“I teach in an AZ public school–title 1 school. The poverty in this school is astonishing. This is my first year teaching in AZ after moving here from another state. I taught almost 20 years in a public school that was also a Title 1 school before moving to AZ. I have a lot of experience teaching in poverty schools. I have never seen anything as dysfunctional and as underfunded as the school I teach in currently. The whole district is in dire straits as it is funneling money away from public schools into charters. The lack of resources in this school is stupefying and confounding. It seems that the people in AZ are automatons and that this “cheating” of public schools is the new-normal. It’s not that people don’t care about education, its just that most people who can leave the poverty schools behind do so without realizing the impact they have. And to be honest, if I had children I don’t know if I would want them to attend one of these public schools. The discipline problems and lack of support for teachers is driving parents and teachers away. Buildings are falling apart. Just today part of the roof caved in at the school library. And then the corruption in the state legislature is driving the drain of resources.”
Now we might wonder where are the think tanks like the Center for American Progress and the Brookings Institution, which never utter a critical word about charter school corruption and malfeasance. CAP and Brookings are supposedly “liberal” think tanks, but for some reason they are unwilling and unable to say anything about the scams in charter world. My guess is that they are still protecting Obama’s education legacy, unwilling to admit that they are also protecting George W. Bush’s education legacy, which was identical.
Through their investigative work, reporters Craig Harris, Anne Ryman, Alden Woods and Justin Price revealed how Arizona’s school funding system and permissive legal structure allow charter-school operators to make huge profits off public education dollars. The team, led by investigative editor Michael Squires, published the five-part series “The Charter Gamble,” which examined how Arizona committed 25 years ago to the then-untested concept of charter schools and what the program has meant for the state.
The George Polk Awards in Journalism were established in 1949 by Long Island University to commemorate CBS correspondent George Polk, who was murdered while covering the Greek civil war, and are presented annually to honor special achievement in journalism, especially investigative and enterprising reporting that gains attention and achieves results. The Republic’s team was recognized at the 70th annual Polk Awards announcement ceremony for “initially disclosing insider deals, no-bid contracts and political chicanery that provided windfall profits for investors in a number of prominent Arizona charter schools, often at the expense of underfunded public schools.”
Greg Burton, executive editor of The Republic and azcentral.com, said the reporting team “unspooled miles of red tape to reveal what had been hidden during a decades-long push to funnel public money to privately run public charter schools — oftentimes with noble intent. But, where regulators and politicians fail as watchdogs, local reporters are vital. In this case, politicians and businessmen who could have pushed for reform made millions by ignoring warning signs. This is where Republic reporters worked to protect the public’s trust.”
In response to the reporting by the Arizona Republic, the legislature is considering charter reforms but none of those reforms will affect the worst abusers, some of whom are members of the legislature.
US News & World Report and Newsweek ranked BASIS charter schools in Arizona as the best high schools in the nation, without noting their dramatic attrition rates and demographics that heavily favor whites and Asians.
But a new audit shows that BASIS is in deep financial trouble.
“The globally renowned BASIS charter school system is nearly $44 million in the red, according to a recent report from a Phoenix-based watchdog group.
“The international charter chain, whose first campus opened in Tucson in 1998, lost nearly $12 million in net assets last fiscal year alone, according to an analysis from Arizonans for Charter School Accountability. BASIS rejects the report’s findings.
“Jim Hall, the accountability organization’s founder, generated the report based on audit documents available on the Arizona State Board for Charter Schools’ website. The Arizona Daily Star confirmed the deficit claims independently with the charter board audit.
“Despite its multimillion-dollar deficit, BASIS Charter Schools, Inc., did retain about $17.2 million in cash flow by the end of the last fiscal year, according to the audit. Hall argues this was possible because BASIS refinanced many of the loans it has taken out over the years to keep its 22 Arizona campuses up and running.”
The charter chain denies that it’s in financial distress, but about 60% of its expenses are payments to the for-profit corporation that operate the chain and nearly 11% is spent for administration.
Arizona’s charter industry is riddled with fraud and corrruption, meticulously documented by a year-long investigation in the Arizona Republic and by Curtis Cardine of the Grand Canyon Institute.
The Republican-dominated felt that it needed to pass a “Reform” bill, even though it was full of loopholes that would protect charter fraudsters and grifters.
So meaningless was the bill that it won the vote of charter operator Sen. Eddie Farnsworth, who made $13.9 million last year when he converted his for-profit charter chain to a nonprofit. Farnsworth gave a speech about why no reform was necessary.
The bill now goes to the House, where Republicans hold a 31-29 advantage.
