Archives for category: Arizona

The parents and educators who created SOS Arizona blocked the last expansion plan for vouchers by getting a referendum on the state ballot in 2018. They had to fight the governor, the legislature, the Republican party, the Koch brothers, the DeVos family, and other monied interests, who wanted to keep expanding vouchers until every student in the state was eligible for a voucher.

The all-volunteer SOS Arizona group gathered over 100,000 signatures to put a referendum on the ballot, fought the efforts of the Koch brothers to kick them off the ballot, and the referendum went to the public, where voucher expansion was overwhelmingly defeated by a margin of 65-35%.

Now SOS Arizona needs your help to put another referendum on the state ballot, to end voucher expansion. Volunteers must collect 350,000 signatures to initiate this referendum. They need YOUR help!

Save Our Schools Arizona (SOSAZ), the grassroots group responsible for stopping universal voucher expansion in Arizona in 2018, has gone on offense. In spite of their overwhelming 2-to-1 defeat of Empowerment Scholarship Account (ESA) voucher expansion, the Arizona state legislature attempted to pass 6 different voucher bills in 2019–all killed by SOSAZ and in 2020 is working to allow ESA vouchers to expand vouchers across state lines. Save Our Schools, once again, said “Enough!”

On February 26, 2020, Save Our Schools Arizona filed a statewide citizens’ initiative (read it here). A critical next step in fighting the privatization movement, capping the program once and for all. The Save Our Schools Act:

Limits private school vouchers to 1% of the AZ student population, allowing current students to stay in the program while blocking ALL new voucher programs in AZ FOREVER

Prevents taxpayer dollars from going to out-of-state private schools

Prevents taxpayer dollars from being deposited into personal accounts to pay for college expenses (a recent public records request by the Arizona Republic uncovered $33 million sitting in unspent recipient accounts including 9 families with a balance of more than $100,000 and dozens of others with more than $50,000.

Prioritizes existing ESA vouchers for special needs students, for whom the program was originally designed

Creates a “Taxpayer Protection Fund” to sweep remaining ESA voucher funds at the end of the fiscal year to enforce the law and increase accountability; remaining funds will transfer to the Exceptional Special Needs public school fund

To successfully place the Save Our Schools Act on the November 2020 ballot, SOSAZ has launched a statewide effort to gather 350,000 signatures by July 2. Please help by donating to this critical cause at https://secure.everyaction.com/gTzwyTPPjU2EeS_rLATvZA2

The IDEA charter chain has received hundreds of millions in federal funding to expand. It has garnered a lot of attention, however, for its caviar tastes. The IDEA board approved a management proposal to lease a private jet for nearly $2 million a year, for the convenience of its executives. Not like your average school board or superintendent!

But their luxury tastes have not been curbed by the negative reaction private jet problem.

Among other big-ticket items noted in this story, here is a notable one. IDEA CEO Tom Torkelson flew to a private meeting with Betsy DeVos in Florida, in a nine-passenger jet in which he was the only passenger. DeVos has given IDEA more than $200 million from the federal Charter Schools Program. She loves IDEA.

The Texas Monitor reports:

Last October, the CEO and president of the largest charter school company in Texas took a trip to Houston. They didn’t travel the way most public-school employees would have. Instead, they traveled by private jet, their spouses and five children came along for the trip, and they got around Houston not by Uber or rent car, but in a chauffeured SUV.

That trip was just one item in an $800,000 bill that IDEA Public Schools racked up between 2017 and 2019 on private jets and other luxe travel spending. Although IDEA received $319 million from the State of Texas and $71 million in federal money in 2018, this kind of travel would be illegal for public school district and state employees in Texas. Traditional public-school supporters and charter school advocates alike say it’s the kind of spending that gives a black eye to the charter school concept.

Charter schools receive no property tax revenue, as traditional public schools do, but are funded through state and federal grants. Like other public schools, they can also raise money from private donors. IDEA says it uses some of that private money for its luxury travel.

