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New Jersey Expose, Part 3: How Charter Operators Collected Hundreds of Millions from a Federal Fund for Building Public Schools

By dianeravitch
March 31, 2019 //
5

 

 

Northjersey.com and USA Today New Jersey are publishing a five-part series of the abuse of taxpayer funds by charter operators. This is part 3 of an investigation called “Cashing In on Charter Schools,” written by Abbott Koloff and Jean Rimbach.

“Hundreds of millions of dollars in federal aid was steered to New Jersey’s largest charter school management companies over the last decade, helping them to create a network of school buildings that are privately owned.

“In other parts of the country, the same aid programs provided interest-free loans to both traditional public schools and charters to construct and renovate buildings. But a much different model emerged in New Jersey as Gov. Chris Christie’s administration gave the state’s entire share of the federal aid — bonds worth more than a half-billion dollars — to charters and other non-traditional public schools.

“More than three-quarters of that money was awarded to the state’s two largest charter school operators, KIPP New Jersey and Uncommon Schools, which used it in ways that strayed far from the intent of the aid programs.

“The companies fashioned complex financial structures that allow them to exploit the bonds by tapping into the aid as a steady stream of income over decades, using methods that in some cases have drawn the scrutiny of federal investigators.

“The result is a string of school buildings that were built with taxpayer money but remain in private hands. The companies that own them were created to purchase real estate and renovate buildings for charter schools, but they are kept legally separate from the charter schools that send millions of dollars their way each year in rent.

“Charter schools rent these buildings indefinitely. Leases do not contemplate a time when rent payments would end or when the buildings would be turned over to the public charter schools, even after the debt is paid.

“The deals involve related companies that are created to lend money to one another — an arrangement that is not uncommon in the world of private finance. But in this case the arrangements steer tax dollars — federal aid that subsidizes the projects by covering the interest on the loans — to private groups that don’t have to share details with the public or the state about how they use the cash.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Categories Accountability, Charter Schools, Education Industry, For-Profit, New Jersey, Privatization

Bill Phillis: Ohio’s State Takeover Law Should Be Repealed

By dianeravitch
March 30, 2019 //
11

 

Bill Phillis, retired deputy state superintendent and passionate advocate of equity and financial advocacy, has written many times about the absurd state takeover law. It gets more insane by the day.

He wrires:

Chairman of Lorain Academic Distress Commission (ADC) says he ALONE will complete the CEO’s job performance evaluation
The Chairman of the Lorain ADC lives 130 miles from Lorain. He was appointed chairman about a month ago. He recently announced that he alone would evaluate the CEO.
HB 70 is an irrational state policy. It permits the State Superintendent to appoint a non-resident of a school district to chair the governance committee. This is absurd. It is like a resident of Lorain leading the Columbus school district or a resident of Cleveland being appointed as the president of the Columbus City Council.
HB 70 should be repealed as quickly as it was enacted—in one day.
William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540| ohioeanda@sbcglobal.net| www.ohiocoalition.org
Categories Accountability, Democracy, Ohio

California: The Charter Law is Broken and Adversaries Don’t Agree on How to Fix It

By dianeravitch
March 30, 2019 //
32

 

 

This is part 3 of the Los Angeles Times’ series about charter school dysfunction in California, written by Anna Phillips. 

Phillips traces many of the problems, especially lack of oversight, to state law.

She explains that the billionaires who fund the rapid expansion of charter schools have squared off against the powerful California Teachers Association, andthe two never agree.

The resultis That a badly flawed lawremains in place.

Phillips quotes several charter school advocates who want to eliminate the role of local school boardsin authorizing charter schools and transfer that power to a single state charter board.

What the advocates never mention is that the school boards have been rendered toothless by the law, which allows charters to appeal their rejection at the local level to the county board. If the county board rejects them, they can appeal to the state board, which has been extremely friendly to charters due to appointments by Governors Schwarzenegger and Brown, both very charter-friendly.

