Billy Townsend is an acerbic critic of Florida charter scandals and the state commissioner Richard Corcoran, whose wife runs a charter school. He never runs out of material.
In this post, he tells the story of a politician, Manny Diaz, who works for a charter chain, blaming a struggling community for the failure of his employer’s charter school, which was launched with much razzle-dazzle.
The nonprofit, nonpartisan group “In the Public Interest” explains the need to regulate the $440 million federal Charter Schools Program, which is awash in waste, fraud, and abuse.
Did you know that the federal government spends $440 million every year to help start privately run charter schools?
Did you know that some of that money ends up in the hands of people who never actually open schools or open them and quickly close them? And that some goes to charter schools run by for-profit organizations in communities that do not want them.
Some even goes to charter schools with a history of worsening racial segregation and others that exclude, by policy or practice, students with disabilities and students who are English Language Learners.
That’s why it’s a big deal that Department of Education just proposed new rules to reform its funding program.
And why YOU, as an individual and/or an organization, need to send a comment in support of the department’s proposed changes.
Please open this link and comment or attach a letter (the deadline is April 13).
Make sure you write that you support the proposed changes. Try to personalize it as much as you can. Talk about how charter schools are impacting your school district or how they might if they started opening and taking away public school dollars. (Here’s a post from education historian Diane Ravitch with more on what to write.)
If you’re short on time, just say who you are and that you support the changes.
Here are the most important proposed reforms:
The charter school industry is fighting the new regulations with all they’ve got. Opinion pieces are echoing across right-wing media.
Let the Department of Education know they are supported. Comment before April 13. It will only take a few minutes.
If you need help writing a comment, don’t hesitate to email us.
Keep in touch,
Jeremy Mohler
Communications Director
In the Public Interest
P.S. We have a new website!!!
Ohio knows charter schools. A lobbyist for the charter school industry wrote the law. Charter schools are mistakenly called “community schools.” Most charter schools in the state are failing schools, but that does not dim the enthusiasm of the GOP legislature for them. Ohio welcomes for-profit charter schools. Charters drain money from public schools.
For the first time in the history of the federal Charter Schools Program, which started in 1994, the federal U.S. Department of Education has proposed regulations to exclude for-profit management of charters that seek federal funding to expand and to require charters seeking federal funding to present a summary of their charter on the locality where they plan to open.
Jan Resseger, who lives in Ohio, sent the following appeal to her followers.
Please Support the Proposed USDOE Rule Changes for the Federal Charter Schools Program
Submit a comment supporting the Department’s new stronger regulations. You can submit your comment HERE, and you must submit the comment before April 13, 2022.
Please read Ohio Public Education Partners’ explanation of an urgently important development that requires our immediate attention. The U.S. Department of Education has published a notice in the Federal Register proposing new rules to strengthen oversight of the federal Charter Schools Program (CSP). It is urgently important for each one of us to write and submit a formal comment expressing support for stronger oversight of the Charter Schools Program.
First, even though the Elementary and Secondary Education Act forbids the allocation of federal dollars to for-profit charter schools, the owners of for-profit charter management organizations (CMOs) have learned how to get around the law. The U.S. Department of Education has proposed to stop the misallocation of federal Charter Schools Program (CSP) dollars to for-profit charter school management companies that hide behind the nonprofit charter schools they manage under sweeps contracts.
Second, when a charter school asks for Charter Schools Program startup funds, the Department has declared its intention to require a community impact statement to ensure that there is a need for a new charter school in the community and that the school won’t promote racial segregation. Neither should rapid expansion of charter schools undermine urban neighborhoods. The most serious consequence of out-of-control charter school expansion has been evident in large cities, where charter schools advertise lavishly to attract families from public schools.
Here is the language of the two urgently important rules the U.S. Department of Education proposes to add:
First — “Each charter school receiving CSP funding must provide an assurance that it has not and will not enter into a contract with a for-profit management organization, including a non-profit management organization operated by or on behalf of a for-profit entity, under which the management organization exercises full or substantial administrative control over the charter school and, thereby, the CSP project.”
Second — “Each applicant must provide a community impact analysis that demonstrates that there is sufficient demand for the proposed project and that the proposed project would serve the interests and meet the needs of students and families in the community or communities from which students are, or will be, drawn to attend the charter school, and that includes the following: (a) Descriptions of the community support and unmet demand for the charter school, including any over-enrollment of existing public schools or other information that demonstrates demand for the charter school, such as evidence of demand for specialized instructional approaches. (b) Descriptions of the targeted student and staff demographics and how the applicant plans to establish and maintain racially and socio-economically diverse student and staff populations, including proposed strategies (that are consistent with applicable legal requirements) to recruit, enroll, and retain a diverse student body and to recruit, hire, develop, and retain a diverse staff and talent pipeline at all levels (including leadership positions).”
Please submit a comment supporting the Department’s new stronger regulations. Don’t let yourself be intimidated by the complicated language and presentation of the new rules in the Federal Register. Begin your comment by thanking the Department of Education for strengthening long-needed accountability in this program. In simple prose, explain your support for each of the proposed new rules for the Charter Schools Program. In your comment, if you like, you may quote the language (above) of each rule followed by your reason for believing the new regulation is so important. Your comment may be as long or as short as you like—a few sentences or several paragraphs. Longer comments must be submitted as attached documents.
You can submit your comment HERE, and you must submit the comment before April 13, 2022.