Records show that company CEO Tom Torkelson, his wife and three children, along with IDEA President JoAnn Gama, her husband and two children, stepped off a private jet at Sugar Land Regional Airport and jumped into the chauffeured SUV. The reason for the trip, records show, was to “visit Houston school sites.”

The flight cost is not noted in the records, nor is the reason for the spouses and children coming along on the trip. The vehicle, rented from Casablanca Limousines in Houston, cost $1,800.

At about the time of the Houston trip, IDEA was preparing to lease a private jet – the same plane that the district had used on an individual trip basis since at least 2014. But board members nixed the lease after the deal became public.

In December 2019, IDEA announced the plane lease had been put aside.

In March, Torkelson proclaimed that “IDEA will not pay for private air travel” any longer.

Four days later, IDEA released the district’s transportation records to Peyton Wolcott, a Texas-based education advocate who had submitted a request for the documents in January.

She questioned the timing and the sincerity of Torkelson’s vow to end the subsidized travel.

“Why shouldn’t IDEA’s board and executives, who enjoyed Texas taxpayers’ largesse, dig deep into their pockets and pay it back? “she said. Records show IDEA has spent hundreds of thousands of dollars on private-plane travel in the past five years.

Flights by Torkelson and IDEA staffers inside Texas between 2017 and 2019 cost, on average, about $1,300 per one-way trip, with a discount for round-trip fares. For example, a private, round-trip flight taken by Torkelson in fall 2018 from McAllen to San Antonio ran $2,340. A commercial flight on United Airlines today would cost $377 for the same route. Bills for private flights can also include lodging and meals for pilots as well as other costs. See a sample invoice here.

Torkelson took a private jet to Tampa in November to meet with U.S. Education Secretary Betsy DeVos to discuss “education philanthropy,” records show. He was the only passenger on the jet, which holds nine people.

I mean, really, do you expect such powerful people to fly economy like a public school employee?

IDEA promises that 100% of its students who graduate will enroll in a four-year college. What they don’t point out is that students are not allowed to graduate unless they have been accepted by a four-year college. And, yes, there are colleges that accept every applicant.

Nonetheless, Craig Harris of the Arizona Republic hopes that IDEA and KIPP will open in Arizona. Arizona has the most lax charter oversight in the nation. It’s the only state that allows for-profit operators of charters (many other states ban for-profit charters, but allow for-profit management, as in Michigan, where 80% of all charters are run by for-profit EMOs). It’s hard to judge whether Arizona or California has had the most charter scandals, but Arizona has had some big ones, where charter operators have made off with millions of dollars, and it was all legal.

There is the grand success of former legislator Eddie Farnsworth, who pocketed up to $30 million by turning his for-profit chain into a nonprofit chain.

Then there was Glen Way, who made millions building his charter schools.

Michael and Olga Block founded the BASIS charter chain in Arizona, whose demographics are skewed white and Asian, get very high test scores, but take home enough to buy a NYC condo for $8.4 million.

No one has accused KIPP or IDEA of fraud, so maybe Arizona needs them, that is, if you think itis a good idea to continue stripping students and resources from public schools.

The principal of the Discovery Creemos Charter School pled guilty to inflating enrollment and stealing $2.5 million from the state and federal governments. 

The former principal of the shuttered Discovery Creemos Academy pleaded guilty Friday to participating in a $2.5 million scheme to inflate enrollment at the defunct charter school.

Harold Cadiz, 55, faces up to 12 ½ years in prison after pleading guilty in Maricopa County Superior Court to two counts of felony theft during the 2016-17 and 2017-18 school years. He’s scheduled to be sentenced March 27.

Cadiz is the second administrator from the Goodyear charter school, also known as the Bradley Academy of Excellence, to admit to participating in the scheme to defraud the state and federal governments by inflating the school’s enrollment by hundreds of students.

