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.”

Huge North Carolina Rally Protests Roll Back of Voting, Labor, Health, Education, and Civil Rights

Unless you live in North Carolina or follow Twitter, where pictures were posted all weekend, you may have missed that nearly 100,000 people rallied in Raleigh on Saturday to protest the policies and direction of North Carolina’s current one-party government and leadership by conservative Governor Pat McCrory, who even appointed far-right financier Art Pope as his budget director.  North Carolina is one of more than half the states that now lack checks and balances because the governor, and house and senate majorities are controlled by one party.

For much of the past year, the North Carolina NAACP, led by the prophetic Rev. William Barber, has been sponsoring Moral Monday protests at the statehouse to decry a rash of legislation that has wiped out what was thought to have been the progressive, “new south,” direction of North Carolina.

Ari Berman writing for The Nation summarizes North Carolina’s legislative record that has spurred the protests:  “Since taking over the legislature in 2010 and the governor’s mansion in 2012, controlling state government for the first time in over a century, North Carolina Republicans eliminated the earned-income tax credit for 900,000 North Carolinians; refused Medicaid coverage for 500,000; ended federal unemployment benefits for 170,000; cut pre-K for 30,000 kids while shifting $90 million from public education to voucher schools; slashed taxes for the top 5 percent while raising taxes on the bottom 95 percent; axed public financing of judicial races; prohibited death row inmates from challenging racially discriminatory verdicts; passed one of the country’s most draconian anti-choice laws; and enacted the country’s worst voter suppression law, which mandates strict voter ID, cuts early voting and eliminates same-day registration, among other things.”

The organizers describe Saturday’s rally as the kick-off for weekly protests leading to the November election when members of the legislature will be on the ballot.  The protestors, multi-racial and from all corners of North Carolina, have set five priorities: pro-labor, anti-poverty policies; well funded, quality public education; health care access for all North Carolinians; protection of the rights of all in the criminal justice system; and the protection and expansion of voting rights.

Rev. Barber’s rallying cry is positive: “We’ve come too far to go back now.”

This blog has covered Rev. Barber and North Carolina’s Moral Mondays here,  and here, and the political activities of Art Pope here.  The New Yorker magazine profiled Art Pope here.

Governor McCrory and His Patron, Art Pope, Attack Common Good in North Carolina

I had never heard of Art Pope until the fall of 2011, when Jane Mayer wrote a scathing profile for the New Yorker magazine about the man who was operating to dominate North Carolina state politics under the freedom created by the U.S. Supreme Court’s 2010, Citizens United decision that “struck down limits on corporate campaign spending.”

On January 3, 2014, Bill Moyers & Company traced the growing power of Art Pope in State of Conflict: North Carolina, a documentary on one of the states where today Republicans control both houses of the General Assembly and the governor’s mansion.  I urge you to watch this program.

Art Pope, owner of Variety Wholesalers, has continued to consolidate power.  Moyers reports: “At the heart of this conservative onslaught sits a businessman who is so wealthy and powerful that he is frequently described as the state’s own ‘Koch brother.’  Art Pope, whose family fortune was made via a chain of discount stores, has poured tens of millions of dollars into a network of foundations and think tanks that advocate a wide range of conservative causes.  Pope is also a major funder of conservative political candidates in the state.”

Pope now serves as the state Budget Director under Governor Pat McCrory, and according to stinktanks.org, the John William Pope Foundation, controlled by Art Pope and named for his father, contributes 90 percent of the funding for two powerful far-right North Carolina groups, the John Locke Foundation and the Civitas Institute.  According to stinktanks.org, the agenda of these two organizations is to block access to affordable healthcare; curb voting rights for minorities, the elderly and students; defund public education and institute vouchers; restrict collective bargaining; repeal the minimum wage, lower corporate taxes, oppose renewable energy; oppose marriage equality; and oppose gun safety measures.

Sue Sturgis of the Institute for Southern Studies documents the amounts Pope spent in the 2012 election to ensure “veto-proof supermajorities in both legislative chambers: $668,000.”  Sturgis adds that an additional $1.4 million was spent by political advocacy groups affiliated with Art Pope along with $20,000 spent to elect now-Governor Pat McCrory.  According to Sturgis, in the past year the state has lost 5,200 public school teachers under the budget passed by McCrory and North Carolina’s far-right general assembly.

Moral Mondays—growing protests of Raleigh’s attempt to curb voting rights, labor rights, healthcare, and public education—have been led by Rev. William Barber, president of the North Carolina NAACP.  You’ll see the prophetic Rev. Barber in Moyers’ video; you can also watch Barber address a national assembly of public education advocates here.  Working with Barber to lead Moral Mondays has been Gene Nichol, professor of law at the University of North Carolina and head of its Center on Poverty, Work and Opportunity.  The Civitas Institute has, as reported in December by the North Carolina Policy Watch, been harassing Professor Nichol by filing a public records request “to obtain six weeks’ worth of Nichol’s personal e-mail correspondence, phone logs, text messages, and calendar entries.”  Hundreds of professors from 24 North Carolina institutions of higher learning wrote a letter to Governor McCrory and Budget Director Pope to condemn the public records request from the Civitas Institute as an infringement of Professor Nichol’s free speech.  The letter states:

“This request is clearly in retribution for Professor Nichol’s public commentary critical of your administration. We write to both of you because it is public knowledge that, in the words of the Institute for Southern Studies, ‘Civitas gets over 90 percent of its funding from the Pope family foundation—so much so that the IRS classifies it as a ‘private foundation,’ a designation reserved for nonprofits that depend on a single benefactor.’  Thus, citizens may reasonably infer that a sitting administration is using a private tax-exempt nonprofit organization funded by one of its leading officials to retaliate for criticism of its policies and intimidate future dissent.  To our knowledge this action is unprecedented in our state’s political history.”