Ohio’s Notorious E-Charters Evade Regulation: ECOT Saga Drags On and On and On

Ohio’s biggest charter school, the notorious e-school, the Electronic Classroom of Tomorrow (ECOT), held a big rally in Columbus early this week. Rick Teeters, ECOT’s superintendent, told all the school’s teachers and students to show up, even though the rally happened in the middle of the school day. Maybe everybody was expected to go home afterwards and study online until midnight.

ECOT’s founder, William Lager, made an emotional speech bragging that his school has provided more choices for those who have few. Lager didn’t mention, of course, the hundreds of millions of tax dollars the school has been receiving year after year from the state on a per-student basis. Neither did he say anything about the $60 million from last year alone that the Ohio Department of Education says ECOT fraudulently charged the state for students who did not really attend school at ECOT last year. ECOT is trying to avoid paying back the money.

In Ohio, pretty much everybody knows that ECOT is a huge scam, but because Ohio is an all-Republican state without any checks and balances at all, and because William Lager keeps on contributing to the campaign coffers of members of the legislature, no strong law has been passed to stop the ripoff.  And now, in the biennial budget bill the House passed on May 2, nobody will even claim the language that mysteriously appeared to undermine oversight of Ohio’s charter school sector.

Under enormous pressure from the press last year, the legislature did tighten the regulatory process to demand that the online academies must now provide documentation that students are at their computers doing 20 hours per week of work in order to be counted.  ECOT has continued to maintain that it has, as the law has specified for years, been providing 920 hours of curriculum for its students each year. But, says ECOT, the state never asked for attendance records in the past, and the state changed its demands suddenly and illegally.

ECOT has been in court trying to block the new regulations. However a Common Pleas Court rejected ECOT’s demand that the court block the state’s effort to claw back two-thirds of what ECOT was paid last year, when ECOT was able to document the participation of only 6,300 of the 15,300 students the school claimed were enrolled. After ECOT lost its case in Common Pleas Court, ECOT appealed the case.

Working assiduously to bog down the court proceedings, ECOT demanded the removal of appeals court Judge Gary Tyack because he made the mistake of telling the truth in a comment he made about ECOT.  Here’s what Tyack said: “The General Assembly cares more about what Mr. Lager (founder of ECOT) and David Brennan (founder of other large e-schools) think than about what I think, frankly.” “It’s hard to ignore the fact that between the two of them they’ve probably gotten a billion dollars worth of State funds that would have gone to public schools because of their clout. In Russia we call them oligarchs. Here, we don’t call them anything. We call them influential donors.”  Maureen O’Connor, the Chief Justice of the Ohio Supreme Court, refused this week to capitulate to ECOT’s demand that Judge Tyack be removed from the case. The case now moves forward; we must await the final decision of the Court of Appeals.

ECOT not only tried in court to block the state’s crackdown on e-school attendance reporting; it also filed an administrative appeal in the Ohio Department of Education itself. But this week ECOT lost that administrative appeal. On Wednesday, the Ohio Department of Education denied ECOT’s administrative appeal and demanded that that ECOT pay back $60 million in fees it overcharged the state last year. The decision of the Department of Education’s hearing officer is not final; the state school board  still needs to vote to seek recovery of the money. We’ll see how that goes; after all, the Ohio state board of education is dominated by a coalition of elected Republicans and members who have been appointed by Republican Governor John Kasich.

Then there are the mystery amendments that appeared in the fine print of the budget bill passed by the Ohio House on May 2.  Most of these last-minute amendments would weaken state oversight of the organizations that sponsor charter schools—sponsors who are paid by the state to provide oversight but who have no incentive to close the huge e-schools they supposedly oversee. The amendments are  pro-ECOT and anti-regulation.

Andrew Brenner, the chair of the House Education Committee, inserted a last minute amendment to change the way sponsors are rated. The state currently judges charter school sponsoring organizations by the quality of the schools they are supposed to oversee, but it weights the schools according to the number of students they serve. Here is the Akron Beacon Journal’s editorial board commenting on the change proposed by Andy Brenner to weight every school—no matter its size—equally in a sponsor’s evaluation: “For instance, ECOT has 15,000 students, or nearly one-half of those enrolled in the 59 schools sponsored by the Educational Service Center of Lake Erie West. Treat the academically challenged ECOT as one school, and it would rate as a tiny fraction of its sponsor’s portfolio.  The sponsor would receive a higher rating, assuming its other schools perform well enough… In the case of ECOT…. with those numbers in mind, the re-weighting, as proposed by Andy Brenner, diminishes the commitment to students, or what charter schools claim as their first purpose. ECOT would be better off. So would the sponsor.”