Cadiz’s plea calls for a prison sentence of 3 to 12 ½ years and up to 7 years of probation.

Arizona public schools are funded based on the number of students, meaning each additional student a school reports to the state brings more tax dollars.

Daniel K. Hughes, president and CEO of Discovery Creemos, was the first executive at the school to cut a plea bargain with the Arizona Attorney General’s Office, admitting to theft and conspiracy in November 2018. He faces a presumptive prison sentence of five years.

The school closed January 2018, just after the 100th day of the school year, ensuring it would receive as much state money as possible before it closed.

A few months before Discovery Creemos Academy closed, Hughes had assured the Charter Board that he would turn around the financially and academically failing charter school. Reviews by the Charter Board for the 2013-14, 2014-15 and 2015-16 school years found the school did not meet its financial performance recommendations.

Hughes has admitted that during the 2017-18 school year, his school reported an enrollment of 528 students, but 453 of them were fraudulent. In 2016-17, the school reported it had 652 students, but 191 were fraudulent.

 

 

Thanks to a provision in the tax law, called the EB-5 program, wealthy foreign investors can buy green cards by investing in charter schools.

Craig Harris, award-winning investigative reporter for the Arizona Republic, took a close look at this provision in the law that allows foreign citizens to buy visas in exchange for funding charter schools.

He visited schools in Arizona and other states.

This story was published in December.

CORNELIUS, N.C. – When Lakeside Charter Academy opened five years ago in this boating community outside Charlotte, it faced the same challenge that confronts many new charter schools.

It had governmental approval to operate and the tax dollars that come with it to pay for teacher salaries, supplies and other expenses. But it had no money to build a school or lease classrooms.

Like most of the 45 states with charter schools — taxpayer-funded campuses operated largely by private businesses — North Carolina provides no money to new operators for start-up or capital costs.

So Lakeside struck a devil’s bargain of sorts. It entered an agreement with an Arizona company to renovate a former church building, funded, in part, by a federal program that allows private companies to raise money by essentially selling green cards to wealthy foreign nationals.

Arizona-based Education Fund of America secured the foreign financing and its business partner, American Charter Development, of Utah, would raise the rest of the cash, build the campus and then lease the space back to Lakeside. Lakeside put no money down.

Peter Mojica, a North Carolina businessman and founding school board member, said Lakeside had few options as parents worked to get the school built around 2012. 

“A charter school has no credit and can’t get the money unless they have a crazy endowment from a rich benefactor,” said Mojica, who still has a son at Lakeside. “So you have Chinese investors buying visas.”

Twenty-seven other campuses in eight states, mostly small charter schools, have struck similar deals with Education Fund of America since 2013, according to its website.

Those deals have put some of the schools in financial jeopardy, according an Arizona Republic investigation.

Two Florida schools closed after one year. Four others, including three Arizona charter schools, are in imminent danger of shutting their doors, records obtained by The Arizona Republic show. More than half of the schools who entered the deals are running budget deficits. And at least 10 have turned to high-interest loans to stay afloat. The majority have average to failing academic scores.

The Republic visited seven states to investigate charter schools and what ongoing shifts in the industry might mean for Arizona, the state with the largest share of charter school students in the nation.

Almost three decades after the first U.S. charter schools opened their doors promising to innovate and compete with traditional public schools, funding remains a daunting barrier for all but the biggest operators. The result, experts say, is small, entrepreneurial operators who were the backbone of the early charter movement are increasingly squeezed out or forced to take big financial risks.

The number of mom-and-pop charter operators is declining. Between 2014 and 2018, 61% of charter schools approved to operate nationwide were affiliated with a nonprofit or for-profit chain, according to the National Association of Charter School Authorizers.

The officials who grant charters to would-be school operators are more inclined to favor big chains with proven track records than independent startups, said Greg Richmond, who until recently was chief executive of the National Association of Charter School Authorizers. 

