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From the Office of the New York State Comptroller
Thomas P. DiNapoli

Contact: Mark Johnson, 518-474-4015
For release: Immediately, Sept. 4, 2014

DiNAPOLI: SPECIAL EDUCATION CONTRACTOR CONVICTED FOR $2 MILLION FRAUD

The former owner of a Queens-based special education provider, who pleaded guilty to fraud charges earlier this year following a joint investigation by New York State Comptroller Thomas P. DiNapoli and U.S. Attorney for the Southern District Preet Bharara, was sentenced today to 24 months incarceration and ordered to pay $2,151,318 in restitution and forfeit another $1,924,318.

“Cheon Park enriched himself and deprived children with physical, developmental and emotional disabilities of the help they need,” DiNapoli said. “His conviction today stands as a warning for those who attempt to cheat taxpayers and instead use the money for their personal benefit. I’d like to thank U.S. Attorney Bharara for prosecuting this crime and working with my staff to bring Park to justice and recover stolen taxpayer money.”

In July 2012, DiNapoli’s office issued an audit of Bilingual SEIT & Preschool Inc. that found Park inappropriately charged New York City’s Department of Education for salaries, vehicle leases and items such as cosmetics and children’s furniture. There were also a number of questionable issues related to staff salaries. For a copy of the audit, visit:

http://osc.state.ny.us/audits/allaudits/093012/11s13.pdf.

DiNapoli referred the findings to United States Attorney Bharara’s office and worked to prosecute Park and recover the stolen funds. DiNapoli also praised the work of the Special Commissioner of Investigation for New York City’s Department of Education, the Office of Inspector General for the United States Department of Education, and the Queens County District Attorney’s Office for their collaboration in this investigation.

DiNapoli has identified fraud and improper use of taxpayer funds in a recent series of audits and investigations of special education providers, resulting in multiple criminal convictions and the recovery of over $3 million. His office has completed 23 audits of preschool special education providers, finding nearly $23 million in unsupported or inappropriate charges. There are currently 18 additional audits of preschool special education providers in progress.

In December 2013, Governor Cuomo signed legislation – proposed by DiNapoli and sponsored by Sen. John Flanagan and Assemblywoman Catherine Nolan – mandating the Comptroller’s Office audit all of the more than 300 preschool special education providers in this $1.4 billion program by March 31, 2018.

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Bill Phillis of the Ohio Equity and Adequacy Coalition asks, where is the outrage?

He writes:

“Charter school operators argue that public tax money becomes private when it reaches the borders of charterland

“Real estate, facilities, equipment, education materials and all other assets purchased by public school districts, obviously, belong to those political subdivisions-not private individuals. Down in charterville, school operators and their charter school allies claim that assets purchased with public tax dollars are owned, not by the public, but the private companies.

“For-profit companies that operate charter schools attempt to shield themselves from transparency and accountability, including public audits, by claiming that tax dollars become private at the moment the tax dollars are transferred to private hands.

“White Hat Management Company, in a case before the Ohio Supreme Court, contends that school property purchased with public tax dollars belongs to White Hat. Hence, real estate, facilities, equipment, educational materials and other assets which were purchased with public dollars would become private property. White Hat, not only turns a profit from its charter school operations, but claims to own publicly-purchased assets.

“An August 9 Akron Beacon Journal article indicates that several non-profit advocacy groups have filed briefs with the Ohio Supreme Court in support of White Hat’s position. It’s all about money, ideology and politics-not education.

“Over the past 15 years charter-promoting state officials have created an out of control monster that intrudes on the rights and funds of school districts. Ohio’s students and taxpayers are the losers.

“Where is the outrage?”

William Phillis
Ohio E & A
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Ohio E & A | 100 S. 3rd Street | Columbus | OH | 43215

Writing in the International Business Times, investigative journalist David Sirota reports that Microsoft admits keeping $92.9 billion offshore to avoid paying $29.6 billion in taxes, according to the most recent filings with the Securities and Exchange Commission.

He writes:

“Microsoft Corp. is currently sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore, according to disclosures in the company’s most recent annual filings with the Securities and Exchange Commission. The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company’s home state of Washington.

“The company says it has “not provided deferred U.S. income taxes” because it says the earnings were generated from its “non-U.S. subsidiaries” and then “reinvested outside the U.S.” Tax experts, however, say that details of the filing suggest the company is using tax shelters to dodge the taxes it owes as a company domiciled in the United States.”

He adds:

“Apple and General Electric, which also employ offshore subsidiaries, are the only U.S.-based companies that have more money offshore than Microsoft, according to data compiled by Citizens for Tax Justice. In all, a May report by CTJ found that “American Fortune 500 corporations are likely saving about $550 billion by holding nearly $2 trillion of ‘permanently reinvested’ profits offshore.” The report also found that “28 of these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.”