Republicans rejected amendments from Democrats “to crack down on conflicts of interest and to provide tighter financial transparency on how charters spend tax dollars.
“Sen. Kate Brophy McGee, R-Phoenix, pushed the bill. It had overwhelming support from Arizona’s $1 billion charter school industry, whose lobbyist helped co-write the bill.“
Last year, the Arizona Republic wrote an expose of the millions made by Glenn Way, founder of a charter chain in Arizona, primarily by real estate deals and construction of the schools by “related” companies. He previously ran charters in Utah.
Way’s chain in Arizona has a red-white-and-blue patriotic theme.
A charter school operator who made millions of dollars building, selling and leasing properties to the schools he runs moved a step closer Monday toward setting up shop in North Carolina.
The N.C. Charter Schools Advisory Board voted Monday to recommend giving a full interview to Wake Preparatory Academy, a proposed K-12 charter school that wants to open in 2020 in northern Wake County. Wake Prep would be managed by a company whose owner also owns the company that would build and lease back the facility to the charter school.
Wake Prep is proposing to contract with Arizona-based Charter One to manage the school. Charter One manages American Leadership Academy, a network of Arizona charter schools. Former Utah state legislator Glenn Way founded ALA and owns Charter One and Schoolhouse Development.
The Arizona Republic reported last year how Way had made as much as $37 million by setting up no-bid deals in which he built school campuses and then sold the properties at a profit to the ALA charter schools. The newspaper’s five-part investigation into charter schools earned it the prestigious George Polk Award for Education Reporting.
Under Wake Prep’s proposed agreement, the school would contract with Schoolhouse Development to build the facility and lease it back to the school. The lease would start with the school paying $2.2 million the first year, $2.6 million the second year and $3 million in each of the next three years.
Bruce Friend, a CSAB member, said the board needs to get questions answered before recommending that the State Board of Education approve the school. Aside from questions about the lease, concerns were also raised that Wake Prep plans to pay Charter One up to 15 percent of its revenues annually…
Some charter schools are managed by for-profit companies. Last month, the advisory board recommended that the state approve three new charter schools in Wake County that would have contracts with for-profit companies.
This is the second time that Wake Prep has tried to open in North Carolina. The school applied last year to be managed by a different company before withdrawing its application.
Hilda Parler, a former CSAB member and president of Wake Prep’s board, said Monday that there’s high demand for high school charter seats among families in northern Wake.
“The population in the Wake Forest, Rolesville area is growing leaps and bounds,” Parler said. “New construction is everywhere.”
Parler was asked why she didn’t apply to just open a charter high school. She answered that a K-12 charter school would be more “lucrative” and “economically feasible” than only offering high school.
The Arizona Republic recently won a Polk Award for its outstanding coverage of charter corruption.
Craig Harris, a member of the investigative team, writes here about how charters ignore parents’ complaints.
When a student is mistreated, there is no re ourse. The boarddoesnt care. It protects the school,not the student.
Students in charter schools have no rights. The parents of the student in the incident described herewithdrew him from the school.
Harris writes:
“Evan George had finished his classes for the day and was hanging out with friends at American Leadership Academy’s Queen Creek campus, when two staff members approached and accused him of vaping.
“Evan, 16, says he was doing a trick with his mouth thatproduces a plume of moist air that resembles vapor from an electronic cigarette.
“His explanation didn’t convince the charter school’s staffers.
“Evan was ordered to the administration office, where Athletic Director Rich Edwards took him into a room and searched him, looking for a vape pen, which would have been a violation of school policy.
“He told me to take my pants down, and he put his fingers in my underwear,” said Evan, who is a junior. “I felt scared.”
“The search didn’t turn up a vaping device, according to records the school provided to the Arizona State Board for Charter Schools.
“ALA still suspended Evan from school for eight days.
“His parents, Chris and Kimberlie George, said both the Dec. 11 search and the suspension were wrong.
“The athletic director inappropriately touched their son, they said. And the school suspended Evan without proof he’d had been vaping, even though their son’s only prior disciplinary issues were for wearing torn jeans and chewing gum, they said.
“But when the Georges sought an independent review of Evan’s suspension, they found they had nowhere to turn.
“Arizona’s charter schools are primarily run by private companies. They must have a governing board, but school owners get to pick who’s on the board, so many are stocked with relatives, friends and even the charter’s owner. In some instances, boards have just one member — the charter operator.
“American Leadership Academy Queen Creek student says he was strip searched over vape trick
16-year-old Evan George says he was strip searched in December 2018 after performing a trick that made it appear vapor was coming from his mouth.
