National School Choice Week: A Time to Examine How the Lessons of ECOT’s Demise Apply Beyond Ohio

During this National School Choice Week, a celebration of school privatization that is being financially and ideologically promoted by people like Jeb Bush and Secretary of Education Betsy DeVos, it is a good time to consider the lessons we have been learning about the impact of parental choice and what is virtually always at the center of school choice: privatization of education at public expense.

One obvious and little noticed problem for those who seek to bring the problems of school choice to the public’s attention is that the laws which established charter schools and govern their operation are state-specific.  When an unscrupulous charter school, or even a big chain of charters goes down in another state, it is easy to think, “This isn’t relevant to me,” and maybe skip reading the story.  Even if the Network for Public Education (NPE) releases a high quality, incisive a report on a selection of charter schools across the country, it is tempting to look for a chapter about a school in one’s own state and skip the report’s first four chapters about California. One can turn away, thinking, “I can’t do anything about this other state’s mess anyway.”

But if you read NPE’s big report, you’ll notice that charter school problems across the states have some things in common. Coincidentally and ironically, this National School Choice Week is happening only days after the Electronic Classroom of Tomorrow, one of the nation’s largest cyber charter schools, was finally put out of business  by Ohio state officials and its sponsoring organization.  ECOT’s demise last Thursday is a good opportunity to reflect on the broader lessons can be learned about school privatization.  ECOT’s seventeen year longevity, despite a history of controversy, is a lesson about outrageous lack of regulation of a privately operated education sector that relies on public tax dollars—public tax dollars that, even when the school is not-for-profit, too frequently flow to for-profit management contractors who use the money to pay state legislators and regulators to look the other way.

In Sunday’s Columbus Dispatch, Bill Bush quotes Bill Phillis, long ago an assistant superintendent of public instruction in Ohio and now executive director of the Ohio Coalition for Equity & Adequacy of School Funding: “How blind can the state be? It was as if a bear was at the door, but they didn’t look out the window.” Phillis speculates, according to Bush’s report, that ECOT has “over billed the state by more than a half-billion dollars over its lifetime, while its founder, William Lager, showered politicians with campaign cash.”

Bush reviews ECOT’s early history: “ECOT opened in September 2000, and three months later, its first superintendent Coletta Musick, was ousted.  The Dispatch reported that the dispute supposedly centered on ECOT’s attendance claims, but Musick couldn’t discuss it because ECOT had paid her $124,233 in tax money to sign a nondisclosure agreement… Shortly after Musick left, three of ECOT’s five school board members, handpicked by Lager, also resigned.  Then-state Auditor Jim Petro issued an attendance audit in 2001 covering ECOT’s first year: The school initially claimed to have 2,270 students, but records showed only seven logged on to any of the school’s computer systems. Yet the school had still received full funding for all the students. ECOT was ordered to repay $1.6 million but was allowed to work off the debt.”

After the legislature strengthened Ohio’s charter school law a bit in 2015, the state could claim the right to demand computer log-in data before reimbursing ECOT for its students’ per-pupil state aid. ECOT, however went to court to protect its right, under a 2003 agreement, not to present log-in records to the state.  ECOT has had the state in court all year to prevent the state’s claw-back of $80 million for just two school years—2015-16 and 2016-17.  Until  ECOT’s sponsor, the Educational Service Center of Lake Erie West cracked down last week based on the school’s pending bankruptcy, the state has been unable to recapture the money.  The Ohio Supreme Court remains scheduled to hear the school’s final appeal in oral arguments on February 13.

Last summer, the Dispatch‘s Catherine Candisky and Jim Siegel were the first to break the story about ECOT’s early history.  The reporters interviewed a disgruntled former-ECOT-employee, Chandra Filichia, employed by Lager as an ECOT registrar for several years, but now back full time as a waitress at the Columbus Waffle House where she met Bill Lager in 2000. Then bankrupt, Lager met with friends over coffee as they tried to come up with a new business venture.  Lager and his ECOT co-founder Kim Hardy mapped out their business plan on paper napkins.  Finally, “The two of them attended state-run classes on how to start a charter school, where they met Coletta Musick.  The former principal brought an actual education background to the team. Lager already had connections for obtaining computers and office equipment.  David Brailsford, a Toledo ticket broker, provided the early financing.”

