The following is the beginning of a blistering piece of satire over at EduShyster:
From there the blogger, Jennifer Berkshire, proceeds to list a few select examples of questionable education reform initiatives (totaling in the billions) pushed or brokered by officials who personally stood to profit from the enterprises. It's a great read but it leaves what might be the most important question unasked: why is a movement dedicated to such admirable goals and run by such smart people so vulnerable to blatant scams and rampant corruption?
I'll be filling out more details, but these are the bare bones of my attempt at an explanation.
1. Group dynamics -- given the scope, size and influence of the movement, we are talking about a surprisingly tight-knit, highly interconnected group. Add to that a relatively high level of homogeneity in terms of background, education, class, teaching experience and pedagogical philosophy. Under these conditions we would expect a tendency toward group-think, excessive social norming, powerful group identity, and us vs. them attitudes. We would also expect affinity cons.
2. Culture -- those us/them tendencies are greatly heightened by a dogma that implicitly and sometimes explicitly blames the failures of schools on "some combination of apathy or incompetence" on the part of non-movement educators. You can find many more examples on Gary Rubinstein's blog.
3. Spin feedback -- the reform movement has been extraordinarily aggressive in its well-financed lobbying and PR efforts. For a while, it was quite successful at selling the twin narrative of impending disaster and shining hope. We've since seen growing popular skepticism about this narrative but very little of that skepticism seems to have made it into the movement itself. Unfortunately, if perhaps inevitably, the rhetoric intended to convince the rest of the world is most resonant within the group.
4. Lack of immediate external checks -- the press has tended to be sympathetic and has generally held off from criticizing until there was overwhelming evidence that something was wrong (Michelle Rhee, the LA IPad fiasco).
The result of all of this is a movement that has no natural defenses against internal abuses, and, given the amount of money we're talking about, abuse is pretty much inevitable.
Update: If you're coming in via link, make sure to check out Joseph's reply.