If you are not planning to write your own comment, you may send the Network for Public Education’s action alert letter, but I urge you to personalize your letter by adding a few sentences of your own.
Jan Resseger
The federal Charter Schools Program was launched in 1994 with a few million dollars, when the Clinton administration decided to offer funding for start-ups. At the time, there were few charter schools. In the early, idealistic days, charter enthusiasts asserted that charters would set lofty goals and close their doors if they didn’t meet them. They were sure that charters would be far better than public schools because they were free to hire and fire teachers.
Right-wingers jumped on the charter bandwagon as a way to undermine public schools and to bust teachers’ unions. In short order, a gaggle of billionaires decided that charter schools would succeed because they operated with minimal or no regulation, like a business.
What no one knew back in 1994 was that the charter industry would grow to be politically powerful, with its own lobbyists. No one knew that the “most successful” charter schools were those that excluded the students who might pull down their test scores. No one knew that for-profit entrepreneurs would set up or manage charter chains and make huge profits, mainly by their real estate deals. No one knew that one of the largest charter chains would be run by a Turkish imam. No one knew that charter schools would develop a very old-fashioned militaristic discipline that prescribed every detail of a student’s life in school. No one knew that the little program of 1994 would grow to $440 million a year, with much of it bestowed on deep-pocketed chains that had no need of federal money to expand. No one knew that charter schools would become a favorite recipient of big money from Wall Street hedge-fund managers and billionaires like Bill Gates, the Walton family, Eli Broad, Michael Bloomberg, John Arnold, Betsy DeVos, Reed Hastings, and many other billionaires and multi-millionaires. No one anticipated that by 2022, there would be 3.3 million students in more than 7,400 charter schools.
Perhaps most important, no one expected that charter schools, on average, would perform no better than public schools. And in many districts and states, such as Ohio, Nevada, and Texas, charter schools perform far worse than the public schools.
School choice has been a segregationist goal ever since the Brown Decision of 1954, when southern states created segregation academies and voucher plans to help white students escape from racial integration. It should be no surprise, then, to see that the same states that are passing laws to restrict discussion of racism, to ban teaching about sexuality and gender, and to censor books abut these topics are the same states that demand more charter schools. Coincidence? Not likely. These are culture war issues that rile the Republican base.
How strange then, given this background, that the Washington Post published an editorial opposing the Department of Education’s sensible and modest effort to impose new regulations on new charter schools that seek federal funding. The education editorial writer Jo-Ann Armao very likely wrote this editorial, since she has that beat. Armao was a cheerleader for Michelle Rhee when she was chancellor of the D.C. schools and imposed a reign of terror on the district’s professional staff, based on flawed theories of reform and leadership.
In the following editorial, she makes no effort to offer two sides of the charter issue (yes, there are two, maybe three or four sides). She writes a polemic that might have been cribbed from the press releases of the National Alliance for Public Charter Schools, the amply endowed lobbyist for the industry. She gives no evidence that she has ever heard of the high closure rate (nearly 40%) of the charters that received federal funds from the Charter Schools Program. She seems unaware of the scores of scandals associated with the charter industry, or the number of charter founders who have been convicted of embezzlement. She doesn’t care about banning for-profit management from future grants. She thinks it’s just fine to set up new charters in communities where they are not needed or wanted. She seems unaware that the new regulations will not affect the 7,000 charters now in existence. Charters can still get start-up funding from Michael Bloomberg, the Waltons, or other privatizers. New charters can still be opened by for-profit entrepreneurs like Academica, but not with federal funds.
Here is the editorial, an echo of press releases written by Nina Rees of the National Alliance for Public Charter Schools (Rees previously worked at the right-wing Heritage Foundation, served as education advisor to Vice-President Dick Cheney, and worked for financier Michael Milken).
The editorial’s title is: “The Biden Administration’s Sneak Attack on Charter Schools.”
Advocates for public charter schools breathed easier last month when Congress approved $440 million for a program that helps pay for charter school start-up expenses. Unfortunately, their relief was short-lived. The Biden administration the next day proposed new rules for the program that discourage charter schools from applying for grants, a move that seems designed to squelch charter growth.
On March 11, a day after the funding passed, the Education Department issued 13 pages of proposed rules governing the 28-year-old federal Charter Schools Program, which funnels funds through state agencies to help charters with start-up expenses such as staff and technology. “Not a charter school fan” was Mr. Biden’s comment about these independent public schools during his 2020 presidential campaign, and the proposed requirements clearly reflect that antipathy.
The Biden administration claims that the proposed rules would ensure fiscal oversight and encourage collaboration between traditional public schools and charter schools. But the overwhelming view within the diverse charter school community is that the proposed rules would add onerous requirements that would be difficult, if not impossible, to meet and would scare off would-be applicants. Those most hurt would be single-site schools and schools led by rural, Black and Latino educators.
Consider, for example, the requirement that would-be applicants provide proof of community demand for charters, which hinged on whether there is over-enrollment in existing traditional public schools. Enrollment is down in many big-city school districts, which would mean likely rejection for any nonprofit seeking to open up a charter. “Traditional schools may be under-enrolled, but parents are looking for more than just a seat for their child. They want high quality seats,” said Nina Rees, president of the National Alliance for Public Charter Schools.Hence the long waiting lists for charter school spots in cities with empty classrooms in traditional schools. Also problematic is the requirement that charters get a commitment of collaboration from a traditional public school. That’s like getting Walmart to promise to partner with the five-and-dime down the street.
