You may recall reading a story recently about Jared Kushner’s sister soliciting investments in Kushner real estate deals at a meeting in Beijing, where she promised that investors of at least $500,000 would get a green card in exchange. Investing in charter school construction is another way in which the EB-5 visas are up for grabs.
This story from South Carolina demonstrates how foreign investors are buying green cards by investing in charter school construction, and the middlemen are raking in money at exorbitant interest rates.
A handful of S.C. charter schools — finally in new school buildings — are poised to pay out millions in taxpayer dollars to middlemen, developers and foreign investors who want green cards.
The money, paid in the form of high-interest rent payments on the new school facilities, has some critics saying that the state’s taxpayers are getting duped. Money they believe is paying for S.C. students’ education is instead going to this relatively new network of out-of-state players who are charging high interest rates, as well as wealthy Chinese nationals searching for a quicker path into to the country.
And it’s all happening with federal government approval.
“They were taken for a terrific ride and are paying this high interest rate. It’s remarkable,” said David North, a fellow with the conservative Center for Immigration Studies in Washington, D.C., “They could end up paying more in interest than the (cost to construct the school).”
Figuring out just who is getting paid what is complicated and is not readily available in one place. Take, for example, Lowcountry Montessori School in Port Royal, a charter school that serves about 400 students in preschool through the 11th grade.
Through a controversial federal program called EB-5, the school received $1.5 million from three foreign investors to build its school building that opened last school year on Broad River Drive.
Critics have long charged that the program allows rich immigrants to buy their way into the country. And in recent years, cases of fraud and concerns about national security have also plagued the program.
The Port Royal school’s financial arrangement was put together by American Charter Development, a Utah-based company, that secured another $4 million for the new building and constructed the school.
The school is now leasing its $5.5 million building from ACD at a whopping 9 percent annual rate of the school’s construction costs. If the school were to make only the minimum payments over the course of the 20-year lease, $5.6 million of its $10.3 million in lease payments would be interest, according to the school’s most recent audit.
Worked into those lease payments is another key player — Utah-based Education Fund of America, a for-profit company which is receiving a 7.3 percent annual fee on the $1.5 million it secured in EB-5 funding for the school.
And then there are the three unnamed foreign entrepreneurs who actually invested the $1.5 million. The school will pay them back as well, likely including a small return on their investment of around 1 percent, say those familiar with the EB-5 program. The repayment is also included in the lease arrangement.
By comparison, the Beaufort County School District is paying just 1.6 percent interest on its construction bonds for its new May River High School that opened last year.
Read more here: http://www.thestate.com/news/state/south-carolina/article151566537.html#storylink=cpy
Diane Ravitch's blog 
“Figuring out just who is getting paid what is complicated and is not readily available in one place”
This is really a consistent problem with finding information on charters. It’s all over the place. It’s layer after layer of contracts- like peeling an onion.
Ohio media does a pretty good job unraveling it but a lot of the newspaper pieces have huge holes in them.
I’ve been wondering for years if the larger charter chains collect funds in one state and transfer any portion of those funds to another state to expand the chain. I have never been able to find out. The information simply isn’t available.
Can Charter Schools USA collect state education funding in Florida and then use some portion of that funding to open a school in Pennsylvania? No one knows.
That transfer was enabled during the Obama administration’s grant programs for charter schools. Money flowed to the “main office” and out to specific schools after a dip into the grant money for administration, bookeeping, etc.
I don’t know the answer to your last question. It is quite clear that non-profits like MindTrust are helping to launder money for charter initiatives that are not limited to its hometown of Indianapolis.
When we used taxpayer money to build a new school here it took two elections, numerous community meetings and nearly endless discussion. The plan was rejected by the public twice and we had to revise to meet their specifications- what they were willing to spend and what they wanted in a new school.
That’s building a public school.
What charter schools are doing is NOT building a public school. They’re negotiating a completely opaque private deal without any input from the public on how the money is spent or whether the money should be spent at all. Who decided that this community needed a Montessori charter or wanted to allocate public funds in that direction? The charter school operator and her investors? How is that “public”?
What ed reformers see as “obstacles” I see as necessary and vital community consent for the outlay of public funds.
It was hard to put forth a school plan that the public accepted. It’s supposed to be hard. It’s THEIR money. They have a say in how it’s spent. ONE person made the unilateral decision to build this school with public money? I mean, really. That’s incredibly arrogant.
So if I wake up tomorrow in South Carolina and decide I want to build a “public school” and hire myself as the publicly-paid director of said school all I need to do is find some foreign investors and launch my wholly publicly-funded entity and the public has an obligation to not only pay my salary but pay for any facility I decide I need?
I mean, come on. It’s OUTLANDISHLY arrogant. The public never consented to any of this. They certainly didn’t consent to people just deciding to invent a publicly paid position and then pay themselves a salary.
I also love how charter operators make this ridiculous distinction- “the charter” is paying this high interest rate. The Charter doesn’t have any money. A “charter” is just a contract. The Public is paying for it. Every dime she collects is public money. It doesn’t become “the charter’s money” when she puts it in the bank. “Her school” didn’t enter into a bad deal. SHE put the public into a bad deal. They’re paying the interest.
All I can say is OMG. I started writing more, but didn’t want to be well…you know.
I implore all of you to read: LISTEN LIBERAL by Thomas Frank. This book gives an inside out look at the shenagans of the Billaries and Obama, Zuckerberg, Gates, and the rest of the DEFORMERS. It is well worth the read.
We have to understand that when we pass laws that allow access to public money with little to no accountability, we will entice many savvy profiteers that will exploit every avenue and loophole of the law. We will also invite the typical fraudsters that most likely be the ones that will get caught. I looked up the “Education Fund of America,” and they look like a well oiled machine with all the right players with the appropriate types of expertise to run this operation. They have real estate deveiopers, immigration lawyers and charter operators on staff. If our privatization madness continues, I would not be surprised if the Kushners are working on their own deal now. Jarrod’s sister would probably front the operation while her brother is in the spotlight. The sister was probably in China trying to line up clients. http://edufundamerica.com/about/
In a public school local control operates the local funds to provide education for local students. There is no global money movement, or shell corporations. All decisions are open, transparent and accountable, and an independent auditor will account for all the funds. If taxpayers understood what is happening to public money, they would rightfully be livid.
Certain parties are all about “living within our means” when it comes to social programs and yes, educational budgets. For them, it is apparently those unions in cahoots with politicians who conspire to rob the taxpayers blind. But when it comes to actual robbing of the taxpayers by private business interests “laisse les con temps rouler!”, because “choice.”
Talking about charter financing I need help. I am trying to find out about the finances of the University Academies in Kansas City, MO. Laura Chapman, any ideas how to get that information? Anyone else that can help?
Thanks in advance! (TIA)
Duane
Duane,
I could not find out about the finiancing, but branches of the University of Kansas are the authorizer of most charter schools on this official list from the state. University Academies are on the list. I could not determine the date of this pdf. The authorizer’s responsibility for audits will depend on the state laws for public disclosures.
Click to access qs-charter-kccharterschools.pdf
cross posted at OEN https://www.opednews.com/Quicklink/How-foreign-investors-use-in-Best_Web_OpEds-Education_Foreign-Corrupt-Practices-Act_Foreign-Money_Investors-170530-763.html#comment660681
with comment linking back to posts here, about the privatization issue