Netflix draws SEC scrutiny over Facebook post

 Netflix and its chief executive Reed Hastings could face a civil action for a Facebook post that US Securities and Exchange Commission staff allege violated disclosure rules that require companies to release important information to all investors at the same time.
On July 3, Mr Hastings put up a public Facebook post to more than 200,000 Facebook followers, announcing that Netflix members had watched more than 1bn hours for the first time in June. The message has since received more than 250 likes and was shared more than 30 times, but the company did not issue a press release or file a document with the SEC about the news.
Netflix disclosed in a SEC filing on Thursday that the company and Mr Hastings had received a Wells notice from SEC staff, warning of the agency's intentions to file civil charges for violating Regulation Fair Disclosure. The rule bans the selective release of material information.
SEC staff will present the case to commissioners, who will vote on whether or not to sue the company. The case is likely to be watched by corporations that increasingly tap social media to disseminate information.
"SEC staff questions a Facebook post. Fascinating social media story," Mr Hastings said in a regulatory filing that he also posted to his Facebook page.
He argued that the company considered a post to more than 200,000 people as "very public", particularly because several of the executive's Facebook subscribers were reporters and bloggers. He added that while the company believed that the post was public, the 1bn viewing hours fact was not "material" to investors because it previously had signalled in a blog post that it was approaching the milestone. He said the company typically released important information via investor letters, press releases and SEC filings.
Mr Hastings noted that while Netflix stock rose on the day of the post, the climb started before the posting occurred and likely was sparked by a positive Citigroup research report.
The news comes amid an 18 month rollercoaster ride at the video rental company, initially spurred by the loss of a licensing deal with Starz followed by a botched rebranding and separation of its DVD business, which the company eventually abandoned.

Doha climate talks: US faces dilemma over final text

There has been a historic shift in the UN climate talks in Qatar, with the prospect of rich nations having to compensate poor nations for losses due to climate change.

The US has fiercely opposed the measure - it says the cost could be unlimited.

But after angry tussles throughout the night the principle of Loss and Damage is now in the final negotiating text.

Small island states at risk from inundation say they will walk out if the US vetoes the proposed deal.

The political stakes are high. The EU's position is not yet well defined, but soundings suggest that it can live with the text.

The US will be seeking support from other big polluters - like Canada - likely to face liability for climate damages.

If the US is left alone fighting against the chair's text, its negotiators face a dilemma - either to bow to the majority and accept that the nations which caused climate change bear a moral responsibility to other nations damaged by it, or to refuse to sign.

If the US vetoes the text, President Barack Obama will be accused of hypocrisy and failure after re-committing himself to tackling climate change since his re-election.
If he agrees the text he will face criticism from Republicans, whilst he tries to negotiate his own deal over US government finances.

One campaign group in Doha tweeted that before the text was agreed Todd Stern, the US chief negotiator, was heard saying: "I will block this. I will shut this down."

Saleem ul-Huq, from the think-tank IIED, told the BBC: "This is a watershed in the talks. There is no turning back from this. It will be better for the US to realise that the principle of compensation is inevitable - and negotiate a limit on Loss and Damage rather than leave the liability unlimited.

"[President Obama] has just asked Congress for $60bn (£37bn) for the effects of Sandy - developed nations are already having to foot the bill for loss and damage of their own."

The Qatari chair has warned delegates that only a few hours remain to sign off the deal. He says the conference will not overrun by another day.

Principle at stake
It is a point of principle that is at stake here for developing countries. In the end it's questionable how much extra money a Loss and Damage Mechanism might bring.

Already poor nations are bitter that rich nations, particularly the US are dragging their feet over a promise made at the failed Copenhagen climate summit to mobilise $100bn by 2020 to help poor nations get clean energy and adapt to climate change.

The developing countries say the original sum was too low - especially in the light of Mr Obama's request to Congress for Sandy damages of $60bn, and the UK's bid to raise £200bn for clean energy by 2020.

Silvio Berlusconi confirms new Italy PM bid

Former Italian Prime Minister Silvio Berlusconi has confirmed he will run for the office again next year.