The Biden administration surprised the charter school community by what charter advocates called a sneak attack. There was no consultation — as is generally the case with stakeholders when regulations are being drafted — and the public comment period before the rules become final ends April 14.The norm is generally at least two months.
The proposed changes, according to a spokesperson for the Education Department, are intended to better align the Charter Schools Program with the Biden-Harris administration’s priorities. “Not a charter fan,” Mr. Biden said, and so bureaucratic rulemaking is being used to sabotage a valuable program that has helped charters give parents school choice.
If you disagree with this editorial, as I do, please send a comment thanking the Department of Education for proposing to regulate a program that has spun out of control and urging them to approve the regulations. Give your reasons.
If you think that charter schools have no need for federal funding when so many billionaires open their wallets for them, if you think that your community has enough charter schools, if you think that public schools must be strengthened and improved, if you want to stop federal funding of for-profit entrepreneurs, if you are tired of funding schools that never open, please write to support the U.S. Department of Education’s reasonable proposal to regulate the federal Charter Schools Program.
People often wonder how charter entrepreneurs make money. This article by Carol Burris, executive director of the Network for Public Education, appeared on Valerie Strauss’s Answer Sheet blog in 2019. It’s a cautionary tale that is as important now as it was then. The new regulations for the federal Charter Schools Program would ban “sweeps contacts” in which for-profit corporations control the funding of charters they manage.
Burris writes:
National Heritage Academies (NHA), the third-largest for-profit charter chain in the nation, is selling 69 of its more than 90 schools to a new corporation created just for the purchase. Charter Development Co., the real estate arm of NHA, will receive the payout from a sale that requires nearly $1 billion to finance. This massive transfer of public dollars into private wealth is running into some roadblocks, however, in NHA’s home state of Michigan.
Both Charter Development Co. and NHA are owned by J.C. Huizenga, an education reform entrepreneur who refers to himself as “the son of a garbage man.” His father was hardly the typical garbage collector, however. In 1971, his successful business joined forces with those of his cousin, H. Wayne Huizenga, to create Waste Management, a trash disposal company worth almost $64 billion today.
The sale of the 69 NHA campuses in seven different states, like the operation of Huizenga’s charter schools, is wrapped in secrecy, even though taxpayers have paid the mortgages for years.
According to the documentation provided to the Wayne County, Mich., Commission, which was asked to approve the deal for 15 schools, the buyer is Campus Partners 1, which describes itself as a Michigan nonprofit organization.
Campus Partners 1’s charitable tax-exempt status, however, has not yet been granted by the Internal Revenue Service. The corporation has no website. It has no records filed with the Michigan attorney general, which is a requirement for nonprofit organizations in that state. Its November 2020 articles of incorporation provide scant information other than an incorporation date and boilerplate bylaws.
The president of Campus Partners 1, according to the documentation given to Wayne County, is John Grant, who serves as general counsel to J.C. Huizenga and his interests. Campus Partners 1 will contract with NHA’s related Charter Development Co. for a facility maintenance contract and “ground lease” so that the buildings can continue to be a cash cow for the for-profit organization. While ownership may technically change hands for the cash-out, control will still be in the hands of NHA.
One might wonder what organization would loan $853,600,000 to a corporation of unsettled status that is less than a year old. Apparently, one that frequently finances for-profit private prisons will. The Industrial Development Authority of the County of La Paz in Arizona is issuing municipal bonds to finance the sale. National Heritage Academy has no charter schools in that county or even the state.
According to this 2014 report in Bloomberg News, La Paz issues municipal bonds to charter schools and for-profit prisons as a means to raise revenue. Arizona is one of only three states that allow the sale of municipal bonds to out-of-state entities. The bonds, according to Bloomberg, are intended to give “riskier borrowers from charter schools to private prisons access to the $3.7 trillion municipal market.”
This is not the first time an Arizona county has financed a charter school cash-out with municipal bonds. Jim Hall, founder of Arizonans for Charter School Accountability, studies the state’s for-profit charter sector. “Bill Coats sold his Leona charter chain for $72 million,” he said. On his website, Hall detailed the sale of Coats’s charter school real estate in 2007.
Coats sold his schools to a Michigan nonprofit he founded by persuading the Pima Industrial Authority of Arizona to issue $82 million in bonds to pay for the sale of 10 of his charter schools, plus expenses.
Like its counterpart in La Paz County, Pima sold municipal bonds, which are attractive to the wealthy for their potential high returns on which they pay neither federal nor state taxes. From mortgage payments to the tax-exempt payouts from the bonds, taxpayers fund charter cash-out deals.
The questionable nature of these dealings has not been lost on some local authorities — at least two of which are putting on the brakes.
Earlier this month, Mount Clemens City Commission refused to approve the sale of the bonds to Campus Partners 1 when it found out that the board of directors of Prevail Academy had no idea that its building was to be sold and had no input into the new lease.
According to reporter Mitch Hotts of the Macomb Daily, Prevail’s board of directors approached the city manager for details regarding the transaction. The firm representing Campus Partners 1 acknowledged that the board of the supposedly independent nonprofit school might have been left in the dark but said that although the board of the school was not briefed, “the owners were in favor of the sale.” The commission is putting the sale on hold, pending further information.
The board’s concern about the new lease is understandable. If the sale goes through, the board will be committing to a 30-year lease with Campus Partners 1.
Casandra Ulbrich, president of the Michigan State Board of Education, is concerned with the terms of the lease as well. “Most charter schools are authorized for five-year intervals,” she wrote in an email on Aug. 25. “What happens if a school closes or isn’t reauthorized? Who will end up ‘holding the bag’?”