Nobody knows who added other language to the House budget to protect the organizations that sponsor the huge and notorious online charter schools. Some legislators are even blaming the Legislative Service Commission, the agency that crafts the language of bills, for adding the language that favors ECOT and its sponsor. The mysterious amendment to the House budget, explains Patrick O’Donnell of the Plain Dealer, “would prevent certain ESCs that take on online charter schools from losing oversight and income from the schools, regardless of their (the schools’) ratings in the future.”

Doug Livingston of the Akron Beacon Journal provides important background about the incentive the Ohio’s legislature has provided for  years encouraging the Education Service Centers to sponsor the giant online academies: “Sponsoring large e-schools is a money-maker for educational service centers….  For each student enrolled in one of their charter schools, the sponsor gets 3 percent of the state funding that follows the students from the local school district where he or she would otherwise attend. At e-schools with more than $100 million (every year) in state revenue, the sponsor fee can be worth millions.” Now the mysterious new budget amendment further protects the Education Service Centers—letting them off the hook when the schools, which they are being paid huge sums to oversee, fail to perform.

Even the pro-charter Thomas B. Fordham Institute wants better oversight of Ohio’s e-charters and wants the mystery amendment removed from the fine print of the state budget.  Livingston quotes Chad Aldis of the Fordham Institute explaining what is wrong with the mystery amendment: “The change would allow an educational service center that sponsors charter schools to bring on a statewide online charter school and maintain sponsorship of it even if the academic outcomes were poor… Essentially, the sponsor would have an exemption from the academic accountability portion of the state’s sponsor evaluation system.”

The ECOT saga drags on and on in Ohio, where it would seem money and state politics make charter school regulation impossible.  Here, summarizing the current operation of Ohio’s super-majority, one-party, Republican legislature, is Columbus Dispatch columnist Darrel Rowland: “They didn’t teach this in ‘How a Bill Becomes a Law.’ A mysterious amendment makes its way into a state budget bill. One by one, lawmakers, including the speaker of the House, express surprise that the three-paragraph provision was part of the measure they just approved, and all deny knowing how it got there. A Legislative Service Commission staffer eventually gets the blame.”

This blog has covered the long-running ECOT saga here.

Powerful ECOT Blocks Crackdown on Inflated Attendance Reports from Several Ohio Online Schools

For years and years, Ohio has negligently failed to demand that online charter schools submit accurate attendance records. In the meantime the state has kept on paying the schools for the students they claim to serve. While the state has continued to say it would crack down, oversight has been blocked by power and money.

More specifically, in 2016, the Ohio Department of Education began asking for attendance records, but the largest of the schools, the Electronic Classroom of Tomorrow (ECOT), said it hadn’t been collecting the information because the state had never asked the school to document that students were spending time online at the e-schools. The state, it said, had required the school to provide 920 hours of curriculum for its students every year, but not to prove the students were actually sitting at their computers using the materials. It seems clear that political contributions to Ohio’s legislators from William Lager, ECOT’s founder and for-profit operator, ensured that the legislature avoided consideration of any kind of law to demand the submission of an accurate student count.

A year ago, the legislature changed the rules and asked the Ohio Department of Education to begin collecting the data.  And the Department conducted a preliminary analysis that showed that ECOT, which collected $109 million for educating the 15,300 students it says it serves, must return $64 million for the 2015-2016 school year alone. ECOT went to court, and after a judge ruled that ECOT must pay back the money and start submitting accurate numbers, ECOT appealed the decision. This blog has been tracking the ECOT scandal.

Patrick O’Donnell reports for the Plain Dealer that, “ECOT lost its first challenge in Franklin County Common Pleas Court and is now appealing its case to the 10th Ohio District Court of Appeals. That court had its hearing on the case earlier this month and a ruling could come in the next couple of months. A dispute over one of the judges on the three-judge panel comparing ECOT founder William Lager, a major donor to Ohio Republicans, to a Russian oligarch could delay that ruling.”

O’Donnell explains that other online schools in the state have also been found inflating their students’ numbers, but as ECOT’s lawsuit drags on, the state education department has been unable to crack down on the smaller virtual academies: “Ohio’s attempts to recover about $20 million in state tax funding from eight online charter schools has stalled for more than six months while a much larger battle over more than $60 million from e-school giant ECOT lingers in appeals court.  The year-long fight between the Ohio Department of Education and ECOT… has also delayed the state legislature from sorting out how to avoid e-school funding controversies in the future.  Eight months after Ohio Auditor Dave Yost called on legislators to find a better way to measure how well online schools educate students and a better way for Ohio to fund the schools, legislators have not acted.  Despite many agreeing that Ohio needs to overhaul its funding of online schools, no one has suggested a single bill, held a single hearing or publicly called for any research.”

