As reported earlier today, online charter operators in California with multiple shell corporations have been indicted for embezzling more than $50 million for their charters.
Also indicted were the leaders of the tiny rural school districts that authorized their charters as a way to collect fat fees for doing nothing. This feature is a serious flaw in the state’s notoriously lax charter law.
A tiny district can authorize a charter in Los Angeles or San Diego, then sit back and collect commissions. Efforts are underway now to fix the law but the California Charter Schools Association has fought all efforts at accountability.
A3 Education recruited small public school districts to sponsor the charter schools in exchange for oversight fees. Prosecutors say A3 enrolled about 40,000 students throughout the state, none of whom received any services.
The company that operated a network of 19 online-only schools is accused of paying sports leagues as little as $25 a student for information used for enrollment. School districts are funded by the state based on the number of students.
The students didn’t know how their names were being used, said San Diego County District Attorney Summer Stephan, calling them victims…
The Dehesa Elementary School District, which has only about 150 students east of San Diego, authorized several charter schools with oversight for 20,000 students, Stephan said. The $2 million in oversight fees collected one year was more than the district’s annual payroll.
Nancy Hauer, Dehesa’s superintendent, was among 11 people charged in the case. Other defendants were employed by A3 and its charter schools.
The Dehesa school board said it couldn’t comment on the charges and vowed to fully cooperate with investigators. Hauer was not available to comment.
“The Board of Education was stunned to learn about the charges, and we have engaged legal counsel to review this matter and any possible implications for district operations,” the Dehesa district said.
The grand jury returned its indictment May 17 after hearing six weeks of testimony from more than 70 witnesses.
A spokesperson for the charter lobby insisted that it did not approve of “bad actors” but has used its vast resources to kill every legislative effort to amend the law.
The California Charter Schools Association said it raised concerns about A3 more than a year ago with the state education department and urged an investigation.
“To be clear, there is no room for bad actors and irresponsible authorizers in California’s charter public school movement,” said Myrna Castrejón, the group’s president.
As we say in Brooklyn, if you believe the lobbyists who have defeated all efforts to stop self-dealing, I have a bridge to sell you.
Diane Ravitch's blog 
I think there is more money to be made from selling view acres on the Moon than selling them a bridge from nowhere to nowhere.
I think the CCSA has come around to taking that position with obvious outrageous scams — as long as the loose laws and nonexistent oversight that allow the scams to flourish aren’t changed in any way, which of course is their goal.
Early on, CCSA would go all out to defend any charter in any situation, no matter how egregious, and they made a posturing point of changing that when it was obviously backfiring on them. (CCSA also changed its name about the same time, formerly the California Network of Educational Charters.)
These folks have very sophisticated, strategic messaging and they move nimbly.
50 million dollars is a lot of money that could have been used for teachers salaries. It’s criminal and I bet they won’t have to return all the money.
Like Ohio.
It’s the Savings & Loan rip-off all over again …
It’s far worse. Taxpayers with no choice, get shafted directly. Students lose their opportunity to learn. And, communities are denied the economic multiplier effect of dollars spent on education.
You are right Linda
The ramifications go far beyond dollars and cents.
That’s why all the so called “reforms” of the past two decades are so insidious. They have destroyed the lives of teachers and stolen the childhood and foreclosed on the futures of millions of students.
The numbers of dollars lost only tell you a small part of the story.
The tiny Dehesa school district has also been authorizing parachuting “learning centers” all over the county for years. They opened their OWN charters in neighboring districts that they authorized themselves. So this board should not be surprised in the slightest that their superintendent was named in this case. They have been authorizing many many online charter scams as well as onsite charter scams for years. They were shady long before they hooked up with the A3 guys.
yes; we hear so often that this or that charter school ‘scammed the government’ but somehow we are NOT hearing that the government’s push for creating charter schools where none are needed has opened up massive money to profiteering
Reblogged this on Wobbly Warrior's Blog and commented:
“As we say in Brooklyn, if you believe the lobbyists who have defeated all efforts to stop self-dealing, I have a bridge to sell you.”
A former director of SETDA (an association of public employees from departments of ed in every state including Calf. and N.Y.) said SETDA lobbies. I’m curious, given the organization’s goals- promotion of digital learning, public private partnerships and, its “Gold, Silver, Event and Strategic” private partners, who the public employees are lobbying for (1) SETDA’s funder -the Gates Foundation (2) the private partners or (3) the publicly-paid state ed tech directors.
This story is just so incredible and eye opening. Everyone around here is talking about it.
Except it’s not incredible at all to those who have been paying attention.
And it is just the tip of the iceberg.
Many people are surprised when this stuff happens, but it should not be at all surprising that when you hand out hundreds of millions of dollars with no oversight and no accountability, fraud will be rampant.
It would be surprising if it were not.