Carol Burris wrote this post on learning that the National Charter Schools  Conference was honoring charter chain founder Ferdinand Zulueta.

 

I am dumfounded that Fernando Zulueta is being honored by the National Charter Schools Conference. He and his brother run one of the most notorious for-profit charter management companies in the country, Academica. The Office of Inspector General’s audit of three Academica schools — Excelsior, Mater High and Mater East  found that the Board of the Excelsior charter school, which ended its relationship with Academica in 2013, allowed Academica to find, design and procure facilities, recommend staff, conduct the day-to-day running of the school, assume responsibilities for accounting, budgeting and produce its financial forecast. The for-profit CMO participated in all charter board meetings and made recommendations to the board.

OIG’s audit of the two Mater charter schools identified related party transactions between the for-profit Academica and a real estate company that leased both buildings and security services to the schools.

Although the audit is difficult to follow due to extensive redactions, it is clear that the investigation found inappropriate transactions among the CMO, School Development HG II, L.L.C., School Development East L.L.C., Duke School Properties, L.L.C. and the charter schools.

School Development Corporation HG II owned and leased a building to Mater High School while School Development East owned and leased a building to Mater East. School Development Corporation was owned by a Panamanian company, the Wolfson Hutton Development Company. The directors of the Wolfson Hutton Company were the Zulueta brothers, one of whom is being honored at the Charter Schools Conference. The brothers were the founders of both the Mater Academies and Academica. The details of the complex for-profit web can be found here in an earlier investigative report by the Miami-Dade Public Schools.

According to OIG, there was no evidence that the relationship between the CMO and the real estate company was disclosed to the charter school’s board of directors at the time of the original lease; nor was there any “evidence of a discussion regarding the renewal of the management agreement with Academica or the reasonableness of CMO services or fees.” The original real estate transactions took place while Fernando Zulueta served on the Mater Board.

By 2010, the Zulueta brothers controlled more than $115 million in Florida tax-exempt real estate with the companies collecting about $19 million in lease payments. Many of the charter schools paid rents well above expected rates. Academica not only benefited from renting real estate it owned, it also sold payroll, employer services, construction services, equipment leasing and school services to the schools.

Considering the complicated web of conflicts of interest and raw profiteering, one would think that Academica would have been scaled back. Not at all. Deep-pocket contributions to Florida lawmakers have shielded Academica and other for-profit CMOs from regulations that inhibit their ability to make a profit off taxpayer funds. And then there are the legislators who are profiting from charter schools.

Until 2016, Academica’s closest ally in the capital was Fernando Zulueta’s brother-in-law, [former Florida House Rep.] Erik Fresen. Fresen, a former lobbyist for Academica, served as chairman of the House Education Appropriations even while working as a consultant for a firm called Civica which had contracts with Academica schools.

During his eight years in the legislature, Fresen never bothered to file his taxes, resulting in a 60-day prison sentence after he left office.