Actually Andrew Brenner, the chair of the Ohio House Education Committee, has now proposed a change in the e-school evaluation process.  But it is a change that would relax state oversight instead of strengthening it.  Today, in the way Ohio oversees the many nonprofit organizations that are permitted to sponsor charter schools, there is a requirement, “that the academic performance of the multiple charter schools in each overseer’s portfolio of schools be weighted by the number of students in each school… As the evaluation ratings stand now, the state report card grades for a 10,000-student online school count 50 times as much as grades for a small, 200-student neighborhood charter school.  If the big school has great state grades under current rules, the (sponsor’s) entire portfolio  of schools looks good when results are averaged together. But if the bigger schools have poor grades, as some large online schools do, the entire collection of schools looks bad.” In fact the huge online academies are notorious for their dismal ratings.  O’Donnell quotes Stephen Dyer, a former legislator and journalist describing Andrew Brenner: “He’s doing the ECOT fix. Wonderful.” O’Donnell confirms Dyer’s suspicion: “ECOT and its supporters backed a similar proposal two years ago, but failed to gain legislative support.”

Joe Schiavoni, the minority leader of the Ohio Senate, who has repeatedly proposed a bill to crack down on lax attendance reporting by the e-schools, believes the proposed change is aimed at relaxing standards for the all-powerful virtual academies: “This would be a break for them. The cynic in me says they are looking for a break.”  The bill Schiavoni has introduced in at least two different legislative sessions to regulate collection of attendance records at the e-schools has never made it out of committee in Ohio’s all-Republican dominated legislature.

Despite that many people across the country seem to believe it is possible to regulate charter schools to stamp out fraud and corruption, watching Ohio’s ECOT scandal has convinced me that money and power will render significant oversight impossible. However, in the past week there has been one small bright spot.  Paolo Demaria, Ohio’s relatively new Superintendent of Public Instruction, just turned back $22 million in federal Charter Schools Program funds to the U.S. Department of Education. The federal Charter Schools Program invests in new charter school startups, and to his credit, Demaria says Ohio can’t use all the money because there are not enough quality applicants.

Here is the back story, in case you have forgotten. In the summer of 2015, a huge public outcry arose over $71 million granted to Ohio from the federal Charter Schools Program. David Hansen, the man who wrote the federal grant proposal, was fired because his proposal was based on the false promise that our legislature had cracked down on sponsors of charter schools. But the U.S. Department of Education made the grant anyway. Ohio’s Congressional delegation and especially Senator Sherrod Brown demanded that the U.S. Department of Education provide extra oversight of Ohio’s grant because our state’s regulations have been notoriously weak.

Now Superintendent Demaria explains that Ohio has cracked down—at least somewhat—and due to stronger oversight, the state does not have enough strong applicants to use all the grant money. Again, here is Patrick O’Donnell: “In a letter sent last week, Demaria said the state will use $49 (million) of the $71 million over five years, not the full amount. He said the lower amount ‘more accurately reflects our eligible pool of prospective community school grantees based on our shared priorities’ of only giving money to strong schools.”  Big problems remain with state oversight of the sponsors.  O’Donnell reminds us: “Only five of the more than 60 sponsors in Ohio earned ‘effective’ ratings and none were rated ‘exemplary’ in the fall. The vast majority were rated as ‘ineffective’ or worse… The state is looking to shut down five charter school sponsor authorizers it rated as ‘poor’… as part of a plan to improve charter schools across the state.”

Superintendent Demaria deserves credit for his integrity.  We shouldn’t hold our collective breath, however, about the capacity of Ohio’s legislators to create regulations that might turn off the flow of political contributions.

EXTRA: Retired Ohio School Superintendent Describes the Scandalous Operation of ECOT

Bill Phillis, Executive Director of the Ohio Coalition for Equity and Adequacy of School Funding, interviews Keith Richards, retired school superintendent of several Ohio school districts over a 40 year career.

In this series of youtube videos, Mr. Richards describes his experience with the unscrupulous, online charter school, the Electronic Classroom of Tomorrow, known in Ohio as ECOT.

Keep in mind that when Mr. Richards uses the term, “community schools,” he is describing charter schools.  Ohio law refers to charter schools as “community schools.”

