October Charter School Investigations—Tales of Fraud, Mismanagement, and Mis-Education

There is so much news from place to place about the financial and management scandals in particular charter schools and charter management organizations that it is hard to keep track. Schools are taking public money—and too frequently finding a way to make a profit—while failing to serve the children they enroll or neglecting to enroll particular groups of children with special needs.  All of this increases the burden on public schools and misspends tax dollars, thereby undermining the public good.  Here are just three examples that have surfaced during mid-October.

North Carolina ProPublica just published a major investigation of Baker Mitchell’s charters in North Carolina including Douglass Academy in Wilmington.  After he came to North Carolina in 1997, according to ProPublica, “Mitchell quickly connected with the state’s big political players, including conservative Kingmaker Art Pope.  By 2002, he was sitting alongside Pope on the board of the John Locke Foundation…. part of the State Policy Network, a Koch-supported group of think tanks whose agenda includes steering public funds away from traditional schools and toward charters, vouchers and tax credits for homeschoolers.”

Mitchell then established the same kind of racket that William Lager of the Electronic Classroom of Tomorrow has going in Ohio: he created a private, for-profit company owned by himself to provide all services for his charter schools. “The company, Roger Bacon Academy, is owned by Mitchell.  It functions as the schools’ administrative arm, taking the lead in hiring and firing school staff.  It handles most of the bookkeeping.  The treasurer of the non-profit that controls the four schools is also the chief financial officer of Mitchell’s management company.  The two organizations even share a bank account.”  Back in 2001 the Internal Revenue Service denied Mitchell’s management company  non-profit status, for, according to IRS, “Mr. Mitchell… controls both your management company and your lessor.  He has dual loyalties to you and his private, for-profit companies.  This is a clear conflict of interest for him.”  However, Mitchell’s board (on which he was serving actively as a member) protested and the IRS eventually capitulated based on promises by the board—promises never fulfilled, according to ProPublica.

Mitchell has also become involved in advocacy for privatization of education in North Carolina.  In 2011, he joined the state’s Charter School Advisory Council that helped eliminate the cap on the growth of charter schools.  In 2013 he was instrumental in helping push a bill through the legislature to remove oversight and regulation of charters and to provide a tax exemption “for landlords who, like Mitchell, rent property to charter schools.”

Adelanto, California: Bill Raden, a reporter for California’s Capital & Main, has investigated the first school in the nation to have undergone a “Parent Trigger” conversion.  The investigation tracks the operation of Desert Trails Elementary School during its first year of operation after it was seized by parents through a petition and subsequently charterized.  The American Legislative Exchange Council (ALEC) disseminated model “parent trigger” legislation across the state legislatures.  According to Raden, “At least 25 states have considered parent trigger legislation and seven of them have enacted some version of the law, including Connecticut, Indiana, Louisiana, Mississippi, Ohio and Texas,” in addition to California.

Rapid turnover of teachers has plagued Desert Trails. Although its executive director has been paid a salary of $200,000, teachers are reported by Raden to be earning only $3,300 per month.  “During its first year, teachers say, the charter lost a principal (Don Wilkinson) and a director (Ron Griffin)—both before the Christmas break—and its vice principal, six classroom teachers and its behavioral specialist.  In addition only nine of Desert Trails’ first-year teacher roster—or 33 percent—are returnees this year.”  Several teachers or former teachers who agreed to be interviewed tell of personally spending hundreds of dollars for basic classroom supplies.  They explain that drinking fountains were turned off to prevent their freezing at night during the high-desert winter when the heat was turned off to save money.

While Desert Trails employed a special education coordinator and teacher, teachers say they were advised by Debra Tarver, the current executive director, not to tell parents about their right to services for children with special needs.  Raden describes instances when parents of children with special behavioral needs were advised that the school “was not a suitable environment to meet their needs,” while school administrators denied that the students had been suspended or expelled.

Teachers report they were subject to a succession of curriculum changes as the school’s administrators turned over.  All report, however,  that intense pressure grew throughout the year to focus on language arts and math, the two tested subjects, and to cut out social studies, science, and physical education.  Raising test scores became an obsession.

Columbus, Ohio: Catherine Candinsky and Jim Siegel of the Columbus Dispatch examined real estate profit-making by Imagine Schools, a national charter management organization.  Candinsky and Siegel report that rent—paid to a real estate subsidiary of its national sponsor, Imagine Schools Inc.—is the highest expense for Columbus Primary Academy.  The school will pay rent of $700,000 this year to SchoolHouse Finance, a national Imagine-owned subsidiary, at the same time its expenditures for salaries and benefits will be only $614,000. “SchoolHouse buys the buildings, resells them typically for two or three times the purchase price, and then leases the facility from the new owner so it can rent the space back to Imagine.”  Policy Matters Ohio has highlighted that this arrangement yields profits for Imagine Schools “both at resale and as it collects rent.”

Real estate profit-making by Imagine Schools  is not merely an Ohio phenomenon: “The upshot is that the complex deals are diverting hundreds of thousands of public dollars to one of the nation’s largest charter-school operators, Imagine Schools Inc., and its affiliates.  Imagine operates 67 charter schools in 11 states and the District of Columbia.  At least three states and Washington, D.C, are investigating Imagine for real-estate maneuvers like those in Ohio, and a fourth state, Missouri, already has shut down several Imagine schools.”

As such investigations continue to turn up violations of the public trust, one wonders whether any kind of oversight is likely to be imposed by state legislatures.  Candinsky and Siegel conclude their Columbus Dispatch expose on Imagine Schools with a reflection on this very issue.  They describe the power of financial contributions for shaping public policy, in this case the political investments by Ohio’s two largest for-profit charter operators:  “David Brennan of White Hat Management and William Lager of the Electronic Classroom of Tomorrow, have combined to give $2.25 million since 2009 to state political parties, lawmakers and statewide officeholders, mostly Republicans.  That includes a combined $320,000 to the House GOP caucus and Speaker William G. Batchelder, R-Medina; $223,000 to Senate President Keith Faber, R-Celina, and his caucus; and $71,000 to (Governor) Kasich.  The likely top two leaders of the House starting next year got a combined $104,000 since 2009.”

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3 thoughts on “October Charter School Investigations—Tales of Fraud, Mismanagement, and Mis-Education

  1. A sweeping indictment of the problems charter schools cause for the Philadelphia School District appears in the Wednesday Inquirer [B1, B5] from the city’s Controller, Alan Butkovitz.. He “calls for changing state law to lessen the schools’ financial impact on Phila. District” and its taxpayers. He looks at the “charter schools as a factor in the district’s continuing financial crisis.” Outside investigations from, for example, the Boston Consulting Group have similar conclusions. “Philadelphia is second only to Detroit in the rate of students attending charter schools.” “The financial burden ….worsened when the state legislature eliminated the state charter-reimbursement program in 2011. That change has cost the district $100 million in state revenue” annually. The district must pay the charters first & then scramble for themselves out of the leavings. Charter schools have admijnistrative costs more than twice that of the public schools: $1,792 vs. $752. Butkovitz recommends an overhaul of the funding formula and a return of the state-charter-reimbursement program. “Butkovitz said copies of the 42-page report would be sent to every member of the Philadelphia legislative delegation and to members of the state House and Senate Education Committees.”

  2. Pingback: The Rev. John Thomas Decries Attack on Democracy in America’s Big City School Districts | janresseger

  3. Pingback: Reports Add Up to Show Charter Fraud, Charter Failure, and Incapacity to Realize What Was Promised | janresseger

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