Archives for category: For-Profit

Bill Phillis of the Ohio Coalition for Equity and Adequacy noticed a curious phenomenon. The Ohio State Attorney General Opposes the efforts of school districts trying to recover funds they lost to the fraudulent Electronic Classroom of Tomorrow (ECOT), which went bankrupt last January, having claimed state funds for non-existent students and having lost its authorizer. Why is the Attorney General taking the side of the guy who was indicted?

Bill Phillis writes:

It is baffling that both the Attorney General and the ECOT Man, Bill Lager, oppose the intervention of school districts in the case to recover funds from Lager and some of his former employees.

In his October 9 Memorandum in Opposition to Intervention, the Attorney General argues, “The Districts cannot intervene…because their interest is substantively remote from the claims pressed here,” the Districts “lack standing” and “their intervention would complicate these proceedings.”

William Lager’s memorandum proffers essentially the same arguments against the intervention.

It is curious that both the Plaintiff and Defendant in this case are on the same page. That accord might validate the importance of intervention by the districts. If they agree on this matter, maybe they will agree on more substantial issues.

Boards of education in three districts-Dayton, Logan-Hocking and Springfield-have adopted resolutions to intervene. Other districts are considering a resolution.

William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540 | ohioeanda@sbcglobal.net| http://www.ohiocoalition.org

You must always remember that Betsy DeVos is working every day to promote vouchers and charters, no matter what story is in the headlines.

While the nation was obsessed with the crucial battle for control of the Supreme Court for the next generation, DeVos was busy promoting her privatization agenda.

Jeff Bryant has the story here.

We know, for example, that she handed out $399 million to the overfunded charter industry, which is riddled with fraud, conflicts of interest, nepotism, and profiteering. These are matters of no concern to DeVos, who supports the expansion of online charters, which have proven to be frauds, and for-profit schools, which have enabled widespread fraud in Michigan.

Bryant writes:

USDoE recently awarded $399 million in federal grants to expand and support charter schools across the country.

The grants, made through the Charter Schools Program, which has enjoyed a $40 million boost under the Trump administration, went to individual charter school operators and various state education agencies and nonprofit groups that either help secure funding for charters, push for their expansions, or advocate for the charter cause.

Even a cursory scan of some of the recipients warrants deeper scrutiny.

For instance, among three Alabama charter schools that received $1 million each in grant money, two have already been the subjects of multiple lawsuits.

Birmingham charter Legacy Prep – which recently changed its name, postponed its opening date, and has yet to find a building – just settled a messy court case with its founder – a Baptist church pastor – over who had authority over the school’s operations and whether the school’s governing board was properly constituted.

The court settlement follows closely after the Alabama Public Charter School Commission won its effort to overturn the Birmingham district school board’s original denial of the charter’s application. The district board had ruled last year that the school’s application did not meet the requirements of the district’s request for charter proposals.

So now, thanks to DeVos and her department, federal funds are going to a charter school under suspect leadership, with no building, that the district doesn’t want.

Similarly, another Alabama charter with a million dollar grant, University Charter School in Livingston, had to hurdle a lawsuit to open its doors.

In May, the county board that oversees the district filed suit to prohibit the charter’s authorizer from operating the school in a former high school that the district sold to the authorizer with the specific condition not to open a charter school in the building.

Here again, federal dollars are funding a charter startup in a local community that does not want it. So much for DeVos’s promises to curb the “overreach” of the federal government in education.

Supporting Rightwing Cronies

Another charter school grant winner on the list that deserves a closer look is the American Heritage Academy in Idaho.

The school’s founder Frank Vandersloot is a conservative billionaire, with a net worth of $1.9 billion, who was a finance co-chair of Mitt Romney’s 2012 failed presidential campaign and has given money to Florida Republican US Senator Marco Rubio, former Republican presidential candidates Carly Fiorina, the Republican National Committee, and state Republican parties across the US, according to a report in Forbes.

Vandersloot made national headlines in 2015 when he sued Mother Jones magazine for defamation after the news outlet published an article detailing his efforts to oppose gay rights.