“The charter school field has become a little more risk-adverse,” he said.

‘MAKING A PROFIT OFF OF OUR CHILDREN’

Lakeside Charter Academy turned to Education Fund of America only after parents struck out trying to get private investors, including hedge funds, Mojica said.

The school has paid escalating rent to American Charter Development for a campus that is far from luxurious, according to interviews and records obtained by The Republic.

Lakeside has no gymnasium or lunch room and only a small playground. At the end of last school year, a parking lot that doubles as a basketball court was rendered unusable by a large sinkhole. Its roughly 300-square-foot library is mostly filled with donated books.

As of July, the school was more than $1.7 million in debt — most of it for unpaid rent — and enrollment had plummeted to 100 students, from a high of 400. The state gave it a “C” academic rating.

“All I wanted was a good school for my sons,” said Alyson Ford, whose boys attended Lakeside until she moved them over disgust with Lakeside’s finances and governing board.

“As taxpayers, we are not happy about this situation,” she said, citing companies “making a profit off of our children.”

She questions Education Fund’s claim that the school was built for $5.1 million, using $3 million in Chinese investment through the federal Employment-Based Fifth Preference Immigrant Investor Program — or EB-5 visa program. County assessor records value the property at $3.3 million….

The nation’s 7,000 charter schools educate more than 3 million children, according to the U.S. Department of Education. The share of public school students attending charter schools nationwide has risen from 1% in 2000 to 6% today.

Despite that growth, starting a charter school remains daunting.

Just seven states and the District of Columbia offer charter school facility grants, and nine have loan programs, according to the Charter School Facilities Center.

The Charter School Facilities Center, a Washington, D.C., group tied to the National Alliance for Public Charter Schools, found in a June research paper that one of the biggest challenges to the expansion of charter schools is state laws that place the burden of funding facilities on school operators who struggle to find affordable facilities.

Arizona Gov. Doug Ducey created a charter school construction lending program in 2016 that was billed as a way to help the “best public schools” expand by providing lower-cost financing with help from the state. It mostly assisted Basis Charter Schools Inc. and Great Hearts Academies — large, successful charter chains with close ties to the governor. After only one charter school received financing through the program in 2018, three Arizona charter schools used it this fall.

The federal government since 1994 has helped fund startup costs for charter schools through competitive grants and credit programs. But only a fraction of the projected $500 million this year is set aside for smaller charter schools, with most going to the large nonprofit companies that dominate the charter school industry.

The U.S. Department of Education last year distributed 32 multi-year grants to individual charter schools. The largest was for $1.25 million, far less than what is needed to build a comprehensive campus. Meanwhile, a single chain, Texas-based IDEA Public Schools, received nearly $117 million.

Operators who succeed in opening a school have a high failure rate, suggesting additional difficulty in finding long-term financing. Since 2000, at least 2,927 U.S. charter schools, or nearly 30%, have closed, federal records show.

The failure rate in Arizona, 41%, is even higher despite the Legislature providing charters with additional per-pupil funding to help with capital costs.

In 2018, The Republic found 1 in 4 Arizona charter schools had significant financial red flags, and that when compared to district schools, charters spend about twice as much or more on administrative costs than in the classroom.

In January 2018, Discovery Creemos, a Goodyear charter school, made headlines when it closed because of financial troubles. The ex-chief executive later admitted to defrauding the state and federal government of at least $2.2 million by inflating enrollment by hundreds of students

The Grand Canyon Institute, a private, nonpartisan think tank, found Arizona charter schools primarily fund buildings and classrooms using high-interest “junk bonds” guaranteed by schools’ projected enrollment growth. If the growth doesn’t materialize, mortgage payments will consume a greater share of the schools’ shrinking revenue, leaving less for the classroom.

Bill Honig, a researcher and California educator who runs the Building Better Schools website, found through his research that charter school closures have disrupted the instruction of at least 288,000 school kids since 2000.