Mount Clemens was not the only location where NHA encountered a roadblock. NHA wants to sell 46 of its Michigan charter schools, 15 of which are in Wayne County.
When advocates of the sale made their pitch to a standing committee of that county’s commissioners, they were met with skepticism and resistance to the sale.
“I just can’t help but think that for every charter school that opens up, one of our public schools closes. … I am going to be a no vote on this one,” council member Irma Clark-Coleman said at the meeting. The Arizona lawyer representing the deal pushed back by describing the requested action as “a technical, administrative thing.”
Council members in attendance unanimously approved a motion to reject approving the bonds for the sale, making it clear that they did not want to be what they called a “one-stop-shop” for the 15 schools.
After the meeting, I spoke with council member Tim Killeen, who was outspoken in his opposition to the deal, and asked him why. “It did not pass the smell test,” he said. “This was not a normal request. It felt like they thought we were going to roll over.”
The representatives of NHA told the Wayne County Commission’s standing committee that if they did not approve the sale, they would ask the localities where the schools are located, or if need be, use private bonds that do not need approval. Denial would just slow the deal down. They also said they might approach the full commission but never did, perhaps not wanting to draw attention to their multi-state efforts.
Can the boards of the charter schools themselves block the sale? In theory, any NHA schools that might not like the new lease agreements should be able to negotiate with the new owner or find another home. They should also be able to fire the for-profit management company pushing the sale. But theory meets reality when charters run by for-profits try.
In 2014, the Detroit Free Press reported what occurred when one NHA school, Detroit Enterprise Academy, attempted to break free of NHA. The board had questioned why the school spent almost $1 million a year on its building lease. According to the story, when the board sought financial information, they were “treated as a student council.”
The board president resigned when she pressed for financial details and was told by NHA that it was “none of the board’s business.” When the board tried to fire the for-profit management company, the school’s authorizer, Grand Valley State University, said the school would not have its charter renewed if the board fired NHA.
According to the letter from the authorizer, the evaluative measures that Grand Valley would use would “cease to exist” because “NHA employs the faculty and administration, NHA owns the building, curriculum and all of the equipment.”
According to reporter Jennifer Dixon, when NHA’s Metro Charter Academy sought a cheaper lease and asked for financial records, Grand Valley “suggested the entire board resign — and summarily reduced the term of office for two who refused.”
Detroit Enterprise Academy is now up for sale for $14.5 million and Metro Academy for $16 million, according to the document presented to the Wayne County Commission.
How does absolute control of a school that a corporation is supposed to work for happen? It happens because NHA operates its schools via sweeps contracts, in which the nonprofit board turns over school control and taxpayer funding to the for-profits. Such contracts are not uncommon in the for-profit-run charter world.
Other examples of sweeps contracts include the contract between the Ohio Distance and Electronic Learning Academy and the for-profit chain Accel Online Ohio, a Nevada limited liability company; the contract between Northeast Raleigh Charter Academy and its for-profit management Torchlight Academy Schools, and the contract between Ohio Virtual Academy and K12 Virtual Schools.
While agreements between for-profit management companies and their schools are hard to find because of the lack of transparency built into state charter laws, as we searched across states, we found the contracts for chain schools and the for-profit management companies to be consistent.
In most cases, for-profit management is an attempt to get around Title 20 of the Elementary and Secondary Education Act, which requires schools to be nonprofit organizations to be eligible to receive federal funding. The nonprofit school is a facade for the for-profit corporation.
And it is the reason the charter lobby unsuccessfully fought so hard to defeat Section 314 of the Departments of Labor, Health and Human Services, and Education 2022 appropriations bill. If adopted by the Senate, it would close the loophole that allows nonprofit schools to be cash cows for for-profit operators.
Ultimately, Huizenga’s charter school cash-out financed by the taxpayers will probably go forward. Unless Congress acts and closes the loophole, the 139 for-profit corporations that manage more than 1,100 charter schools in the United States will continue to put profits before taxpayers and kids. And more cash-outs funded at taxpayers’ expense will occur.
Jan Resseger writes here about the U.S. Department of Education’s proposed new regulations for the federal Charter Schools Program. To a significant extent, the Department has incorporated recommendations offered by the Network for Public Education aimed at blocking for-profit entrepreneurs from winning federal funding. The charter lobby is fighting furiously to block these new regulations. Public comment is open until April 13.
Open this link and send your comment.
Peter Greene writes here about the proposal to tighten federal regulations so that for-profit corporations will not qualify to receive federal charter funding.
Greene writes:
This is exactly the kind of boring policy wonk stuff that can make ordinary humans nod off. But it;’s worth paying attention to. It’s even worth giving the feds your two cents. I’ll tell you how at the end of this. First let me explain what’s happening.
The Charter Schools Program (CSP) is a federal grant program that gives charter schools money both for start-ups and expansions. It’s a big, beautiful federal tax dollar gravy train, and it’s been running for many years through many administrations. The first batch of granty largesse was disbursed in 1995; since then something like $4 Billion has been thrown at charters, with decidedly mixed results. A report from the Network for Public Education found that about 1 out of every 4 dollars ($1 billion) had been spent on fraud and waste, including schools that closed within a year as well as schools that never opened at all (spoiler alert: no, the taxpayers don’t get their money back when that happens). Despite all that, the gravy train is still running, this year to the tune of about $440 million.
