I originally posted this story in October 2016. In light of the Trump-Pence privatization agenda, it is worth reading again.
Pat Hall and Sue Legg of the Florida League of Women Voters have performed a public service by detailing how for-profit charter companies rip off taxpayers and cheat children.
You can be sure Jeb Bush will not assign this report when he lectures at Harvard this fall about the Florida “miracle” that no one can see other than himself and his hirelings.
Here is the beginning. Please note that 40% of taxpayer funds goes to the management company, not to educating students. What a racket!
Hall and Legg write:
“ANALYSIS OF CHARTER SCHOOL USA REAL ESTATE BUSINESS PRACTICES
“Florida now educates more than 230,000 students at more than 650 publicly funded charter schools. While many of these schools are providing good educational opportunities, we have found that the fundamental structure of the for-profit management companies, specifically Charter Schools USA, must be questioned. The following outline summarizes a very detailed report given the LWVF Board this past summer.
“1. CSUSA has six non-profit school boards that operate 49 schools in 12 urban counties in Florida. Additionally, CSUSA operates 17 schools in 6 other states.
“2. The six governing school boards cover the 49 charters and are run by CSUSA; they are not independent of the management companies.
“3. Inter related affiliated businesses include Red Apple Development, Ryan Construction Company, the Florida Charter Education Foundation and Connex (curriculum software). Furthermore, we found over 300 limited liability companies (LLCs) initiated by CSUSA.
“4. Facilities financing incorporates all aspects of land acquisition, site clearing, construction, bond financing and multimillion dollar lease fees. CSUSA charges the Hillsborough County School district at one of their four schools more than $30/square foot, significantly higher than downtown Tampa skyscrapers!
“5. Tracking expenditures of taxpayer monies is impossible due to for-profit business practices which are not transparent.
“6. Long term lease agreements, after flipping (changing deeds from one related company to the next) from Ryan Construction to Red Apple Development, are charged out 40 years, and charge rent and interest amounts on top of the lease payments. Most CSUSA lease fees in Hillsborough County take 25% of all taxpayer dollars designated for educating children. Some are even higher.
“7. Another 13% to 15% is charged by CSUSA for management fees, hence 40% of public money is not spent instructing children. State auditors have questioned how these costs are reported.
“8. Evidence exists of real estate “flipping” by CSUSA in Hillsborough County. This results in new real estate appraisals to increase value. Lease and rent costs use these values to justify cost charged to charter budgets.
“INTERIM REPORT: ANALYSIS OF CSUSA REAL ESTATE BUSINESS PRACTICES
“By Pat Hall and Sue Legg, LWVF Education Team, June 2016
“Introduction. District school boards grant charter school contracts to private entities and monitor their financial balance sheets, but by legislative intent, they do not have responsibility for their management and operation. Charters have little regulation, and the result has been a continuing saga of scandals. This report goes beyond the mismanagement and corruption issues to the fundamental structure of for-profit management companies, and it questions the accountability of these companies for their use of public funds. Charters may be self-managed or operated by non-profit or for-profit companies. We focus on one for-profit charter management company, Charter Schools, USA (CSUSA). Florida has several others including, Academica which was the focus of a federal investigation, and Newpoint charters which face indictments. A detailed example of the complex facility transactions for CSUSA’s Woodmont K-8 school raises the issue of excessive profiteering. We have data that indicate these business practices are not specific to one school or one company. CSUSA organizational structure: CSUSA is owned and operated by the CEO, Jonathan Hage. It has multiple interrelated entities whose operations are difficult to track. CSUSA has created six non-profit charter school boards to operate 49 publically funded, privately managed charter schools in 12 Florida counties. Additionally CSUSA operates 17 schools in 6 other states. These non-profit boards subcontract to the CSUSA for profit educational management firm which founded them.”
Diane Ravitch's blog 
Reblogged this on David R. Taylor-Thoughts on Education.
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Amazing detail from diligent and qualified researchers on the frauds that are not entirely unique to Florida. Especially eye-opening is he proportion of money channeled to profit seekers and not for instruction of the students.
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Not unique to Florida at all. Due to a national move toward deregulating educational funding, profiteering and fraud are two viruses spreading widely.
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Disturbing, but not surprising.
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Why not surprise?
Expect the unsespect . No disturbance to the surprise!!!!
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The League of Women Voters should send their research to all the major newspapers in the state. Most of the public has no idea of the amount of waste, fraud and crooked lease agreements in charters there are in the state. Everyone talks about accountability in education. Taxpayers should revolt against this mishandling of tax dollars.