In a new and detailed expose for Mother Jones, James Pogue revisits this early story, adding details and photographs to depict the online charter school’s humble beginning as a budding business venture.  Pogue re-interviews Chandra Filichia, the waitress later hired by Lager to recruit students for ECOT, about her disillusionment with the quality of ECOT’s academic program: “As a registrar, she described herself as being in a position to see the school’s attendance problems.  She said kids who hadn’t logged on in for weeks would call, after being threatened with truancy proceedings, begging for her help.”

Pogue  quotes Jeffrey Forster, a former superintendent at the school, responding to an inquiry from an Ohio Department of Education’s attorney about the process ECOT used to verify its student enrollment: “Forster recalled as an example how one day in 2009, ECOT gathered its teachers in a Columbus-area Doubletree hotel, and over the course of 10 hours had them verify attendance for as many as 14,000 students. They passed the forms around a string of lined-up tables and worked from memory as much as from login or attendance records… If no one recalled a student, the teachers—each of whom could have had dozens of pupils, sometimes many more—would look on their rosters to see if they could find a name.  Many of the students presumably had done their schoolwork in good faith, and if a student had definitively dropped out the teachers would decline to sign.  But the verifications seem to have had nothing to do with how much time the student actually spent doing classwork.”

Pogue also quotes Keith Richards, who as Newark, Ohio’s public school superintendent in 2006, wrote a formal letter of complaint to ECOT’s sponsor, the Educational Service Center of Lake Erie West.  Superintendent Richards also forwarded his complaint to State Auditor Petro: “Of the 12 former Newark students who have attended ECOT this year, we have found many violations… with regard to enrollment, attendance, instruction time and activity and withdrawal procedures.” Superintendent Richards continued, “We have documentation that shows that four ECOT students… do not have a computer or even in some cases, internet access in their homes.  We know of one student who was enrolled in ECOT for two years… and who was never given a computer or ECOT coursework.”

On Sunday, the first day of this year’s National School Choice Week, the Columbus Dispatch editorialized: “Ohio’s charter-school laws were from the start, exceedingly friendly to big campaign donors who would go on to use them to make a buck. Numerous attempts over the years to reform the laws and strengthen oversight have been stymied by the charter-school lobby and legislators friendly to it.”

As a way of marking National School Choice Week this year, please read Catherine Candisky and Jim Siegel’s July 30, 2017 expose on ECOT ,  James Pogue’s report at Mother Jones: The GOP’s Biggest Charter School Experiment Just Imploded, and the Network for Public Education’s recent report, Charters and Consequences.

Then consider, as a contrast, our nation’s system of public schools, regulated by law and the democratic process to protect the rights of their students and protect the public’s investment. Privatization of education is not inevitable.  School choice responds to power and privilege.  Maybe it is time to consider the best way to protect the public good by strengthening the public investment in well regulated public schools—and distributing tax dollars more generously to the schools in poor communities whose needs are great and whose funding remains meager.


Cleveland Presses State of Ohio to End Shoddy Oversight by Charter Sponsor, St. Aloysius Orphanage

Ohio, where charter schools can be authorized by nonprofit agencies, even agencies with no experience in education, is a national exemplar of poor oversight of its charter school sector. Agencies frequently sponsor schools in far away cities, as there is no requirement in state law that authorizing agencies be located near the institutions they supposedly oversee.

In the news this week is charter school sponsor, St. Aloysius Orphanage—along with Charter School Specialists, the for-profit firm with which St. Aloysius Orphanage has contracted to provide all the services required of charter school sponsors by the Ohio Department of Education.  St. Aloysius Orphanage was founded in Cincinnati, Ohio in 1837.  It has evolved from a 19th century orphanage into a 21st century mental health agency, which also provides a local Cincinnati charter school for children needing special education services. St. Aloysius Orphanage has also become one of Ohio’s statewide charter school sponsoring agencies.