But if we’re going to do this, couldn’t we at least institute a few rules for getting the grant money? That’s what the Biden administration is proposing right now, and we are all invited to offer our thoughts before the proposed rules are adapted and/or adopted.
The language of the proposal is about priorities–in other words, if you meet these certain guidelines, you score more points in the Give Me Some Grant Money contest– and application requirements. So let’s take a look at the proposed language and see what we’ve got, because some of this is good and some of it could be better.
Greene explains the changes the feds want to make. And he also gives you information on where to write to express your views. If you or your organization thinks that the feds should stop enriching for-profit corporations, you should write a letter. The charter industry is working furiously behind the scenes to organize their allies and to fight these new regulations.
Greene writes:
Offering your two cents is the easiest thing in the world (Well, not the easiest–but pretty damn easy). On the government website that I’m linking right here, you can find a copy of the full proposal. Up and to the right is a blue button that says “comment,” which you just click on and there you go. There’s a guide in case you want some “how to” tips. You can comment as an individual or as a group representative. You can even comment anonymously.
Do not be intimidated. One of the comments currently up at the sites say, in total, “Hi hello I believe this is an important topic to discuss!”
And here’s the thing. The charter industry does not want this, and they are already mustering troops to flood these comments with tales of how this will hurt the children and cripple their good work and be a terrible awful no good very bad thing, even though these rules boil down to a simple message–
Maybe charter schools should partner with communities and other people interested in education instead of partnering with people whose main interest is making money.
So tell the feds that. Make your voice heard. Help the government make one tiny step toward the kind of charter function and accountability that we always should have had.
This year, for the first time since the federal Charter Schools program was established in 1994, the U.S. Department of Education is setting forth meaningful regulation of the program. This is a historic development and great news for those of us who have watched the charter industry escape accountability and transparency, while tolerating grift and profiteering.
As the Network for Public Education showed in two major reports (Asleep at the Wheel and Still Asleep at the Wheel), the federal charter program is riddled with waste, fraud, and abuse. Nearly 40% of the charter schools funded by this program either never opened or closed soon after opening. About $1 billion was wasted.
The Department has made a good faith effort to repair the negative aspects of the Charter School Program and to create regulations that would put guardrails in place for charter schools.
There are three key features to these regulations:
First, to qualify for federal funding, charters must develop an impact statement, describing the demographics that they will serve, whether there is a need for their proposed charter, whether the charter would intensify racial segregation in district schools, and how the charter would impact the local district schools.
Second, charters would have to demonstrate how they will serve the local community.
Third, charters operated by for-profit organizations would not be eligible for funding.
These are all significant reforms that have the potential to turn charters into good neighbors of public schools.
I urge you to write your own comment to support the Department’s bold effort to regulate the recipients of federal money for charters ($440 million). You can write 50 words in the comment or write a letter and attach it.
Please open this link to make a comment or send a letter:
Please read the letter that Carol Burris wrote on behalf of the Network for Public Education, posted here.
Comments from The Network for Public Education Regarding Proposed Priorities, Requirements, Definitions, and Selection Criteria-Expanding Opportunity Through Quality Charter Schools Program (CSP)-Grants
Docket ID Number: ED-2022-OESE-0006
April 1, 2022
The Network for Public Education (NPE) writes in response to the invitation to submit comments regarding “Proposed Priorities, Requirements, Definitions, and Selection Criteria-Expanding Opportunity Through Quality Charter Schools Program (CSP)-Grants to State Entities (SE Grants); Grants to Charter Management Organizations for the Replication and Expansion of High-Quality Charter Schools (CMO Grants); and Grants to Charter School Developers for the Opening of New Charter Schools and for the Replication and Expansion of High-Quality Charter Schools (Developer Grants).
NPE is a national non-profit organization with 350,000 subscribers. We network with nearly 200 national, state, and local organizations all committed to the same mission—to preserve, strengthen and support our democratically governed public school system. For the past several years, we have been deeply concerned by what we view as endemic corruption and waste in the Federal Charter Schools Program.
The U.S. Department of Education (USED) must update its priorities and its requirements to address loopholes and flaws in the program that have resulted in for-profit run schools receiving grants, 12% of all CSP grants going to charter schools that never open, grants received by schools and charter management organizations that provide false and misleading information, and sub-grants issued to charter schools with a history of exacerbating racial segregation and that exclude, by policy or practice, students with disabilities and students who are English Language Learners.
The Award of CSP Grants Charter Schools Operated by For-Profit Organizations
We strongly support the Department’s attempt to ensure that charter schools operated by for-profit management corporations do not receive CSP grants, specifically this language:
(a) Each charter school receiving CSP funding must provide an assurance that it has not and will not enter into a contract with a for-profit management organization, including a non-profit management organization operated by or on behalf of a for-profit entity, under which the management organization exercises full or substantial administrative control over the charter school and, thereby, the CSP project.
The federal definition of a public school under IDEA and ESEA is “a nonprofit institutional day or residential school, including a public elementary charter school, that provides elementary education, as determined under State law.” 20 U. S.C. §§ 1401(6) (IDEA), 7801(18) (ESEA) Similarly, the statutes define a “secondary school” as “a nonprofit institutional day or residential school, including a public secondary charter school, that provides secondary education, as determined under State law․” 20 U.S.C. §§ 1401(27) (IDEA), 7801(38) (ESEA).
