The founders of Ivy Academia in the San Fernando Valley in California were convicted of embezzlement and a variety of other charges stemming from their use of $200,000 in school funds for personal expenses.
From the LA Times:
“”This message is going to resonate throughout the charter school community,” said prosecutor Sandi Roth. “You can’t spend the charter school funds for anything you want. It has to be money spent on the kids and the schools.””
And this:
“”The prosecution seeks to undermine the cornerstone of what makes charter schools successful — their freedom from the rules binding traditional district schools,” said attorney Anne A. Lee, in a brief on behalf of the California Charter Schools Assn.”
Recently, the American Indian Public Charter schools in Oakland lost their charter after an audit revealed that $3.8 million of school funding was directed to businesses owned by the school leader and his wife.
The continuing scandals at charter schools is indicative of the near-complete absence of supervision of the state’s more than 1,000 charter schools.
The state–which has more charters than any other state–and the Los Angeles school district, which has the largest number of charters of any district, should develop a strategy to establish accountability and transparency for these unregulated schools. The reason for the huge number of charters? Former Governor Schwarzenegger appointed a state board dominated by charter advocates, even though less than 5% of the public students in the state attended charters.
Plus, big money in California–starting with Eli Broad–invests heavily in charters.
Without oversight of expenditures, a charter is a license to get public money and do with it whatever you want. You won’t get caught unless someone squeals, because no one at the State Education Department or the local school district is paying attention. No one is watching.
And here is an interesting sidenote: the teachers at the charter school voted in February to form a union and affiliate with the UTLA.
Diane Ravitch's blog 
Since one of the functions of this list serve seems to be to share news of public education scandals, here’s another one form Seattle. One of the people charged with embezzling more than $1 million from the Seattle Public Schools already has pleaded guilty, according to the Seattle paper.
Perhaps some of you can suggest changes in both California and Washington state law to reduce likelihood that these things will happen.
Joe
http://www.komonews.com/news/local/Central-figure-in-Seattle-schools-scandal-arrested—again-201787971.html
SEATTLE – Silas Potter Jr., one of the central figures in a financial scandal in Seattle Public Schools, was arrested Saturday and booked into the King County jail after he skipped a court appearance.
Potter was arrested in Kent and booked into jail Saturday for investigation of first-degree theft and driving with a suspended license. He was ordered held on $100,600 bail.
Potter and another man, David Johnson, are facing 42 charges of second- or first-degree theft in connection with the scandal, in which millions of dollars were embezzled from the school district.
A former Seattle schools official, Potter ran a contractor-outreach program for the district. Johnson purportedly ran a Tacoma charity called Grace of Mercy that got district money.
In the wake of a damning report by the state Auditor’s Office, King County prosecutors originally charged Potter, Johnson and Lorrie Kay Sorensen with stealing $250,000 from the Seattle schools program meant to encourage small firms to bid on district projects.
Sorensen has since pleaded guilty.
State auditors examining the small-business development program found that $1.5 million in expenditures were questionable and that $280,000 was paid for work that wasn’t done or didn’t benefit Seattle Public Schools.
Auditors said in a later report that they may have turned up $1.3 million more that may have been spent incorrectly.
The district originally hired Potter as a mover. But he was promoted in 2005 to run the regional small-business development program. With little oversight, he administered payments for business classes and workshops meant to help small and minority-owned businesses better compete for school district construction contracts.
A Seattle police investigation uncovered that Potter and Johnson arranged to create fake invoices from Grace of Mercy for classes that were never taught, according to charging documents.
Potter allegedly admitted that he approved the invoices and received cash from Johnson. A personal budget on his computer showed an entry for a $2,500 monthly allocation, according to a police report.
Police discovered Johnson and Sorensen had created a second fraudulent business, Emerald City Cleaning.
Johnson allegedly told police it was a “front for getting easy money from the school district.” The cleaning company was set up to receive payments that were ostensibly for janitorial services after classes. The district was billed $83,000 over two months, according to a police report.
After charges were first filed in 2011, Potter missed a court apppearance and was arrested Nov. 9, 2011, in Florida. He then was sent back to Seattle to face theft charges on connection with the scandal and has pleaded not guilty in the case.
The scandal cost former Seattle Schools Superintendent Maria Goodloe-Johnson her job. She was fired from her position in March 2011. She died from undisclosed causes in December 2012.
Joe,
Let’s rid our society of the 1 in 4 sociopaths who have risen to the top of many organizations for their own profits rather than to improve life for the many.
How do we do this?