Vandersloot has hosted a closed door meeting with President Trump at the headquarters of his company, Melaleuca. The company – which sells diet, personal care, home cleaning, and cosmetic products – has been compared to Amway, the mega-company DeVos is heiress to, in that it employs a multi-level marketing strategy.

Vandersloot and DeVos are, in fact, connected through their participation in a multi-level marketing trade group that has been active in promoting legislation that attempts to limit the Federal Trade Commission’s ability to investigate and prosecute multi-level marketing scam operations.

All the Things We Don’t Know

None of this is to consider whether Vandersloot’s charter school, or any of the other charter school grantees, may or may not be worthy institutions, but shouldn’t taxpayers know more about why the school deserves our money?

Should we know, for instance, why grant money will go to a North Carolina charter, the Charlotte Lab School, that touts racial diversity in its mission, yet has a student population that is two-thirds white in a district where only 30 percent of the students are white?

Should we know more about why a federal grant is going to a Kansas City charter school, Scuola Vita Nuova Charter School, that is located at an Italian Cultural Center and had to pay $30,000 to former principal who filed lawsuit claiming the school’s founder made her fire her same-sex partner who also worked at the school?

Because of DeVos’s general lack of transparency, what we’re left with, instead of answers, are more questions and a well-founded suspicion that her purpose in office is to purloin as much public money as she can into the hands of private interests while justifying it as a much-needed reform.

Perhaps if there’s a Democratic majority in the US House of Representatives after the upcoming midterm elections, there will be inquiries to reveal the inner machinations of DeVos’s department. But in the meantime, she and her associates toil away behind a shroud of scary headlines, and that’s just the way they want it.

You read that right. Democratic senators want an investigation of virtual charter schools, the kind that I have posted about here about 100 times. They read a report about how shoddy they are, written by the Center for American Progress. That shocked them. They say there is almost no research about these profiteering virtual charter schools that Betsy DeVos and ALEC adore. Apparently, the only research they ever hear about is whatever is written by the Center for American Progress, which loves charters but not vouchers.

Two Democratic senators asked Wednesday for the Government Accountability Office to launch an investigation into the practices and policies of virtual charter schools. The request comes on the same day the Center for American Progress released a report outlining stark academic shortcomings at these schools and a disproportionate focus on profit over quality.

The virtual charter schools have come under scrutiny in states including California and Ohio. But now Democratic Sens. Patty Murray (Wash.) and Sherrod Brown (Ohio) are calling for a more comprehensive look at how these schools work in the 27 states that house them. About 300,000 students attend these online public schools of choice. The enrollment has been steadily increasing over the years.

“There is almost no research on whether virtual charter schools meet student needs, especially for students who require specific accommodations, including English learners and students with disabilities,” says the letter from the senators.

Of course, they are wrong. There has been a great deal of research about the failure of virtual charter schools, much of it by Gary Miron of the Western Michigan University, published by the National Education Policy Center. Here is the latest.

The charter-friendly CREDO at the Hoover Institution at Stanford studied online charter schools in 2015 and determined that their students typically lost a full year of learning in math, and 72 days in reading. (p. 23). That’s like not going to school at all.

The first set of analyses examines the academic growth of online charter students compared to the matched VCRs made up of students who attended brick-and-mortar district-run schools. These schools are typically referred to as traditional public schools (TPS). Compared to their VCRs in the TPS, online charter students have much weaker growth overall. Across all tested students in online charters, the typical academic gains for math are -0.25 standard deviations (equivalent to 180 fewer days of learning) and -0.10 (equivalent to 72 fewer days) for reading (see Figure 3). This means that compared to their twin attending TPS, the sizes of the coefficients leave little doubt attending an online charter school leads to lessened academic growth for the average student.

In addition to research studies documenting the virtual charter sham, there have been many excellent pieces of investigative journalism, like Jesse Calefati’s series on K12, Inc. in California.

And I should mention that I devoted a chapter to virtual charter scams in my 2013 book Reign of Error: The Hoax of the Privatization Movement and the Danger to America’s Public Schools.

What kind of education staff do these senators have? Why is CAP their only source of information?