Those closures take a largely overlooked toll on students.

Stanford University’s Center for Research on Education Outcomes examined school closures in 26 states over eight years, and found that fewer than 50% of students displaced by a closure ended up at a better school.

A UC Santa Barbara study, considered the definitive look at the subject, found students who changed schools between the eighth and 12th grades for any reason other than being promoted to a higher grade, were twice as likely to drop out…

Wing launched Education Fund eight years ago to help address the lack of charter school start-up funding. 

“Charter schools have a massive financial disadvantage,” he said.

As a U.S. Citizenship and Immigration Services regional center for EB-5 visas, Wing’s Education Fund essentially sells green cards to wealthy foreign nationals in exchange for an investment in U.S. charter schools.

Among its first projects was to provide $2 million in foreign investment for the Learning Foundation and Performing Arts charter school, which opened in Gilbert in 2013.

Education Fund’s website shows smiling students, 28 “EB-5 financed charter schools,” and a breakdown of foreign capital and other investments.

There are about 880 regional centers. But Education Fund, which is approved to operate in 11 states, claims to be the first to raise foreign investment for charter schools.

Its work has gone largely unnoticed, even within the charter school industry. Assistant U.S. Secretary of Education Jim Blew, one of the country’s top charter school advocates, told The Republic he was unaware charter schools have been funded through the EB-5 program.

The foreign investments must create or maintain at least 10 U.S. jobs within two years. When Lakeside Academy signed on with Education Fund, investors could get a visa with a $500,000 investment provided it was for a project in a rural or high-unemployment area.

Wing declined to say how many visas Education Fund’s investors have obtained. Nationwide, about 10,000 such visas are issued annually, but not without controversy and allegations of fraud.

Reports to Congress by U.S. Government Accountability Office in 2015 and 2016 found a lack of federal oversight of the program resulted in fraud.

Sen. Chuck Grassley, R-Iowa and then-chairman of the Senate Judiciary Committee, in 2017 raised questions about an EB-5 scheme that created no jobs while allowing operators to pocket $50 million from Chinese investors.

 

The far-right Goldwater Institute has filed a lawsuit claiming that the state has no right to regulate how parents spend their voucher money, the money that is paid by taxpayers. Goldwater says that if the parents misspent the money, it should be refunded to parents so they can try again. The Goldwater Institute, along with the DeVos family and Charles Koch, have sponsored efforts to expand the voucher program to cover all students in the state. They began with the “camel’s nose” under the tent, offering vouchers for students with disabilities (who abandon their federally-protected rights when they go to private schools); then added students in foster care; then added students in “failing” public schools; then students on reservations; then students from military families. They won’t be satisfied until every student in the state gets a voucher to leave public schools for a private school.

The Arizona Republic reports:

The Goldwater Institute, a conservative think tank, has filed suit against the state Department of Education contending it doesn’t have the authority to enforce rules governing Arizona’s school voucher program.

The suit — which was filed in Maricopa County Superior Court and names the state attorney general as a defendant — alleges the Department of Education didn’t follow the state’s rule-making process when it created the ESA handbook, a set of rules that outlines the Empowerment Scholarship Account program. The ESA program grants parents money to send their children to private school.

The suit also contends the Department of Education does not have the authority to require that parents who have misspent ESA money reimburse the state for those funds. It is demanding the Department of Education instead put that misspent money back into parents’ accounts. 

Finally, the lawsuit claims the department has no right to make funding conditional on parents filing expense reports to document how they spent the taxpayer money. It calls the quarterly reports “cumbersome and time-consuming” and says as a result payments to participants are often late, breaching their contract and causing them to miss payments to private schools.

Under the ESA program, parents receive 90% of the state funding that would otherwise go to their local public school districts. Children in six categories, such as those with special needs, in foster care, from failing schools and others, are allowed to enroll in the program. 

