New Jersey has 180 private schools that receive public funding for students with disabilities.
They operate with little or no state oversight.
Governor Chris Christie and his State Commissioner Chris Cerf are big supporters of privatization.
They rant about the high salaries of public school superintendents, but say it is none of their business if the publicly-funded private schools have even higher salaries.
They don’t care about nepotism or self-dealing.
Hey, it’s the private sector.
Christopher Baxter of the Star-Ledger reports on a two-month investigation of private schools that spend public money in ways that would be illegal in public schools.
Baxter writes:
The payroll at Somerset Hills School reads like a family tree, with 10 relatives sprinkled throughout. Four of them earn six-figure salaries.
The cafeteria serves up a nice profit, paying hundreds of thousands of dollars for food to a company founded and owned by the school’s executive director.
Even the land and buildings are worth big bucks. The school paid nearly half a million dollars for rent in 2012, mostly to a company owned by its former executive director.
Tucked away amid lush green meadows in Warren Township, Somerset Hills is one of about 180 private schools across the state where more than 10,000 severely disabled children go for an education when their public schools can’t handle them.
Though Somerset Hills is privately owned and run, it’s like a public school in one simple way: You pay for all of it.
And more:
In an era when public schools are under intense pressure to do more with less, the newspaper’s review showed nepotism, high executive salaries, generous pensions, fancy cars and questionable business deals are common in parts of this more than $600 million New Jersey industry.
Of course, Governor Christie would not tolerate such practices in the public schools.
But here are more findings:
• While Gov. Chris Christie rails about the pay of public school superintendents, top employees at these schools live in another world, spared from his rancor. Nineteen directors were paid the maximum allowed salary — $225,734 — to oversee schools with anywhere from 30 to 327 students a day. And 52 people at these schools took home more than $175,000, the most superintendents are allowed to earn in public schools with up to 10,000 students.
• About a third of the schools did business with companies owned or controlled by the same people who run the schools, or their relatives or associates, oftentimes at a higher cost than other schools pay. The deals ran the gamut from real estate to bus rentals to food.
• Nearly one-fifth of schools had instances of nepotism. One school had four related directors, three of whom earned the maximum $225,734. Another employed a part-time classroom aide related to the director who earned $94,000 in 2013, three times other aides’ salaries.
• Three dozen schools offered generous pension plans paid for by the public but requiring no contributions by employees, in stark contrast to public school teachers and administrators’ plans. At one school, a former official collected retiree health benefits after she served time for ripping off taxpayers.
• Twenty-two cars — including two BMWs, a Land Rover, three Lexus and two Mercedes — were charged in part to taxpayers despite being used for personal transportation by officials. School disclosure reports show many cars were kept at officials’ homes.
Consider that Governor Chris Christie want more privately managed charter schools, which will enjoy the same lax supervision as the private schools for children with disabilities.
Expect more outlandish executive salaries, akin to Eva Moskowitz’s $475,000 in New York City, where her schools enroll fewer than 5,000 students (she is an attorney, not an educator). Expect more nepotism, as is now common when charter schools (like those in Arizona) are unregulated. Expect more elaborate real estate deals, where the charter operator buys the real estate, then pays his corporation outlandish rent.
That’s the future, New Jersey. Governor Christie believes in it. So does Chris Cerf. They are pushing as hard as they can to privatize schools in every city in the state, which will operate with minimal oversight.

I emailed Baxter yesterday and applauded him for this piece. I also drew the parallel to fiscal abuse in Charters and asked him to write about that…let’s see what he does.
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Here is the response I just got from Chris:
Thanks so much for taking the time to send me your note, and I’m glad you found the article enlightening. I’ve heard from several people with concerns about charter schools, and I have no doubt we’ll keep an eye on that as well. Thanks again. –Chris
Not holding my breath, but at least he acknowledged it.
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“Thiers said private school leaders should have fewer educational and professional requirements so as not to limit who — from parents to entrepreneurs — can open a school.”
