New York State Kills Education Contract With News Corp. Subsidiary

Wireless Generation was set to receive $27 million

It’s no secret that News Corp. has been trying to expand into the education business. In the past year, it hired former New York City Department of Education Chancellor Joel Klein, acquired student tracking software developer Wireless Generation, and announced plans to host a presidential candidates’ forum titled “The Future of American Education." But it seems that the recent News of the World hacking scandal could ruin Rupert Murdoch’s hopes of becoming a major player in the field.

The New York Daily News reports that the scandal has prompted New York State Comptroller Thomas DiNapoli to kill a lucrative contract between Wireless Generation and the state’s Education Department. The company was set to receive a $27 million contract as part of the state’s $700 million “Race to the Top” initiative to develop software to track student test scores.

“In light of the significant ongoing investigations and continuing revelations with respect to News Corp., we are returning the contract with Wireless Generation unapproved,” DiNapoli’s office wrote to the Education Department, adding that News Corp.’s “incomplete record” was cause for concern.

The decision was met with anger from state education officials, who accused DiNapoli of caving to teachers’ unions that had originally opposed the contract. “The comptroller has allowed political pressure to get in the way of vital technology that would help our students,” said Education Department spokesman Jonathan Burman.