Phillips quotes one charter advocate who points to New York as a model. New York hastwo charter authorizing Boards: the State Board of Regents and the SUNY Charter Institute. Neither supervises the charters they authorize. The SUNY committee consists of appointees of Governor Cuomo, who loves charters and receives big campaign contributions from the charter billionaires and Wall Street charter lobby. When billionaire Merryl Tisch was chair of the Board of Regents, it too was an ally of charters. She is now on the SUNY board. Even now, the Regents continue to endorse charter expansion,despite local objections.

The Network for Public Education, which is not funded by teachers unions, believes that charters should be authorized ONLY by local school districts to meet their needs, not because an entrepreneur wants a school of his own or because a corporate chain sees a chance to grow.

The irony is that the charter billionaires seem already to have captured Governor Gavin Newsom, even though they supported another candidate. Newsom promised charter reform, and he signed a bill requiring accountability and transparency and forbidding conflicts of interest and nepotism. But he may have shackled the charter reform agenda by appointing charter allies to a majority of places on the new state task force to recommend changes to the charter law. Phillips ends her article by mentioning the task force but fails to mention that charter allies were given seven of 11 seats, surely by Newsom.

So this otherwise great series ends for me on a disappointing note. It is far easier for billionaires to capture a single state board or two state boards than to deal with hundreds of local school districts. There is a limit to the number of elections and seats they can buy, even with their deep pockets. One thing has become clear about “Reformers.” They don’t like democracy. They like mayoral control and state control. Local school boards get in their way.

 

 

Categories Accountability, Billionaires, California, Charter Schools, Democracy, Education Industry, Education Reform, Privatization

Beto O’Rourke’s Wife Works for an Organization that Brings Charter Schools to El Paso

By dianeravitch
March 30, 2019 //
154

 

I was an enthusiastic supporter of Beto O’Rourke when he ran against Ted Cruz. I regularly sent him checks of $50, $100. I would have loved to see Beto beat Cruz. I heard that Beto’s wife Amy was connected to the charter school movement but decided that was less important than beating Cruz.

Now that Beto is running for President, it matters more. I don’t want another Democratic President pushing privatization of public schools and public money.

i won’t support any candidate who supports charters and/or vouchers. I also feel that he, like some other candidates, lacks the experience to be president.

Beto’s wife, Amy O’Rourke, is part of CREEED, an economic development agency that recruits charters to El Paso as part of an economic development plan (gentrification).

Amy runs the “Choose to Excel” Program, which recruits IDEA and Harmony charters to El Paso. Harmony is part of the Gulen Turkish network. IDEA bolsters its graduation rates by not allowing students to graduate until they have been accepted into a four-year college.

The Hunt Family Foundation gave $12 million to CREEED specifically to recruit more charters to El Paso. The local public school teachers were not happy. 

“Norma De La Rosa, president of the El Paso Teachers Association, said the donation is a slap in the face to public schools and teachers.

“De La Rosa added that charter schools don’t work as closely with special needs and limited English-speaking students.

“Public school is here to provide that education, that support, and prepare our students for the future,” De La Rosa said. “Charter schools do not have the interest of all students at heart.”

“However, Woody Hunt, chairman of the Hunt Family Foundation and vice chairman of CREEED’s board of directors, said he hopes the donation will show large charter school backers, like the Bill & Melinda Gates Foundation, that the education community in El Paso is committed to school choice.

“This is a journey, and I think the reason for us to go public at this time is the opportunity we have with some external funders that are potential investors, and we wanted to send the message that the local community is financially supportive of the endeavor,” Hunt said. “

The Washington Post said that Beto and Amy had worked closely with local Republican businessmen on economic development, which some saw as gentrification.

“Before Beto O’Rourke became the darling of liberal online donors, his top financial backers hailed from a different set entirely — wealthy businessmen who have sought political influence by collectively donating millions of dollars to Republicans.

“Several of El Paso’s richest business moguls donated to and raised money for O’Rourke’ s city council campaigns, drawn to his support for a plan to redevelop El Paso’s poorer neighborhoods. Some later backed a super PAC that would play a key role in helping him defeat an incumbent Democratic congressman.