Part I

Part II

Part III

ECOT Tries to Hold On to Over $60 Million in Tax Dollars It Collected for Phantom Students

The Ohio legislature is in the midst of its lame duck session—the opportunity for lawmakers to do something about the outrageous scam at the Electronic Classroom of Tomorrow (ECOT).  And today, according to Plunderbund, Senate Bill 3, an omnibus education law with 29 amendments is to be introduced in the House Education Committee.

A big question is whether the legislature will do anything at all about regulating the out-of-control online charter sector. Here are some of the issues, according to Plain Dealer education reporter, Patrick O’Donnell, who explained last week that, “ECOT, Ohio’s largest online school, has lost a court appeal that would have blocked the state from trying to ‘claw back’ as much as $65 million the school received last year…”  ECOT—which hasn’t been keeping accurate log-in attendance records, and which has claimed that the state requires it merely to provide 920 hours of instruction for the 15,000 students the school claims it educates but not to require its students to actively use the materials for at least 20 hours per week—took the state to court earlier this year to try to block the state’s crackdown on its massive reimbursement for phantom students. ECOT has lost in court at every turn as it has appealed its case, but the school’s leaders are shameless in demanding that the state continue paying the school for the students it claims, without proper records, are enrolled.  Its total tax-dollar reimbursement is currently over $100 million, but the state wants ECOT to return over $60 million.

O’Donnell reports that now in the legislature’s lame duck session, “The schools are asking state legislators to add a ‘hold harmless’ provision to another bill in the next few weeks to stop the state from using attendance reviews of the schools to take millions of dollars of state funding away from them.”  O’Donnell describes the pressure being brought on ECOT’s behalf by Neil Clark, Ohio’s most powerful Republican lobbyist, who represents ECOT and who alleges that “the Ohio Department of Education ‘created new rules for e-schools and then applied the new rules retroactively.'”

Last March, Senate Minority Leader Joe Schiavoni of Youngstown introduced a bill to try to establish oversight of charter school enrollment.  In a press release he declared: “We need to make sure that online schools are accurately reporting attendance and not collecting tax dollars for students who never log in to take classes. Online schools must be held accountable for lax attendance policies. Without strong oversight, these schools could be collecting millions of dollars while failing to educate Ohio’s school children.” Schiavoni’s bill would have required e-schools to keep accurate records of the number of hours student spend doing coursework. It would have required the online school to notify the Ohio Department of Education if a student failed to log-in for ten consecutive days.  It would have required that a qualified teacher check in with each student once a month to monitor active participation.

There was always a very dim hope that wisdom and the relentless exposure by the Cleveland Plain Dealer, the Columbus Dispatch and the Akron Beacon-Journal might have pressured Ohio’s lame duck legislature to consider Schiavoni’s bill, but it was sidetracked last summer to the Senate Finance Committee by the Senate leadership in an attempt to get around a sympathetic Peggy Lehner, chair of the Senate Education Committee. In Ohio’s supermajority Republican legislature, Senator Schiavoi’s sensible bill will die at the end of the legislative session.

Now as December begins, with only a couple of weeks left in the lame duck session, ECOT and its fellow online schools are begging to avoid the threatened claw-back of their funding for this year, because they say they were not properly warned of the new regulations that kicked in last winter.  After all, the problem is more widespread than ECOT. O’Donnell reports: “The state also ordered Provost Academy in Columbus to repay $800,000 after finding that it had the equivalent of just 3 full-time students, not the 160 it had claimed. And it found that Akron Digital Academy could not document 80% of its students and that the Buckeye Online School for Success could not document any of its 900 students.”

Jim Siegel of the Columbus Dispatch reports that as the e-schools are trying to pressure legislators to save their funding, ECOT’s hearing before the Ohio Department of Education—the one the school has attempted repeatedly to block in court—began yesterday.  The department is meeting with representatives of the online schools as they continue trying to appeal the department’s ruling earlier this year.

Like O’Donnell, Siegel has wondered whether ECOT’s demand for a one-year hold harmless might be added as an amendment to another bill—perhaps to the already highly amended omnibus Senate Bill 3.  When he posed the question to Republican leaders in the House, “(B)oth (Andrew) Brenner, (chair of the House Education Committee) and Speaker Cliff Rosenberger, R-Clarksville, said they do not expect to add proposals that have not already been heard in committee as separate bills. Asked specifically about help for e-schools, Rosenberger said, ‘We’re not going to be seeing anything like that.'”

