In The Public Interest Releases New Report on Widespread Financial Mess in California Charters

Today’s subject is the charter school sector in California, a microcosm of widespread problems with charter schools across the states. Many of us are missing the seriousness of the charter school scandal across the United States. Because education is governed pretty much by the state constitution, activists are in the habit of following the education news in their own state and assuming that schools elsewhere are the problem of that other state. This all makes it very easy to ignore the scope of violations of students’ rights and the amount of tax dollars being stolen by unscrupulous charter school operators. Reading about what’s happening in another state’s charter schools helps one grasp that problems of charter schools are widespread.*

Yesterday, In the Public Interest (ITPI) published Fraud and Waste in California’s Charter Schools, a fine new report clarifying the magnitude of charter school problems in California: “A modern gold rush continues to sweep California. Charter schools, which are publicly funded but privately operated, have increased in number by more than 900 percent in the past two decades to over 1,200 schools today, the most in the nation. Charter school funding (in California), including local, state, and federal expenditures, now tops $6 billion annually—this on top of the hundreds of millions of public dollars and publicly subsidized funds the state’s charter schools receive each year to lease, build, or buy buildings.”

And it is not only that money flows out of the public schools to fund privatization, but also that charter schools in California—as in many other states—are poorly regulated: “Despite this substantial investment, governments at all levels are unable to proactively monitor (for fraud and waste) the private groups that operate charter schools…. Most public school districts aren’t given adequate resources to oversee operators, especially large charter management organizations (CMOs), while all lack the statutory authority to effectively monitor and hold charter schools accountable.”

ITPI’s new report identifies three categories of fraud and waste:

• “The most straightforward type of charter school fraud is the illegal practice of using public funds directly for personal gain.”  For example, the founder of the Celerity Education Group in Los Angeles used public dollars to buy luxurious meals, hotel stays, limousine trips and salon visits.
• “Some charter school operators have used public funds to illegally support their own personal businesses.”  For example, the Bay Area’s Tri-Valley Learning Corporation was discovered covering up conflicts of interest, misappropriation of funds, and weak internal financial controls that allowed the CEO to divert $2.7 million without any record of the spending.
• Finally there is widespread basic mismanagement. Beacon Classical Academy eventually lost its charter for failure to educate students, faulty financial audits, violations of the open-meeting-law, and fire code violations.

Despite that California’s legislature has “made limited attempts to increase oversight,” there are not nearly enough auditors to monitor charter schools for fraudulent financial practices, and state officials lack adequate authority for investigation unless serious violations have been alleged. Charter school operators are able to manipulate regulations to limit transparency. In California local school boards or country boards of education function as charter school authorizers, but if a school district or county board rejects a charter school application, state law permits the California State Board of Education to overrule the local agency’s decision.

ITPI’s report lists individual schools that have been caught, punished or closed in each category—turning public money into personal gain, self-dealing, and mismanaging public money and schools.  The report also includes an appendix that identifies the name of each charter school, its location, and the amount of money stolen or misspent.

Last November’s report from the Network for Public Education (NPE) is a wonderful companion to ITPI‘s new report. The early chapters in Charters and Consequences describe NPE Executive Director, Carol Burris’s visits to California to investigate abuses by charter schools. Her stories describe not only financial mismanagement and fraud by currently operating California charter schools but also educational malpractice—drop-in centers in strip malls where even 12-year-old students stop by occasionally to talk with their supposed teachers—and tiny school districts that sponsor satellite drop-in schools in far away urban school districts (that are never informed about the siting of these charter schools within their school district boundaries) in order to tap into funds California awards to sponsors for what is assumed will be oversight. Oversight, however, is what is lacking; nobody is looking out for the needs of students or for the interests of California taxpayers.

ITPI’s Fraud and Waste in California’s Charter Schools concludes: “Only the tip of the iceberg is visible, but this much is known: total alleged and confirmed fraud and waste in California’s charter schools has reached over $149 million.”