“For his part, O’Rourke worked on issues that had the potential to make money for some of his benefactors. His support as a council member for the redevelopment plan, which sparked controversy at the time because it involved relocating low-income residents, many of them Hispanic, coincided with property investments by some  of his benefactors.https://tpc.googlesyndication.com/safeframe/1-0-32/html/container.htmlAs a congressman he supported a $2 billion military funding increase that benefited a company controlled by another major donor. That donor, real estate developer Woody Hunt, was friends with O’Rourke’s late father. Hunt also co-founded and funds an El Paso nonprofit organization that has employed O’Rourke’s wife since 2016.

“We shared a common goal,” said Ted Houghton, a local financial adviser and longtime O’Rourke donor who raised money for former Texas governor Rick Perry, a Republican, and helped steer millions in state transportation funding to the city. “The common goal was we needed to move El Paso in a different direction.”…

”In contrast to the aspirational image he has fostered in recent years, however, O’Rourke’s political career traced a more traditional path for a Texas politician — winning support from a typically pro-GOP business establishment interested in swaying public policy. Born into one politically potent family and married into another, he benefited repeatedly from his relationships with El Paso’s most powerful residents, including several nationally known Republican moneymen….

“Once O’Rourke got to Congress, he made cleaning up corruption in government a priority. He stopped taking money from political action committees after his first term, promised to support term limits for members of Congress, and sponsored bills to provide partial public financing for campaigns and limit donations to national party committees.

“At the same time, O’Rourke continued to receive large amounts of money from employees of companies run by major donors. Employees of one of his father-in-law’s former companies, Strategic Growth Bank, including Sanders himself, gave $57,400 during O’Rourke’s 2014 and 2016 House campaigns. Employees of El Paso-based Western Refining, including its chairman, Foster, gave $10,600 in 2014.

“Hunt Companies’ employees, including Hunt, gave $60,300 to O’Rourke in the 2014 and 2016 cycles, more than the employees of any other business, according to the Center for Responsive Politics.

“O’Rourke worked in Congress to promote a military funding issue that directly affected Hunt’s business. Hunt Companies boasts of being the nation’s largest builder and manager of privatized military housing in the country. In 2015, the Obama administration persuaded Congress to cut troop stipends for those units.

“Until then, troops who lived in the privatized units on bases would receive a monthly stipend equal to their projected rent. But when the cuts became law in 2014, the stipend was to be gradually reduced. As a result, providers of base housing were faced with either reducing their rents and losing revenue or risking the loss of tenants by asking soldiers to pay out of pocket.

“In response, Hunt Companies’ lobbyists billed $380,000 in 2017 and 2018 for work that included contact with Congress on military housing and defense appropriations issues. During this period, O’Rourke’s office listed restoring the money for privatized housing as the 13th of 15 priorities in an internal database shared with Republican leaders, according to a person familiar with the work of O’Rourke’s congressional office.

“With the support of Republican leaders of the House Armed Services Committee, who had opposed the initial housing stipend cuts, the defense spending bill that passed in 2018 included an increase in funding for privatized housing that the Congressional Budget Office estimated would cost taxpayers an additional $2 billion between 2019 and 2023. O’Rourke voted for the bill, which President Trump signed.

“O’Rourke’s spokesman said Hunt played no role in O’Rourke’s support for the measure.”

Forbes took up the question of whether Amy Sanders O’Rourke is a billionaire heiress. It disputed that characterization and concluded that her father was worth “only” $500 million. 

Whatever her father is worth is irrelevant.

What bothers me is that she is deeply tied to the charter ideology, with charters used as a tool to transform the economy while drawing funds from the local public schools.

The Intercept wrote here about Beto’s charter school problem. Frankly, I hope that every Democratic candidate realizes that charter schools are an albatross and that real Democrats support public schools. Charter schools are part of the Republican ideology of consumer choice andthe superiority of free markets. Charter schools and vouchers are points on the same spectrum.

That’s why I won’t support Beto in the primaries.

If he is the candidate, I will support him against Trump.