Sure! Why not? Anyone at all should be opening and running schools. We probably need more deregulation, to spur innovation and…nepotism.
Christie’s privatized half-way houses for adults are a corrupt money hole, too. He’s really, really good at this privatization game.
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AZ has just as much, if not more, corruption. The administrators for BASIS schools (a for profit school, most likely invading your area soon,) make six figures and created a corporation to run their schools, so now no one knows how much they make. The bookkeeper for the school is related and lives in the Czech republic. Similar to other charters, they cherry pick their students.
We also have a state legislator, Steve Yarbrough, who runs a Student Tuition organization. An STO receives money for scholarships to private schools and sends the money to the school. Yarbrough regularly votes on legislation that benefits him, so he is able to legally pocket 10% of the funds funneled through his STO, receive rent from a space owned by him, and (surprise) act as the STOs legal counsel.
http://arizona.typepad.com/blog/2009/05/steve-yarbrough-landlord.html
http://www.pfaw.org/media-center/publications/model-to-avoid-arizonas-tuition-tax-credit-law
When they call AZ the wild west, they’re not kidding.
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AZ has just as much, if not more, corruption. The administrators for BASIS schools (a charter school, most likely invading your area) make six figures and created a for profit corporation to run their schools, so now no one knows how much they make. The bookkeeper for the school is related and lives in the Czech republic. Similar to other charters, they cherry pick their students.
We also have a state legislator, Steve Yarbrough, who runs a Student Tuition organization. An STO receives money for scholarships to private schools and sends the money to the school. Yarbrough regularly votes on legislation that benefits him, so he is able to legally pocket 10% of the funds funneled through his STO, receive rent from a space owned by him, and (surprise) act as the STOs legal counsel.
http://arizona.typepad.com/blog/2009/05/steve-yarbrough-landlord.html
http://www.pfaw.org/media-center/publications/model-to-avoid-arizonas-tuition-tax-credit-law
When they call AZ the wild west, they’re not kidding.
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Anyone else remember that not too long ago one of the most oft-repeated refrains of the charterite/privatizer crowd was ‘fiscal responsibility’ and ‘charters can do a lot more than public schools with a lot less’ and ‘you can’t solve a problem by throwing lots of money at it’?
Rheeally?
Lately the only issue relating to ‘fiscal responsibility’ is how much taxpayers owe edufrauds for all the $tudent $ucce$$ they’re producing for the, er, non-profits with high administrative salaries and nepotistic practices, justified of course by rigorous teacher evaluations tied to high scores on high-stakes standardized tests.
Oops! That’s changed too! The charter chain that used to be run by State Commissioner John King can afford to opt out of RTTT so forget about accountability even on their own Holy EduMetrics.
Link: http://www.nydailynews.com/new-york/education/charter-school-chain-ignore-new-teacher-evaluations-article-1.1484571
And what about the students?
My bad: just another “special interest group” that is interfering with $tudent $ucce$$.
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Eva S. Moskowitz has a PhD in American history and held a variety of undergraduate teaching positions for about a decade. She does not have a law degree.
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On just the property here is how it works. According to the bragging of the hedge funds they can double their money in charters in 7 years instead of 12 years through just the property. They get special tax breaks, we have had our CPA look into this, which allow this. Nice deal for a billionaire on the side to almost double the expansion of that school investment fund next to the normal 12 years now you are at 7. Students run that number out over time for profit. Nice deal isn’t it. And the rest goes from their. $475,000, plus the ups and extras, is not bad for the size of a large high school where it is here about $130,000/year. Triple money, KOOL. Got ’em again.
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George, do you know anything about the rental agreements? I see how purchasing a building and leasing it back to the charter is profitable and has tax advantages, but how are they structuring this as far as leasing publicly-owned buildings?
The contracts in Ohio are not available to the public.
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Charter chains have perfected the art of sale-leaseback, in which they own the land and pay themselves above-market rents. Good business.