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*Here is the question that comes up every time we talk about charter schools.  Aren’t charter schools really a kind of public school? The answer is NO.  Charter schools are a form of private contracting by a state or state-approved charter school authorizer. Even if your school district is the authorizer, your school district is contracting with a private provider with its own privately appointed board of directors. Proponents of charter schools try to BRAND charter schools as “public charter schools,” and they justify the branding with the fact that charter schools are funded largely with tax dollars. But the tax dollars are always paid to a private operator. That operator may be nonprofit or for-profit, but even if it is a nonprofit, it may well be subcontracting the operation of the school to a for-profit. By definition, however, charter schools are a form of private contracting. Someone other than a public school district is basically hired to run the charter school.

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Bombshell Report Exposes Federal Failure to Oversee Charters

I was once in a meeting where Education Secretary Arne Duncan declared: “Good charters are part of the solution. Bad charters are part of the problem.” Unfortunately, Secretary Duncan has done nothing to increase federal oversight for the purpose of addressing what he called “the problem.”  A new report from the Center for Media and Democracy, Charter School Black Hole, exposes the U.S. Department of Education’s total abrogation of responsibility for oversight of an education sector to which it has granted $3.7 billion since 1995. The federal Charter School Program (CSP) awards grants to state departments of education to encourage charter school expansion.

Who’s in charge?  Really nobody: “The system insulates each element from accountability for what actually happens in charters.” The federal government has relinquished oversight to the states receiving federal grants, states which have then turned over regulation to  charter school authorizers in what the Center for Media and Democracy calls, “a classic example of ‘industry capture’ of the agencies charged with oversight by the industry they are tasked with overseeing.” “This is due in part to the way laws governing charters have been built by proponents, favoring ‘flexibility’ over rules…  Charters are policed—if they are policed much at all—mainly by charter proponents….”  “Theoretically, the charters are held ‘accountable’ to charter authorizers.  However, enforcement of standards by charter authorizers appears lax in many instances, and states have said they lack legal authority under statutes that created the charter option to demand compliance.”  “As a consequence, the public does not know how much federal seed money each charter has received and does not know how it has really been spent…” “Unlike truly public schools, which have to account for prospective and past spending in public budgets provided to democratically elected school boards, charter spending is largely a black hole.”

The Center for Media and Democracy gathered the information in the report through a series of formal Freedom of Information Act (FOIA) requests to the U.S. Department of Education as well as requests to the state education offices (SEAs) that administer federal Charter School Program (CSP) grants.  First CMD asked the U.S. Department of Education for a list of all charter schools that have received money under the Charter School Program. Only after repeated requests and many months did the Department of Education comply: “Finally, in late summer, the agency gave CMD a list of charter schools that had received CSP SEA money in recent years.  But, due to the poor quality of the format, CMD had to manually transcribe the list.”

CMD explains that the application process for federal charter school funding has never been public; hearings are neither held to share who is making the federal proposal nor to examine what is being proposed.  No one has the opportunity to testify publicly on the quality of the application being made by a state agency or a charter management company before the federal grant application is submitted or the grant awarded. “Without calling for broader public input, federal charter school bureaucrats accepted the word of state charter proponents that their charter programs had adequate controls for performance and against fraud and waste.”  “In the current structure, the U.S. Department of Education hears only from proponents of the charter school grant application and in this closed loop—unsurprisingly—it approves money to a state like Ohio based on formal submissions that praise it, in spite of numerous failures.”