Mr Berlusconi told reporters in Milan that he was "running to win" - and that his decision came after his People of Freedom party had not found a leader who was as well known as him.

Mr Berlusconi said PM Mario Monti's austerity policies had harmed Italy.

Mr Berlusconi, 76, resigned in November 2011 over Italy's economic troubles and was convicted of tax fraud in October.

He is appealing against that ruling.

Mr Berlusconi is also on trial accused of paying for sex with an under-age prostitute, in the so-called "Ruby" case. He denies wrongdoing.

He has already served as Italy's prime minister for three separate terms and built up what is believed to be a vast personal fortune from his business empire.

Fear of judiciary
Mr Berlusconi told reporters in Milan that everyone in his party had agreed that the PDL needed a leader "like Berlusconi in 1994" but "there wasn't one".

"It's not that we did not look... but one needs time to be imposed as leader," the former prime minister said, mentioning the PDL secretary general Angelino Alfano.

He said he was entering the race because polls put the centre-right PDL behind the Italian left.

The PDL abstained from confidence votes in parliament on Thursday - which the government won.

Mr Monti replaced Mr Berlusconi as prime minister just over a year ago, and launched a programme of reforms aimed at pulling Italy out of economic crisis.

Mr Berlusconi said his party had given "proof of great responsibility and had supported [Mr Monti's] technocrat government for a year, seeking to correct policies that are not convincing, whilst insisting that austerity in an economy that does not grow is harmful. And harm has been done".

The former leader said he had not missed the office of prime minister "not even for a minute" and he was returning out of a "sense of responsibility".

Referring to his confrontation with the Italian judiciary, Mr Berlusconi said he saw it with "a great sense of fear because we have to do with an omnipotent judiciary".

Mr Monti is due to hold talks with the Italian president later.

President Giorgio Napolitano has said he wants to avoid a "turbulent" end to Mr Monti's technocratic government.

Boehner sees no fiscal cliff progress after Geithner meeting

House of Representatives Speaker John Boehner said there was no progress on Thursday in "fiscal cliff" talks with U.S. Treasury Secretary Timothy Geithner and criticized President Barack Obama and Democrats for failing to "get serious" about including spending cuts in a final deal.

Geithner, Obama's chief negotiator in talks to avert the "fiscal cliff," held a round of meetings with congressional leaders on Thursday but the sessions appeared to move the two sides no closer to a deal to avoid the tax hikes and spending cuts to be triggered on January 1 without an act of Congress.

"Based on where we stand today I would say two things. First, despite the claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts," Boehner, of Ohio, said after the private session with Geithner.

"And secondly, no substantive progress has been made in the talks between the White House and the House over the last two weeks," he said.

Markets dipped briefly into negative territory on Boehner's comments, continuing what has become a pattern of gyration based on the latest utterance or headline about the outlook for an agreement on the cliff.

In the absence of progress, or any realistic understanding as to when or if Republicans and Democrats might avert the cliff or come up with some deficit reduction agreement, prodding is now coming on a regular basis from business leaders as well as Federal Reserve officials.

New York Fed President William Dudley and Richard Fisher from the Dallas Fed, highlighted the problems Thursday that U.S. lawmakers are causing for both hiring and the economy with each day they fail to strike a deal to avoid a pending fiscal crisis.

Dudley warned that, if it is not addressed, the economic contraction is likely to be larger than normal because interest rates are so low.

Geithner met with Boehner and other House Republican leaders after a session with Senate Democratic leader Harry Reid, of Nevada. He later plans a lunch with Republican Senate Minority Leader Mitch McConnell of Kentucky followed by a meeting with House Minority Leader Nancy Pelosi of California.

Congressional budget analysts have warned that the fiscal cliff's approximately $600 billion in tax hikes and spending cuts that would begin in 2013 would push the U.S. economy back into recession.