Former for-profit entities have created non-profit facades that allow the for-profit and its related organizations to run and profit from the charter school, following the judgment of the Ninth Circuit Court of Appeals in Arizona State Bd. For Charter Schools v. U.S. Dept. of Educ. in 2006 (464 F.3d 1003).
Ineffective provisions undermine the present regulations against the disbursement of funds from the federal Charter Schools Program (CSP) to charter schools operated by for-profit entities. We identified over 440 charter schools operated for profit that received grants totaling approximately $158 million between 2006 and 2017, including CSP grants to schools managed with for-profit sweeps contracts.
We offer as examples the recent CSP grants awarded to Torchlight Academy Charter School of North Carolina and Capital Collegiate Preparatory Academy of Ohio. We also bring your attention to the audit of a charter school run by National Heritage Academies in New York. The State Comptroller specifically chides the charter board for the fees taken by a for-profit that played the role of applying for and managing grants. National Heritage Academies schools have frequently received CSP grants and operate under sweeps contracts.
The relationship between a for-profit management organization is quite different from the relationship between a vendor who provides a single service. A school can sever a bus contract and still have a building, desks, curriculum, and teachers. However, in cases where charter schools have attempted to fire the for-profit operator, they find it impossible to do without destroying the schools in the process.
Recommendations:
Many for-profit organizations operate by steering business to their for-profit-related entities. They are often located at the same address, and the owner of the management company or a member of the immediate family is the owner of the related entity. Therefore, it is recommended that wherever references to for-profit organizations appear, the phrase “and its related entities” is added.
(a) Each charter school receiving CSP funding must provide an assurance that it has not and will not enter into a contract with a for-profit management organization, including a non-profit management organization operated by or on behalf of a for-profit entity, under which the management organization and its related entitiesexercise(s) full or substantial administrative control over the charter school and, thereby, the CSP project.
Quality Control of Awards and the Importance of Impact Analysis
We strongly support the proposed regulations that seek to bring greater transparency and better judgment to the process of awarding CSP grants. We especially support the inclusion of a community impact analysis.
We are pleased that “the community impact analysis must describe how the plan for the proposed charter school take into account the student demographics of the schools from which students are, or would be, drawn to attend the charter school,” and provide “evidence that demonstrates that the number of charter schools proposed to be opened, replicated, or expanded under the grant does not exceed the number of public schools needed to accommodate the demand in the community.”
More than one in four charter schools close by the end of year five. A foremost reason for both public school and charter closure and the disruption such closures bring to the lives of children is low enrollment, as seen this past month in Oakland. In New Orleans, school closures have resulted in children being forced to attend multiple schools during their elementary school years, often traveling long distances. Between 1999 and 2017, nearly one million children were displaced due to the closure of their schools, yet only nine states have significant caps to regulate charter growth.
We applaud language that states, “The community impact analysis must also describe the steps the charter school has taken or will take to ensure that the proposed charter school would not hamper, delay, or in any manner negatively affect any desegregation efforts in the public school districts from which students are, or would be, drawn or in which the charter school is or would be located, including efforts to comply with a court order, statutory obligation, or voluntary efforts to create and maintain desegregated public schools…”
In some states, charter schools have been magnets for white flight from integrated schools. Other charter schools have attracted high achieving students while discouraging students with special needs from attending. And, as you know from the letter you received in June of 2021 from 67 public education advocacy and civil rights groups, the North Carolina SE CSP sub-grants were awarded to charter schools that actively exacerbated segregation, serving in some cases, as white flight academies The information requested by the Department is reasonable and will help reviewers make sound decisions.
In addition to our support for the proposed regulations, we have two additional recommendations to strengthen the impact analysis proposal.
Recommendations: (1) That impact analysis requirements include a profile of the students with disabilities and English Language Learners in the community along with an assurance that the applicant will provide the full range of services that meet the needs of students with disabilities and English Language Learners. (2) That applicants include a signed affidavit provided by district or state education department officials attesting to the accuracy of the information provided.
Regarding proposed rules regarding transparency, we note that in the past, schools were awarded grants without providing even one letter of support, or provided false information indicating support that did not exist.
We also strongly support the requirement state entities provide additional supervision of grants. Some will argue that they do not receive sufficient funding to provide supervision. We believe that funding is more than sufficient and we offer the following example as evidence.
In 2020, the Pennsylvania Coalition of Public Charter Schools(PCPCS) received a SE grant of $30 million to open 18 new or expanded charters in the Commonwealth within five years. ESSA allows state entities to retain 10% of all grant funding with 3% dedicated for grant administration. That means that this small state entity would have access to $1 million dollars to supervise the CSP grant spending of eighteen schools. Given that it is a five-year grant, PCPCS would therefore be allowed to spend from CSP funding $200,000 a year to review applications and keep track of grant spending.
To date, three schools have been awarded grants according to the two co-directors hired to administer the program.
We strongly support all SE sub-grant review requirements. These include: (a) how peer reviewers will be recruited and selected, and (b) efforts the applicant must make to recruit peer reviewers from diverse backgrounds and underrepresented groups. We applaud the requirement for a review team. In some states, including New York, CSP sub-grants are routinely distributed as part of the charter authorization process.
To those proposals we suggest adding the following:
Recommendations: (1) That review teams must include at least one reviewer representative of the district public school community. (2) that a minimum point threshold be established for an award, (3) that applications be checked for factual accuracy, and (4) that applications be posted for public review and comment for a period of no less than 45 days before award decisions.