“Microsoft’s use of the offshore subsidiary tactics has exploded in the last five years, with the amount of Microsoft earnings shifted offshore jumping 516 percent since 2008, according to SEC filings.”

That kind of money, repatriated to the United States, could underwrite prenatal care for low-income women, provide early childhood education for all low-income children, underwrite medical clinics in low-income communities, and save public education in cities like Detroit and Philadelphia, where it is in dire peril. Imagine $550 billion invested in the well-being of our children! Imagine using that money to reduce our child poverty rate, which is currently the highest among the advanced nations of the world.

On Anthony Cody’s new independent blog site, “Living in Dialogue,” Chicago teacher Michelle Gunderson offers her views on the ethical use of student data. 

 

In her many years as an elementary school teacher, she has seen standardized tests evolve from a sorting instrument to a means of punishing children to an excuse for privatizing public schools.

 

She will not be complicit in any of these uses of student test scores. She would abolish the standardized tests if she could, but that is not within her power.

 

So she pledges, first, that they will always be on of multiple measures; that she will remain strict confidentiality about student test scores and never publish them on a data wall or release them to the public; and that she will communicate with families about the frequency and amount of time spent on testing.

 

Tests, like all tools, may be used wisely or wrongly. Tests should be used to help children and teachers, not to punish or label them or close their school.

In a two-part article called “Florida’s Charter Schools: Unsupervised,” Karen Yi and Amy Shipley of the Sun-Sentinel describe how the state’s weak laws allows charter school operators in South Florida to profit while wasting taxpayers’ money and children’s lives.

South Florida has more than 260 charter schools. Local districts are supposed to oversee them. The laws about who may open a charter school are lax. Charters open and close, and millions of dollars disappear. Is every charter a fraud? No. But members of the charter sector hold key positions in the state legislature, and the charters are the pride of former Governor Jeb Bush, so there is little effort to rein in the miscreants.

The article begins:

“Unchecked charter-school operators are exploiting South Florida’s public school system, collecting taxpayer dollars for schools that quickly shut down.

“A recent spate of charter-school closings illustrates weaknesses in state law: virtually anyone can open or run a charter school and spend public education money with near impunity, a Sun Sentinel investigation found.

“Florida requires local school districts to oversee charter schools but gives them limited power to intervene when cash is mismanaged or students are deprived of basic supplies — even classrooms.

Once schools close, the newspaper found, districts struggle to retrieve public money not spent on students.

Among the cases the newspaper reviewed:

“• An Oakland Park man received $450,000 in tax dollars to open two new charter schools just months after his first collapsed. The schools shuttled students among more than four locations in Broward County, including a park, an event hall and two churches. The schools closed in seven weeks.

“• A Boca Raton woman convicted of taking kickbacks when she ran a federal meal program was hired to manage a start-up charter school in Lauderdale Lakes.

“• A Coral Springs man with a history of foreclosures, court-ordered payments, and bankruptcy received $100,000 to start a charter school in Margate. It closed in two months.

“• A Hollywood company that founded three short-lived charters in Palm Beach and Collier counties will open a new school this fall. The two Palm Beach County schools did not return nearly $200,000 they owe the district.”

The laws were written to make it easy for anyone to open a charter school.

“State law requires local school districts to approve or deny new charters based solely on applications that outline their plans in areas including instruction, mission and budget. The statutes don’t address background checks on charter applicants. Because of the lack of guidelines, school officials in South Florida say, they do not conduct criminal screenings or examine candidates’ financial or educational pasts.

“That means individuals with a history of failed schools, shaky personal finances or no experience running schools can open or operate charters.”

“The law doesn’t limit who can open a charter school. If they can write a good application … it’s supposed to stand alone,” said Jim Pegg, director of the charter schools department for the Palm Beach County school district. “You’re approving an idea.”

“Charter-school advocates say the complexity of the application, which can run more than 400 pages, weeds out frivolous candidates. But school officials in Broward and Palm Beach counties told the Sun Sentinel some applicants simply cut and paste from previously approved applications available online.”

Charter operators can receive approval and funding before they know where their school will be located. Two iGeneration charters in West Palm Beach opened 11 days after school started.

“As students showed up for class, parts of the building remained under construction. Classrooms had not undergone required fire inspections and sometimes lacked air conditioning, district documents show. The iGeneration charters bused their high schoolers on unauthorized daily field trips because they didn’t have enough seats at the school, records show.

“On one trip, they lost a student. Though she was found four hours later, district officials immediately shut down the schools.

“Because of the quick shut-down, the iGeneration charter schools were overpaid nearly $200,000, according to the Palm Beach County school district. The schools have not returned the money.”

Academic chaos is not unusual:

“A former teacher at the Ivy Academies stored her classroom supplies in the trunk of her car. Every morning, she’d wait for a phone call to find out where classes would be held that day.