The immediate issue is whether the tax cuts that originated in the administration of former President George W. Bush should be extended beyond December 31 for all taxpayers including the wealthy, as Republicans want, or just for taxpayers with income under $250,000, as Obama and his fellow Democrats want.

Republicans have said they are willing to consider new ways to raise revenue as long as Democrats and Obama agree to accompany it with significant spending cuts. But Boehner said he was "disappointed" with the negotiations and said Geithner had brought no specific proposals to the talks.

"We have no idea what the White House is willing to do. I gotta tell you I'm disappointed in where we are and disappointed in what's happened over the past couple of weeks," said Boehner, adding he had a "direct and straightforward" talk with Obama on Wednesday night.

The Geithner meeting with House Republicans also was set to include Majority Leader Eric Cantor of Virginia, Budget Committee Chairman Paul Ryan of Wisconsin - fresh off his Republican vice-presidential campaign - and the chairman of the House's tax writing Ways and Means Committee, Dave Camp of Michigan.

Despite a few cracks in Republican ranks, most notably from Republican Representative Tom Cole of Oklahoma, neither side has budged significantly from its position, leaving the markets and political analysts alike to grasp at wording nuances.

"I think unfortunately it seems pretty clear that the market is trading very much off the reading of the tea leaves on how these fiscal cliff negotiations are going," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. "I think we're hostage to this for the rest of the year."

The post-election lame-duck session of Congress has made clear that until the two sides get over the immediate tax issue, they will not be able to move forward on the serious discussions they desire on longer-term deficit reduction and tax reform.

Keeping the nation in suspense down to a white-knuckled deadline has become the rule rather than the exception for Congress in recent years.

Whether the risk has been a government shutdown or, as in the events that led to the fiscal cliff, default for failure to raise the U.S. government's borrowing power, Republicans and Democrats have needed the pressure of time and possible disaster to bring them together.

Shakira sued for $100m by former boyfriend

Colombian pop star Shakira is being sued for $100m (£62.4m) by a former boyfriend who acted as her business manager for six years.

Antonio de la Rua claims he was the "principal architect" of a business plan that turned the singer into a global superstar.

He is seeking to "recover his share of past and future partnership profits," according to papers filed in New York.

In a separate case, Shakira is suing de la Rua for misappropriation of funds.

Her legal case, filed in the Bahamas in October, accuses him of paying himself an unauthorised bonus and using funds from their business partnership to pay personal expenses.

Mr De la Rua denies the allegations.

Sex appeal
His legal papers, however, provide a rare insight into the intricacies of sustaining a global pop career.

He explains how the couple met in 2000, shortly after he had managed his father Fernando's successful campaign to become president of Argentina.

As they became romantically involved, he frequently joined her on her first world tour - The Tour Of The Mongoose. He describes how, as it came to a close, the star was "shocked" to learn the tour had "actually lost money".

The news caused the performer "extreme emotional distress and interfered with her ability to sleep and perform". She sacked her manager, and asked Mr De la Rua to take over her business affairs.
They agreed he would be entitled to a share of the profits from her music and business ventures "in exchange for the contribution of his business and marketing skills, knowledge and expertise".

But his court papers acknowledge that the partnership, which began in 2004, was based only on an "oral agreement".

Mr De la Rua goes on to describe how he brokered a $300m deal with concert promoters Live Nation and a "lucrative" deal for a range of perfumes.

He was also instrumental in persuading a reluctant Shakira to record the song Hips Don't Lie in order to reverse flagging sales of her Oral Fixation Vol. 2 album. The song went on to top the charts in more than 25 countries.

The court papers describe a similar situation in 2009, when the first single from Shakira's She Wolf album "bombed".

He claims to have brokered a deal for Shakira to record the official World Cup song Waka Waka, the success of which ensured a profitable world tour which "saved the relationship" with Live Nation.

The legal papers add: "The combination of de la Rua's business and marketing talents with defendant's artistic talents, beauty and sex appeal succeeded in propelling the value of the partnership far beyond anything either had previously achieved or believed possible."

When the couple broke up in 2010, Shakira announced the news on her website, but stressed "we continue to be partners in our business and professional lives".