Over the years, it has become obvious that virtual charter schools are a sham. ECOT in Ohio was a spectacular failure, which made millions for its for-profit owner (“the ECOT man”) but cost taxpayers over a billion dollars that should have gone to public schools. The founder of the Pennsylvania Cyber Charter School is now in jail, convicted of stealing millions of dollars, but convicted only of tax evasion, not embezzlement. June Brown, who operated K12 Inc. schools in Pennsylvania, avoided conviction because of her advanced age (she kept the money).

K12 Inc. is perhaps the biggest of the shams because it has the most students. It is listed on the New York Stock Exchange. It makes handsome profits, but its students drop out at a high rate and get low test scores on state tests. The NCAA stripped 24 of the virtual K12 Inc. schools of accreditation a few years back after it discovered that students were often taking the K12 Inc. tests without bothering to first sit for instruction. NCAA officials saw tests that included “true-false” questions, and observed that students could take the test again if they failed. Any number of K12 Inc. virtual schools have been engaged in fraudulent practices that led to fines or even jail sentences for their operators.

K12 Inc. has been repeatedly criticized for the poor performance of its students. They start behind and they don’t catch up. See here. See here. See here. See here.

K12 Inc. originated with Ron Packard, who was paid $5 million a year to run it, Michael Milker, the ex-felon who invested in it, and Bill Bennett, the ex-Secretary of Education who was supposed to sell it to home schooling families (but had to step back after making a comment on his radio show that the best way to reduce crime was to encourage the abortion of black babies.)

Politico interviewed Kevin Chavous, a close ally of Betsy DeVos, who adores for-profit virtual charter schools. He promised to do better in the future.

K12 INC. PUSHES TO DO BETTER AMID CRITICISM OF VIRTUAL SCHOOLS: Low graduation and attendance rates have led to widespread scrutiny in recent years of virtual schools, which allow students to do Internet-based schooling on a computer at taxpayers’ expense. One of the largest providers is K12 Inc., which serves 110,000 students in 31 states.

— Kevin Chavous, a former D.C. council member and a founding board member of the American Federation for Children school choice group that Education Secretary Betsy DeVos used to chair, took over a year ago as president of the company’s academics, policy and schools group. He recently stopped by the POLITICO newsroom, and offered insight into work underway at K12 Inc. Here’s what he shared:

— Tracking students. Chavous said the company rolled out a new system to more closely track both student and teacher performance and focus on “aggressive engagement” to ensure students are logging on. Teachers and administrators are held accountable when students aren’t progressing. He noted that only 11 percent of K12’s first-time students are on grade level when they start, so many have a long way to go to catch up academically. “We are going to be very disciplined about making sure we have growth with all of our students,” Chavous said.

— ECOT collapse. Even though K12 wasn’t affiliated with the massive Ohio virtual school ECOT that closed earlier this year, Chavous said its collapse has been a wakeup call. He said about 4,000 of its former students moved to Ohio Virtual Academy, a K12 school. One big lesson is that the “onboarding process” is important, so he said in Ohio they’ve started requiring mandatory orientation so there’s a clear understanding among students and parents of what’s expected. Another lesson, he said, is that providers need a better understanding of each student’s academic needs from the get-go.

— Desperate parents. Chavous said he’s spent hours listening to inquiries from parents calling to ask about attending a K12 school. Nearly half are parents whose kids have been bullied, he said. “Ninety-five percent of those phone calls, the parents are full of desperation,” Chavous said.

— School violence. After school shootings, he said K12 sees an uptick in calls, and safety concerns are one reason parents like online education. “We’re filling a need that others aren’t filling. That means we do have a responsibility to fill that need academically in the right way. And … our company takes that charge on,” he said.

— Future of school choice. Chavous said he thinks DeVos’ support for virtual schools has had little effect on the work K12 is doing around the country. “It really hasn’t had an impact on policy shifts that we’ve seen,” he said.

Forbes reports on the investment strategy of billionaire hedge fund manager William Ackman. He makes money investing in charter schools and thinks he is “doing good” by undermining public education.

“It turns out that Bill Ackman is making good money in the most unexpected of places: financing charter schools for low-income kids.

“Since 2011, the billionaire hedge fund manager has invested $20 million of his own money in the Turner-Agassi Charter School Facilities Fund, which was started by former tennis star Andre Agassi and has built 79 new charter schools in poor neighborhoods around the country. The impact investment, which Ackman made via his charitable foundation, has netted annual returns north of 10%.