“I would never know where we [were] going,” said teacher and former middle school dean Kimberly Kyle-Jones. “It was chaotic.”

“The two Ivy Academies lasted only seven weeks.”

District officials didn’t know where the “nomad campuses” were.

“The biggest tragedy is what happened to those students during the course of time they were in that charter,” Broward Schools Superintendent Robert Runcie said. “When you get a lot of private actors coming into the marketplace, folks are in it to make money … Public education is not a place for you to come to make money.”

Some of the charters don’t know how to run a school or to provide basic supplies. In one, the lights were turned off because the school didn’t pay its elecrtticity bill. Children are the losers.

“Every time a charter school closes, dozens of children are displaced — in some instances, mid-month. Many return to their neighborhood schools where some struggle to catch up because their charters did not provide required testing, instruction in basic subjects or adequate services for those with special needs.

“This isn’t just a regular business. This isn’t a restaurant that you just open up, you serve your food, people don’t like it, you close it and move on,” said Krystal Castellano, a former teacher at the now-closed Next Generation charter school. “This is education; this is students getting left in the middle of the year without a school to go to.”

When charters close, district officials are often unable to collect money that the charter didn’t spend:

“State law requires that furniture, computers and unspent money be returned to the districts, but when officials attempt to collect, charter operators sometimes cannot be found.

“We do know there have been a few [charter schools] … where hundreds of thousands of dollars were never spent on kids, and we don’t know where that money went,” said Pegg, who oversees charters in Palm Beach County. “As soon as we close the door on those schools, those people scatter … We can’t find them.”

“When a Broward school district auditor and school detective went searching for Mitchell at the Ivy Academies in September 2013, he left through a back door, records show. District officials said they have yet to find him, or to collect the $240,000 in public money the schools received for students they never had…..

“When the Miami-Dade school district demanded the return of more than $100,000 it overpaid the Tree of Knowledge Learning Academy in 2009, the year-old charter school ceased operations. The district did not recoup the money.

“It’s almost mind-blowing what’s going on,” said Rosalind Osgood, a Broward School Board member. “They just get away with it.”

Two-thirds of South Flotida’s charters are run by management companies, which further complicates the money trail. These companies collect between 10 and 97% of all revenues.

“They’re public schools in the front door; they’re for-profit closed entities in the back door,” said Kathleen Oropeza, who co-founded FundEducationNow.org, an education advocacy group based in Orlando. “There’s no transparency; the public has no ability to see where the profits are, how the money is spent.”

Given the low bar for opening charter schools in Florida, the number is expected to increase dramatically over the next five years. There are more than 600 charters in the state now. And there will be no more supervision than there is now.

Part 2 of the series tells the story of Steve Gallon, who was banned from working in Néw Jersey because of fiscal improprieties but welcomed as a charter leader in Florida.

The research is clear: schools in rural and semi-rural districts work best when they have the support of the entire community.

Cheatham County, Tennessee, doesn’t need competing schools–one that picks its students, the other legally required to accept all students.

Stick together. Act as a community. Don’t divide your community.

When your board meets on August 18, tell them you support public education. Tell them you want your school to be governed by an elected board, not an unaccountable corporation.

Tell them you support your community public school. Your school needs parental involvement and community support. It needs collaboration, not competition. Don’t let the elites push you around for their benefit. Schools are not a hobby or a plaything. They belong to the community. Don’t let them take it away. It is yours.

REVISION: This election was held on August 7. Mary Pierce, the candidate endorsed by Michelle Rhee’s StudentsFirst won. My error. Wish I had known about it sooner.

There will be a crucial school board race on Tuesday in Nashville.

Becky Sharpe, who has been endorsed by the Metro Nashville Education Association, is running against Mary Pierce, who has been endorsed by Michelle Rhee’s StudentsFirst.

Support for or opposition to charter schools is the defining issue in the race.

A mailer from StudentsFirst on behalf of Mary Pierce describes Becky Sharpe three times as a “liberal” who is opposed to charters. The mailer says:

“Becky Sharpe is supported by liberal unions who oppose giving parents and students better choices for education,” it reads. “That’s because Becky Sharpe refuses to support charter schools — even for those who need them the most.”

The Metro Nashville Education Association, which endorsed Sharpe, said in its mailer: “Charter zealots are backing Becky’s opponent and this seat could determine future privatization of education in Nashville.”

The choice for Nashville voters is clear: if you want to support public schools, vote for Becky Sharpe.

If you want to support more privately managed charter schools, vote for Mary Pierce.

Funny, isn’t it, that Michelle Rhee insists she is a Democrat, yet her organization denounces a school board candidate as a liberal? Since when do organizations that claim to be allies of the Democratic Party attack candidates as “liberals.”