But a year later, in October 2011, the pop star instructed her lawyer to "terminate de la Rua, as if he were a mere employee," the legal papers claim.

Mr De la Rua said he has not received his share of the profits since then, and is seeking a payment of "not less than $100m" at trial.

At the time of writing, Shakira's representatives had not responded to the complaint.

The star is currently expecting her first child with footballer Gerard Pique, who plays for FC Barcelona. She has also signed up as a coach for the next series of The Voice in the US.

Why U.S., Israel should welcome Palestinian move at U.N.

Rabbi Michael Lerner is editor of Tikkun: A Quarterly Journal of Politics, Culture and Society, chair of the interfaith Network of Spiritual Progressives and rabbi of Beyt Tikkun synagogue in Berkeley, California. He welcomes feedback: rabbilerner.tikkun@gmail.com
Israel's security can only be assured when its neighbors believe that it is no longer oppressing the Palestinian people but instead living in peace and harmony with them.
The de facto strategy of past and present Israeli governments of seeking security through domination and by pushing Palestinians out of their homes, or allowing right-wing religious fanatics to create settlements throughout the West Bank to ensure that no Palestinian state could have contiguous parts, has not and cannot work to provide safety for Israel.
Israel's fate and its well-being are intrinsically linked to the well-being of the Palestinian people. It's time for the powerful to show generosity to the relatively powerless.
So those in the U.S. and Israel who want Israel to be secure should welcome the Palestinian Authority's decision to seek observer status as a nonmember state in the United Nations. The authority has agreed to return to negotiations with Israel without conditions once that status has been granted. The goal is creation of a state living in peace with Israel in borders roughly approximating those of the before than 1967 war, with minor border changes mutually agreeable through negotiations.

Britain’s two cheers for Carney

When Mark Carney, the respected head of Canada’s central bank, was appointed on Monday to the even more august position of governor of the Bank of England, Britain’s reaction was a characteristic blend of self-deprecation and smugness.

The self-deprecation was publicly expressed by an Opposition MP, Barry Sheerman: “Isn’t it a little surprising that the leading banking nation on earth could not find a British candidate for the job?” This feeling of mild embarrassment seemed to be quietly shared by many Britons in addition to the distinguished domestic candidates who were passed over.

The smugness has been much more in evidence. There has been a veritable orgy of self-congratulation among British politicians, media commentators and financiers at having nabbed “the outstanding central banker of his generation,” as George Osborne, the British chancellor, described his new hire. Embarrassment and praise are both justified, but for other reasons.

Starting with the embarrassment, there was actually no shortage of outstanding British candidates to run the BoE. All four Britons who publicly revealed their interest – Adair Turner, Paul Tucker, Terry Burns and John Vickers – have credentials that easily match Carney’s and would have put them in the top league of global central bankers alongside Ben Bernanke and Mario Draghi. This appointment, therefore, was definitely not an example of the “Wimbledon syndrome,” whereby Britain hosts the world’s best tennis tournament but never produces a player who is good enough to win.

Why, then, did Osborne go to Canada to fill the BoE post? The reason, and the true cause for British embarrassment, is the failure of Osborne’s economic policy, for which Sir Mervyn King, the departing governor, will now become a useful scapegoat.

Had Osborne appointed a serving official, like Turner or Tucker, this would have been a vote of confidence in the economic institutions that he had inherited from Gordon Brown’s Labour government. By choosing a complete outsider, Osborne maximizes his freedom to blame Britain’s economic problems on Brown’s mismanagement and King’s errors of judgement – and to some extent, this is justified.

Not only did the BoE initially mishandle the 2007-08 crisis, but more importantly, King played a key role in crafting Osborne’s self-defeating fiscal strategy of sharply higher taxes and slashed public spending in the midst of an economic slump. King assured Osborne after the 2010 election that BoE monetary easing would counterbalance the deflationary effects of any additional fiscal tightening, but then failed to provide the genuinely radical monetary policies that might have delivered on this pledge. The consequences have been a deeper and longer slump than Britain experienced even in the 1930s and failure on all the government’s fiscal objectives.

