News Continues to Seep Out About How ECOT Cheated Ohio Taxpayers

Presumably now that yesterday’s primary election has occurred, Ohio State Auditor Dave Yost will release his long-awaited audit of the now-defunct, mega-online-charter school, the Electronic Classroom of Tomorrow (ECOT).  In yesterday’s primary election, Yost ran unopposed for the Republican nomination for Attorney General, and Mike DeWine, the current Attorney General, became the Republican nominee for Governor. Some time will pass before the November general election—time perhaps for voters to forget about what they learn in the audit about the way Ohio’s trifecta (House, Senate, Governor) Republican supermajority has handled the outrageous ECOT scandal.

Here are some of the revelations about ECOT that have recently seeped out.

We learned on Monday that, when ECOT was caught using a quarter of a million tax dollars to pay for television ads attacking the Ohio Department of Education for trying to crack down on ECOT for grossly inflating its attendance figures, ECOT quickly had one of its for-profit contractors pay the bill. Of course, ECOT’s only source of revenue—and the only source of revenue for the privately held for-profit corporations that managed ECOT and the communications company that handled its public relations—was the tax money paid to the school from the state as part of the school’s per-pupil tuition.

The attack ads represented an illegal use of tax dollars. As the Columbus Dispatch‘s Jim Siegel reports, “Although charter schools can legally run ads in an effort to recruit students, no public school—charter or traditional—is allowed to spend taxpayer money on political–type ads….”  You will remember that ECOT launched the television advertising campaign after the state began trying to claw back $60 million the state calculated it had overpaid ECOT in the 2015-16 school year because the online school had over-reported its enrollment by 60 percent. Here is how Siegel characterizes the television ads : “ECOT took to the airwaves, launching a string of television ads attacking the Department of Education, urging it to keep ECOT open and accusing it of wanting to end school choice and not caring about ECOT students.”

Siegel describes the transaction: “Using private companies owned by Electronic Classroom of Tomorrow school founder Bill Lager, plus a media-production company run by his daughter, ECOT tried to hide the source of payment for nearly $250,000 worth of TV attack ads aimed at the Ohio Department of Education.  That is the conclusion reached by the office of state Auditor Dave Yost, who, in a draft finding for recovery obtained by The Dispatch, lays out details of a plan designed to avoid the appearance that ECOT illegally used taxpayer money to pay for political ads.  As a result, Yost is ordering a pair of Lager’s ECOT-affiliated for-profit companies, Altair Learning Management and IQ Innovations, along with Third Wave Communications, where Lager’s daughter Jessica Harris is an owner, to repay ECOT a total of nearly $250,000 for illegally spending public money.”

ECOT was shut down by its sponsor, the Educational Service Center of Lake Erie West, in January, and a receiver is using the school’s assets to repay ECOT’S creditors including the state, which has not yet been able to recapture the tens of millions of tax dollars overpaid to ECOT for the 2015-16 and 2016-17 school years alone.

We learned this week that an auction has been scheduled for Friday.  Among the items scheduled to be auctioned off were ECOT’s administrative computers, although the Dispatch reported late yesterday that the Columbus City attorney is trying to block the sale of computers, in case they may contain evidence needed in a future trial.  Earlier in the week, State Auditor Dave Yost sent investigators to copy data from the computers to be kept potentially as evidence if criminal charges are ultimately filed against the school and William Lager, who owns Altair Management and IQ Innovations, the for-profit operators of the school.  The Plain Dealer‘s Jackie Borchardt reported:  “A Franklin County judge last week ordered Ohio Auditor Dave Yost to issue a subpoena for the information. A Yost spokesman confirmed Monday that the unit that deals with cyber technology and fraud was onsite ‘mirroring’ data from computers and information ahead of the sale.”

Last week we learned that ECOT paid hush money as severance bonuses to several ECOT employees if they would sign a non-disclosure agreement promising not to compromise ECOT by sharing information that might be used to prove that the school was intentionally fraudulent in its over-reporting of student enrollment.  Ohio’s Plunderbund reported: “Stormy Daniels isn’t the only one who has been offered hush money.  Some past employees of ECOT were offered some, too…. News that several past employees were offered public money in exchange for agreeing not to disparage the Electronic Classroom of Tomorrow (ECOT) follows an Associated Press story that quoted a whistleblower saying the Department of Education was informed last August that ECOT manipulated software to garner unearned money from the state… The whistleblower turned down two weeks of severance pay by refusing to sign the agreement—a decision that freed him to tell the public about ECOT’s attendance padding.”

WCMH-TV reporter Jason Aubry adds: “According to Sandy Theis, a member of Ohio’s Charter School Accountability Project, six individuals have confirmed with her they were provided non-disclosure agreements… to sign when they parted ways with the charter school.  At least two of the six individuals signed the NDA as part of their severance package where they were provided some money as part of a layoff.”

The Toledo Blade recently editorialized about the ECOT scandal: “The Electronic Classroom of Tomorrow, an online charter school now shuttered, is becoming a millstone around Republican necks this election year. And rightly so. The online school, chartered for nearly the last two decades in Lucas County but based in Franklin County, was forced into bankruptcy when state officials, after dragging their feet for years, went after ECOT’s exaggerated attendance claims… It sits in the lap of Republicans who accepted large donations from ECOT’s founder, William Lager, and then looked the other way for years as ECOT’s founder and chief vendor became rich with the state’s per-pupil funds… From the start, anyone could have known that an online charter school would not require the same level of per-pupil reimbursement that a regular bricks-and-mortar school would need.  And yet, ECOT received that money, and Ohio’s lawmakers went along with this baloney… The state of Ohio failed miserably…  and the children of Ohio are the victims.”

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One thought on “News Continues to Seep Out About How ECOT Cheated Ohio Taxpayers

  1. And you have to ask yourself why Yost took so long to do the audit. Seems a bit fishy that the DODO would hit the fan in an election year when this thievery has been going on for years….and it’s been common knowledge. Politicians are the lowest of the low and they are only in it to serve themselves. Seems Yost knew but was smart enough to not accept any “contributions”. I don’t live in Ohio, but I can tell you from living on the outskirts of DC that this is how it rolls. Dirty politics from dirty politicians and to hell with the people who pay the taxes.

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