Hedge fund billionaire Dan Loeb appears to be courting New York Mayor Eric Adams over charter schools


New York Mayor Eric Adams (L) and Dan Loeb, CEO of Third Point LLC.

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Hedge fund billionaire Dan Loeb appears to be getting closer to New York Mayor Eric Adams after donating $1 million to the political action committee that helped him get elected, according to people familiar with the matter.

Adams and Loeb have had several private discussions since Adams was sworn in earlier this year, focusing primarily on Loeb’s passion project: city charter schools, these people explained, asking not to be named to freely discuss Loeb and Adams’ discussions. Loeb has long been one of the city’s wealthiest charter school supporters and was the former president of Success Academy, which operates a network of about 50 schools in New York City and boasts higher scores in the standardized tests than most public and private schools.

Adams’ election marked a shift in the city’s relationship with charter schools from former New York City Mayor Bill de Blasio, who favored public schools over publicly funded but managed schools. independently. Charter schools have more freedom to define their curriculum and are considered a free alternative to public and private schools.

Adams was invited to the Success Academy Spring Gala on April 25, according to people familiar with the event. The dinner honored former Mayor Mike Bloomberg who plans announced the previous week to raise $50 million for NYC charter schools. Loeb, who still sits on the board, donated $250,000 to the dinner, according to his website.

The contribution enabled Loeb to have VIP-type seating at the event, with a table for 10 people, the site said.

Although Adams’ spokesman Fabien Levy said the mayor did not attend the event, other people close to the mayor believe Adams received an invitation because of his ties to Loeb. .

“The mayor has repeatedly said he’s ready to work with anyone and everyone to build a more prosperous city for all New Yorkers, but we don’t discuss private conversations,” Levy said. .

A Success Academy spokeswoman said Adams was invited because of his pivotal role in the city’s education system.

“He is the mayor of New York, and the educational success of New York’s children is of paramount importance,” Ann Powell, spokeswoman for the charter school network, told CNBC in an email. A spokesperson for Loeb declined to comment on the Wall Street executive’s private conversations.

Charter schools are funded by the taxpayers of New York with funds from the federal government or grants from private foundations. In New York, charter schools are considered public schools but operate independently of traditional school districts.

Schools are initially granted a five-year charter by either the SUNY Board of Trustees or the New York State Board of Trustees. School charters could include standards for test performance, pass rates, or other operational requirements.

Charter school critics and supporters have argued over whether these institutions have withdrawn critical public funding from traditional public schools.

Adams has indicated that he wants to maintain the statutory charter school cap that limits the system to 460 schools across the state., but he also wants to duplicate institutions that have proven themselves, Chalkbeat New York, which reports on the city’s education system, reported late last year.

New York Governor Kathy Hochul’s 2023 Budget Proposal boosted the funding per student of $16,844 for Big Apple Charter Schools by 4.7%. The final budgetary agreement, however, has not lifted the legal ceiling on the number of charters allowed statewide.

Loeb’s tenure as chairman of the Success Academy board in 2017 was marred by controversy after he offensive New York State Senator Andrea Stewart-Cousins ​​in a racist Facebook post.

“Meanwhile, hypocrites like Stewart-Cousins ​​who pay allegiance to powerful thugs and union bosses are hurting people of color more than anyone who has ever donned a balaclava,” Loeb said, citing the Ku Klux Klan for criticize Stewart-Cousins, who is black. , according to the New York Times. She has served as the state Senate Majority Leader since 2019.

Loeb later resigned as president and has since apologized for the position.

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He has a history of donating to candidates on both sides of the aisle, making him a potentially wealthy ally for Adams if he runs for re-election in 2025.

Loeb has signaled to his allies that he intends to contribute to New York state races in the final months of the 2022 election cycle, according to a person briefed on the matter. And he tried to cultivate political alliances across the country and the political spectrum.

In March, he donated $250,000 to the Senate Leadership Fund, a super PAC run by allies of Senate Minority Leader Mitch McConnell, R-Ky., that aims to elect Republicans to the Senate, according to data from the nonpartisan Center for Responsive Politics.

That same month, he gave $250,000 to the Congressional Leadership Fund, a super PAC that backs GOP House candidates, and $125,000 to the Democratic Majority for Israel.


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