Mother Jones: The Incredible But True Story of ECOT, Ohio’s Virtual Disaster

It soon became obvious there were problems. Jim Petro, then the state auditor, issued a brutal assessment of the school’s first year, finding that “ECOT did not have any written policies or procedures for enrolling students,” that it exhibited an “inability to provide computers to students at the beginning of the school year,” and that in two months there were “106 instances in which the reported student was either less than 5 years old or greater than 21 years old, contrary to legislated age requirements.” It also found that the school received almost $1 million in the month of September 2000 as payment for the students it claimed to be educating, although that month “only 7 students logged-in to one of the available computer-based instruction systems.” In other words, during the first month of operations, only about 1 of every 300 ECOT students managed to access Lager’s revolutionary new online education program.

Astonishingly, and despite the auditor’s conclusion that the school was paid an additional $1 million the following month for students it couldn’t account for, ECOT was allowed to carry on…

By 2006, ECOT was growing into a behemoth, and Lager was growing rich. His private companies eventually billed ECOT for at least $153 million, most of it taxpayer dollars. These companies were largely insulated from state oversight. In 2002, a law put forth by Republican legislators had given oversight authority of certain charter schools to chartering agencies, like Lucas County ESC, which were left largely responsible for monitoring the schools that paid them. Charter management companies like Altair weren’t—and still aren’t—required to report what percentage of the state funds they received was paid out in individual salaries. But two early state audits show that at least in the first two years of ECOT’s operation, more than $1 million in fees paid to Altair went to Lager personally.

He began to pour that money into politics, donating $1.9 million over the course of 18 years, mostly to Republican candidates. Some high-level ECOT or Altair employees also frequently donated to pro-charter candidates, according to one former ECOT administrator and state records. “I was bothered by it, to a degree, but I stayed out of the politics and just did my job,” he said. “That was what I was getting paid for, and I didn’t care about getting involved with Mr. Lager or any of that other stuff.”

In one instance reported by the Akron Beacon Journal in 2006, Lager gave $10,000 over a four-day period to the gubernatorial campaign of the former auditor, Jim Petro, who had since been elected as the state’s attorney general. Four ECOT or Altair employees, along with their spouses, each donated $5,000 to Petro during the same four-day span—totaling at least $50,000 from ECOT and Altair staff during a primary campaign. One couple that contributed $24,500 had never donated to a state or federal campaign until that year. Petro lost but remained the attorney general. And soon, despite his lacerating assessment of ECOT’s first year, he gave the commencement address at the school’s 2006 graduation ceremony…

Across the country, many state legislatures were increasingly permissive of charter schools, and their enrollments were skyrocketing. From 2006 to 2016, they would nearly triple their enrollments nationwide, from 1.2 million students to 3.1 million. In Ohio, the system had grown from almost nothing to 70,000 students in just 10 years, and the charter lobby was becoming one of the most influential in the state. “There were a lot of powerful lobbies in Columbus,” Stephen Dyer, who was elected to the Ohio House in 2006, told me. “You had coal, you had general energy companies, you had nursing homes. I never saw any sector get everything they wanted except charters.”

Amid the national wave that overturned the GOP majority in 2006, Ted Strickland, a Democrat who wanted to get a handle on charters, was elected as Ohio’s first Democratic governor in 25 years. But a sudden flood of almost $900,000 in campaign cash from a group headed by Betsy DeVos, who long before becoming Trump’s education secretary was active in pushing the most radical approaches to school deregulation, helped to keep Ohio’s House of Representatives in Republican hands. Over the four years of Strickland’s tenure, charter industry allies in the Legislature blocked many of the governor’s attempts. “I don’t think all political contributions are efforts to do something nefarious,” Strickland told me. “But in this case, I think it was so obvious that these schools were so bad and were failing and had such lax oversight. I cannot give the Republican Legislature the benefit of the doubt and say that they did not know.”

“When you have a situation where public moneys are used to enrich individuals,” he added, “who then in turn support the politicians that support the policies that enrich them—it may not be illegal, but I think that fits the definition of corruption…”

In June 2010, Jeb Bush flew to Columbus to give the commencement speech at ECOT’s graduation. It was just one among several efforts to boost Lager’s business. The next year, Bush would push for increased funds for e-schooling in Ohio—never mind that ECOT’s test scores were some of the worst in the state, worse than those in all but 14 of 609 Ohio school districts. And in the months following his commencement address, Bush would convene a Digital Learning Council with support from major tech companies including Apple, Google, and Microsoft. The council—which Lager sat on—contributed to laws in Florida, Utah, and Wisconsin that helped steer public money to online education companies. Nationwide, online charters would soon educate an estimated 200,000 students a year, even as one study of their performance compared the educational shortfalls they produced to a student losing “72 days of learning in reading and 180 days of learning in math” out of a normal school year. “The US education system currently operates as an eight-track tape in an iPod world,” Bush said, after Gov. John Kasich signed a 2011 bill encouraging e-learning in the state. “Ohio is on a path to transform education for the 21st century…”

Only in recent months [2018] have Ohio politicians begun to distance themselves from the school. Last August, the state Republican Party returned $38,000 in donations from Lager and another $38,000 from his lieutenant at Altair, Melissa Vasil. Yost put Lager on warning in January by publicly suggesting that the ECOT founder, who over the years has purchased a $3.7 million home in Key West, Florida, along with a lakeside retreat and properties around Columbus, could be expected to personally repay some of the tens of millions of dollars ECOT owes the state. A few days later, a framed photo of Yost was reportedly removed without explanation from the lobby at ECOT’s headquarters.

“I don’t think there’s any conscionable reason why Lager should make the profits that he makes off of educating kids in public schools,” a former ECOT administrator told me. He defended his accomplishments at ECOT and said that for many children he worked with, online schooling really was the best option—safer for kids who had been bullied or threatened by gangs, and more flexible for students whose families might be transient.