Siegel believes, however, that Andrew Brenner will still try to figure out how to waive this year’s claw-back of taxpayer funds from the e-schools. Andrew Brenner is a “nonvoting member of the state Board of Education,”  who has told Siegel: “I’m going to be talking to the board president and a couple of others to see what we can do to at least get us through this last school year, and then maybe we can have a permanent fix going forward… Brenner said his key concern is that even if the state Department of Education is legally authorized to ask online schools to provide more detailed login durations to justify enrollment figures, state officials should not have implemented the policy in the middle of the school year… It would have been more reasonable, Brenner said, for the department to warn schools this year, and then start docking their funds next year if enrollment could not be verified by login durations.”

Notice that Brenner’s focus is protecting the Electronic Classroom of Tomorrow. Remember that legislators have have been encouraged to consider ECOT’s well-being through political contributions from ECOT’s operator William Lager. As columnist Brent Larkin declares in the December 4, Plain Dealer: “Ohio is saddled with a damaging reputation as home to some of the nation’s worst charter schools. Worse yet, none of this seems to bother the state’s legislative leaders, whose breathtaking incompetence and corruption prevent them from angering their campaign contributors by making the tough decisions needed to improve the state’s educational standing.”

Brenner doesn’t seem to care that funding for Ohio’s massive unregulated online charter school scam is being sucked out of the state’s education budget and that Ohio’s way of funding charter schools even steals back money from local school districts’ levy funds.

This blog has covered the long-running scandal of Ohio’s failure to regulate ECOT here.

Ohio Judge Denies ECOT an Injunction to Prevent State’s Search for Phantom Students

On Friday afternoon, Ohio was granted the possibility that perhaps someday it can recover some of the hundreds of millions of dollars in years’ of over-payments to the notorious Electronic Classroom of Tomorrow (ECOT). The Ohio Department of Education won a preliminary court victory on Friday, but in the context of state politics, for-profit educational management organizations, and huge political donations from wealthy charter school operators, regulation of charter schools remains a distant possibility in Ohio and in many other states.  However, thanks to Jenifer French, a judge in Franklin County Common Pleas Court, there is at least now a chance here in Ohio. ECOT has been in court trying to get a temporary injunction to prevent the state’s crackdown on what are ECOT’s obviously inflated claims about the number of students the state should be paying for.

Patrick O’Donnell, the Plain Dealer’s education reporter, explains the significance of Judge French’s decision: “Ohio can try to make the state’s largest online school, the Electronic Classroom of Tomorrow, return money to the state for having no proof of how much time students spent learning, Franklin County Common Pleas Judge Jenifer French ruled Friday. French denied a request from the school for a preliminary injunction to stop the state from attempting to recover some of the $106 million the school was paid for the 2015-2016 school year. But ECOT can still try to block that process in a hearing before the state school board and through a larger, ongoing court fight.” ECOT has already announced that it will appeal Judge French’s decision all the way to the state’s supreme court if necessary.

Judge French demonstrated on Friday, however, that she at least does not accept ECOT’s argument that the school deserves to have collected an annual fee of $6,900 per student in tax dollars even if students have been logging on for only an hour per day.  The e-school argued in court that the school should be required to document only that students are offered 920 hours of online curriculum each year, not that the students are actually using the curriculum. O’Donnell quotes Judge French’s response to that argument: “There is a public interest in ensuring that our children are receiving the education that our taxpayers are funding… This may be occurring at ECOT and other e-schools, but ODE (the Ohio Department of Education) has no way of knowing whether it is occurring because there are no records being maintained to ensure that it is.”

The school’s operators also argued in court that when new regulations were put in place last winter, the state somehow shifted the rules without enough warning. O’Donnell describes French’s response: “French rejected that argument, noting that the state has told online schools for years that how long its students spend online would be part of any attendance and payment review.”

ECOT also defended itself by presenting a 2003 funding agreement signed by an official at the Ohio Department of Education—a 2003 agreement that required the school merely to provide the curriculum. Officials who worked at ODE in 2003 explained to the court that the agreement came very early in the evolution of charter schools in Ohio and is no longer valid.  In her decision, Judge French’s declares that the 2003 agreement is surely invalid: “‘The Court finds that interpreting the Funding Agreement in the manner ECOT suggests, and enforcing an outdated 2003 agreement would be in violation of public policy” and would “require the state to continue paying hundreds of millions of dollars per year, without any ability to determine whether students are in fact participating in any curriculum at ECOT at all.”