 

Categories Accountability, Charter Schools

New Jersey Expose, Part 2: Millions of Taxpayer Dollars Spent on a Floundering Charter School

By dianeravitch
March 30, 2019 //
5

 

Northjersey.com and USA Today New Jersey are posting a five-part series about how taxpayers are being taken for a ride by the charter industry. 

Part 2 is about the millions of state dollars spent to bailout a low-performing charter school.

Reporters Jean Rimbach and Abbott Koloff write:

“By 2010, four years after it opened, the Central Jersey Arts Charter School in Plainfield was in trouble.

“The state had just put it on probation for a host of deficiencies, ordering it to limit spending, develop a curriculum and address problems with its board and student achievement.

“Yet little more than three weeks later, a state agency voted to issue bonds that allowed a fledgling nonprofit called the Friends of Central Jersey Arts Charter School to borrow $8.2 million to buy and renovate a building for the school to rent and, one day, potentially own.

“It was a loan whose repayment was based on the tax dollars flowing to the public charter school.

“The Friends quickly ran out of cash, and about six months later approached a different state agency seeking millions of dollars in additional financing to finish the project without explaining why they had come up short. The next year, another $1.7 million in bonds were issued, this time with the federal government picking up most of the interest.

“While the Friends were permitted to borrow nearly $10 million, the school itself was floundering. A financial report covering the 2010-11 school year stated that Central Jersey Arts was “not in good financial condition” and raised “substantial doubt” about its survival.

“The building opened with fanfare as contractors went unpaid. The next year, the school was back on probation, where it stayed until the state shut it down in 2015 for weak finances and “dismal” academic performance — but not before dumping more taxpayer cash into a now-defunct for-profit management company in the hope of turning it around.

“This is the story of a charter school that failed, and a building that used up millions in public dollars and continued to receive federal aid long after it was left vacant. It’s a story about dubious decisions by multiple state agencies, one that raises questions about the use of public money and the oversight of private groups that own real estate for public charter schools.”

The school “churned through teachers and business administrators at an alarming rate…At one point, a janitor was doing the books.”

It became difficult to know whether to attribute the school’s failure to fraud, theft, or incompetence.

Ultimately, the public money was lost and the education of hundreds of students was squandered.

In this brilliant article, the wisest comment came from a woman who had served as Board president for a time. She said, “You know, the bottom line is greed should not supersede education.”

Categories Accountability, Charter Schools, Education Industry, For-Profit, New Jersey, Privatization

Charter Schools: A Very Horrible, Terrible, Awful Week

By dianeravitch
March 30, 2019 //
42

 

This has been possibly the very worst week in the history of charter schools, which have existed for almost 30 years. It is fitting that this week coincided with Public Schools Week, reminding us of the importance of public schools, which are democratically governed, open to all who apply, and accountable, financially and academically, to the public.

Consider the trajectory of the charter idea.

What began as in idealistic proposal–experimental schools-within-schools, created and operated by teachers with the approval of their colleagues and local school board, intended to reach out and help the struggling and turned-off students—has turned into a libertarian’s dream of deregulated, even unregulated industry replete with corporate chains, entrepreneurs, billionaire backers, highly segregated schools, and a battering ram against collective bargaining.

Charter schools in the initial version were supposed to collaborate with public schools to make them better or to learn from failed experiments. That was charter 1.0.

That didn’t last long. Entrepreneurs saw an opportunity to profit from guaranteed public funding while skimping on teacher pay. Grifters saw a chance to get rich with land deals and leases. Ideologues like the Waltons and the Koch brothers saw a way to get rid of teachers’ unions.

Democrats were duped by the rhetoric of “saving poor kids from failing schools,” which was spouted by Obama, Duncan, Romney, Trump, and DeVos.

But this week, all the flowery rhetoric melted.

First came the report from the Network for Piblic Education, revealing the waste of nearly $1 billion in federal funds awarded to charters that never opened or soon closed.

Then began a three-part series in the Los Angeles Times by Anna Phillips on charter corruption and a state law that invites charter waste and abuse.

