This remarkable article by Cassie Walker Burke with assistance from the Better Government Association details the story of Juan Rangel and the UNO charter school network, the biggest charter chain in Chicago.
It is a gripping tale about the consequences of deregulation and privatization, of creating schools that are not subject to the same laws as public schools, and of the problematic nexus between charter operators and politicians. The charter operators need the money controlled by the politicians, and the politicians need the troops controlled by the charters.
Burke writes, after a lengthy interview with Rangel last fall:
What emerged is a cautionary tale about the intersection of ambition and opportunity. UNO and its CEO thrived mainly because of gaping loopholes in the charter school system. While UNO has received a staggering $280 million in public money over the past five years to spend on education, neither Chicago Public Schools nor the Illinois State Board of Education provided enough oversight. Without that, insiders say, UNO developed a free-wheeling culture that was ripe for abuse. It collected lots of money, and Rangel amassed lots of power. But he didn’t always use them for the benefit of the thousands of kids in his charter schools…
From the beginning, Rangel operated on the notion that charters were exempt from the school district’s nepotism rules (they are allowed to write their own ethics policies) and from the so-called Shakman Decree, a consent decree put into place in 1983 to curb the patronage practices of Chicago pols (it applies to CPS but not to charter operators). As the UNO organization grew, it created plenty of jobs: teachers’ assistants, IT consultants, central office administrators, and community relations officers that Rangel and Mullins filled as they pleased…
[After dismissing its external for-profit management company], UNO…began paying itself a “management fee” of $1 of every $10 it received from local, state, and federal sources. (Some years UCSN kicked up more. In 2012, those fees totaled $5 million.) Under Rangel and Mullins, UNO had control over how that cash was spent…
A third of the nation’s charter schools pay fees to management companies—a head-scratching arrangement when you consider that charters were created as a way to eliminate bureaucracy, not create it. Few rules govern these arrangements, according to Gary Miron, a professor of education at Western Michigan University who has studied charter financing (though not UNO’s specifically). Once the charter manager collects the fee, the funds go under “the veil,” says Miron. “Basically, all of this money ends up getting paid to the management company, but we don’t know how much goes into their pockets or how much they spend on administrators, or administrators’ nephews or uncles.”
Free from oversight or supervision, the UNO organization collected millions from private foundations (like Walton) and from the government; and it was rife with conflicts of interest.
In June 2009, the state legislature awarded UNO a $98 million grant for school construction. Even charter advocates were shocked by such a staggering sum handed out to a single operator. “Very few, if any, charters [nationwide], except UNO, get that kind of state money to build schools,” says Andrew Broy, the president of the Illinois Network of Charter Schools, a lobbying and resource group.
Anticharter parents’ groups and unions immediately cried foul. “What on earth was the state thinking?” says Julie Woestehoff, the executive director of Parents United for a Responsible Education, a Chicago advocacy organization. “We have this huge budget crisis. To be giving UNO $98 million—it’s preposterous. It throws into enormous relief the political nature of this organization, the clout they have.”
UNO’s coup was the result of a classic one-two punch. The cousin of Miguel d’Escoto, Rangel’s chief organizer at the time, had bused hundreds of parents in matching T-shirts to Springfield to rally for weeks in front of the Capitol and the TV cameras. Behind the scenes, Rangel had worked Republican lawmakers— many of them charter fans—from Senate Republican leader Christine Radogno on down. To reinforce the message, he had hired a cadre of powerhouse lobbyists, including Victor Reyes and Michael Noonan, a former Madigan aide.
“They were playing the ‘Kumbaya’ chord that this was for the betterment of Latino families,” recalls Senator William Delgado, a Chicago Democrat who chairs the Senate Education Committee and voted for the grant—a decision he says he now regrets. “But it was the wolf dressed in sheep’s clothing. These guys [at UNO] weren’t responsible enough to get that much money.”
With that $98 million, UNO began scrambling to build new schools, Rangel’s two-campus Soccer Academy complex among them. No one inside the organization, it seems, bothered to read the grant agreement’s fine print. It specified that UNO “must immediately notify the [Illinois Department of Commerce and Economic Opportunity, which administered the grant] in writing of any actual or potential conflicts of interest.”
As the Sun-Times would reveal in February 2013, a long line of contractors, plumbers, electricians, security firms, and consultants tied to many of the VIPs on UNO’s organizational chart got a piece of the action. Rangel spelled out in tax documents and in later bond disclosures that the construction firm d’Escoto Inc.—owned by former UNO board member Federico d’Escoto, the brother of Miguel d’Escoto—was the owner’s representative on three projects funded by the grant. Another d’Escoto brother, Rodrigo, was paid $10 million for glass subcontracts for UNO’s two Soccer Academies and a third school in the Northwest Side neighborhood of Galewood.
The vendor lists were peppered with other familiar names: a $101,000 plumbing contract awarded to the sister of Victor Reyes, UNO’s lobbyist, who helped secure the state grant; a $1.7 million electrical contract given to a firm co-owned by one of Ed Burke’s precinct captains; tens of thousands in security contracts to Citywide Security, a firm that had given money to Danny Solis, and to Aguila Security, managed by the brother of Rep. Edward Acevedo, who voted for the $98 million for UNO.
…Behind the scarlet curtain, UNO’s schools could be sloppy. Rangel rarely entered them. From 2008 until 2011, day-to-day operations fell to a strict Catholic nun, Sister Barbara McCarry, a veteran from the CPS office that vetted charters. To make up a budget gap from leaner times, UNO began stuffing more kids in classrooms (up to 30 in kindergarten and first grade, compared with the CPS average of 24) and levying “activity fees” on unsuspecting families. Expectations were high, tempers were strained, and a revolving door of principals (called directors at UNO schools) left a young and largely inexperienced crop of teachers casting about for guidance. Teachers say they felt pressure to please parents and to not draw any negative attention to the schools….
UNO’s teacher turnover rate careened toward 40 percent for the 2011–12 school year, though the network wasn’t the only charter operator in Chicago burning through staff. According to the independent Chicago education journal Catalyst,average teacher turnover at all local charters exceeded 50 percent the previous year….
[with legal troubles growing, Rangel resigned in December but UNO is still operating.]
UNO can’t count on more largess from the State of Illinois, at least until the inevitable political amnesia sets in. (In an email, a Quinn spokesperson wrote “NO” in all caps in response to the question of whether the governor would consider future UNO grants.) But the network’s authorizer, CPS, remarkably still seems to have its head firmly planted in the sand. Last February—after the Sun-Times stories broke—the board of education voted unanimously to extend UNO’s charter for another five years.