Since early last week, when the Ohio Department of Education released the results of a new attendance audit of ECOT, Ohioans had been anxiously awaiting Judge French’s decision.  ODE conducted the audit over the summer with a sample of ECOT’s supposed students.  Early last week O’Donnell described ODE’s new findings: “ECOT was paid about $106 million in state funding last year for a reported 15,322 full-time students. But after a preliminary attendance review in March and a final review in August that required the school to verify its enrollment through student log-in durations, the department has concluded that ECOT’s actual verified enrollment is 6,313 students.  Based on the final determination, the department could try to force ECOT and its politically influential founder, Bill Lager, to repay about $60 million to the state.”  And potentially much more if there is a retroactive claw-back for over-payments in previous years.

After Judge French’s decision, the Columbus Dispatch optimistically editorialized: “If ECOT, which has vowed to appeal, loses the fight, taxpayers stand to recoup $60 million of the $106 million paid to the school last year.”  Time will tell, however, whether Ohio can succeed in cracking down on charter school fraud. As ECOT’s appeal moves through the court system, we’ll see if William Lager is powerful enough to protect ECOT and continue cheating taxpayers.  Because of the complicated way Ohio calculates and routes funding for charter schools, a significant part of the dollars being diverted to ECOT are coming not just from the state but also from local school levy dollars.  Neither the state nor local school districts can afford to be losing the tens of millions of dollars being paid to ECOT as tuition for phantom students.

Ohio Legislators Fail—So Far—to Block Investigation of Notorious Online Charter Schools

Ohio is a state with huge Republican majorities—protected by gerrymandering—in both houses of the legislature, a Republican governor and an elected Republican supreme court. Few elections in the next few years will be contested; everybody is very safe.  Hence there are virtually no checks and balances.

Despite all this, the state has been moving by millimeters toward at least the most minimal regulation of an out-of-control charter school sector.  Most notably there has come a realization that the notorious online charter school magnates—people who have been buying the legislature for years—must somehow be stopped.  This is partly due to the relentless daily e-mail blasts from Bill Phillis, the former assistant state superintendent who led the Ohio Coalition for Equity and Adequacy of School Funding to bring the school funding case, DeRolph v. Ohio, and win four times at the Ohio Supreme Court.  And it is because Ohio’s major newspapers have refused to let this issue go—Patrick O’Donnell, the Cleveland Plain Dealer‘s education reporter and Jim Siegel and Catherine Candisky at the Columbus Dispatch—along with the editorial boards at the Plain Dealer, the Dispatch, the Akron Beacon-Journal and other papers.

Brent Larkin, the Plain Dealer‘s editorial director from 1991 until he retired in 2009, writes a Sunday column in which for a year he has been eviscerating the legislature for sending hundreds of millions of dollars to unscrupulous charter school entrepreneurs and thereby robbing the state’s public schools and our children.  Larkin did it again on Sunday:

“The biggest scandal in Ohio history is knocking on the Statehouse door… It’s about pouring hundreds of millions of dollars a year down a rat hole and selling out tens of thousands of children. Every penny of this massive waste of money would come straight from your pocket.  Every child who would get kicked in the teeth might as well be your neighbor. The villains who want to perpetuate this swindle are the Republicans who run the Ohio General Assembly.”

Here is what’s been happening recently as Bill Lager, operator of the notorious Electronic Classroom of Tomorrow (ECOT) and his lobbyist Neil Clark have tried to pull every string to keep the Ohio Department of Education from auditing the 15,000-student school for what seem to be serious problems with its reporting of student attendance.  In a preliminary audit this spring, the state’s Department of Education discovered that ECOT’s students were logging on to their computers for an average of only an hour a day, even though the state has been paying the online school for 15,000 full time students.  (This blog has covered the long-running ECOT scandal here.)  The legislature passed a new law last winter that would penalize the agencies that sponsor charter schools when these authorizers neglect their oversight responsibilities, but ECOT and its attorneys have filed a lawsuit to block increased state oversight of the e-schools and their sponsors.  In late August at a legislative committee hearing, legislators friendly to ECOT—contending that the Department of Education has tried to use a new law retroactively—blocked a rule that would allow the Department’s investigation of attendance records to move forward.

Jim Siegel of the Columbus Dispatch quotes Rep. Greta Johnson, D-Akron, as she responded to the committee’s action to delay oversight of the notorious e-schools: “This is a clear case of Republican charter school industry allies doing everything in their power to derail, disrupt, and delay new reforms that would help hold charter schools to a reasonable standard of achievement.”  State Senator Bill Coley, R-West Chester (suburban Cincinnati) labeled the Department of Education’s attempt to impose its new rule to investigate the number of phantom students at the online charters “the height of arrogance.”