The Center for Media and Democracy examines the role of federal Charter School Program grants in eleven states plus the District of Columbia: California, Indiana, Michigan, Ohio, New York, Texas, Utah, Arizona, Colorado, Florida, and Wisconsin.  In coming weeks this blog will return to the information in the state reports.  Here is just one example— a taste of what CMD discovered as it surfaced information about poor oversight of federal charter school grants in Michigan: “(C)harter schools in Michigan received $34,997,658 between 2010-15 under the CSP (federal Charter School Program) umbrella, after the state was awarded $43.9 million under the CSP expansion in 2010.  (This discrepancy is based on appropriations amounts and cycles and other differentials.)  Almost half (139) of the charters in Michigan were subsidized in part by federal tax dollars, in the past five years… Since the inception of charters in the state (back into the 1990s), more than 100 charters have closed (108).  Many of them have closed due to lack of ‘academic viability’ (poor results) while others have closed due to lack of ‘financial viability’ (such as inadequate enrollment) and some for both or other failings… Another area of concern is that four out of every five Michigan charter schools are really being run by for-profit management companies…. Perhaps one of the most surprising takeaways from the federal information available about how taxpayer money is being spent or wasted is the existence of ‘ghost’ schools that never opened.  Out of the charters that were approved for CSP funds by the Michigan Department of Education in 2011 and 2012, twenty-five never opened…  The organizations behind these proposed charter schools were approved for a total of nearly $3.7 million in federal tax funds in ‘pre-planning’ and ‘planning grants…”

Ohio is another of the states covered in the report: “Ohio has been awarded a substantial amount in federal CSP SEA grants: more than $195 million between 2004 and 2015.”  At the end of September 2015—in grants awarded for 2016 or over the upcoming five years—the U.S. Department of Education awarded over $157 million to seven states, the District of Columbia, and eleven charter school projects across the country for the expansion of charter schools.  Ohio was granted the most of any state—$71 million—even as the state was locked in a political battle about establishing even the most minimal oversight of charter schools.  (Subsequent to the receipt of the federal grant, the Ohio legislature did pass a modest bill to begin correcting some of the most egregious problems in the states out-of-control charter sector.)  Aware of the state’s unregulated charter schools, in July of 2015, Ohio Senator Sherrod Brown introduced a bill for federal regulation of charter schools; some of the proposed bill’s provisions were folded into the Senate’s proposal for the reauthorization of the federal education law.  (Very different Senate and House versions of a reauthorization of the No Child Left Behind Act have passed, but a joint version has not yet emerged from a conference committee.)

And last week Senator Brown stepped up again to provide leadership by demanding federal oversight.  Senator Brown joined Ohio Representative Tim Ryan to introduce a bicameral Congressional bill to regulate charters  through increased “accountablity, transparency, and community involvement.” The legislation would impose Congressional oversight over a process that until now has been hidden inside the Department of Education.  The proposed Charter School Accountability Act would require independent financial audits of charter schools and reports on each school’s program, mission, school discipline policy, student attrition rates, staff turnover, and data reflecting admission and recruitment policies and student retention.  The proposed bill would require states applying for federal grants to set charter school performance standards and to collect data on school closures and performance reviews.  It would also require state legislatures to establish state “authority to suspend or revoke a charter schools’ s authorization based on poor performance or violating policies,” and it would demand that states establish regulations to prevent conflicts of interest and implement fiduciary policies for charter school boards, treasurers, and staff.  The bill would also require states to seek parental and community involvement as charter schools are planned.

The new report from the Center for Media and Democracy confirms the pressing need for the kind of federal oversight proposed by Senator Brown and Representative Ryan. The federal government’s protracted failure to oversee it’s $3.7 billion investment in charter schools has been among the most egregious problems in Arne Duncan’s Department of Education.  While Duncan has been in charge for seven years as Secretary of Education, he has made no attempt to regulate charter schools; his clear priority has been innovation rather than oversight.  This blog has covered Duncan’s failure to establish adequate regulation of the out-of-control charter sector here, here, here, and here.

Charter Schools: Deregulation and Lack of Oversight

The National Education Policy Center (NEPC) at the University of Colorado publishes reviews of studies and reports by education think tanks.  Recently NEPC published a review by Gary Miron of Western Michigan University, and Bill Mathis and Kevin Welner of the University of Colorado at Boulder of a policy document from the National Alliance for Public Charter Schools (NAPCS) called, “Separating Fact & Fiction: What You Need to Know about Charter Schools.”  NEPC’s authors believe that “Separating Fact & Fiction” is largely a glowing fictional account of what NAPCS would like the story of charter schools to be.

