Economy for All as an independent, grassroots-driven nonprofit fighting for a stronger economy, when in reality, it is supported by only a handful of unions making substantial contributions.
Michael Kink, the executive director of Strong Economy for All and the individual who launched Hedge Clippers, is an employee of the UFT, as outlined in federal tax and labor records. He was hired in 2011 to establish and lead the coalition. In the previous year, Kink earned $183,000 as a union supervisor. Over the last two years, he has consistently ranked among the 15 highest-paid employees of the UFT, which lists nearly 700 employees in its U.S. Department of Labor filings.
The connection between Kink and the UFT does not seem to be widely known, surprising lobbyists and ethics watchdogs when questioned about it. In an interview, Kink admitted that he has never identified himself as a UFT employee and believes he has nothing to say about it at the moment. He emphasized that he works for the Strong Economy for All coalition and receives payment from them.
It’s worth noting that Kink’s name does not appear on the coalition’s federal tax returns, which require organizations to disclose board members, top officials, and the highest-paid employees.
Image: Strong Economy’s 2013 990 filing
William "Billy" Easton, known in New York political circles as the executive director of the Alliance for Quality Education (AQE), is listed as the president of the coalition in the federal tax filings. AQE is one of the coalition groups that actively participates in Hedge Clippers. AQE primarily advocates for increased school spending, greater oversight of charter schools, and against high-stakes tests. Easton’s specific duties as the president of Hedge Clippers are not mentioned and he does not receive a salary for this position.
Easton explained that he appears as the president on the coalition’s tax returns because AQE is one of the founding organizations. He clarified that Kink, the executive director of AQE, does not appear as the president because it is a board position that is not compensated. (However, Easton’s tax returns for AQE list him as the executive director with a compensation of $52,000.)
The treasurer listed on the tax returns is David Hickey, who also volunteered his services. When he is not managing the finances for Strong Economy for All, Hickey is the chief financial officer for the UFT (United Federation of Teachers) and earned a total compensation of over $300,000 last year.
Image: Strong Economy’s most recent 990
The coalition’s address on the tax returns is 52 Broadway, which is also the UFT’s headquarters in downtown Manhattan. According to records from NYSUT (New York State United Teachers), the coalition operates from an office in Albany that is shared by coalition members.
A spokesperson for the 200,000-member union, UFT, stated that they provide office and logistical support to the coalition.
Support from the teachers union for Strong Economy for All and its members is not a secret, nor is it improperly undisclosed. The New York unions themselves are members of the coalition, which was established in 2011 to advocate for labor-related causes.
Furthermore, the Hedge Clippers website clearly identifies its sponsor as the Strong Economy for All Coalition. Press accounts also typically mention that the Hedge Clippers are supported by labor unions or more specifically, the American Federation of Teachers, the D.C.-based national affiliate of the New York unions, which contributes to Strong Economy for All and is the union that opposes hedge fund influence most prominently.
Susan Lerner, the executive director of Common Cause New York, a government ethics watchdog, affirms that the Hedge Clippers website clearly indicates their backing and directs visitors to the Strong Economy for All site, where the UFT and NYSUT logos are visible. She emphasizes that there is no confusion about who supports them and where their direction comes from.
While it is generally assumed that labor supports Hedge Clippers within the education community, the extent of union funding is not widely known. The same applies to the control the unions have over the movement, which could explain why protests have focused on the perceived threat of hedge funds to public education, despite insufficient evidence according to some observers.
Andrew Rotherham, co-founder and partner at Bellwether Education Advisors and a board member of , comments on the politics of this issue and states that while some fund managers support education reforms and charter schools, the majority are not involved at all. He suggests that teachers should consider whether this is where they want their dues to be spent.
Kink argues that activist fund managers have caused harm across various interconnected social issues, including education. He believes that this fight is for a fairer society and extends beyond just education, although education is a part of it.
Hedge Clippers was launched in response to the successful 2014 campaign backed by wealthy fund managers to elect a Republican majority in the New York State Senate. Several of these investors, along with leaders from other funds, became actively involved in charter schools and advocated for an increase in the number of charter seats across the state to meet the growing demand. The aim was to provide more options for parents, leading to a decline in enrollment in traditional unionized schools.
Last night, protestors gathered in a designated ‘free speech zone’ outside of the GOP debate. The Hedge Clippers Twitter account shared images of the protest, promoting their cause. However, experts believe that the conflict between hedge funds and public education is mostly confined to New York, where the largest funds are based.
Michael Petrilli, President of the conservative Fordham Institute, believes that outside of New York, the issue is not of great significance. He compares the situation to a playground, with everyone involved together.