Siegel explains the goal of the delay tactics—to sink new oversight rules into the morass of committee obfuscation: “The rule isn’t dead, but it is going back to the Common Sense Initiative office, which determines if agency rules have an unusually detrimental impact on businesses… The CSI will spend up to 30 days reviewing the rule again.  Then the clock restarts on the JCARR process, which takes at least another 30 days.”

Larkin isn’t impressed with the maneuvering of Ohio’s legislative leaders: “(T)he legislature continues to whittle away at the reforms it enacted less than a year ago—and make no mistake, that’s the intent of House Speaker Cliff Rosenberger and Senate President Keith Faber…”  Larkin explains: “At the heart of it is the legislature’s obsession with protecting online charters, notably the Electronic Classroom of Tomorrow (ECOT), Ohio’s largest online school, with nearly 15,000 students.  William Lager, ECOT’s founder, has been a huge contributor to GOP legislators’ campaigns.  And, as I’ve written repeatedly, this is a legislature run by people who care a lot more about contributions than they do about kids. But the people at the Ohio Department of Education are old-fashioned.  Unlike many Republican legislators, they think students attending online schools should spend time on the computer, doing school work.”

Larkin describes ECOT’s response to increased state oversight of its lucrative operations: “So when the state asked a Franklin County court to order ECOT to turn over attendance records as part of an effort to determine whether students are actually receiving the 920 annual hours of education that the state requires, ECOT fought back—with a vengeance.  ECOT now accuses the state of ‘criminal misconduct’ and ‘incompetence’…. School spokesman Neil Clark argues passionately that ODE has gone ‘way overboard’ in its attempts to harm ECOT.”

Like the Beacon Journal‘s editorial board last week, Larkin begs Governor John Kasich to find a way to intervene to stop the legislature’s capitulation to William Lager’s demands—if for no other reason than to save the governor’s own reputation.

And after Larkin’s commentary was published online earlier in the week, he revised it for the Sunday newspaper to give the governor and State School Superintendent Paolo DeMario credit for moving forward with the oversight of the online schools: “On Thursday, State Education Superintendent Paolo DeMaria brushed aside legislative attempts to prevent his department from continuing charter school sponsor evaluations, saying existing rules allow the department to proceed as planned. DeMaria’s decision to prevent legislators from undermining the charter evaluation process was endorsed by the governor… Good for him.”

Portfolio School Reform and Unregulated Charters Harm Ohio as School Year Begins

On Monday, children in Cleveland, Ohio began the 2016-2017 school year, but problems in a one-party Republican state whose legislature has warmly embraced “corporate school reform” will affect their education this year.

First of all, as the school year began on Monday, the Cleveland Teachers Union presented the school district with the required 10-day notice of a strike, to begin on the Friday before Labor Day unless the district and the teachers union can reach agreement on a long-running problem.  Teachers, who have been without a contract since early July, are wearing blue t-shirts that proclaim, “I don’t want to STRIKE, but I will!”

Why begin the school year with such conflict? Actually it isn’t a new problem. In 2012—with support from the Cleveland business establishment, the philanthropic sector, and the mayor and his appointed school board—the Ohio legislature passed a portfolio school reform plan (Manage the district like a business portfolio with a marketplace of school choice including rapid expansion of charters that receive local tax dollars.) and imposed it on the Cleveland schools.

Plain Dealer reporter Patrick O’Donnell explains that the Cleveland Transformation Plan also has affected salaries for teachers, and continues to affect contract negotiations four years later: “Negotiations on this contract are more complicated than in most districts, thanks to the Cleveland Plan for Transforming Schools…. That Plan called for a teacher pay plan ‘based on performance,’ instead of the traditional teacher salary schedule other districts use. That made Cleveland the only district in Ohio that no longer gives raises for years of experience and degrees that teachers earn. But the district and union have failed for four years to create the full pay plan called for in law and in the last teacher contract, reached in 2013. Though the sides agreed in their last contract that teachers would receive raises for multiple reasons, the district is only awarding them when teachers receive strong ratings on annual evaluations.  Ignored, so far, are contractually-agreed items like teaching in hard-to fill jobs or undesired schools; completing pre-approved courses and training that directly affect teaching; and taking steps to develop as a mentor and leader. That leaves raises entirely based on ratings, which are greatly affected by student test scores. ‘We have an over-reliance on using these standardized tests to evaluate teachers,’ (David) Quolke said.”  Quolke is president of the Cleveland Teachers Union.