The voucher money, loaded on debit cards, is intended to cover specific education expenses such as private- or religious-school tuition, home-school expenses and education-related therapies.

Dawn Penich-Thacker, spokeswoman for Save Our Schools Arizona, which has opposed expansion of the ESA program, said the suit is really about stripping power from Kathy Hoffman, the Democratic superintendent of public instruction elected in 2018.

“They (Goldwater) don’t want her having any say over it,” Penich-Thacker said. 

Parents have complained about the expense reports for years but Goldwater only now filed suit, Penich-Thacker said. 

Last year, two bills in the Arizona Legislature would have stripped oversight of the ESA program from Hoffman and given it to the Treasurer’s Office, which is overseen by Republican Kimberly Yee.

“Suddenly, this is when the school choice community is up in arms,” Penich-Thacker said. “Parents are saying this is happening since day one, but it took the election of 2018 for anything to actually become a problem.” 

The Goldwater Institute has been involved in shaping the ESA program since before the voucher program became law in 2011. 

The think tank was instrumental in writing the legislation that created the program. It was also deeply involved in the numerous expansions of the law, which were often copied from model legislation written by special interests.

It was a big backer of the universal voucher expansion that would have allowed all 1.1 million Arizona public school students to use public money to go to private school. The number of students receiving the funds would have been capped at 30,000. Voters overturned the voucher law in November 2018 by a vote of 65% to 35%.

Goldwater also has wielded an “iron-like grip level of influence” behind the scenes with the Department of Education, attempting to dictate how the program should be implemented and acting as if it retained ownership of the program.

It has not been a good year for vouchers. The research continues to show that they don’t “save poor kids from failing schools.” They are in fact more likely to cause their academic performance to decline.

Pastors for Texas Children has led the effort to block vouchers in Texas and SOS Arizona led the effort to block voucher expansion in Arizona.

Voucher advocates (Koch-funded) are coming back with new legislation for 2020, and Arizona SOS has pledged to beat them again.

There are heroes among us.

 

December 2019
PRIVATE SCHOOL VOUCHERS: AN UNSUCCESSFUL EFFORT TO OVERTURN THE WILL OF VOTERS IN ARIZONA AND GROWING SUBURBAN OPPOSITION IN TEXAS
This is the third in our series, Private School Vouchers: Analysis of 2019 State Legislative Sessions. Read the first and second parts.
In 2017, the Arizona Legislature passed, and the Republican Governor, Doug Ducey, signed, a bill expanding the state’s existing Education Savings Account (ESA) voucher program. The legislation created one of the most expansive voucher programs in the nation, opening the existing ESA voucher, first established in 2011, to all students statewide. The program had been limited to students with disabilities, several Native American Tribes, and students in “low-performing” public schools.
Shortly after the bill’s passage, public school advocates collected more than 111,000 signatures to put an initiative on the ballot to overturn the ESA voucher expansion. In November 2018, Arizonans voted against the voucher expansionby an overwhelming margin: 65% to 35%. Following the vote, Beth Lewis, co-founder of Save our Schools Arizona, the grassroots group that led the effort to collect signatures, said, ”This result sends a message to the state and the nation that Arizona supports public education, not privatization schemes that hurt our children and our communities.”
However, just a few months after the public referendum, during the 2019 legislative session, Republican lawmakers introduced a number of bills to again expand the ESA voucher program. These bills would have added new student eligibility categories, including families below a certain income threshold and students who are victims of crimes or harassment. Two of these bills passed the relevant committees but were not considered by the full House or Senate. The remaining bills were not taken up at all.
While the proposed private school voucher bills did not pass in 2019, Arizona demonstrates that public school supporters can never assume their work is done, even when the public has resoundingly spoken against privatization. A day after the defeat of the expanded voucher program at the ballot box, voucher advocates publicly redoubled their efforts to expand the ESA program.
In Texas, where a Democrat has not been elected statewide since 1994, every bill introduced in the Legislature to establish a private school voucher program has failed to become law. As in several other conservative states, a bipartisan coalition of Democrats and rural Republican legislators in Texas has consistently opposed these bills. However, unlike many of these other states, more suburban Republican legislators are joining the opposition to vouchers, preferring to focus on funding for public schools.
In the 2018 election, Democrats picked up a number of seats in the suburbs of the state’s large cities, including those previously held by several strong voucher proponents. Additionally, during primary elections, several pro-voucher legislators lost to candidates who were more supportive of public education. As the head of the Texas American Federation of Teachers, Louis Malfaro, said, “….almost categorically the Republicans who ran as friends of public education prevailed over those who said we need more school choice, we need more vouchers, so I don’t see appetite on either side of the aisle.”
During the 2019 legislative session, Republican leaders, including the governor, notably did not include private school vouchers among their education priorities. Perhaps in response to electoral losses in the suburbs and a lack of support for vouchers, legislative leaders emphasized improving the state’s public school financing system instead.
Read Parts 1 and 2.
Acknowledgements
Many thanks to Jason Unger for compiling the research and drafting this series on 2019 legislative sessions.
Press Contact:
Sharon Krengel
Policy and Outreach Director
Education Law Center
60 Park Place, Suite 300
Newark, NJ 07102
973-624-1815, ext. 24