Then began a series jointly sponsored by Northjersey.com and USA Today on the ways that charter operators use public funds to build charter facilities that are privately owned, not public. Legal theft, you might call it.

Even the Onion chimed in, with a satirical piece about an innovative charter school that accepts no students.

Will the charter spin machine recover or are we seeing a new boldness on the part of the press?

Perhaps the new attention to charter scandals was encouraged when a team of reporters at the Arizona Republic received the prestigious George Polk Award for its exposes of charter scandals in that state.

The mask has fallen away.

Lets give credit where it’s due. Betsy DeVos has made crystal clear that she loves charters, hates accountability, and welcomes profit making. Thanks, Secretary DeVos, for explaining the end game of privatization.

Categories Accountability, Charter Schools, Disruption, Education Industry, For-Profit, Fraud, Privatization

Rhode Island: Under Pressure, Gov. Raimondo Will Donate Sackler Money

By dianeravitch
March 29, 2019 //
15

 

The Providence Journal published 20 articles about Governor Gina Raimondo and Sackler contributions to her campaign. It was only $12,500, nothing in the world of hedge fund managers, Raimondo’s former occupation. The publicity finally got to her, and she announced she was donating the money somewhere. 

Sackler owns Purdue Pharma, major manufacturer of OxyContin, the highly addictive opioid responsible for more than 200,000 deaths. There are more than 1,600 lawsuits against Purdue and the Sacklers, whose net worth exceeds $14 Billion.

Sackler is a major funder if charter schools and charter advocacy groups, such as Achievement First, ConnCAN and 50CAN.

Categories Accountability, Charter Schools, ConnCAN, Connecticut, Education Industry, Privatization, Rhode Island

New York: State Teachers’ Union Fact Checks State Commissionerof Education

By dianeravitch
March 29, 2019 //
25

 

NYSUT, The New York State United Teachers, issued a blistering fact check of State Commissioner MaryEllen Elia’s claims about the state tests. 

You have to open it to get the full flavor because NYSUT, not normally outspoken, shreds Elia’s claims.

Elia writes in Orwellian Newspeak about value of the tests.

NYSUT response: Because of the lack of movement by SED on NYSUT’s suggested changes to the testing system, the current tests do not provide any useful information to parents or teachers or any real information on how a district is performing. The results do not accurately predict future student success. In fact, the tests mislabel more than half of the test takers as failing, while more than 80 percent of students go on to graduate from high school. The results of the current tests are not only useless, but also damaging to students.

There are several such exchanges.

Bear in mind that no one but the testing company is allowed to know student responses to questions. So teachers learn NOTHING about the strengths or weaknesses of their students. Teachers, students, and parents get a score but nothing of any diagnostic value.

All students in grades 3-8 should OPT OUT of these pointless tests.

Categories Accountability, New York, Opt Out, Parents, Students, Testing, Unions

California: Small Districts Make Money by Authorizing Charters in Big Districts with No Oversight

By dianeravitch
March 29, 2019 //
7

 

This article is the second of three written by Los Angeles Times education reporter Anna Phillips. The first told the story of charter operators who were making millions of dollars opening subpar charters.

This story is about California’s broken system for authorizing charter schools. Small rural districts with small budgets can collect millions by authorizing charters that open outside their district. Charters that have been rejected elsewhere can go shopping for a friendly authorizer who gladly takes a commission of millions and conducts no oversight.

Its a win-win-lose-lose. The rural district gets money, the charter gets authorized. And no one checks on its quality. The only losers are the public schools in districts where the new charters drain away students and resources, and students who sign up for charters of unknown quality and unpredictable sustainability. Here today, gone tomorrow.

“State law allows school districts to charge charters fees that are meant to cover the cost of monitoring the schools, but it does not restrict how districts use the money. As a result, districts have spent charter oversight fees on sports coaches, textbooks and computers for their own schools.”

”When the California Legislature passed the Charter Schools Act in 1992, it was intended to introduce competition into public education as well as an incentive for districts to experiment. There was supposed to be a marketplace of ideas about new ways of teaching and learning. But what has evolved in some parts of the state resembles an actual marketplace in which charter schools can shop for lenient authorizers and school districts can rake in much-needed cash.