“Meanwhile, performance at his hedge fund has been languishing. Ackman has lost money for the past three years running, largely because of disastrous bets on two companies: Valeant and Herbalife. During that time, his net worth has dropped by more than half, to an estimated $1.1 billion. Recently he’s managed to turn things in the right direction, with his Pershing Square Holdings posting gains of 15.8% through September 30, according to the firm.

“Ackman’s foray into impact investing began in 2011 when Agassi, a tennis champ with eight Grand Slams under his belt, pitched him on his new fund, the Turner-Agassi Charter School Facilities Fund. Agassi, who had teamed up with professional impact investor Bobby Turner, promised Ackman that his capital would go toward the construction of 100 new charter schools for low-income children by 2020 in areas like the Bronx and Southwest Detroit—and that he would see double-digit returns, to boot. Ackman put in $10 million and agreed to take calls from other potential investors who were deciding whether to plunk down their own money. (Ackman, who began playing tennis at age 7, says he managed to beat Agassi in a doubles match—sometime after the two first met in 2011).

“With that, Ackman became a vocal and early proponent of impact investments, which are designed to reap a financial return as well as some positive social or environmental impact. His foundation has put a total of $42 million toward these investments in recent years, in areas ranging from affordable housing to financial inclusion to education…

“His largest impact investment to date is in the Turner-Agassi Charter School Facilities Fund, which has financed construction for 79 new charter schools that have served over 41,000 students since 2011. It generates returns for investors by leasing or selling new schools to charter school operators like KIPP at a profit. Ackman has put a combined $20 million into two funds. (Stewart Rahr, another U.S. billionaire and a Forbes 400 member, has put in $10 million.)..

“Ackman, who signed the Giving Pledge in 2012 and promised to donate more than half his wealth, has pledged or donated over $400 million to organizations like Teach for America and Human Rights Watch through his foundation.”

Someone should tell Mr. A koan that his investments and gifts are undermining a basic democratic institution and harming the teaching profession by sending inexperienced amateurs into classrooms to replace professional teachers. At the same time, he is helping to kill unions.

Maybe that, plus return on investment, is exactly what he wants.

Scott Maxwell of the Orlando Sentinel writes here about a voucher school that is a sham, but the state doesn’t care. Does anyone in Florida care about accountability for taxpayers’ money, or about the quality of education?

I urge you to subscribe to the Orlando Sentinel to follow its fearless coverage. I did.

And remember, when you read this story, that this is what Betsy DeVos describes as the “best” state because she wants everyone to follow Florida’s example of charters, vouchers, and no accountability for public dollars.

Maxwell writes:

Two years ago, the Beta Preparatory school in Orlando was being run — with your tax dollars — inside a commercial complex on South Orange Blossom Trail, alongside eight bail-bonds businesses and a drug-testing company.

With no outdoor space for recess — and fellow tenants such as “Drug Tests R Us” — it wasn’t most parents’ vision of an ideal learning environment.

Apparently Beta wasn’t an ideal tenant either. The private school that takes state vouchers was evicted for not paying its rent.

Yes, the entire taxpayer-subsidized school. (Class, the words of the day are: “Final notice.”)

So last year, Beta moved to a new locale — a church campus in Orlando, where it continued to take more of your tax dollars … until things went south there, too.

Teachers filed formal complaints about a “lack of basic school supplies,” academic “irregularities,” student safety, inadequate staffing and a “lack of professionalism.” Multiple teachers said the school stiffed them on salary. The church said the school stiffed it on rent.

Ultimately, the school shut down for good.

You might think that would be the final chapter in this sorry story.

But not in Florida.

As Sentinel reporter Annie Martin reported last weekend, the owner of the Beta school simply opened another school a few weeks ago with a new name; this time in Volusia County … once again with your tax dollars.

Court records show the school’s owner filed the application for the new school the same week a court ordered him to pay $18,793 for not paying a teacher at his last school.

Florida education officials and politicians didn’t seem to care. They seem content to send your money — and children’s futures — down a black hole.

