Will Huntsberry is the investigative reporter who untangled the $50-$80 million scam that led to the indictment of eleven people associated with a virtual charter chain in California (“Inside the Charter School Empire Prosecutors Say Scammed California for $80 Million”).
In his latest investigation, he details the complicated business dealings that are enriching the owners of a “nonprofit” chain of 60 charter schools across the state.
John Helgeson, a charter school executive, has a great deal for a public servant.
In 2007, he helped found Charter School Capital, a for-profit Oregon company that loans money to charter schools and buys school properties. In May 2015, he also started making $300,000 a year as an executive vice president at Learn4Life, a nonprofit network of more than 60 charter schools that serves roughly 45,000 students in California.
Charter School Capital lends money to Learn4Life schools and pockets the interest. While working at Learn4Life – which is funded almost entirely by California taxpayers – Helgeson maintained an ownership stake in Charter School Capital. In doing so, Helgeson discovered a way to collect not just one, but two paychecks from California’s cash-strapped public school system.
Learn4Life, which operates nine San Diego locations, serves a unique group of students. Many are at-risk and have dropped or failed out of traditional high schools. The schools are publicly funded and often located in strip-mall storefronts. Students usually come in to meet with a teacher once or twice a week and complete work packets.
Since 2014, Charter School Capital has loaned more than $6 million to two Learn4Life schools in San Diego alone. A charter school borrowing money from a for-profit lender is normal enough. To have a key employee who profits from both is not.
Just two months after Helgeson came on board at Learn4Life, the company increased its business with Charter School Capital. Charter School Capital purchased the 100,000 square-foot corporate headquarters of Learn4Life in July 2015 – making Charter School Capital the landlord of Learn4Life. Now Charter School Capital wasn’t just profiting on its loans to Learn4Life. It was also profiting on a lease. And so was Helgeson.
“It sounds like a classic conflict of interest, where someone is serving two masters,” said Jessica Levinson, former president of the Los Angeles Ethics Commission and a professor at Loyola Law School.
To learn more about these storefront charters where students meet a teacher once a week, read Carol Burris’s devastating report Charters and Consequences.
She wrote:
Of the San Diego charter schools, over one-third promote independent learning, which means the student rarely,
if ever, has to interact face to face with a teacher or fellow students. One of the largest independent learning charters, The Charter High School of San Diego, had 756 students due to graduate in 2015. Only 32% actually made it. The Diego Valley Charter School, part of the mysterious Learn4Life chain, tells prospective students that they “are only required to be at their resource center for one appointment per week (from 1-3 hours), so it’s not like having a daily commute!” The Diego Valley cohort graduation rate in 2015 was 10.8%, with a dropout rate of 45%. The San Diego School District’sgraduation rate was 89%.
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