The Cleveland Transformation Alliance submitted a recommendation this week that the Ohio Department of Education revoke St. Aloysius Orphanage’s authority to continue sponsoring charter schools within the Cleveland Metropolitan School District.  The Transformation Alliance was created as part of the Ohio Legislature’s imposition of a “portfolio school reform” plan that expanded school choice and charter schools across the Cleveland District back in 2012. The state granted the Transformation Alliance the authority to review charter school sponsors, but gave the Transformation Alliance no real power. Final decisions about the authorization and placement of new charter schools is up to the Ohio Department of Education. Whether the  state will accept the Transformation Alliance’s recommendation to curtail the activities of St. Aloysius Orphanage as a charter sponsor in Cleveland remains a question.

This week’s recommendation by the Cleveland Transformation Alliance that the state revoke St. Aloysius Orphanage’s right to continue sponsoring charter schools in Cleveland is damning not only of the job being done by St. Aloysius Orphanage and its contractor, Charter School Specialists.  The letter sent by the Transformation Alliance to State Superintendent Paolo DeMaria also broadly condemns Ohio’s system for regulating charter schools.

Here is the Plain Dealer‘s Patrick O’Donnell reporting on this week’s action by the Transformation Alliance: “The St. Aloysius Orphanage, the sponsor and overseer of 42 charter schools across Ohio, is not worthy of overseeing any new schools in Cleveland, city leaders decided on Monday… Mayor Frank Jackson’s school quality panel says it should not be allowed to. Members said Monday that despite St. Aloysius having a high rating from the state, it does too little to guarantee school quality. They say St. Aloysius is quick to create mediocre or poor schools just to offer school choice for its own sake. They questioned whether profit is a major motivation for adding more schools. And they questioned St. Aloysius’ reluctance to shut down schools that perform poorly.”

The Transformation Alliance’s letter this week to State Superintendent DeMaria explores several serious concerns. When members of a Transformation Alliance task force met by phone with representatives of St. Aloysius, “The sponsor representatives addressed questions…  about the relationship between St. Aloysius, the nonprofit that is eligible to be a sponsor in Ohio, and the for-profit firm with which St. Aloysius contracts to perform all its sponsorship services, Charter School Specialists.  The task force was left without complete clarity on the arms-length relationship between the two entities, how the academic performance of its sponsored schools fits within St. Aloysius’ evaluation of Charter School Specialists, and the motivation that drove St. Aloysius to become a statewide sponsor of… (charter) schools, particularly given its original mission to serve families in the Cincinnati area.”  “The task force also noted that St. Aloysius’s sponsorship fee is 3 percent of a school’s state funding allocation, the maximum allowed by the state… (G)aps in the type and quality of oversight are apparent.  St. Aloysius staff represented on the interview team were unable to adequately answer questions about specific school improvement efforts. It was also not clear that St. Aloysius’s board had any member with an education background…. The task force also expressed some concern that Charter School Specialists, which delivers all sponsorship services for St. Aloysius, also provides school treasurer and other services for sponsored schools for a separate fee. It is not clear how arms-length assurances are maintained.”

The Transformation Alliance also raises questions about school quality: “While St. Aloysius has an articulated process of charter renewal and revocation, this process does not appear to be driven by schools’ academic performance nor tailored specifically to individual schools… The task force found that St. Aloysius did not sufficiently demonstrate a clear vision for quality authorizing and failed to demonstrate an adherence to high academic standards described in the Cleveland Plan… A review of three years of publicly available data on St. Aloysius’s 27 K-8 schools across Ohio shows mixed results…. Literacy standards for grades K-3 are met in only one of 21 reporting schools.  Gap closing is not met in any of the reporting schools. Value-added is met in 13 of the 26 reporting schools… In 2015-16, two-thirds of St. Aloysius’s 15 high schools, all of which are dropout recovery schools, did not meet state standards, compared to 40 percent in that category for all dropout recovery schools across the state.”