Let’s have universal health care starting with prenatal care, or starting with societies understanding of what a sociopath is, or how about we get back to the classical education my parents had, and we who began our education in the 50’s didn’t have.
The worsening of education started a longer time ago than with NCLB.
http://www.azcentral.com/news/articles/20121016insiders-benefiting-charter-deals.html
Board members and administrators from more than a dozen state-funded charter schools are profiting from their affiliations by doing business with schools they oversee.
The deals, worth more than $70 million over the last five years, are legal, but critics of the arrangements say they can lead to conflicts of interest. Charter executives, on the other hand, say they are able to help the schools get better deals on services and goods ranging from air-conditioners to textbooks and thus save taxpayers money.
http://www.eastvalleytribune.com/article_285e4131-4960-5bac-bd92-0cfd8561596e.html
A majority of East Valley charter schools refuse to disclose administrator salaries despite being funded with tax dollars, a two-month Tribune investigation has found.
Requests for principal salary records, which are routinely available from all 13 East Valley school districts, were sent last month to 81 East Valley charter schools. Overall, about two-thirds either ignored the requests or declined to grant access.
The secrecy of charter schools on the topic leaves school districts largely on their own to face public scrutiny on whether enough money is reaching the classroom. State law, however, defines charter schools as “public schools” the same as district schools, and both receive state funding based on similar formulas of student enrollment and attendance.
The inequity concerns some parents who like to stay involved in school matters.
“It should be public information if they’re receiving public funds,” Scottsdale parent Molly Holzer said. “It holds everyone accountable.”
Apache Junction parent Liz Sloan agreed. She said she knows how hard it can be to get financial information from a charter school because she tried about six years ago when her child was enrolled at an Apache Junction charter school that no longer operates.
Sloan said the school’s director fought her for three months before releasing a copy of the school budget, which Sloan asked to inspect because she wanted to know why her child was not receiving the speech therapy the director had promised.
Sloan eventually pulled her son out of the school and enrolled him in the Apache Junction Unified School District, where she said she has had no trouble gaining access to all types of information.
“I think it’s horrid that district schools are under strict guidelines, and charter schools are not,” she said. “It’s still my tax money going to these schools.”
Let’s not forget the fact that this corruption occurred under the leadership of a Broad Academy Superintendent.
Wrongdoers obviously exist in the public school system. But the charter sector opens up a whole new fertile ground for looters and thieves. And it’s one with an immense amount of political protection that makes it nearly impossible to provide adequate oversight.
As one obvious example in my area, Oakland’s American Indian Public Charter Schools got away with financial wrongdoing for years, while being showered with adulation by the press and politicians — including former President George W. Bush and former Gov. Arnold Schwarzenegger — for the schools’ sky-high test scores.
It has been made abundantly clear that it’s politically near-impossible to wield oversight against even the most troubled charter, so that expands the opportunities for looters even more. It seems pretty evident that when you offer temptingly large amounts of public money to pretty much anyone who shows up to ask for it, and then make it logistically and politically impossible to provide any oversight, looting is guaranteed.
Agreed, exactly as I would have said it. Thanks for saying it first.
BTW, Carolinesf I took your first paragraph here, and giving credit to you and placed it on my facebook page. I live in Oakland.
What I don’t understand is how this was ever allowed. I don’t remember voting for anything like this. Charter schools, under strict financial oversight, managed by teachers and parents: yes. Charter schools owned and operated by private individuals and corporations without oversight? No, no, no. Are we crazy?
Here’s the major difference – did you see the part about AUDITOR’S OFFICE? Public schools, at least in Washington State, have their finances checked over by the state.
Charter schools in many other states don’t – or won’t – turn over their financial records to be audited, and most of the charter boards are staffed by charter advocates who won’t push for financial accountability. Many states don’t have any control over their charter boards – since they are appointed rather than elected – and can take kickbacks and grease the path for their buddies at will. Check out some of the older articles in the East Valley Tribune (AZ) about how requests for financial info from charter schools in AZ were ignored, had partial compliance, or were flat out refused.
Better yet, take a look at the big exposé the Arizona Republic did on charter school corruption, or play six degrees of Utah legislators and their charter schools. And then there’s the Oregon charter school that spent a million dollars and never even opened.
By the way – want to know how much charter school teachers and admins get paid? Too bad. Even though they get public monies, they keep all that to themselves.
Yet public school employee salaries – along with other information – is public record and public accessible databases can be found for every state. For some reason, most of the major newspapers love to tout this information, thus you can often find the link on a newspaper’s site.
Thanks for playing. Try again.