Given that Canada has done better than any other G7 economy since the crisis, Osborne clearly hopes that Carney will sprinkle some fairy dust and that Britain’s economic prospects will be transformed. But Canada did not face the structural devastation caused in Britain by the meltdown of international banking. So Carney’s record in Canada says little about handling what he himself has described as the “much greater challenges” at the BoE.

Now for the good news. The first reason to cheer Carney’s appointment is, ironically, his background as a Goldman Sachs banker. This has helped him challenge simplistic arguments on regulation, both from self-interested bankers and from their extreme opponents who see breaking up big banks as an end in itself.

Carney’s financial background gives him some insight into the value of a dynamic and innovative financial sector. This understanding puts him in a different category from most central bankers and academic economists, who tend to see finance as a socially destructive and parasitic activity, which extracts excessive “rents” from the “productive” economy that are totally disproportionate to any services provided.  This is nonsense. Finance is arguably more useful and less damaging to society than the manufacture of over-powered cars that kill people and pollute the atmosphere, or the production of wines and spirits that cause alcoholism and liver diseases.

But even if it were true that finance was a totally unproductive, zero-sum game for the world as a whole, the fact is that it has been Britain’s most successful industry since the 17th century, and it probably will be for decades, if not centuries. Britain will therefore continue to earn a large part of its income from hosting what cynics describe as the global financial casino. And since in reality finance is indispensable to any economy advanced enough to involve trade, savings and long-term investment, financial activities are bound to grow rapidly as economies become more complex, interdependent and globalized.

Given London’s position as the world’s financial hub, it is essential for Britain to have a central banker who understands the importance of international finance for global economic growth. Because of Britain’s history of profiting from this industry, this justification may sound less self-interested, and therefore more convincing, if it comes from somebody who is not, himself, British.

Britain’s openness to welcoming foreign talent, initiative and enterprise is another reason for self-congratulation in the appointment. While the United States is universally recognized as a nation created by immigrants, Britain’s openness as an economy and a society is widely understood. The share of Britain’s population born abroad is now about the same in Britain (11.3 percent) as in the States (12.9 percent) — and in London (34 percent) as in New York (36 percent).

While the “Wimbledon effect” and the management of the English football team by a string of unsuccessful foreigners is a standing joke in Britain, few societies are more ethnically diverse and tolerant of cultural differences. As a quintessentially “foreign” Briton, it has often struck me that it is a country so unusually secure in its identity that it does not even feel the need to agree on its name: Britain, England or the UK.

Recently British politics has succumbed to minor signs of xenophobia, partly encouraged by the Cameron government’s muddled immigration policies. Carney’s appointment should act as a reminder that Britain has, throughout its history, recruited not just merchants, football managers and central bankers, but even kings, from around the world.

The fight for a grand bargain

The Gang of Eight: (Top Row, L to R) Senator Mark Warner (D-Va.), Senator Saxby Chambliss (R-Ga.), Senator Tom Coburn (R-Okla.) Senator Kent Conrad (D-N.D.) (Second Row, L to R)) Senator Mike Johanns (R-Neb.), Senator Mike Crapo (R-Idaho), Senator Dick Durbin (D-Ill.), Senator Michael Bennet (D-Colo.)  

There is growing momentum in Washington and around the country in the fight to restore fiscal sanity. So get ready for the counter-attack by the special interests and ideologues.

A growing number of Republicans have now stood up to Grover Norquist’s organization, Americans for Tax Reform, and disavowed the pledge they signed to not raise taxes. We should all commend legislators like Senator Saxby Chambliss (R-Ga.), Senator Lindsay Graham (R-S.C.) and Representative Peter King (R-N.Y.), who have recently joined in refusing to put ATR’s pledge ahead of the nation’s interests.

They and other elected officials give us hope that Congress will get behind non-partisan solutions to address both the near-term “fiscal cliff” and the larger “fiscal abyss,” represented by our enormous projected deficits and growing national debt.