”Before he was elected to the school board for Acton-Agua Dulce, Pfalzgraf recalls attending meetings and watching with growing concern as a line of charter operators sought approval to open new schools. He remembers those meetings as breezy, friendly affairs in which the answer was nearly always yes and district officials asked few questions, even of schools known to have been rejected previously by other districts.

“You’re telling people they’re supposed to vet charters. But they also know that if there’s no charter revenue, they don’t have a job,” Pfalzgraf said. “I think staff was looking at this and going, ‘If I recommend no, what’s going to happen to me?’

The district’s income from charter fees has more than doubled in the past five years, surpassing $3 million last school year. Roughly 25% of its operating budget now comes from those fees, according to its current superintendent.

”Students attending the out-of-town charter schools have not always benefited. Last school year, most of the charters Acton-Agua Dulce oversaw posted lower passing rates on state exams than its own district schools. In four of the charters, more than 95% of students failed the math test…”

“Many of the charters approved by small districts are classified as non-classroom-based, meaning their students receive much of their instruction off campus. Schools in that category typically aren’t a threat to district enrollment numbers because they draw from different markets — home-schooled children, students who work full time and others who have dropped out.

”In Shasta County, for example, a one-school district with 35 students and one part-time administrator has approved three non-classroom-based charters.

”In Kern County, a district with about 300 students has authorized five charters — all but one conducts most of its classes online.

”In one small San Diego County district, charter oversight fees made up nearly a third of its operating budget last school year.”

The districts collect about 3% of the charter’s revenue, a hefty sum. It can add on thousands more for fees of various kinds.

This loophole in the law encourages corruption. It is corrupt for a small district to balance its budget by opening a charter in another district, poaching its students without oversight or acccountability.

This is an invitation to small districts to make money by harming other districts.

The law incentivized greed and malfeasance, not educational improvement.

The law must change!

Categories Accountability, California, Charter Schools, Education Industry, Education Reform, Privatization

New Jersey Exposé, Part 1: How Charters Use Millions of Dollars from Taxpayers for Their Private Property

By dianeravitch
March 29, 2019 //
10

 

NorthJersey.com and USA Today New Jersey are running a five-part series called “Cashing in on Charter Schools, written by reporters Jean Rimbach and Abbott Koloff.

Follow this series if you care about integrity in spending public dollars.

What follows is an excerpt. Open the link to read the story. .

Part one.

NJ taxpayers are spending hundreds of millions of dollars to construct and renovate charter school buildings, but the public doesn’t own them.

School buildings that are paid for with millions of dollars in public money but owned by private groups.

Inflated rents, high interest rates and unexplained costs borne by taxpayers.

And tax dollars used to pay rents that far exceed the debt on some school buildings.

This is the world of charter school real estate in New Jersey.

Where public money can disappear in a maze of intertwined companies.

Where businesses and investors can turn a profit at taxpayer expense.

And where decisions about millions in tax dollars are made privately, with little public input and little to no oversight by multiple state agencies.

More than two decades into the state’s experiment to create charter schools, which were conceived to provide residents with choices and to spur innovation, serious flaws in the design of the system have led to the diversion of millions of dollars in taxpayer money to private companies that control real estate.

Two of the state’s largest charter school operators, KIPP New Jersey and Uncommon Schools, have been permitted by the state to monopolize hundreds of millions of dollars in federal aid for public school construction, helping them to create networks of privately owned buildings.

And investors positioned themselves to make millions from taxpayers, including real estate entrepreneurs, developers and a range of lenders….

KIPP New Jersey’s new Newark Collegiate Academy building, located at 229 Littleton Ave., was built with the help of millions of dollars in federal aid.

What that means is that millions of your tax dollars are being siphoned off by private interests to pay for buildings ― often without your knowledge ― that you don’t own.
Categories Accountability, Charter Schools, Education Industry, For-Profit, KIPP Charter Schools, New Jersey, Privatization
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