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They won’t print it, those papers are part of a media ownership network that probably also profits from this scam.,
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The Harvard Kennedy School of Government mocks the Kennedy family and JFK’s legacy whey it boasts about student intern placements with the Heritage Foundation and DFER. When the school invites the privatizing Jeb Bush, to laud a system that lines the pockets of Wall Street, at the expense of communities and kids, it demonstrates the depravity of the ivy leagues and shows either cavalier indifference to or hatred of democracy.
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Linda, it’s not just the Ivies. It’s a whole lot of so-called “elite schools.”
After all, Stanford welcomed war-criminal Condoleezza Rice back with open arms after her work with G.W. Bush. And UC Berkeley Boalt Hall School of Law welcomed war criminal John Yoo back, as well.
And I say “war criminal” because the two of them, along with a whole host of others in the G.W. Bush administration, were, in fact, war criminals, and should be up before the International Court in The Hague for human rights abuses.
Money, and fame, rule, unfortunately, when it comes to these institutions.
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A list of “prestigious schools”, with reprehensible values can be compiled and, it would certainly include the tech industry’s play toy university. Schools may have some outlier faculty, with nobility of purpose but, the institutions’ overriding culture, from the top down, reflects greed and unwarranted arrogance. The President of University of California, Napolitano, is featured with Rumsfeld, at the Walton’s Gen Next site. Julian Assange focused on Gen Next in his book chapter, “Google is Not What It Seems”. Univ. of Calf. economists signed the letter against Sanders, while failing to identify their corporate board employment.
When institutions of higher learning become the tools of oppressors, historically, we know the outcome.
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“Personal agendas, favoritism and favors”- “Inside Stanford Business
School’s Spiraling Sex Scandal”. (Vanity Fair)
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Cross posted at
http://www.opednews.com/Quicklink/The-League-in-Action-on-Fo-in-Best_Web_OpEds-Charter-School-Failure_Charter-Schools_For-profit-Education_Schools-161003-180.html
with this comment WHICH HAS EMBEDDED LINKS IF YOU GO TO IT.
MY COMMENT :
Denis Smith describes a recent legislative hearing in Ohio, where similar issues were discussed. Charter allies in the legislature made it clear that they don’t want to micromanage their friends, or for that matter, give them any responsibility, like dotting i’s and crossing t’s.And look at Georgia where Top down chicanery spelled doom for Georgia’s public schools In this post, is the twisted trail of big-money behind Governor Deal’s push to privatize public schools, and create a money pot for entrepreneurs. He is pulling the wool over the eyes of the public with an ALEC-inspired program to erode local control and expand privatization.
Governor Deal’s constitutional amendment ballotasks voters “whether the state should have the authority to intervene to help failing schools, yes or no.” The real purpose of this Orwellian ballot, is to create a special non-contiguous district consisting of the state’s lowest performing schools. They will be removed from their district and handed over to state control. The state will then transfer them to charter chains. Gov. Deal is taking advantage of the Supreme Court’s horrendous Citizens United decision that removed limits on political contributions. ”
see also EduProfiteers See a Big Market in Education. California: Meet the Billionaires Who Are Financing the Spread of School Privatization and warning us to be aware that this is a worldwide takeover of education by the oligarchs who KNOW that getting people as kids, wins the battle to take over any nation.
Anya Kamenetz wrote an illuminating and actually frightening article about Pearson’s ambitious plans to introduce for-profit education around the world
See my series on privatization, OR GO TO DIANE’S LINKS
https://dianeravitch.net/?s=PRIVITIZATION,
Diane Ravitch provides the story about the state legislatures which are taking over the local schools, with nary an educator on board, and giving them to charters, with not a shred of oversight! Here is a link to Diane’s posts on charter school corruption .
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ripping off and cheating tax payers certainly is the trend. Yes we see this in charter school scams repeatedly as they are exposed but ignored by the major media outlets. And then there are our politicians. Trump being the lastest and greatest example! Read Robert Reich’s discussion of Trump/Bankcruptcy/Tax Scam
http://robertreich.org/post/151251244330
How do we expect charters to operate above the law when the law seems to set up ways to cheat if an individual or business is rich enough to hire “the right lawyers”????
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The department has persisted even as ECOT has challenged the effort in court. Four days before Judge French ruled, the department reported that its attendance review found 6,313 full-time students, not the 15,322 ECOT claimed for last year. That translates into an overpayment of roughly $60 million. Other online schools have been cited for similar practices and, in view of attendance driving funding, have been ordered to repay the state.”
Looks like Ohio has to correct their number for children in charter schools.
Do these unregulated entities report a single accurate number? Who knows! No one monitors them!
I can’t help but notice that ed reformers are eager to dump tens of reporting mandates on PUBLIC schools every year, but no one even knows who many children are in charter schools.
http://www.ohio.com/editorial/editorials/bilked-by-ecot-1.716437
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