But the battle is far from over. Ideologues and special interests on the left and right are marshaling forces to crush all efforts to achieve a reasoned fiscal compromise. We are about to discover if our elected representatives are leaders or minions.

Each party has its sacred cow, untouchable in previous negotiations. For the Republicans, it is their insistence on no tax increases; for the Democrats it is a refusal to consider cuts to social insurance programs.

Both positions are irresponsible — because we cannot address our structural deficits and mounting debt burdens without additional tax revenues and reform of existing social insurance programs. After all, total federal liabilities, unfunded promises for Medicare and Social Security, and other commitments are more than $71 trillion and growing by about $100 billion a week.

Already, however, several major unions and other special interest groups – for example, AARP and The Committee to Preserve Social Security and Medicare – have launched campaigns to pressure members of Congress to keep social insurance programs off the table in connection with any fiscal Grand Bargain.

These efforts coincide with the “Social Security Protector’s Pledge” championed by Sen. Bernie Sanders (I-Vt.). His pledge now has signatures from 110 representatives and 11 senators.

Meanwhile, Americans for Tax Reform still has signed no-tax pledges from more than 200 representatives and many senators. You can bet that right-wing ideologues will be threatening to punish any Republican legislators who stray.

There are no guarantees that enough of our elected representatives in Washington will stand up to the special interests and the wings of both parties, which have an outsized influence on fundraising as well as the parties’ conventions and primaries.

Fortunately, we have a group with a strong spine in the Senate’s “Gang of Eight,” an informal, bipartisan group seeking to forge a fiscal Grand Bargain. Another encouraging sign is the commitment of rank-and-file members like Representative Jeff Fortenberry (R-Neb.) and Representative Jim Himes (D-Conn.), who rejected special-interest pledges and committed to put everything on the table some time ago.

There is another important reason we might finally get meaningful action no later than the end of 2013. That is the fact that the special interests and ideologues are out of step with a vast majority of the American people. The key message from Nov. 6 was that the voters want Washington politicians to work together and compromise to achieve real solutions for our challenges.

This didn’t surprise me, given my extensive travels on fiscal issues. Everywhere I went this fall, during a nationwide fiscal responsibility bus tour, more than 95 percent of our audiences agreed that putting the nation’s finances in order should be a top priority. More than 80 percent agreed that it would take both additional tax revenue and reduced spending, including social insurance reforms.

A significant majority of “We the People” are ready for tough choices. They are tired of Washington policymakers evading their fiduciary duty and stewardship responsibility to America and Americans.

That message should be loud and clear to every elected official who has shackled himself to special- interest pledges — whether express or implied. People who do so represent part of the problem rather than part of the solution.

In contrast, those who resist and reject the dictates of special interests and who put the interests of the country first are in tune with the American people. It’s time for all federal elected officials to rescind these pledges, get to work and achieve real results.

Our collective future may depend on it.

Jeb Bush, with cash and clout, pushes contentious school reforms

Former Florida Governor Jeb Bush soared to rock star status in the education world on the strength of a chart.

A simple graph, it tracked fourth-grade reading scores. In 1998, when Bush was elected governor, Florida kids scored far below the national average. By the end of his second term, in 2007, they were far ahead, with especially impressive gains for low-income and minority students.

Those results earned Bush bipartisan acclaim. As he convenes a star-studded policy summit this week in Washington, he is widely regarded as one of the most influential education reformers in the U.S. Elements of his agenda have been adopted in 36 states, from Maine to Mississippi, North Carolina to New Mexico.

Many of his admirers cite Bush's success in Florida as reason enough to get behind him.

But a close examination raises questions about the depth and durability of the gains in Florida. After the dramatic jump of the Bush years, Florida test scores edged up in 2009 and then dropped, with low-income students falling further behind. State data shows huge numbers of high school graduates still needing remedial help in math and reading.