They scream about “accountability” for public schools, but have few checks and balances on the private schools that take public money to supposedly better serve low-income and special-needs students.

In its “Schools Without Rules” series, Sentinel reporters found voucher (or “scholarship”) schools faking safety reports, hiring felons, hiring high-school dropouts as teachers and operating in second-rate strip malls. They discovered curricula full of falsehoods and subpar lesson plans.

If you confront defenders of this system, be they legislators or school operators, many start mumbling about the virtue of “choice”— as if funding a hot mess of a school is a swell thing, as long parents choose that mess.

Horse hockey. I choose accountability. And transparency. And standards.

And the estimable Mr. Maxwell goes on to write:

Florida legislators — such as House Speaker Richard Corcoran — claim to support all those things as well.

If a tourism bureau makes headlines about questionable activities, Corcoran issues subpoenas and screams that taxpayers have a right to know how “every penny” and “every dollar” is spent. (He’s right.)

When a university is accused of improperly spending $38 million on a construction project, he demands an “immediate investigation.” (He’s right there, too.)

But as nearly a billion dollars — a mix of tax dollars and corporate tax credits — are siphoned away to voucher schools, many with proven problems, Corcoran and his buddies look the other way, meekly mumbling: Um … choice.

Mr. Speaker, you should choose to do your job.

Instead, the Sentinel’s been doing it for you. Last year, our journalists personally inspected more voucher schools in six months than every state education official combined visited in a year. And we found problems galore.

Some voucher schools whine: You’re focusing on the bad apples.

You’re damn right we are. That’s what news organizations do. We focus on problems — whether it’s dangerous airlines, corrupt toll-road agencies or, yes, shoddy schools — so we can fix them.

We’ve done it for decades at public schools — exposing safety violations, unfit teachers, absentee school board members and failing schools. And in every case, elected leaders demanded fixes.

But when problems are found at voucher schools, defenders simply whine about being picked on.

Grow up. You sound like an airline exec asking news teams not to cover a crash.

Lawmakers should require all voucher schools to hire certified teachers, or at least college grads. Schools should be inspected every year. Curriculum plans should be filed with the state. Graduation rates and nationally accepted test scores should be publicly reported. And school operators who fail shouldn’t be allowed to re open.

If you want those standards — all basic, yet none of which are in place for voucher schools — demand them from your legislator. (Contact info at http://www.leg.state.fl.us)

No decent school should be afraid of standards. If you don’t want accountability, don’t take public money.

And if you’re an elected official who doesn’t care about accountability — for all schools — find a new line of work.

Governor Doug Ducey of Arizona has been a stalwart champion of unregulated charters and vouchers. He has looked the other way when members of the legislature pass laws to enrich themselves while running charter chains and voucher programs. He has ignored conflicts of interest, nepotism, and self-dealing because, hey, that’s how unbridled capitalism works!

But the state is now knee-deep in scandals committed by privatizers, and guess what? Governor Ducey says it is time to reign in the corruption!

In a debate with his Democratic opponent, David Garcia, Ducey claims he wants to reform charter law. Is it because of the latest scandal, where a legislator (Eddie Farnsworth) sold his for-profit charter chain to a nonprofit and cleared at least $11.8 million in profit plus a contract to manage the nonprofit chain?

Laurie Roberts of the Arizona Republic is outraged that the government is indifferent to charter fraud.

She writes:

Farnsworth says he’s just a businessman who took a risk, followed the law and is now reaping the reward.

“Charter schools have been lucrative to me because I’ve done what every other business has done to make money: I had an idea,” he told Harris. “I put the business plan into place. I followed every law and every contract. I provided a product that is a good product that people wanted.”

“It doesn’t hurt that for most of the last two decades, Farnsworth, along with other legislators who own charter schools, has helped write some of those laws. In his 16 years as a legislator, for example, Farnsworth has voted 12 times to boost “additional assistance” to charter schools (read: himself).

“But there is no conflict, we are told.“

Garcia is an education professor. He has pledged to eliminate the profiteering from the charter se tor. His own children have attended an arts-focused charter school, so he is not opposed to charters on principle, just to the rampant fraud that makes Arizona a national laughing stock.

