John Merrow says that Baker Mitchell of North Carolina could teach Jesse James a few tricks about making money.
Lesson one: Open charter schools.
Lesson two: become the sole supplier of most of the things they must purchase.
Lesson three: Keep your books closed because your for-profit corporation is private.
Lesson Four: remember to say you are doing it for the kids.
Lesson Five: Go to the bank: “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.”
Merrow writes:
“Mr. Mitchell seems to have experienced a learning curve. At first he billed his own charter schools for only two line items: ‘Building and equipment rental’ and ‘Management fees,’ for a total of just $2,600,878 in FY2008 and $2,325,881 in FY2009.
But apparently he was learning how the system works. In FY 2010 he added an innocuous sounding line item, “Allocated costs,” for which he billed $739,893, cracking the $3,000,000 barrier.
In FY2011 he added more line items:
Staff development & supervision: $549,626
Back office & support: $169,357
Building rent-classrooms: $965,740
Building rent-administration offices: $82,740, and
Miscellaneous equipment rent: $317,898.
The grand total for FY2011 was $3,712,946.
Jesse James was shot by a member of his own gang; if he were alive today, he might be dying from envy.
Mr. Mitchell broke the $4,000,000 barrier in FY2012, when the same line items totaled $4,137,382.
According to the audited financial statements for FY2013, Mr. Mitchell’s companies received $6,313,924, as follows:
16% management fee: $2,047,873
Administrative support: $2,796,943
Building and equipment rental: $1,474,108
“Dig into the audited statements (here and here) and you get some idea of where the $6,313,924 did not go. For example, the schools spent only $16,319 on staff development [4], which works out to less than three-tenths of one percent. They report spending just $28,060 on computers and technology, which is also about three-tenths of one percent.”
It’s all for the kids.
Diane Ravitch's blog 
yeah yeah, we know.
NC is all kinds of messed up. But I am glad to see these articles and I repost them.
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North Carolina: the new Louisiana.
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well, we don’t have “breakaway schools” yet, whatever they are (I’ve just been hearing about them in Baton Rouge).
There are still plenty of good, strong things happening in NC public schools. There is much to work to save.
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WOW! Instead of fighting this we should join in. They won’t pay for a quality teacher.
To bad that this is wrong in my book. I could not live with myself.
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I’m sure this is not that different from health care. If education in the US is privatized it will become twice as expensive. Instead of 500 billion a year, education in the US will cost 1 trillion a year. This most likely be unaffordable, and the same 500 billion budget will remain, providing half the education of yesteryear. Less education, and greater inequalities of what is provided to the students.
Education privatization is an apple maggot. Quarantine privatization before it’s too late.
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Maybe if you had education insurance.
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Reblogged this on Lloyd Lofthouse and commented:
A sure-fire lesson to all venture capitalists, hedge fund billionaires—who are already rich, but enough is never enough—and any other edu-carpetbaggers out there on how to fool parents and get rich quick off taxes that once supported the democratic public schools.
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North Carolina charters can follow the example of White Hat management in Ohio and, take even more tax payer money. (PR Watch)
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This is what happens when the government is complicit.They allow the vulture capitalists to run the show. Under Rick Scott at the behest of Jeb Bush, chlef stakeholder of cyber education, passed a law that goes into effect in 2015 stating that all high school students will be required to take a virtual course in order to graduate.That’s how one hand washes another in politics.
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A trusted Republican friend offers these points on the article (his words, not mine). Anyone care to comment?
———
1) The rising expenses may well be a matter of increasing attendance year over year. No attempt is made by the author to put increases in context of enrollment figures.
2) The fact that the financial reports get more detailed each year is a sign of increasing transparency. The author casts otherwise.
3) No attempt was made by the author to examine the charter’s overhead costs with the overhead costs of traditional public schools.
4) No attempt was made by the author to measure any increased academic success that the students themselves may have enjoyed.
—————
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Tell your friend to read the linked article (not just Diane’s excerpt) carefully. The point is the Mr. Mitchell’s charter schools almost exclusively self-deal (no bid) with Mr. Mitchell’s for-profit companies in ways that would be clearly illegal in any other industry. Further, these private, for-profit companies aren’t publicly audited, so we have no way of knowing where the money is going. Mr. Mitchell’s charter schools have received over $55,000,000 – isn’t your friend even the least bit curious to see some proof that that money has been spend on actual educational expenses, not on padding Mr. Mitchell’s bank accounts?
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Republicans can be a strange breed. That’s all I think I can conclude from his comments. Most, in my experience, reach a point where they just don’t have much else to say. Kind of like the reason I could not have ever taught voice at the college level; at a certain point, I just really didn’t have anything else to critique. I was just happy people were singing.
🙂
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Boy, this stuff is as old as capitalism. My favorite music version on this theme is Tennessee Ernie Ford’s “Sixteen Tons.” My favorite movie on the same theme is “Matewan,” especially the scene where the Black and Italian strikebreakers line up to get their shovels and supplies and be told how they will be “paid.” If you’ve listened to that song or watched that movie lately, let’s stay in touch. Charter schools are just the latest version of “I owe my soul to the company store…”
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Good news in NC! One ALEC guy OUT!!!!! Yay Brian Turner who defeated Moffitt.
I am so happy.
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If Republicans do not see this as government waste then I do not know what to say to them. It is your taxpayer education dollars going down a black hole.
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When a portion of the wasted money goes to the politicians’ campaign funds, there is an incentive to ignore the fraud.
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