And some of the policies Bush now pushes, such as vouchers and mandatory online classes, have no clear links to the test-score bump in Florida. Bush has been particularly vigorous about promoting online education, urging states to adopt policies written with input from companies that stand to profit from expanded cyber-schooling.

Many of those companies also donate to Bush's Foundation for Excellence in Education, which has raised $19 million in recent years to promote his agenda nationwide.

Sherman Dorn, a professor of education at the University of South Florida, says some of Bush's policies as governor, such as an intense focus on teaching reading, made a real difference to Florida students. "It's pretty clear Governor Bush should get credit for giving a damn," he said. But by teaming with for-profit corporations to push cyber-schools, which have produced dismally low test scores in many states, Bush is "throwing away whatever credibility he had coming out of Florida," Dorn said.

Bush's allies disagree. For them, the former governor - widely considered a top contender for the 2016 Republican presidential nomination - is a visionary striving to build on his record of success.

"I've been very impressed with the thoughtfulness of his policies," said Joel Klein, who ran New York City schools for eight years and now heads News Corp's education division, Amplify, which donates to the Bush foundation.

Klein and officials at several other education companies that support Bush's foundation say they do so not for their own financial interest but to promote a broad policy debate.

Any implication "that corporate donors give to us for us to advance their agenda" is simply false, said Patricia Levesque, the foundation's executive director.

THE FLORIDA FORMULA

Bush, who declined to comment for this story, says often that he has one abiding goal: to give all students the chance to reach their "God-given potential."

His "Florida formula" rests on the principles of increasing accountability and expanding parental choice. Among its tenets:

* Grade schools on an A-to-F scale, based mostly on student scores and growth on standardized tests. Give students in poorly ranked schools vouchers to attend private and religious schools.

* Hold back 8-year-olds who can't pass a state reading test rather than promote them to fourth grade.

* Expand access to online classes and charter schools, which are publicly funded but privately managed, sometimes for profit.

In Florida, Bush paired his tough-love measures with generous support. Schools that improved their grade or got an "A" received extra funding. Teachers got bonuses for successes like getting more kids to pass Advanced Placement tests. And students required to repeat third grade got intensive help at free summer reading camps.

States adopting the policies now, in a time of austerity, tend to leave out the costly support systems. That has stirred protests from school superintendents, school board members, teachers unions and parents who see the policies as punitive, humiliating and too narrowly focused on a single test as a measure of success.

Voters have spoken loudly, too. In this month's election, overwhelmingly Republican electorates overturned Bush-style reforms in Idaho and South Dakota and ousted the Indiana state schools chief, who had enacted much of the Florida formula.

In Florida, meanwhile, the durability of the Bush-era gains has come into question.

High school graduation rates rose during Bush's tenure but remain substantially lower than in other large and diverse states, including California, New York and Ohio, according to new federal data. Students' average score on the ACT college entrance exam has not improved and remains well below states such as Missouri and Ohio, where a comparable percentage of students take the test.

Florida's scores on the National Assessment of Educational Progress, widely considered the most reliable metric, dropped on all four key tests last year - fourth- and eighth-grade reading and math. On all four tests, low-income students fell further behind their wealthier peers.

Jaryn Emhof, a spokeswoman for the Bush foundation, said the slipping scores are an indication that "schools were getting complacent" and need to be pushed with higher standards.

Opponents contend Bush's reforms never deserved much credit for the gains in the first place.

Other factors were at play, they argue. Florida voters passed a constitutional amendment to limit class size in 2002, for instance. And Bush's tenure coincided with soaring property tax receipts, thanks to the housing boom, which led to more local funding for schools. Per-pupil spending in Florida jumped 22 percent from 2001 to 2007, after accounting for inflation. It has since fallen sharply.

"There's this single-minded notion that only the programs has supported yield improvements," said Ruth Melton, director of legislative relations for the Florida School Boards Association. "There's more to this than meets the eye."

Some recent research has cast doubt on the long-term effectiveness of the Bush policies.