Despite his support for charters, the Network for Public Education Action Fund Endorses Garcia because Ducey is an ALEC stooge and a voucher proponent. Garcia opposes vouchers and has pledged new dedicated funding for public schools.

In this post, journalist Stephen Rosenfeld explains how charter operates make a profit. He has only scratched the surface. Some make profits through clever real estate deals, where they buy or lease a space, renovate it at public expense, then charge the state exorbitant rental fees. Some embezzle. Some use their school credit card like an ATM. Some set up “related companies” and divert funds to those companies, which they happen to own. Some hire contractors and get kickbacks. There is no end to ingenuity when no one is watching.

Rosenfeld begins with the interesting question: In what way is Enron like the charter industry? (One of the major funders of charter schools is John Arnold of Texas, who made his fortune as an Enron trader, before it imploded).

On the surface, Enron was in the energy business. But behind closed doors, it was engaged in an array of dubious investments and transactions that helped its top executives amass wealth. The charter schools cited in their report similarly present a public face of being alternative public schools. But their founders also used an array of financial tactics, especially involving school real estate deals, to become rich by diverting millions from their classrooms.

Nationwide, 43 states and the District of Columbia have 6,800 charters serving 2.9 million students. They comprise 6 percent of K-12 public school enrollment, which has increased six-fold in the last 15 years. When states approved the first charters in the 1990s, the idea was to nurture locally accountable experimental schools. However, since then a K-12 privatization industry has emerged that is dominated by companies seeking to create regional or national brands, akin to any other corporate franchise. These larger charter operations tend to have non-profit and for-profit arms, which can mask an array of complicated financial relationships.

The charter industry’s largest operations often are run by what’s called educational management organizations, EMOs, which “now control 35-to-40 percent of the industry with an estimated 45 percent of charter students,” the scholars said. These sophisticated operations can attract private investors because they can use their status as schools to get large tax breaks, which, in turn, are applied to a range of profit-making ventures that have nothing to do with educating under-served communities.

“Charter schools attract investors because of the potential for new revenue streams,” the authors said. “For instance, the New Market Tax Credits (NMTC) program provides investors the opportunity to make profits from charter-school real estate transactions. Enacted as a component of the Community Relief Tax Credit Act of 2000, the NMTC was designed to encourage investment in low-income communities. The NMTC accomplishes this goal by providing investors in a community development entity (CDE) a 39% tax credit over a seven-year period.”

But the biggest way to grab seven-figure sums in the privatized education sphere was through shady real estate transactions, they said, saying their for-profit arms can “obtain revenue from charter schools through lease payments for the use of the facilities.” The authors them gave five stunning examples, where the school’s founders could not stop themselves from grabbing millions.

Read about his five examples.

Bill Phillis writes:


State Inspector General holding up a report of an investigation into a multi-million contract that the state steered to IQ Innovations, a company owned by the ECOT Man

The ECOT Man’s donations to political campaigns and political party organizations opened up several spigots connected to state revenue streams. IQ Innovations, created by the ECOT Man, received millions via a contract steered to it by state officials. The Ohio State University was a section of the pipe through which the funds flowed. The chancellor of the Board of Regents was an operative in turning on the spigot.

The attached news release provides yet another sordid piece of the ECOT scandal.

Why the corruption? Because some state officials not only allow it to happen but helped it happen.

“The whole people must take upon themselves the education of the whole people and be willing to bear the expenses of it. There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves.”
– John Adams, September 10, 1785

William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540 | ohioeanda@sbcglobal.net| http://www.ohiocoalition.org

The virtual charter industry is booming in Michigan, despite its abysmal performance.

Michigan, DeVos’s home state, has outsourced its education system as much as possible to for-profit entrepreneurs. Michigan is the only state where 80% of charters are operated by for-profit corporations.

http://www.wkar.org/post/study-virtual-schools-growing-mi-despite-poor-outcomes#stream/0

According to this report, one-quarter of the 101,000 students attending virtual charters did not pass a single class.

The graduation rate is far below that of public schools.

Michigan’s standing on NAEP has fallen to the bottom 10 since the widespread adoption of school choice.

Michigan is an exemplar of PROFITS MATTER, NOT EDUCATION.