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AZ has just as much, if not more, corruption. The administrators for BASIS schools (a charter school, most likely invading your area) make six figures and created a for profit corporation to run their schools, so now no one knows how much they make. The bookkeeper for the school is related and lives in the Czech republic. Similar to other charters, they cherry pick their students.
We also have a state legislator, Steve Yarbrough, who runs a Student Tuition organization. An STO receives money for scholarships to private schools and sends the money to the school. Yarbrough regularly votes on legislation that benefits him, so he is able to legally pocket 10% of the funds funneled through his STO, receive rent from a space owned by him, and (surprise) act as the STOs legal counsel.
http://arizona.typepad.com/blog/2009/05/steve-yarbrough-landlord.html
http://www.pfaw.org/media-center/publications/model-to-avoid-arizonas-tuition-tax-credit-law
When they call AZ the wild west, they’re not kidding.
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Hang on a minute, folks. This report concerns special education private schools, the places that are supposed to work with students who can not receive comparable services in their disctrict schools. In other words, these are NOT the sort of private school favored by Chris 1 and Chris 2. Yes, bloated payrolls and other abuses should not be tolerated, but what is really at the back of this study? If the kids with autism at, say, Chapel Hill Academy are returned to district, will they be better served? (Will the Common Core Standards help them?)
This isn’t about the private school Hurricane Christie sends his kid to. So, this info is nothing but goods news for voucher crowd.
How do you make a victory seem like a setback? Gee, Machiavelli, I don’t know.
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Mr. Chucksyer, this is about nepotism and bloated payrolls. Nothing more. It happens in charters of all kinds.
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Yes, there is no excusing this theft of tax dollars–these “private” schools charge districts about 50 grand per kid (more in some cases). No district enthusiastically approves such funding: these children are among our most seriously afflicted. These are not, generally speaking, the kids of the rich–at least not in the spec. ed school in my neighborhood. At any rate, I doubt parents consider such placements a luxury.
My concern is that by focusing on this scandal, Christie and Co. can claim that they are tough on the privates, while ignoring the well-connected charters that do not, in most cases, even accept the disabled.
If the same scrutiny were directed to all private and charter schools receiving public funds, none would ‘scape whipping. Let’s do it.
Oh, and if this scandal causes us to examine our treatment of special ed. students . . .
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Ms. Ravitch,
I have a ton of respect for you, ever since I wrote a book review on one of your books for a course in my Masters in an Ed. Admin. program. In this case, I feel you haven’t done the proper research. I have a lot of experience in and out of these schools, and beyond the misrepresentation of several key points by Mr. Baxter’s article, the nepotism and bloated salaries are straight wrong. When asked, Mr. Baxter’s evidence regarding relatives in these schools, he was just looking for the same last names. For one school, that meant assuming that several employees were related, even though they’re addresses were different (if you dug deeper) and, in fact, they were not related. I know a healthy amount about the regulations that cover private schools for students with disabilities (profit and nonprofit), and there are explanations for many of the “facts” rolled out.
I agree in your assessment that there are definitely reforms needed, but that is the case at every level of education, in all sectors. The article appears to point to a system that is robbing the taxpayers blind, but the truth is those schools provide a necessary service that the districts do not have the resources or ability to provides themselves. While your general concern is targeted in the right direction, the use of Mr. Baxter’s article is a very weak foundation.
The most enduring lesson to be learned from that article is the ease of any writer/reporter to completely distort the facts to pursue a story who, I imagine, already knew the end result he wanted.
But beyond all that, I’m glad the article helped me find your blog!
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Thanks, Luke. Unfortunately the same pattern of corruption, fraud and nepotism was found by the New York Comptroller when he audited the privately-run, publicly-funded private schools for preschool students in special education. See, among several articles about it: http://www.nytimes.com/2012/12/18/nyregion/new-york-audit-finds-lax-oversight-of-preschool-special-education.html
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