A Harvard education research group reported this summer that Florida students who were held back in third grade notched a big boost in test scores initially, but the effects faded to insignificance before they entered high school. And annual studies commissioned by the state have found no evidence that low-income students who receive vouchers to attend private schools do any better at reading or math than their peers.

As for Florida's charter schools, a recent report found their students consistently outscore kids in traditional schools on state tests. The charters, however, serve fewer poor and special-needs students and fewer students still learning English.

Meanwhile, researchers have found that other states, such as Massachusetts, have boosted achievement without Florida-style reforms, using more old-fashioned remedies such as increasing spending and imposing rigorous curricular standards.

After an exhaustive study of state-by-state academic gains, the Harvard researchers concluded in a July report that "the connection between reforms and gains ... thus far is only anecdotal, not definitive."

Emhof, the Bush foundation spokeswoman, said that while "there is no silver bullet" to improve schools, the Florida formula "is the path with the most proven results." The state's size and diversity mean "if something works in Florida, it can work anywhere," she said.

MEET AND GREET

Indeed, the Bush foundation touts the Florida test gains as "perhaps the greatest public policy success story of the past decade" and aggressively presses its formula on other states.

Hundreds of emails obtained under a public records request by the nonprofit advocacy group In the Public Interest, which opposes privatization of schools, show the foundation working closely with allies in Maine, New Mexico, Florida and elsewhere to craft public policy.

Foundation employees write legislation and edit proposed bills line by line, then send in experts to testify on their behalf, the emails show.

The Bush foundation also funds trips and events to introduce Bush's donors to policy makers. At last year's national summit in San Francisco, the foundation set aside two hours for several state superintendents of education, dubbed "Chiefs for Change," to meet the foundation's sponsors.

In an email forwarded to Executive Director Levesque, an official from Apple Inc also requested access to the chiefs to tout the company's products.

"This is a great opportunity. ... But there are a dozen other companies that want access," Levesque responded. She couldn't accommodate Apple, she wrote, unless the chiefs first found time to meet with "all the other companies including those actually funding" the Chiefs for Change network.

Apple declined to comment.

Bush foundation donors include family philanthropies, such as those established by Microsoft founder Bill Gates and New York City Mayor Michael Bloomberg. Corporate donors include Connections Education, a division of global publishing giant Pearson; Amplify, the education division of Rupert Murdoch's News Corp; and K12, a publicly traded company that runs online schools.

Many of these donors sit on a Digital Learning Council that helped draft the Bush foundation's policy agenda. Key planks call for states to require online course work in high school and to lift restrictions that hinder cyber-school growth, such as limits on class size.

Studies in several states including Pennsylvania and Colorado have found that online students fare far worse than their peers in reading and math. Bush has said bad programs should be shut down, but he believes online schools have great potential to offer personalized, self-paced education.

"This is not about our commercial success," said Sari Factor, chief executive officer of E2020 Inc, which develops online curricula and recently signed up as a foundation sponsor. "We're focused on what's right for kids."

Still, Factor acknowledged that E2020 has "absolutely" benefited from Bush's advocacy.

In particular, Bush often talks up an Arizona charter school called Carpe Diem, which uses the E2020 online curriculum, employing just four teachers for 225 students because the kids do so much work online. Bush has flown policy makers from across the country to admire the school's innovation and cost cutting. That has brought more clients to E2020, Factor said.

Arizona data shows Carpe Diem test scores have fallen sharply over the past two years, a drop founder Rick Ogston attributes to a new curriculum and the sudden death of the principal.

That has not slowed its momentum; after visiting Carpe Diem on a trip paid for by the Bush foundation, Indiana officials urged Ogston to apply to open a branch there. The head of the state charter school board, Claire Fiddian-Green, says the school's "fairly strong track record" impressed her despite the recent slip in test scores. The new Carpe Diem campus in Indianapolis opened this fall.

Ogston said he and other charter and online school operators count on Bush's foundation to remove obstacles to their growth, such as state laws that require students to put in time in a physical classroom.

"We come to them to say, 'These policies are in the way, and it would be great if you could change them,'" Ogston said. "That's what they do better than anyone."