We also recommend that the Department retain funds from the Charter Schools Program to conduct audits of all Developer, CMO and SE subgrants to ensure the funds are being properly spent and that the conditions and aspirations as described in the applications are being met. Annual audits of 5% of all active awardees in each of the programs, randomly chosen by the Department should be conducted each year.
Priorities One and Two
We strongly support the proposed priorities, which we believe will help return the charter school movement back to its original purpose and benefit the children who attend charter schools. Priority one builds off the successful community schools’ movement. Priority two encourages cooperative activities between district and charter schools. We believe that these priorities should be absolute priorities.
Unfortunately, in many cases charter schools’ employee handbooks commonly require teachers to sign nondisclosure agreements that threaten legal action if they reveal the schools “trade secrets” including such things as “curriculum systems, instructional programs, curriculum solutions … new materials research, pending projects and proposals, proprietary production processes, research and development strategies, technological data, and technological prototypes.”
Recommendation
That the Department disallows grants or sub-grants to any schools that apply under priority two if the school or the CMO considers educational material confidential and proprietary and/or does not make publicly available financial, personal or contracting information.
Planning Grants to Unauthorized Charter Schools
According to a 2019 response to Representative Raul Grijalva by then-Secretary of Education Betsy DeVos, 12% of all CSP grants between 2001 and 2019 were awarded to schools that never opened and were not expected to open. In most cases, these schools had never achieved authorization. Whether unauthorized schools can receive funding for planning purposes and how much can be awarded has been left up to the states. This has resulted in large amounts of federal CSP money in the pockets of people who provided no service to the public.
It has also resulted in egregious abuse, especially in Michigan, where charter schools have received more than $100,000 in awards before their authorization was approved. An in-depth review of such planning grants by Michigan State Board of Education President Cassandra Ulbrich revealed questionable submissions, including invoices that would-be charter operators paid themselves and excessive technology purchases.
Recommendation: A school’s planning amount before an authorization is limited to $10,000. If justifiable expenses exceed that amount, they should only be compensated following authorization.
Proposed Selection Criterion for CMO Grants
ESSA places the following restriction on grants awarded to State Entities: No State entity may receive a grant under this section for use in a State in which a State entity is currently using a grant received under this section. However, ESSA is silent regarding the awarding of grants to CMOs. This has resulted in CMOs having several active grants at the same time, with new grants being issued without proper inspection of the efficacy of former grants. For example, it has resulted in the IDEA charter CMOreceiving six grants in a ten-year period totaling nearly $300 million. These grants occurred under a leadership structure that engaged in questionable practices, including the attempted yearly lease of a private jet, related-party transactions, and the rental of a luxury box at San Antonio Spurs games.
IDEA received two awards, in 2019 and 2020, totaling more than $188 million even as the 2019 audit of the Inspector General found that IDEA submitted incomplete and inaccurate reports on three prior grants. The IG report also looked at a randomly selected sample of expenses and found that IDEA’s charges to the grants did not always include only allowable and adequately documented non-personnel expenses.
Recommendations:
That department regulations disallow the awarding of grants to any CMO currently using a grant received under the CMO program and that for any grant exceeding $25 million, the Department’s OIG conducts an audit before an additional grant is awarded.
I don’t often ask the readers of this blog to do anything other than vote. I urge you to write the Department on behalf of these urgently needed reforms.
The deadline for comments is April 13, 2022.
Craig Harris of USA Today wrote a blistering expose of the money grab by charter schools for federal COVID funds. Harris was previously a reporter for the Arizona Republic who often covered charter school scandals in that state where deregulation has enabled grifters to get rich by opening charter schools. This story is a national scandal. Unfortunately, it is behind a paywall, so I urge you to run out and buy the Sunday March 20 USA Today.
The story begins:
America’s charter schools received at least a $1 billion windfall during the pandemic, an unneeded cash infusion for most from a federal program intended to bail out struggling small businesses, USA TODAY has found.
More than 1,000 of the publicly funded but privately operated schools that educate a fraction of U.S. children jumped at the chance to collect forgivable loans up to $10 million after Congress created the Paycheck Protection Program in March 2020.
The hastily launched program was designed to save small businesses during the pandemic by helping them cover employee salaries and other costs.
While more than 90% of all eligible businesses across the country took the roughly $800 billion inloan allocations, charter schools were among the first to get the money — ahead of mom-and-pop shops and minority-owned companies — during the early days of the crisis when the economy was cratering and many business owners scrambled to get a financial lifeline.
And charter schools were uniquely positioned to get the loans — even though they continually received funding from taxes, just like traditional public schools. But unlike those schools, which educate the vast majority of American children, charters qualified for what would eventually become pots of free money because they are considered a business.
A USA TODAY investigation, based on public records,found 93%of the charter schools may not have needed the money because they were in states that continued to fund them at the same level as before the pandemic, or at even higher levels in some cases. These schools also had access to federal COVID grants.
Records show some of the private companies that operate the charter schools used the money to pad savings accounts or, in one case, hand millions of dollars to an investor.
USA TODAY’s investigation is based on publicly available documents from 1,139 charter schools, as well as federal and state agencies, including 37 departments of education that oversee local funding for charter schools.
“It makes me furious because there was absolutely no reason for those (charter) schools to get that money and take it from small businesses,” said Carol Corbett Burris, a critic of charter schools and executive director of the Network for Public Education Foundation, an advocacy group in New York City. “They successfully double-dipped….”
Charter school advocates said operators were entitled to the loans, which ranged from $150,746 to $9.8 million,because they are technically private businesses.
