Last spring, the founders of a high-scoring charter school in California were convicted of misappropriating over $200,000 in public monies. According to the charges filed, the couple spent, for example, “more than $34,000 on meals, entertainment and gifts that they classified as business expenses or gestures of appreciation for teachers.” Also, “Some charges centered on the lease for the main campus on De Soto Avenue in Woodland Hills. In 2004, the couple negotiated a 10-year lease for $18,390 a month. But three years later, they began charging the school $43,870 a month for a sublease. At the same time, Selivanov and Berkovich took on responsibility for a $520,000 bank loan to the school.”

The couple was sentenced this week. The husband will spend nearly five years in state prison, while his wife will be incarcerated for 45 days in the county jail plus probation and community service.

The California Charter Schools Association entered an amicus brief on their behalf maintaining that the couple are not guilty of any criminal offense because charter schools are not subject to the laws governing public schools. CCSA says that charter schools are exempt from criminal laws governing public schools because they are operated by a private corporation.

They say the money received for their nonprofit corporation is not public money, even though it comes from the state and from taxpayers.

CCSA maintains: “Moreover, the prosecution completely ignores the fact that the Legislature has expressly allowed charter schools to be operated by private nonprofit corporations, and that many, if not all, of the complained of actions of the defendants are lawful actions of employees and officers of nonprofit corporations (e.g., ordinary and necessary expenditures on meals, gift cards, flowers, leases with employees and officers of the nonprofit etc.) And, most importantly, the court cases and administrative agency decisions make clear that these private officers and employees of the nonprofit corporation are not subject to Penal Code section 424 – because these nonprofit corporations are private entities, with private employees, expending private moneys (i.e., not “public moneys”).”

This criminal prosecution, says CCSA, has sent “shock waves throughout the charter school community,” which heretofore thought that the laws applied to public schools did not apply to them.

In a case in the Ninth Circuit Court of Appeals, an Arizona charter successfully argued that it was a private corporation, not a public school. In Chicago, the teachers at a charter school wanted to form a union, but the charter founder argued before the National Labor Relations Board that the charter was operated by a private corporation and not subject to state labor laws.

Anthony Cody reviewed this case and concluded that we should accept the claims of the California Charter Schools Association that charter schools are private entities, managed by private corporations that are outside the purview of the law.

Is this really a good development for American public education? One set of schools (charter schools) receiving public funds but exempt from the law, and another set of schools (public schools) closely regulated by the state? One set of schools (charter schools) free to set their own discipline policy, free to enroll few students with disabilities and English learners, while another set of schools (public schools) must accept everyone, including the students excluded or tossed out of the charter schools.

Does it make sense to give public money to schools that are neither transparent nor accountable for their use of that money and unwilling to comply with state laws?