Curtis Cardine, former superintendent of both public and charter schools, is the preeminent expert on charter schools in Arizona. He created the Grand Canyon Institute to study education issues, and it keeps a close eye on charter malfeasance.

Cardine has written two books that are well worth reading to learn about the failures of the charter industry in Arizona. He is an expert in school finance, and he demonstrates in detail how charter operators are ripping off the public.

The first was Carpetbagging America’s Public Schools.

I quote that book extensively in my own new book SLAYING GOLIATH.

Cardine’s second book, recently published, is Schooling Alone, in which he compares the atomization of society caused by school privatization, and likens its effects to sociologist Robert Putnam’s classic study of social disintegration, Bowling Alone.

Cardine recently prepared a review of Arizona charter school closures and their relation to the bond debt incurred by charters.

Read his letter to two Arizona state senators here.

Arizona is a swamp of charter corruption.

Earlier this year, the Arizona Republic won the distinguished George Polk Award for its coverage of charter school corruption.

Now star reporter Craig Harris has another blockbuster story.

He reports that the founder of a charter chain paid companies he owns or co-owns nearly $47 million in the past year. 

American Leadership Academy, an East Valley charter school chain, paid this past fiscal year at least $46.8 million to companies owned or co-owned by founder Glenn Way or his relatives, newly released financial records show. 

The payouts include more than $30 million to the management company that employs the schools’ teachers and staff, millions to another firm for operational services, and almost half a million to an apparel firm for school or athletic uniforms. Way or one of his relatives is a co-owner in all of those businesses.

In total, the payments to so-called related parties made up more than half of ALA’s annual $79 million budget.

An Arizona Republic investigation last year found that businesses owned by or tied to Way resulted in profits of about $37 million in real estate deals associated with the expansion of ALA schools, a figure Way said at the time was closer to $18 million because of other costs. 

Arizona is fortunate to have the Arizona Republic looking out for frauds and corruption because the state doesn’t care.

Arizona also has Curtis Cardine of the Grand Canyon Institute, a former superintendent of both public and charter schools. Cardine became so incensed about endemic corruption that he has studied the finances of every charter school in the state (except those that keep their book secret). He reported in a book called Carpetbagging America’s Public Schools that nearly 3/4 of the state’s charter schools do business with “related” companies, companies connected or owned by the charter owner.

The hard-right Governor Doug Ducey is a stand-in for the Koch Foundation. His elections were funded by the Koch brothers, the DeVos family, and other billionaires who hope to eliminate public education.

Parents and teachers managed to defeat their last attempt to expand vouchers by fighting for a referendum, in which vouchers were overwhelmingly rejected by voters.