For instance,  NEPC’s authors quote the claim of the National Alliance for Public Charter Schools: “Charter schools introduce an unprecedented level of accountability into public education.  If a public charter school is not improving student achievement as laid out in its foundational charter agreement, it can be closed down.”  

Here is Miron, Mathis and Welner’s response to that claim: “This assertion, which is frequently repeated by charter advocacy groups, is based on how charter schools are supposed to work rather than actual practice.  The core bargain underlying charter school policies is that these schools would be freed from various governmental regulations and collective bargaining agreements, and in turn the schools would have to demonstrate strong performance, set forth in each specific charter…  But saying they can be closed is not the same as saying they are closed.”

Marian Wang for ProPublica reports that most states have neither regulated charter schools well enough to protect the needs of children nor to prevent fraud and widespread waste of public dollars that were historically spent for better regulated traditional public schools.  Most states leave oversight up to an array of authorizers: “Known as ‘authorizers,’ charter regulators have the power to decide which charter schools should be allowed to open and which are performing so badly they ought to close.  They’re supposed to vet charter schools, making sure the schools are giving kids a good education and spending public money responsibly.  But many of these gatekeepers are woefully inexperienced, under-resourced, confused about their mission or even compromised by conflicts of interest. And while some charter schools are overseen by state education agencies or school districts, others are regulated by entities for which overseeing charters is a side job, such as private colleges and nonprofits….”

Wang describes the “sponsor hopping” that Indiana law fails to prohibit.  Imagine Schools, which Wang describes as “a national charter school operator trailed by a track record of questionable financial dealings at schools in multiple states,” looked for a charter authorizer to oversee its opening of schools in Indianapolis.  After rejection from the office of Indianapolis’ mayor, who could have authorized opening a school, Imagine Schools went to Ball State University, got approval, and opened a number of schools.  Later, Ball State did shut down three of Imagine’s schools due to poor academic records, but Trine University, whose “charter school office is headed by Lindsay Omlor, who prior to this job had spent six years working for Imagine,” stepped in to become the authorizer.

Then there is the situation in Ohio where nonprofit organizations can authorize charter schools.  Ohio law provides that authorizers get to keep 3 percent of the dollars the state provides for each of the charter schools they authorize.  These funds are supposed to cover administrative costs, but there is evidence that some nonprofit organizations use these funds as “walking around money” rather than to support or oversee the school.  One Ohio authorizer, St. Aloysius Orphanage of Cincinnati, formerly an orphanage but according to Wang, now a mental health agency, sponsors 43 schools across the state of Ohio.  Wang reports that St. Aloysius Orphanage contracts out regulation and management of its schools to a for-profit vendor, Charter School Specialists. “Charter School Specialists reviews the schools’ finances and conducts school site visits on behalf of St. Aloysius.  It writes the required annual report on behalf of St. Aloysius, running through how the charter schools are doing.  But Charter School Specialists also sells services to charter schools, such as handling accounting, payroll or even providing schools with treasurers.  In other words, it’s a for-profit middleman paid by both the regulator and the regulated.  For the former orphanage, authorizing brought in $2.6 million in fees paid by charter schools, the group’s 2013 tax filing shows.  In the same year, St. Aloysius paid Charter School Specialists $1.5 million, leaving the nonprofit an extra $1.1 million. It’s not clear exactly, what St. Aloysius has done to earn the difference….”

Wang also examines Michigan, where Grand Valley State University sponsors charter schools, as one of the state’s largest authorizers.  For-profit National Heritage Academies (NHA), with 80 schools across several states, operates a third of Grand Valley State’s charter schools in Michigan.  According to Wang, however, “that’s not the extent of the relationship between the university and the company.  NHA’s founder and chairman, J.S. Huizenga, serves as a director at the Grand Valley State University Foundation.  And though he’s not an alumnus, he’s in a special class of donors that have given $1 million or more to the university, which also oversees more of his schools than any other regulator in the state.”

