It isn't just the New York City Department of Education that has some suspicious and very expensive contracts, the New York State Department of Education has some curious deals of its own. Like the $27 million no-bid contract the Daily News reports on which was recently given to a News Corp. company that just happens to be overseen by former city Schools Chancellor Joel Klein. Nothing fishy about that at all!

The contract is part of the $700 million Race to the Top federal program and goes to News Corp. subsidy Wireless Generation which develops software to track student test scores, among other things. And Wireless Generation, for its part, denies that Klein—who is bared from working with the city's Education Department for a year but not the State's—had anything to do with the contract. A VP there says that "It's fundamentally unfair to insinuate Klein had anything to do with this when the facts are absolutely otherwise. He had nothing to do with this contract. He had nothing to do with this negotiation."

The State was less forceful in its denial, which reportedly took three weeks to come: "Consistent with our Race to the Top commitments made well over a year ago, this contract provides for an integrated and flexible student data system in an open source, non-proprietary application that will save taxpayers tens of millions of dollars and improve education across the Statem," spokesman Tom Dunn told the paper.

And yet, as Susan Lerner of Common Cause New York puts it, that doesn't really matter. "It raises all kinds of red flags," she said. "It just smacks of an old-boys club, where large amounts of public money are spent based not on 'is this the best product?' but 'I know this guy and I like him and I want to be sure he makes a lot of money.'"

Klein took his multi-million dollar job at News Corp. (while keeping his $34,000-a-year pension) overseeing its educational technology business after he vacated the chancellorship in December.