Sherry Gay-Dagnogo won the Democratic primary in Michigan’s 8th House District. The Network for Public Education endorsed her because of her strong stand against over-testing and privatization. She is a former middle school teacher. Gay-Dagnogo also supports Congressional Hearings on the cost and misuse of testing.

Sherry Gay-Dagnogo’s victory is a big win for students and public education in Michigan. Her victory sends a strong message to candidates nationwide that siding with the over-testing zealots isn’t just bad policy, it’s bad politics. Seat by seat, in legislatures, in the gubernatorial races, in Congress, we will fight to elect friends of public education, who defend children and sound education.

Never forget: no matter how much money the privatizers spend, we are many, and they are few. A victory for public education is a victory for democracy.

Congratulations, Sherry!

The mainstream media love to point to New Orleans as the national exemplar of the new brand of “reform”: replace public schools with privately-managed charter schools and get rid of the teachers’ union. Success! Many cities, especially those with high concentrations of poor African-American majorities, such as Detroit, Newark, and Philadelphia, seek to copy the New Orleans model.

What really happened in New Orleans?

Here is an excellent account in the Jacobin magazine by Beth Sondel and Joseph L. Boselovic.

This is the framework for the article:

“The state of education in New Orleans is often presented as a sort of grand bargain: on the one hand, the neoliberal transformation has been undemocratic and has marginalized community members, parents, and educational professionals; on the other hand, advocates of reform are quick to cite higher test and state school performance scores as evidence that the reforms have been successful. While the former is true, the claim that there has been substantial improvement in the educational experiences of young people is unfounded.

“In such a market-based system, students’ assessment data are used to compare charter providers, recruit families, maintain charter contracts, and reward teachers. The willingness of reform advocates to hold up test scores as the key indicator of success places enormous pressure on schools and teachers to produce quantifiable results. When the focus is on increasing assessment data, what happens to the democratic purposes of schooling?

“If we are willing to accept that the purpose of schooling goes beyond raising test scores, and is in fact tied to preparing citizens to engage in and deepen our democracy, then we need to look more closely at how power has been distributed in school governance across New Orleans and the ways in which this distribution shapes the experiences of students.

“We must ask if we are raising test scores at the expense of raising citizens.”

Those who follow the twists and turns of the “reform ” movement are aware of a growing number of books that exposé the false narrative of reform. The reform narrative is funded by billionaires and philanthropists who believe in the free market and scorn government regulation. It fastens on genuine problems–like the low performance of children who live in poverty–and blames their teachers rather than the poverty that limits their opportunity. The reformers divert their eyes from poverty, segregation, budget cuts, and loss of vital services. What began, arguably, as a well-intentioned effort to shake up schools and unleash innovation has now become a vehicle for privatization of the public schools.

The struggle to save public education will require an informed public. Only an informed public will have the motivation to vote for representatives to defend what belongs to the entire community and to stop the headlong rush to consumerism. Fortunately, teachers and other educators are publishing books to tell the story. The blogosphere and social media have become invaluable means of democratic communication, enabling dissenters from top-down reform to meet and exchange ideas and information.

Videos are appearing too, to get the story to the public. It is not easy for them to get on television or to be distributed commercially. Unlike the charter propaganda “Waiting for Superman,” or “Won’t Back Down,” the films that exposé the dark side of the testing and privatization movement do not have the support of billionaires.

Here are a few of the recent must-see videos that challenge the corporate reform movement.

Vicki Abeles’ “Race to Nowhere” makes the case against high-stakes testing and shows how it distorts the lives of adolescents. Abeles has taken the film to churches, synagogues, community centers across the nation, wherever she can show it.

The film “Rise Above the Mark” was written and produced by educators in West Lafayette, Indiana. It shows what high-stakes testing is doing to the children, teachers, and schools. It is a powerful film.

Daniel Hornberger’s “Standardized” shows how standardized testing is ruining education. The subtitle is, fittingly, “Lies, Money, and Civil Rights: How Testing Is Ruining Public Education.” It includes interviews with prominent educators who denounce the standardization that is now imposed by the federal and state governments.

One of the first videos was released in 2011. “The Inconvenient Truth Behind ‘Waiting for Superman,'” depicts the battle in New York City against corporate education reform, with parents and teachers fighting fruitlessly to save their schools from closure against an unhearing may orally-controlled board. The film was created by a team of teachers and parents called the Grassroots Education Movement.

There are others, and I welcome readers to submit additions to this list. And more are on the way. Help me compile a list of videos that challenge the dominant narrative that fills the airwaves and is destroying public schools, hurting children, dissolving communities, and opening new frontiers for corporate profit.

Many of these films are online for free or the producers will send a video for a nominal fee. Consider showing these films at your next parent and/or teacher meeting. Be informed. There can be no democratic debate when only one side can afford to present its views on television and in commercial films.

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