Miron, Mathis and Welner explore the contention of many charter school supporters that charter schools are in fact public schools: “It is true that federal and many state laws define charter schools as public schools.  Further, charter schools are funded primarily with public funds.  But the actual legal status, in any meaningful policy discussion, is much less clear… Most charter schools are governed by nonprofit boards.”  “It is increasingly the case that charter school buildings are privately owned by the charter’s founders, by an affiliated private company, or by a private trust.  In schools operated by private education management organizations (EMOs), the materials, furniture and equipment in the schools are usually privately owned by the EMO and leased to the school. Except for a small number of states that require teachers to be employees of the charter school, it is common for teachers to be ‘private employees’ of the EMO.  Although most charter schools have appointed nonprofit boards intended to represent the public.., a growing portion of charter schools are operated by private EMOs, and key decisions are made at corporate headquarters, which are often out-of-state. Public schools, like other public entities, are subject to transparency laws.  Charter schools and their private operators increasingly refuse to share information and data in response to public requests… Thus, while claiming to be ‘public,’ and while having some elements that are public (most importantly, public funding for a no-tuition education), their operations are basically private.”

Those who prevail in such a system are charter operators who can hire the lawyers to help them comply with the letter of regulatory law, if not its intention, and those who can contribute campaign cash to the legislators who refuse to oversee what has become a privatized education marketplace.  Once again, we benefit from reading a warning from Benjamin Barber’s Consumed: “The transfer of public power to private hands often is associated with a devolution of power; but in fact privatizing power does not devolve but only commercializes it, placing it in private hands that may be as centralized and monopolistic as government, although usually far less transparent and accountable, and also pervasively commercial.” (Consumed, p. 145)

Reports Add Up to Show Charter Fraud, Charter Failure, and Incapacity to Realize What Was Promised

In a new blog post Gene V. Glass, who, earlier this year with David Berliner published the excellent 50 Myths & Lies That Threaten America’s Public Schools, recently posted, Are Charter Schools Greenhouses for Innovation and Creativity?  Glass declares: “The rationale for the charter school movement went something like this: ‘Public education is being crushed by bureaucratic regulation and strangled by teacher unions.  There is no room left for creative innovation; and tired, old traditional educators have run out of energy and ideas.  Let free choice reign!’ It sounded good, especially to people who were clueless about how schools actually run.  How have things actually worked out?  What new, revolutionary ideas have come out of the charter school movement that can teach us all about how to better educate the nation’s children?”  Glass describes the conclusion in his and Berliner’s new book: “that in our opinion the vast majority of charter schools were underperforming traditional K-12 public schools and that the charter school industry was shot through with fraud and mismanagement.”  You’ll have to check out his blog post to read the story of his confrontation with two young charter teachers who recently tried to prove to him that their school was more innovative than the surrounding public school district only to learn that the International Baccalaureate program their charter had just launched was introduced ten years ago and continues to be offered in the public schools.  Berliner’s critique of charters comes among a recent rash of news reports about the woes of the charter sector.

This blog just covered Robin Lake’s despairing critique of the charter school catastrophe in Detroit.  “No one in Detroit is responsible for ensuring that all neighborhoods and students have high-quality options or that parents have the information and resources they need to choose a school.  ‘It’s a free-for-all,’ one observer said. ‘We have all these crummy schools around, and nobody can figure out how to get quality back under control…’”  Lake is the executive director of the Center on Reinventing Public Education which has made the promotion of “portfolio school reform” (in which the portfolio contains a mix of public and charter schools from which parents can choose) its primary mission.  Her recent piece  suggests that she, a central promoter of charter schools, has no idea how to rein in school choice gone wild in Detroit.