“Beyond the school, parents can only turn to the state Charter Board. And regulators there, because of limited resources and limited authority, rarely investigate such complaints against schools, an Arizona Republic investigation shows.
“The result is a lack of independent oversight that leaves students and families at some charter schools, in disagreements big and small, with no recourse to challenge school officials’ actions — even if they think those moves inhibit their students’ academic progress or personal safety.
“ALA Queen Creek officials denied the Georges’ request for an appeal hearing before ALA’s Board of Directors, which is composed of friends of ALA founder Glenn Way.
“Evan was never afforded due process,” Chris George said. “He wasn’t able to speak to his accusers, and the dismissal hearing was a farce. There was no interest in what the truth was.”
The Arizona Republic has previously written about Glenn Way, the founder of this charter chain.
On July 11, 2018, the Arizona Republic described how Way has made millions of dollars through hischarter chain.
“When Glenn Way moved to the East Valley at the end of the Great Recession, he might have been looking for a fresh start.
“The charter school operator was deep in debt to the IRS, had sought bankruptcy protection, and recently resigned from the Utah Legislature after his wife filed a protective order against him, public records show.
“Arizona offered other opportunities for someone in his line of work: A more lightly regulated charter school industry that’s well-funded.
“At his American Leadership Academy, which he launched in June 2009, he promised students would find “the best educational experience … in a moral and wholesome environment.”
“Thanks partly to Arizona’s favorable charter school laws and lucrative no-bid contracts with ALA, Way would find new wealth.
“The schools, which have made patriotism central to their brand, including red, white or blue student apparel, have been a hit in the conservative East Valley. American Leadership — which bears the same name as a charter school Way and his wife, Shelina, operated in Spanish Fork, Utah — has over nine yearsgrown to a dozen campuses with 8,354 students in Florence, Gilbert, Mesa, Queen Creek and San Tan Valley.
“Way’s own development and finance companies bought the land and then built most of the school buildings. Then, they sold or leased them to American Leadership Academy, where Way, until last year, was board chairman.
“An Arizona Republic review of property records shows that during ALA’s nine-year expansion, businesses owned by or tied to Way made about $37 million on real estate deals associated with the schools — funded largely by the Arizona tax dollars allocated to his charter schools.
“Way disputes the profit figure, saying undisclosed capital costs tied to the campuses, such as street improvements, trimmed profits to $18.4 million. He did not provide documents to show a lower profit.
“But building and selling the schools weren’t the only ways he has profited. Another one of Way’s firms is paid at least $6 million a year to operate them under a contract with American Leadership, records show.
“An Arizona charter schools watchdog said regardless of the precise size of the multimillion-dollar profit, it’s clear that Way has profited handsomely — like other charter operators — using Arizona’s loose charter school laws.
“Meanwhile, the Arizona State Board for Charter Schools is investigating allegations of financial mismanagement at ALA.
“Way said there has been no wrongdoing.
“Charter schools were not designed for people to make a profit,” said Chuck Essigs, government relations director of the Arizona School Association of Business Officials.
“Way disagrees.
“The (charter school) law is silent on the question of profit, and for good reason. Arizona families will only benefit if more operators of quality charter schools are enticed to expand their offerings in our state,” said Way, who is building a home in Queen Creek valued at nearly $1 million.”
It must be the height of patriotism to get rich from public funding intended for schools.
Arizona blogger David Safier reports that an investigative team of reporters at the Arizona Republic has won a prestigious Polk Award, one of the highest honors in American journalism, for its fearless reporting about charter school scandals in the state.
Safier writes:
The Arizona Republic’s thorough, ground-breaking stories about charter school corruption and profiteering have received scarce press coverage in southern Arizona from anyone but your faithful education blogger. That’s a serious omission. Though the stories tend to be based in Phoenix-area charter schools, they speak to statewide problems stemming from the lack of adequate charter regulation and oversight. One of the bad actors discussed in the series, for example, is state representative Eddie Farnsworth, who is making millions by selling his for-profit charters, which run on taxpayer dollars, to a non-profit company. That piece of news is definitely relevant everywhere in Arizona.
Also nearly absent in local reporting (I can’t say it hasn’t been reported, but I haven’t seen it) is the team of reporters who put together the articles that won the prestigious Polk Award in Journalism.
So let me be [among] the first in the southern Arizona news media to congratulate reporters Craig Harris, Anne Ryman, Alden Woods and Justin Price for sharing the honor, as well as the investigative editor Michael Squires.