In New York, the organizations involved in the Hedge Clippers movement have overlapping leadership, personnel, and activities. This blurs the line between the efforts of different organizations. Despite depicting themselves as grassroots, the involvement of the American Federation of Teachers (AFT) and the National Education Association (NEA), who are two of the nation’s largest political contributors, raises questions about the true nature of Hedge Clippers.
The Hedge Clippers’ focus on exposing financial secrecy seems contradictory when considering that, during the last election, only two organizations contributed more money to 527s (less-regulated groups that can raise unlimited funds for or against candidates). This raises questions about transparency in their own operations.
The AFT and their coalition partners, Citizen Action and NYC Communities for Change, did not respond to requests for comment.
Common Cause, an organization that rates the transparency of grassroots lobbying advertisements, graded the Strong Economy for All group with an F in 2011. The Alliance for Quality Education received the lowest score of any group. The NYSUT and the UFT received higher scores, but still with room for improvement.
Jeffrey Henig, a professor of political science and education at Teachers College, suggests that the reform movement in education forced unions to expand their influence beyond their own members. They needed to shape public opinion by addressing issues such as inequality and privatization. These issues also help unions mobilize parents and other groups.
By targeting hedge funds and highlighting certain fund managers who promote charter schools, unions are able to frame their fights for education and pension reform as part of a larger movement against Wall Street. This strategy also taps into the public’s anger towards Wall Street and dissatisfaction with its perceived disregard for the average person.
Dana Goldstein, a journalist and author, believes that transparency has become increasingly important in today’s society. Teachers unions have always valued transparency and see it as a right. By exposing organizations that harm public sector workers, unions aim to shed light on their actions. This focus on transparency is a key aspect of their political activities.
We can uncover the true nature of dirty hedge funds that are driven by greed. The organization Hedge Clippers aims to shed light on the secretive world of hedge fund managers and fight for democracy. However, it is troubling to discover that the New York State United Teachers (NYSUT) spent over $500,000 of its members’ funds on supporting Hedge Clippers. NYSUT has not responded to inquiries about this matter.
Hedge Clippers emerged as a fully-formed movement, drawing on the resources of Strong Economy for All and other groups. They position themselves as a populist uprising against the wealthy 1%, similar to the Occupy Wall Street movement. However, Hedge Clippers focuses on specific individuals and criticizes both their professional and personal lives to make a greater impact.
The President of the United Federation of Teachers (UFT), Michael Mulgrew, suggested that Hedge Clippers naturally evolved from the founding vision of Strong Economy for All. They wanted to push back against economic policies that harmed working people and diminish their voices. Strong Economy for All created the coalition to combat the lies spread by big-money interests and give truth to the people.
In February 2015, the coalition gave birth to Hedge Clippers, along with a public relations firm. Their first press release targeted tax abatements received by wealthy condo buyers at a luxurious residential tower in Midtown Manhattan called One57. They titled their criticism of the tax abatements "New York State Homeowners Respond," but failed to disclose that one of the homeowners quoted in the press release worked with their partner organization, Citizen Action. Only one other quote in the release came from the President of Citizen Action, Karen Scharf.
The report on One57 was part of Hedge Clippers’ ongoing series called "Hedge Papers," which aims to expose the inner workings of New York’s billionaire hedge fund elite. These extensively footnoted reports criticize hedge funds across various sectors and have garnered some media attention. Some of the reports also focus on education, including negative portrayals of charter schools, Success Academies (a charter school network in New York City), and the pro-charter group Families for Excellent Schools. Hedge Clippers has dedicated individual reports to billionaire charter school supporters Daniel Loeb and Paul Tudor Jones, who are frequently targeted in their campaign.
It was surprising for many in the business world to see Hedge Clippers focus on Paul Tudor Jones. He has a reputation for environmentalism and philanthropy, with his anti-poverty Robin Hood Foundation as evidence. Business news outlets did not view him as an obvious target for protests against inequality, as he is not politically active compared to other hedge fund managers. However, Jones has supported New York Republicans to gain control of the state Senate, founded a charter school, and sat on the board of a pro-reform group called StudentsFirstNY. The Robin Hood Foundation, supported by hedge fund managers and billionaires, also invested in charter schools.
Hedge Clippers attempted to portray Jones as a contemporary robber baron, reversing the Robin Hood trope. According to their reports, they accused him of amassing immense wealth at the expense of the poor. They used various mediums such as reports, websites, videos, graphics, and social media to spread their message.
In March, a group of 100 protesters journeyed to the residence of Jones in Greenwich, Connecticut to stage a demonstration. This event marked the first time that the group received significant media attention.
Kink, who was present at the rally, spoke about the focus of Hedge Clippers on hedge fund billionaires and the elite of the hedge fund industry. He was joined by leaders from other Strong Economy for All groups.