Like Michigan, Texas is struggling to regulate the quality of its charter schools. The NY Times reports that one charter school district, the Honors Academy Charter chain, is currently operating seven schools even though Honors Academy Charters were formally closed under a 2013 law due to poor performance.  “Well into the new school year, all seven Honors Academy schools, which enroll a total of almost 700 students in Central Texas and the Dallas-Fort Worth area, are still open,” despite that the district has lost its contract and its accreditation.  Although, “The state ordered the charter operator to turn over student records and its remaining state funds, and to find alternatives for its students,” “Honors Academy officials… decided to open their doors anyway.  They have argued that the provision forcing closure is unconstitutional.” Costs are being covered by $3.5 million left over from last year, most of it revenue from the state.   According to state officials, because the schools are now unaccredited, students attending Honors Academy schools will be unable to transfer coursework.  Parents interviewed by the reporter in the parking lot were unaware that the school had lost its charter to operate.

What is happening in North Carolina may not be illegal, but it ought to be. In his column Taking Note, PBS education correspondent John Merrow recently skewered Baker Mitchell, the North Carolina “businessman who has figured out a completely legal way to extract millions of dollars from North Carolina in payment for his public charter schools… Even though none of his publicly-funded schools is set up to run ‘for profit,’ about $19,000,000 of the $55,000,000 he has received in public funds has gone to his own for-profit businesses, which manage many aspects of the schools.”  This blog covered Baker Mitchell’s schools here.

Mark Weber, writing for New Jersey Spotlight, echoes Gene Glass’s critique that charter schools have never as a sector fulfilled what was promised.  Weber co-authored a recent report from Rutgers University that used readily available data from the state to demonstrate that charter schools segregate students. (This blog covered the Rutgers report here.)  In his short review for New Jersey Spotlight, Weber concludes: “On average, charters educate proportionately fewer students in economic disadvantage… than do the district schools in their communities.  Charters also educate fewer students with special education needs; further the students with those needs that charters do educate tend to have less costly disabilities.  In addition, the sector enrolls very few students who are English language learners.”  “‘Choice’ in schooling will likely lead to what we found in our report: the concentration of economically disadvantaged, special education, and Limited English Proficient students within district schools…  I see three core challenges in New Jersey’s urban schools: segregation, inadequate school funding, and child poverty.  None of these challenges will be solved by the expansion of charter schools.”

Outcry Grows Over Charter School Waste, Fraud, and Mismanagement

Once you have a burgeoning, unregulated private sector in a democracy,  how do you build sufficient political will to get some regulation in place, especially when the unregulated sector is using its profits in savvy ways to contribute to the campaigns of the politicians who are responsible for imposing the regulation?

There are a lot of people grappling with this challenge right now in relation to the charter schools that have sprung up across America’s big cities.  Although I have personally heard Arne Duncan, the U.S. Secretary of Education, say, “Good charter schools are part of the solution; bad charter schools are part of the problem,” I have never heard Secretary Duncan make any proposal for regulating the bad charters.  This despite that Duncan’s Department of Education has had a lot to do with the rapid increase in the number of charters. In order even to apply for Race to the Top funding, states had to remove any statutory caps they might have previously imposed on the authorization of new charters in any one year.

Even Robin Lake, whose Center on Reinventing Public Education at the University of Washington has promoted the expansion of charter schools through “portfolio school reform,” worried about lack of regulation of charter schools when she visited Detroit.   In Detroit, Lake said charters “have created a lot of new opportunities, and a lot of great new schools are up and running as a result,”  but “not enough attention has been paid to quality and equity access in Detroit.” She said that today Detroit has a massive oversupply of schools but “a lack of high-quality seats.”  She said parents “are having a difficult time navigating their options.”  “What’s happening in Detroit is very messy right now.”  “It’s not clear who’s keeping an eye on the city’s schools and making sure that every neighborhood has access to a high quality school.”

In a new article in The Nation, Pedro Noguera describes charter school operations as too often not open to public scrutiny despite the receipt by these schools of public tax dollars: “Charters were supposed to be laboratories for innovation  Instead, they are stunningly opaque… In several cities throughout the country, there is a fierce conflict raging over the direction of education reform.  At the center of this increasingly acrimonious debate is the question of whether or not charter schools—publicly funded schools that operate outside the rules (and often the control) of traditional public-school systems—should be allowed to proliferate.”