The Transformation Alliance has been examining St. Aloysius this summer because the statewide sponsor is set to open a new charter school in Cleveland this fall, Orchard Park, in the West Park neighborhood: “In making the decision to open a new school in the Westpark neighborhood, St. Aloysius noted the availability of an empty building. St. Aloysius did not make use of the 2015 IFF report on Cleveland, which compared the supply of high-quality seats to the number of school-age children in each Cleveland neighborhood. That report showed that Westpark is not a high-priority neighborhood in terms of new schools.”

There are some other serious problems with the new school planned by St. Aloysius at Orchard Park.  Patrick O’Donnell, of the Plain Dealer, has been reporting for several weeks about the for-profit company with which St. Aloysius has contracted to open and manage the school, Cambridge Education Group. Cambridge’s Florida counterpart, Newpoint Education Partners has been indicted in Florida, as has the founder of both companies, Marcus May.  O’Donnell explains: “Cambridge Education Group, the operator of 19 Ohio charter schools and of a new school about to open in Cleveland’s West Park neighborhood, is distancing itself from recent fraud and racketeering charges in Florida against founder Marcus May. But details are trickling out about how much that alleged fraud may have spread from Florida to the 19 schools Cambridge operates here in Ohio.  And Cambridge and its counterpart in Florida, Newpoint Education Partners—a company that is itself under indictment in that state—have had a tight relationship for several years, besides just being founded by May. The school logos in both Ohio and Florida for Cambridge and Newpoint have the same theme…. and the two companies have shared the same officers at times, including Cambridge owner and President John Stack. Stack has not been charged in the case.  His name does not appear in court filings against May…  Stack said that he was unaware of any of the schemes to defraud schools of money that May is accused of.”

Charter School Specialists, the for-profit company with which St. Aloysius Orphanage contracts to fulfill its sponsorship responsibilities, is headed by Dave Cash, who is quoted in an additional article by Patrick O’Donnell about the problems at Cambridge-Newpoint, which St. Aloysius intends to hire to run its new Orchard Park charter school: “We have been aware of the legal concerns of Newpoint in Florida and have been in contact with the prosecutor in the case… The boards of each school that utilize Cambridge Education Group have also been monitoring the case and staying abreast of the issues.”

O’Donnell asked Cash directly, “Given that Cambridge has a low academic rating from the state, why would you pick them?” Here is how he describes Cash’s reply: “Cash responded only that Cambridge applied to be sponsor, that his company approved the school last year and that it was ‘re-approved based on completion of our rigorous application process.'”

It is reassuring that the Cleveland Transformation Alliance has recommended that the Ohio Department of Education revoke St. Aloysius Orphanage’s authority to continue authorizing charter schools in Cleveland. We can only wish that the Ohio Legislature had given the Transformation Alliance real power to eliminate shoddy and shady charter operators within the school district’s boundaries.

Egregious Mismanagement of Charters in Ohio Drags On and On, a collaboration of Innovation Ohio and the Ohio Education Association, released a scathing report last week about the waste of millions of dollars in federal Charter School Program grants for Ohio charter schools that soon closed, or worse, never opened in the first place.

Belly Up: A Review of Federal Charter School Program Grants explains that in Ohio, “At least 108 of the 292 charter schools that have received federal CSP (Charter School Program) funding (37 percent) have either closed or never opened, totaling nearly $30 million.” “Of those that failed, at least 26 Ohio charter schools that received nearly $4 million in federal CSP funding apparently never even opened and there are no available records to indicate that these public funds were returned.”  Charter School Program grants are to support the development  of new charter schools, and Ohio has been a big recipient over the years, receiving CSP grants of $99.6 million since the 2006-2007 school year.