The efforts of the new group received a notable endorsement in late March from Ginia Bellafante, a columnist for the New York Times Metro. She praised their attempt to shed light on how hedge funds harm the economy through their self-serving practices. Bellafante specifically mentioned a protest outside Loeb’s apartment in Central Park West, where she claimed that Hedge Clippers educated the public about the complex functioning and accumulation of wealth by hedge funds.
Bellafante concluded that if the Hedge Clippers were able to expose the secretive few, they would accomplish a significant achievement.
Although Bellafante’s approval added to the group’s credibility, some of her conclusions seemed overly trusting. By grouping the activists as being supported by the American Federation of Teachers, prominent labor and community groups, and Zephyr Teachout, she blurred the distinctions between funders and advocates.
Following the rally in Greenwich, Hedge Clippers continued to protest in various locations across New York City. Their demonstrations took place at high-profile investment conferences, luxurious hotels, and the offices of money managers in Midtown and on Wall Street. They also marched for higher wages in upscale restaurants as well as fast-food chains, and criticized hedge funds for worsening the economy of Puerto Rico.
Furthermore, the group traveled to Albany to lobby for bills that would increase taxes on the wealthiest residents of the state. They also sought to close the "carried interest" loophole, which allows hedge fund managers to pay a significantly lower tax rate on their income compared to regular income tax.
The group gained significant media attention around four key events:
– In July 2015, a protest outside Loeb’s summer home in East Hampton, New York, served as their most highly publicized demonstration. Loeb was hosting a fundraiser for Gov. Andrew Cuomo, making the event a double target since Cuomo had several major hedge fund donors. Attendees of the rally displayed banners with the slogan "Hedge Funds = Inequality," and although the event was not disrupted, it garnered considerable attention.
– In March 2016, Hedge Clippers joined forces with the Patriotic Millionaires, a group of wealthy business people advocating for the end of the carried interest loophole. They celebrated the introduction of a bill in the Assembly that aimed to increase state income taxes for hedge fund managers. Michael Kink was identified by The New York Times as one of the bill’s authors.
– In February 2016, Hedge Clippers and the American Federation of Teachers (AFT) jointly released a report highlighting the negative impact of hedge fund fees on college endowments.
– In April 2016, the trustees of New York City’s civil employees’ pension voted to remove $1.5 billion invested in hedge funds. According to New York magazine, credit was given to the Hedge Clippers by Tish James, the public advocate and fund trustee, for influencing the decision to divest.
The media interpretation of public events can be influenced by the contributions made by unions, as demonstrated by the coverage of a rally organized by NYSUT in January 2015 to protest state education policies. The rally took place in Albany at the state capitol building’s Great Western Staircase. It attracted the presence of two other major union leaders, several state Democrats, and 1,000 "coalition partners" according to NYSUT’s newsletter. Their story was depicted as a fight for fairness under the headline "NYSUT and broad coalition fight for fairness on Moral Monday."
A video released by the AFT highlighted the leaders of Strong Economy for All, who were present among the VIPs. One of the leaders, Zakiyah Ansari of AQE, addressed the crowd, and others wore AQE T-shirts and held placards that would become associated with Hedge Clippers (which would be launched a month later).
Teachout’s display of moral authority and NYSUT’s wide-ranging coalition both highlighted the presence of groups that received substantial funding from unions to participate in political advocacy, such as attending rallies.
Union leaders firmly assert that they do not compensate protesters to attend events.
During the rally, which coincided with the beginning of the state’s budget season, a leader from NYSUT urged lawmakers to increase funding for education in order to prevent potential teacher layoffs throughout the state. AFT’s Weingarten criticized Albany’s habit of "blaming educators," while Mulgrew, the president of UFT, faulted the governor for adopting a "so-called ‘reformer’" mindset instead of exploring ways to generate revenue from the top 1 percent.
The "fairness-focused broad coalition," as NYSUT described them, enthusiastically supported these perspectives with loud cheers, creating the impression of extensive backing for policies that lawmakers were currently negotiating. These policies aimed to boost union membership and potentially sidestep accountability for teachers’ job performance.
As Hedge Clippers begins to expand into other states, discussions regarding its funding, leadership, and supporters are likely to intensify.
After their protest at the Waldorf, Charles Khan, the chief organizer of Hedge Clippers, was asked on Fox Business how the organization was funded. He responded, "We are primarily funded and operated by various community groups throughout the country, ranging from teachers to janitors to working-class individuals. We receive support from a wide range of people." However, he neglected to mention that he himself is also an employee of UFT.
Disclaimer: This article contains mentions of Success Academies Charter Network and its chairman, Daniel Loeb. Loeb is a benefactor of , and Editor-in-Chief Campbell Brown serves on the board of Success Academies. Hedge Clippers staged a protest at a speech given by Brown in September 2015.
Receive stories like these directly in your inbox. Subscribe to Newsletter.