The reporters received the Polk Education Reporting award, one of 14 Polk awards given in 2018, for:
“disclosing insider deals, no-bid contracts and political chicanery that provided windfall profits for investors in a number of prominent Arizona charter schools, often at the expense of underfunded public schools that educate all but 30,000 of Arizona’s 1.1 million students.”
This is one of those series that demonstrates the power of the press.
Instead of acting forcefully to improve the working conditions for teachers, the legislature is stuck on devising ways to expand its voucher program. That’s why the Koch brothers elected Governor Ducey, and they expect him to deliver.
She writes:
Anyone wondering where we stand with Arizona’s teacher shortage? After all, last year was probably the most significant year ever for Arizona public school teachers. Some 75,000 of them marched on the state Capitol demanding better pay for themselves and support staff, lower class sizes and more. The result was an additional 9% salary increase added to the 1% Governor Ducey had originally offered for the year. Surely this must have helped us retain quality teachers, right?
Well, not so fast. As the Arizona School Personnel Administrators Association (ASPAA) learned in their annual statewide survey of districts, we are a long way from “out of the woods” and aren’t even headed in the right direction.
The 211 districts and charters that responded last year reported that 7,453 teacher openings needed to be filled during the school year. As of December 12, 2018, there were still 1,693 vacancies and 3,908 individuals not meeting standard teacher requirements, for a total of 75% of teacher positions vacant or filled by less than fully qualified people.
On top of that, 913 teachers had either abandoned or resigned from their teacher position within the first half of the school year without a candidate pool to replace them. To make matters worse, 76% of these teachers held a standard teacher certificate.
These are alarming statistics, made all the more so considering the strides made in 2018, and the worse status since the 2017–18 report. It showed that as of December 8, 2017, 62.5% of teacher positions were vacant or not meeting standard teacher requirements and 866 teachers had abandoned or resigned within first half of the year, over 80% of whom held a standard teacher certificate.
The salary increase didn’t solve the problem, partly because salary and benefits still aren’t competitive, but also because teacher working conditions (such as high class sizes and the dramatic increase of children dealing with trauma and Adverse Childhood Experiences) make it really tough to do the job right. And, oh by the way, allowing our districts to hire uncertified teachers hasn’t done anything to make our teachers feel valued as professionals. As the state’s Superintendent of Public Instruction, Kathy Hoffman, told the state House Education Committee yesterday, our teacher shortage is a crisis. To make matters worse, 25% of Arizona teachers are eligible to retire in the next two years.
The geniuses in the legislature thought that lowering teacher qualification standards would attract more teachers. It didn’t.
Legislation introduced by an influential Republican state senator would require charter schools to disclose more about their finances. But the bill contains a large loophole that would allow the state’s biggest chains like Basis Charter Schools and Great Hearts Academies to avoid revealing how they spend their money.
Brophy McGee acknowledged, however, that her bill would not prevent charter chains from giving large, no-bid management or construction contracts to their founders. Nor would it prevent charter CEOs from paying themselves exorbitant amounts, as Primavera online charter Chief Executive Damian Creamer did by receiving $10.1 million from the school over the past two years.
Brophy McGee called millionaire charter school “outliers.”
Democrats, whose past efforts to more tightly regulate charter schools have failed, and Republican Attorney General Mark Brnovich’s Office both said the bill is a step in the right direction. But they said it needs additional work.
State law doesn’t prohibit conflicts of interest in charter-school contracts or impose the strict reporting of expensesas it does for district schools. Charter school boards can also be staffed with the friends and relatives of school executives. And there’s no limit on how much money charter schools can spend outside the classroom.
Brophy McGee’s bill, which has not been scheduled for a hearing, could change some of that. It would:
Require every charter school to have at least a three-member governing board, with no more than two immediate family members serving. Family members cannot constitute a majority of the board.
Prohibit in, certain instances, buying goods or services from a charter owner or family member, governing board member or a related business.
Require that any purchase of more than $50,000 be in the “best interest” of the charter school and follow generally accepted accounting principles.
Prohibit charter schools from retaliating against an employee who reports violations. Currently, nearly all charter employees can be fired at any time for any reason.
The new procurement regulations, however, would not apply to management contracts between a charter holder and a management company. Charter management companies, popular with major charter chains like Basis and Great Hearts, also would be exempt from the procurement regulations.
Loopholes in the bill
That loophole for charter management companies gives Democrats heartburn, said Rep. Reginald Bolding, D-Phoenix.
Charter operators could avoid the new requirements by simply transferring all or nearly all of their state funding to a management company that runs their schools, he said.
Ryan Anderson, a spokesman for Brnovich, said the attorney general also has concerns about the exemption, as well as language that would require prosecutors to get permission from a charter sponsor in order to investigate wrongdoing.