“Funding is always difficult to secure but was even more challenging during the pandemic,” said Nina Rees, president and CEO of the National Alliance for Public Charter Schools.
Rees added that charter schools typically receive less public funding than traditional school districts and Congress intended for them to get the money because of “the special nature of these unique public schools.”
Critics have a different view.
A congresswoman who has monitored the program said that while the schools may have done nothing legally wrong, their decisions to take the money were “terrible.” And one superintendent who leads an inner-city San Diego charter operation said that despite the legality, the behavior was unethical because financially strong charter businesses took money from those truly in need.
“At the time PPP became available, we had not suffered financially,” said David Sciarretta, superintendent of the Albert Einstein Academies, which has 1,450 students from kindergarten to eighth grade at two San Diego campuses. “I saw PPP as a way to help small businesses, especially those in the service sector…There is a fiscal way to look at it, and there’s a moral and ethical way to look at it.”
While Sciarretta declined to call out specifics schools, USA TODAY found, for example, that at least 14 affiliates of the California-based charter chainKnowledge Is Power Program (KIPP) took a collective $28.4 million in loans and had them forgiven at locations around the U.S.
Its national headquarters in San Francisco, meanwhile, saw its bottom line swell 56% to $75 million during the first year of the pandemic….
The concerns about charter schools have spurred critics to pressure the federal Small Business Administration, which is in charge of forgiving the loans if companies used them to save jobs and cover COVID-related expenses, to claw back the money.
The SBA declined repeated requests for interviews in response to questions about financially solid charter schools having their loans forgiven.
The agency in a late December email told USA TODAY it was committed to helping businesses reopen and that it had removed hindrances for small businesses to have their loans forgiven.
SBA two months later, following additional questions from USA TODAY, blamed the Trump administration for issues of “fraud, waste and abuse” in the program. Yet, nearly all of the loan forgiveness has happened at SBA during the Biden administration.
California Congresswoman Judy Chu is a member of the House Small Business Committee, and she has sought answers about where the money went and which businesses received loan forgiveness. Shamed by media attention in the early days of the pandemic, the Los Angeles Lakers and the national chain Shake Shack returned their multi-million dollar PPP loans.
Congresswoman Chu said:
It was never the intent of Congress to forgive loans to companies, such as charter schools, that experienced no economic loss.
“It’s terrible,” Chu said about the charter schools. “But nonetheless, it is in the realm of what is permissible.”
Permissible, but not ethical. Charter schools got their ”loans” early on because of their relationships with their banks, but minority-owned businesses waited for months.
The PPP program was a boon to the charter industry, which never lost its state funding, but it was ineffective. Harris quotes a study by the National Bureau of Educational Research which found that the program “the program kept up to three million workers employed an additional year at a cost of up to $258,000 per job retained.”
This is a very powerful, well researched article that raises important questions. if charter schools are “businesses,” how can they call themselves ”public schools?” Public schools were not eligible for PPP funds because they are not businesses. Charter schools qualified for public school funding and for PPP funding. They are both fish and fowl. They did not lose money, like the mom-and -pop stores that had to close their doors. But they eagerly took the money that was supposed to save the jobs of people who lost them and save the businesses on the edge of bankruptcy.
Permissible? Perhaps. Ethical? No.
Dana Milbank wrote about the companies that have stopped making money in Russia to protest its invasion of Ukraine and its ruthless attacks on civilian targets. And those who didn’t.
Milbank said that all of us can help Ukraine by refusing to patronize the businesses still operating in Russia. Zelensky asked this of us when he spoke to Congress yesterday.
Milbank writes:
Zelensky made another ask on Wednesday morning, and it’s something all Americans can help with. We can stop buying the products of businesses that continue to fund Vladimir Putin’s war machine, even after its full horrors — indiscriminately targeting civilians, murdering children — are obvious to the world.
“All American companies must leave Russia. … Leave their market immediately, because it is flooded with our blood,” the young leader said, asking lawmakers “to make sure that the Russians do not receive a single penny that they use to destroy our people in Ukraine, the destruction of our country, the destruction of Europe. … Peace is more important than income.”
Most American companies get that. Some 400 U.S. and other multinational firms have pulled out of Russia, either permanently or temporarily, according to Yale’s Jeffrey Sonnenfeld, who has kept the authoritative list of corporate actions in Russia. Oil companies (BP, Shell, ExxonMobil) and tech companies (Dell, IBM, Apple, Google, Facebook, Twitter) led the way, and many others (McDonald’s, Starbucks, Coca-Cola) eventually followed…
Those who want to stop Russia’s murderous attack against Ukraine should stop investing in or buying the products of these companies.
Koch Industries, whose owners gave to right-wing causes for years, is now financing Putin’s war. The people who make Brawny paper towels, Dixie cups, Quilted Northern toilet paper, Vanity Fair napkins and Georgia-Pacific lumber are abetting the spilling of Ukrainians’ blood.
Like Reebok shoes? They’re being used to stomp on Ukraine. Authentic Brands Group, which also owns Aeropostale, Eddie Bauer, Brooks Brothers and Nine West, among others, is in the hall of shame.
The source of his information about the companies that closed their doors and those who didn’t was a list compiled by Jeffrey Donnenfeld at Yale University. Check it out.
The worst malefactor is Koch Industries. The father of the Koch brothers did business with Stalin and Hitler in the 1930s. It’s business.
Diane Ravitch's blog 