Last week three organizations—the Center for Popular Democracy, Integrity in Education, and Action United—released a report on Fraud and Financial Mismanagement in Pennsylvania’s Charter Schools.  The report, which documents $30 million in outright fraud that has been uncovered in Pennsylvania’s charter schools since 1997, declares: “The current system of oversight relies heavily on information provided by charter schools themselves and traditional audits that are designed to check accuracy rather than detect and prevent fraud.”  The authors note the burden that falls on under-funded public school districts like Philadelphia’s to uncover and investigate charter school fraud within their district boundaries, a project that cannot be adequately staffed in a financial crisis when public school school counselors, school nurses and thousands of teachers have been cut by the district.  The report suggests that Pennsylvania’s legislature “establish a moratorium on new charter schools until these recommendations are met.”

The Ohio Education Association and a public policy organization, Innovation Ohio, have just launched a website that, while it does not expose outright fraud, documents the total amount of public tax money flowing away from each of the state’s more than 600 school districts to particular charter schools:  knowyourcharter.com.  This is an interactive site, where anyone can explore the flow of funds from a particular school district to any of the state’s charter schools.  One can learn, for example, that this year over $9,821,390 is flowing away from the Cleveland Municipal School District to two of Ohio’s most notorious virtual academies—the Electronic Classroom of Tomorrow (ECOT) and the Ohio Virtual Academy (a K12 affiliate).

Jeff Bryant, in a far-reaching investigation for salon.com, The Great Charter School Rip-Off, traces growing public awareness about poor regulation of charter schools from state to state.  Too often, says Bryant, parents and citizens have no democratic input into the process of authorizing charter schools when instead, “charters are being imposed on communities—either by legislative fiat or well-engineered public policy campaigns.”  Bryant describes a new plan to charterize York, Pennsylvania’s public schools, where the two charter companies being considered are Mosaica—which just left Muskegon Heights, Michigan halfway through its contract to run that district when it was unable to turn a profit—and Charter Schools USA, reported by the Florida League of Women Voters to have been “running a real estate racket…” that partnered Charter Schools USA with Red Apple Development Company “in a scheme to lock in big profits for their operations and saddle county taxpayers with millions of dollars in lease fees every year.”

It seems there is lots of awareness of widespread problems in the way charter schools are operated in one state or another, but fraud or mismanagement in one state does not seem to prevent gullible charter authorizers in other states from hiring the very same management companies.  Too many charters seem to be able to find  dollars to invest in extravagant advertising like the nearly half-million dollars raised from venture capitalists by Eva Moskowitz’s Success Academy for TV ads aired across New York City last week.  And charter school owners like William Lager of Ohio’s ECOT, who has made over $100 million since 2001 in profits from two privately held companies he owns—Altair Management Company and IQ Innovations that provide all services for ECOT—continue to be able to invest heavily in the political campaigns of candidates for the state legislature.  Plunderbund, the Columbus Ohio blog, reports that since 2000, William Lager has contributed $1,444,242.46 to the political coffers of Ohio legislators.

One can only hope that increased reporting of misspending and outright fraud will stimulate a growing revolt by citizens who want to protect public education as well as the public’s right to ensure stewardship of tax dollars.  Martha Woodall in the Philadelphia Inquirer, reports that public officials in Pennsylvania expressed gratitude for last week’s report from the Center for Popular Democracy, Integrity in Education, and Action United: “State Auditor General Eugene De Pasquale said, It’s ‘good that they put this together.  To me, the more voices on this the better.  I think in the next term in the legislature, there is going to be a charter-reform bill move forward.'”  Woodall quotes Philadelphia City Controller Alan Butkovitz: “We certainly agree with the need for greater oversight and auditing.  That’s been one of our constant themes.”