I can suggest some changes for California that would improve things, namely publicly elected boards and fiscal oversight, two things that the revenue hungry charter school industry is averse to. Of course, if those two things happened, they’d actually be somewhat like public schools instead of privately managed corporations. Another thing we could do is force the charter school sector to accept every child, instead of the rank discrimination they currently engage in.
Charter trade group CEO Jed Wallace wrote that the only transparency the lucrative charter industry needed was Form 990 filings. Those of us social justice activists familiar with how the Nonprofit Industrial Complex (NPIC) works scoffed at his astonishingly obtuse statement. With scandal after scandal, history has proven us right and proven Wallace for the charlatan he is.
Ultimately, Ivy and AIPCS is the inevitable result of when you put public money into private hands. Mr. Nathen’s slight of hand above is just that, there’s easily 20 charter scandals for any given public one, and that’s just the charters that get caught.
http://charterschoolscandals.blogspot.com
The real crime is that we allow these privately managed charter corporations to take public money that should be going to public schools. Charter school executives are laughing all the way to the bank while our public schools starve from lack of funding.
Diane: Do you have a Hall of Fame for prosecutors like Sandi Roth?
“The prosecution seeks to undermine the cornerstone of what makes charter schools successful — ” This sounds like what the charter school association is really saying: “The prosecution seeks to undermine our freedom to spend the children’s money any way we damn well please.”
OOO. The side note! That horrible sin and bain of charters! UNIONS! Teachers being represented! Due process! Go Teachers! I mean isn’t that why they started the charters to begin with, to get rid of the unions?
Savings and loan scandals, insider trading, internet bubble, housing bubble. stay tuned for the charter school bubble…who will take the blame once it bursts?
The blame will be placed on the teachers, where else? Because the ones that caused to charter school bubble will have made off with the dough and certainly will not “take the blame”.
Problems with the Ivy owners started before the school opened when they failed to get proper permits, etc. for their facility.
http://www.thefreelibrary.com/IVY+ACADEMIA+JUST+DID+NOT+FOLLOW+THE+RULES.-a0122388440
Then came allegations of misuse of funds relating to their for-profit pre-school and attendance anomalies. Yet, in 2007, the audit done by the Inspector General was virtually ignored by the school board when it granted IVY a 5 year renewal in 2008 with no stipulations. Things changed when the district attorney’s office got involved, but the owners did not get suspended for two more years in 2010, giving them ample time to steal as much as they could before being kicked out.
While this may have pushed LAUSD to revisit it’s ineffective charter school policy, there doesn’t seem to be any evidence that anything has changed. Three Magnolia Charter Schools were audited in 2012 and have never been held accountable for their misdeeds. Also, Monica Garcia’s favorite charter, Academia Semillas, was recently audited, but in a new twist, the audit was not performed because the school refused to turn over any documents.
Click to access 12492ACADEMIA%20SEMILLAS%20CHARTER%20SCHOOL.PDF
Also, on the IG’s website is a report on how charters spend special ed funds.
Click to access CHARTER%20SCHOOL%20USE%20OF%20SPECIAL%20EDUCATION%20FUNDS.PDF
The conclusion of this report was that a large number of charters spend their special ed funding on other things, including administrator salaries. Academia Semillas is named in the report as one of a handful of schools that failed to hand over any information on special ed spending. Anyone surprised? Where is the LAUSD charter policy now?
Thanks for the suggestions. I agree that a charter school’s budget should be a matter of public record, easily accessible. A number of states require this.
According to a report from the Center for Ed Reform, more than 1,000 of the approximately 6,700 charters that started have been closed. They’ve been closed for problems with financial problems, mis- management, academic problems, facility problems and what CER calls “district obstacles (that’s only 6% of the closures, 1/3 of the number of closures due to academic problems).
http://www.edreform.com/2011/12/charter-schools-closure-rate-tops-15-percent/
Like the US, the charter movement was and is a work in progress. There’s more to learn, and plenty to improve. I think the same is true for district public schools. As some of you know, our 3 children attended urban (non-admissions test magnet) public schools, k-12.
I don’t particularly quibble with that particular information, but the Center for Ed Reform is a strongly biased source, entirely engaged in advocacy/propaganda, financially supported by “reform” sources, with a record of inaccuracy and dishonesty — yes, I can cite details if you want — and not in general a credible source of information.
Also, by the way, the pertinent point in questioning anyone’s credibility as a commenter is whether they are paid to espouse that viewpoint, or angling to be paid. (Speaking as someone who has LOST income opportunities for being an outspoken critic of the dominant trends in education reform — and an urban public school parent for 26 kid-years, extremely active volunteer and wife of a teacher.)