According to the new report, federal demands for oversight of Charter School Program grants has been minimal: “Since the grant program started in 1995, the U.S. Department of Education apparently has conducted exactly one examination of Ohio’s grant awards—and that review was contracted out seven years ago to a private education consulting firm called WestEd, which has written many pro-charter school reports.  Not surprisingly though, this 2009 assessment found some serious problems in Ohio. ‘The State needs to strengthen its subgrant application and verification process to ensure compliance with Section 501(c)3 eligibility requirements….’  WestEd was particularly concerned about the for-profit operators acting as the de facto school, even choosing the members of its charter schools’ boards.”  Last week’s Belly Up report adds, however, that in the years since WestEd’s report, “several new charter school laws (most significantly House Bill 2 which passed last year) have remedied some of these concerns. However, Ohio’s history of not allowing the state’s oversight agency—the Ohio Department of Education—to exercise any real, meaningful oversight of the state’s charter sector greatly concerned the private company hired to monitor the state’s federal grant program.”

Last summer, prior to the passage of House Bill 2, which provides for only the most minimal oversight of charter schools in Ohio, the U.S. Department of Education’s Charter School Program granted Ohio $71 million, its largest 2015 CSP grant to any state.  After it was exposed that David Hansen (husband of John Kasich’s presidential campaign chair Beth Hansen) had not only provided misleading information in the federal grant application but also created a charter school evaluation scheme that mysteriously omitted any kind of records of Ohio’s notorious online charter schools, Hansen was fired. Publicity about Hansen’s dubious work forced the U.S. Department of Education put the $71 million grant on hold.  Last week’s report includes a timeline with dates of the filing of the application, the firing of David Hansen, the freezing of the grant by the U.S. Department of Education pending Ohio’s production of additional information, the U.S. Department of Education’s demanding more information from Ohio, and the Ohio Department of Education’s attempting to answer questions in December, January and twice in February.  Ohio has not yet received the grant.

Earlier last week, Ohio’s Republican state auditor, Dave Yost, held a news conference to announce the results of surprise visits his staff made to Ohio charter schools on November 9.  The purpose of visits by the auditor’s office was to spot-check attendance, as charter schools are reimbursed by the state on a per-student basis and inflation of attendance records has been a long-running problem.  At his press conference, Yost highlighted a severe attendance inflation problem at what Ohio calls its drop-out recovery schools—schools designed for students who want to earn a high school diploma after already having dropped out.  The Columbus Dispatch‘s Catherine Candisky reports, “Auditors found attendance ranged from 0 to 50 percent of students at the 14 drop-out recovery schools visited, for an average of 34 percent… Yost also told reporters that the Ohio Department of Education, responsible for overseeing charter schools, was ‘among the worst, if not the worst-run state agency in state government…. It takes weeks or months to get data.'”

Candisky continues: “Three of the schools were referred to the Department of Education for review because of ‘high variances in students counted by Auditor of State staff versus the number of students those schools reported to the Ohio Department of Education.’ The Urbana Community School, a drop-out recovery school sponsored by the Urbana School District, reported 38 students to state officials but auditors found none. London Academy, a drop-out recovery school overseen by London Schools, reported 123 students but auditors found 10.  Yost said the academy appears to be a correspondence school which is illegal in Ohio.  Utica Shale Academy was the third school Yost referred for review.

Yost commented: “What continues to be concerning is there are too many empty chairs that taxpayers are paying to be occupied, particularly at our high-risk drop-out recovery and and prevention schools.”  He added that, in his opinion, the state reimbursement ought to be calibrated according to a very different measure: “I think we have to look at them by the number of lives redeemed.”

In a recent reflection for the Education Opportunity Network, Jeff Bryant examines the problem from state to state of legislative politics dominating the entire conversation about charter schools: “Regardless of how you feel about charter schools, because of the way they’ve been forged in the crucible of politics, they’ve become much more political beings than they are institutions of education.  Simple mandates to expand these schools, without any attention to these political consequences, will make matters worse.” In Ohio, because of power and money, it seems there is no way to get charters under control, and the federal government which has been actively promoting charters as an experiment has created a cash flow but never any empirical analysis of the results.

This blog has covered Ohio’s failure to regulate charter schools here.