Someone needs to demand accountability and transparency for charters.

Arizona is the only state that openly endorses for-profit charters. The other states ban for-profits, but allow for-profit management companies to operate nonprofit charters, which is a shell game.

 

 

When a new Secretary of State (aDemocrat in a Koch-owned State) was elected in November 2018 in Arizona, she discovered that her predecessor had signed a long-term contract with a private company to store public records.

The state’s storage facility sat empty while the private company collects millions.

One former state official described the warehouses as something out of “Indiana Jones,” with stack after stack of boxes.

A few years ago, the hulking facility just down the street from the Arizona Capitol was filled with government records, from the files of prison inmates to old meeting minutes.

Today, its three warehouses sit mostly empty.

Instead of storing records here, the state agreed in 2017 to ship each box to the warehouses of a storage and information management company, Iron Mountain.

Then-Secretary of State Michele Reagan, a Republican, touted the deal in a news release as saving money.

But her Democratic successor, Katie Hobbs, says the financial implications of the decision have been staggering. And the state appears stuck with the deal for years under a contract awarded without competition.

Hobbs published a proposed budget Thursday that calls for an infusion of funds into her office for 2020, the coming election year. She pointed to the Iron Mountain contract as a major drain on the office’s finances, describing the deal as part of what she called “severe mismanagement and irresponsible oversight of public resources” under Reagan’s administration.

Under the contract with Boston-based Iron Mountain, the price for each box is only going up. The Secretary of State’s Office says the costs of storing government records has nearly doubled from the year before the contract took effect.

At the same time, the state is paying to maintain its mostly vacant complex of warehouses, which remain government property.

The contract runs for 10 years.

In all, the records management program will cost the Secretary of State’s Office about $1.6 million this fiscal year, even considering that the state slashed the number of staff positions in records management from 11 to three after initially implementing the contract.

Meanwhile, the fees from other government agencies are expected to total $900,000.

In addition, the state pays $400,000 a year for its own empty storage facilities.

Under the contract, the price for storing each carton of documents will increase annually starting next year.

Not only do the fee schedules in the contract call for higher prices year after year, Iron Mountain could add a surcharge on the cost of each trip it makes to pick up government records if fuel prices rise over a certain level. And if the state wants to transfer the records to another company or to its own warehouses for storage, the government will have to pay for the move, too.

Do the math. The state is paying about $3 million a year to store its records. That cost is expected to rise in each year of a ten-year contract. The state saves by cutting the jobs of eight employees, who were probably making less than $100,000 a year, probably $60,000 a year, filing records.

In Arizona, this is a public-private partnership.

Guess who benefits?

Assistant U.S.  Secretary of Education Scott Stump traveled to Arizona to celebrate the success of charter schools, and he did so at a public magnet school!

This top education official insisted that Tucson’s University High is a charter school.

When he was corrected by a reporter after his news conference, he continued to insist that the public high school was a charter school.

Like his boss, Betsy DeVos, Mr. Stump is on an “Education Freedom Tour” to point out the great achievements of every school that is not a public school.

That is the U.S. Department of Education’s “back to school” message: Abandon public schools.

Never mind that Arizona has what is possibly the most corrupt charter industry in the nation (excepting Florida).

Never mind that Arizona is the only state that legally allows for-profit charters (the others ban for-profit charters but allow for-profit managers to operate nonprofit charters).

Never mind that Arizona charter law permits nepotism and conflicts of interest among members of the board and the management company.

In Arizona, corruption is legal.

Never mind that Betsy DeVos and the Koch brothers poured millions into elected Governor Doug Ducey and a rightwing legislature.

To enter University High, students must pass an entrance exam, so of course the school has high test scores.

But it is not a charter school.

It is a public school, governed by the elected Tucson school board. Unlike a private charter school, it is fully accountable and transparent to the public, not to a private board.