“We still have a lot of questions,” Anderson said, adding that this is a work in progress.
Brophy McGee said it was not her intent to allow charter operators to avoid procurement restrictions, and she would consider fixing the language. She declined to say whether the Charter Schools Association, which has blocked past reform efforts, or major charter operators with powerful allies in the Republican establishment had inserted the exemption language in her bill.
She said the legislation is a work in progress that ultimately won’t make everyone happy. But, she said, the charter school industry needs more oversight.
Matt Benson, a spokesman for the Charter Schools Association, said the intent of the exemption was “to protect the school brand so that the founder of a charter school doesn’t risk losing control of his/her creation.”
Benson acknowledged the bill may be too broadly worded and that the association will work with Brophy McGee to refine the language. He said the association would oppose any law that requires charter operators to accept open bids for management contracts, as school districts are required to do.
Bolding said the loopholes will allow charter operators to continue self-dealing and enriching themselves. The bill also won’t stop charter operators from using Arizona tax dollars to expand outside the state, he said.
Basis, which has some of the top-ranked high schools in the country, transfers nearly all of its state funds to a management company owned by its founders, Michael and Olga Block.
Basis officials have stated because a closely tied private company, Basis.ed, runs the schools it isn’t required to disclose how much the Blocks or other executives are paid.
The Attorney General’s Office also has expressed concerns that the legislation does not give its office enough additional power to investigate charter schools.
Brnovich wants subpoena power over charters and broader authority for the auditor general to investigate charter finances. Further, Brnovich wants charter schools to segregate public funding from private dollars in businesses related to the charter school.
“The big question is what happens with the public’s money,” said Anderson, the AG spokesman. “The bill does not appear to deal with that issue…We now have difficulty on the civil (enforcement) side on investigating misuse of public money when all money is commingled together.”
Benson said the legislation allows the Attorney General’s Office to investigate procurement related complaints. However, that would not occur for private management companies.
More disclosure?
Bolding said he likes that Brophy McGee’s bill requires charter schools to disclose more information about their finances and governance.
The bill would require charter operators to post on a public website the names of voting members of the governing body, the number of independent voting members, total annual state revenue, as well as expenses, assets and liabilities.
Charter schools already are required by state law to disclose much of that information to the Arizona State Board for Charter Schools. That information is available on the Charter Board’s website.
The bill also would require charter operators to adopt a conflict-of-interest policy and to provide a written statement that describes the services provided by a management company and the cost.
The bill, however, does not require a charter operator to release the actual contract or precise financial expenditures of its private management company. Further, the bill does not require the private management company to disclose how much its executives are paid with public tax dollars.
School districts, which receive less in per-pupil state funding than charter schools, have to abide by much stricter procurement and disclosure laws.
Brophy McGee said she will not seek to have charter management companies disclose financial information, stating that they are private companies and should not be subject to that level of transparency. Republicans in past years have blocked Democrats’ efforts to force charter management companies to comply with state public records law.
The bill also requires the state Charter Board to provide training courses on the state open meetings law, public records requirements, enrollment laws and regulations, applicable procurement rules and discipline.
Charter schools already are required by law to follow the open meeting law and public records requirements. The Republic has found some schools refuse to comply with those laws.
Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478 or on Twitter @charrisazrep.
Arizona has celebrated its role in the charter gold rush and is often considered “the wild west” of chartering. The laws are lax, the schools are deregulated, and there is little or no oversight.
Following the abrupt closure of at least three Arizona charter schools over the past year, a new report concludes more than 100 of the state’s charters are in danger of closing because of excessive debt and other financial troubles.
It’s a “near certainty” that more than 50 of the state’s 544 charter schools will close in the near future, according to the report by the Grand Canyon Institute, a self-described centrist think tank.
As a whole, Arizona’s 544 charter schools owe more to creditors than they’re worth as businesses contracted with the state to educate kindergarten to 12th-grade students, the report states. “Like any business, an overleveraged charter is financially vulnerable and could fail if it then suffers an income loss,” the report states.
“You will see a bunch of charters folding suddenly,” said Curt Cardine, the study’s main author and a former charter executive for EdKey Inc., a large Arizona charter chain that had a $7.74 million net deficit as of June 30, 2018.
The 211 districts and charters that responded last year reported that 7,453 teacher openings needed to be filled during the school year. As of December 12, 2018, there were still 1,693 vacancies and 3,908 individuals not meeting standard teacher requirements, for a total of 75% of teacher positions vacant or filled by less than fully qualified people.
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