Quolke has said the union does not desire a strike but has no other option. After all, the district has a crucially important local school levy on the November ballot. In Ohio, a state that brags there are no unvoted tax increases, school districts must take requests for local property tax millage directly to the voters.  Quolke has declared, “It is our hope that the CMSD (Cleveland Municipal School District) and the Mayor will commit to using the next two weeks to resolve the contract. It is essential that we invest in our schools and in our students, and we provide more, not fewer opportunities for students; and it is essential that we settle this contract and begin working to pass the Cleveland school levy.”

Like many school districts in Ohio, Cleveland is also being affected by the statewide scandal over reimbursements to charter schools which are sucking money not only out of state reimbursements to school districts but in many cases also redirecting local funds. In the news all year has been the scandal of reimbursements to the notorious online charter school, the Electronic Classroom of Tomorrow (ECOT), where evidence has emerged that many students whose education is being underwritten by tax dollars are not really actively pursuing an education. ECOT is reported to be sucking over $7 million every year out of Cleveland’s public schools.

The problem is in the legislature, which has failed to address a long-running problem of tax funding paid to ECOT for students who have signed up for ECOT but who fail to participate regularly. ECOT has been reaping over $100 million each year, tax dollars that feed the profits of the two privately held management companies owned by ECOT operator William Lager: Altair Learning Management and IQ Innovations.

We have known that ECOT has hidden attendance records and has asked the courts to block the Ohio Department of Education from checking up. The courts have instead ordered ECOT to present attendance records to the Ohio Department of Education. Now it has become clear that, although ECOT students are said to spend a lot of time in offline activities that further their education, ECOT has not kept records of these activities at all. While there are minimal computer log-in reports—a preliminary audit indicates students are averaging an hour per day in logged participation— The Columbus Dispatch recently reported that Ohio State Auditor David Yost signed what is called “an agreed-upon procedures engagement” that did not require ECOT to keep detailed logs of its students’ activities.

Dispatch reporters, Jim Siegel, Catherine Candisky and Bill Bush explain how Ohio’s sketchy attendance rules for the full-time, online charter schools evolved: “Today’s legal battle potentially involving hundreds of millions in taxpayer dollars paid to online charter schools in Ohio began more than 15 years ago with an audit, an unusual agreement and a mysterious scrawled signature—followed by years of legislative inaction… Back in 2002, state officials weren’t thinking about checking for 920 (annual) hours of attendance or tracking students’ computer log-in durations. Few rules and regulations governed new online schools, and attendance concerns were much more basic: Were students getting computers and could they actually log into the fledgling Electronic Classroom of Tomorrow’s system?”

The Dispatch reporters have tracked the name of the official with the illegible signature: “David Varda, then associate superintendent at the Ohio Department of Education, who signed the odd funding agreement with ECOT in January 2003.”  Varda, who is now quoted as believing that better documentation would help the state oversee ECOT, says the agreement he signed in 2003 was intended to provide “documentation that they (students) were actively engaged.”  The Dispatch adds that some people were concerned back at the time charters were being launched across the state: “Then-state Auditor Jim Petro’s office identified the problem almost immediately: In a special audit of ECOT’s first few months of operation in fall 2000, his office found the school billed the state for thousands of students but could document that only seven logged into the ECOT computer classroom. ECOT was sending a bill for every student who signed up, the investigation found.”

How have all these years passed with ECOT collecting millions of taxpayer dollars?  ECOT founder William Lager is among Ohio’s most generous political contributors. Between 2010 and 2015, Lager gave more than $1.2 million in disclosed campaign donations to legislative Republicans.

The ECOT scandal, along with Ohio’s charter school funding in general, affects Ohio’s public school districts directly. While much of the funding for charter schools comes from the state—the $5,900 state basic per-pupil allocation plus additional weights when students have needs for special education, economic disadvantage, and career tech—the money is not paid to charter schools out of the state budget. When a student leaves for a charter school, the charter reimbursement is directly deducted from the budget of the school district where the student resides (a budget that includes the state and local funding for that school district). After all the formulas and charge-offs have been applied to state funding, students very often carry more to charters from their local district than the original state funding received by the district.

ECOT sucks millions from Ohio’s largest school districts—over $7 million per year from Cleveland’s schools, $11.5 million from Columbus’ schools, and over $3 million from Dayton’s schools, for example. Recent evidence shows that much of this money—which could be supporting the education of children living in poverty is being sent to ECOT for phantom students. This blog has extensively covered ECOT here.