William Lager and Ohio’s ECOT: Parasite Feeding on Tax Dollars

In Ohio’s First Public School Hundred-Millionaire: ECOT Founder William Lager, Plunderbund, the Columbus Ohio blog, continues to track the riches in tax dollars being siphoned by William Lager, owner of the Electronic Classroom of Tomorrow (ECOT), Ohio’s largest on-line academy, and the two private companies Lager owns that provide all curriculum and services for ECOT.

ECOT’s 13,836 students fare poorly on standardized tests, and its four-year graduation rate is only 35 percent, rising to 38 percent in five years.  Plunderbund has updated all numbers as of the end of 2013.  Since 2000, William Lager’s political donations to Ohio legislators total $1,444, 242.46.

Altair Management Company and IQ Innovations, Lager’s private companies that provide services for ECOT have each received over $50 million in tax dollars since 2001.  In December of 2013, ECOT won an Ohio Straight-A Fund innovation grant of $2,951,755, approved by a State Control Board, three of whose members, according to Plunderbund, have shared $57,000 in campaign contributions from William Lager.

In Ohio political contributions continue to protect ECOT at the expense of traditional public schools.  Ohio’s school funding takes from state and local tax dollars for traditional public schools to support charters including the on-line academies like ECOT; see this post.  And the federal government that has created incentives for the authorization of a growing charter sector has at the same time made no attempt to regulate them.

Duncan Offers No Way to Regulate Bad Charters Like Ohio’s ECOT

In June of 2010, I was part of a group that met with Education Secretary Arne Duncan. Some of us challenged Secretary Duncan about the fact that to apply for grant funding from his Race to the Top competition, states had to get their legislatures to pass laws to remove any caps on the authorization of new charter schools.  Duncan replied, “Good charters are part of the solution. Bad charters are part of the problem.”  But Secretary Duncan did not suggest any ways that he thought the federal government ought to regulate or oversee the bad charters.

The problem of the bad charters remains. A case in point is Ohio’s Electronic Classroom of Tomorrow (ECOT).  ECOT’s on-line students score abysmally below students in  the majority of the state’s traditional school districts and other charter schools.  ECOT’s five-year graduation rate is 37.8 percent, far below other school districts.  And the massive investment of tax dollars is being turned into profit for its CEO/owner/operator, William Lager.

These facts are documented by Ohio’s Plunderbund  blog in a searing indictment of ECOT and William Lager, one of Ohio’s largest political contributors.  According to Plunderbund, from 2010 to 2013, Lager made over $700,000 in political contributions to Ohio’s legislators.

Plunderbund explains that, “William Lager is connected to ECOT in three different ways.  First, he is the school’s CEO…. Second, William lager is also the CEO of Altair Learning Management Company….  And third, William Lager is the CEO of IQ Innovations….”

Altair manages personnel and human resources, instruction, purchasing, strategic planning, public relations, financial reporting… equipment and facilities.  In 2012, Altair’s management fee was $3,157,964.  IQ Innovations provides curriculum services.  In 2012, ECOT paid IQ Innovations $12,631,856.  “In total, that means that Lager’s school, ECOT, is paying Lager’s other two companies Altair and IQ Innovations, over $15.7 million annually.”

Now, ECOT has won an Ohio competitive innovation grant beyond the state’s per-pupil allocation for each of its 13,836 on-line students.  ECOT applied for one of Ohio’s new Straight A Fund innovation grants and was just awarded “their full request of an additional $2,951,755.” Plunderbund  provides details from the budget of the proposed project that will be largely managed by IQ Innovation Services . “ECOT is being given an additional $2,951,755 by the state (legislature), of which $2,725.250, or a whopping 92%  is going directly into Lager’s IQ Innovations company. That means that next year, William Lager, as CEO of ECOT, will be funneling over $18.5 million dollars in state funding directly to his own private companies.”