Archives for category: For-Profit

You may recall reading a story recently about Jared Kushner’s sister soliciting investments in Kushner real estate deals at a meeting in Beijing, where she promised that investors of at least $500,000 would get a green card in exchange. Investing in charter school construction is another way in which the EB-5 visas are up for grabs.

This story from South Carolina demonstrates how foreign investors are buying green cards by investing in charter school construction, and the middlemen are raking in money at exorbitant interest rates.

A handful of S.C. charter schools — finally in new school buildings — are poised to pay out millions in taxpayer dollars to middlemen, developers and foreign investors who want green cards.

The money, paid in the form of high-interest rent payments on the new school facilities, has some critics saying that the state’s taxpayers are getting duped. Money they believe is paying for S.C. students’ education is instead going to this relatively new network of out-of-state players who are charging high interest rates, as well as wealthy Chinese nationals searching for a quicker path into to the country.

And it’s all happening with federal government approval.

“They were taken for a terrific ride and are paying this high interest rate. It’s remarkable,” said David North, a fellow with the conservative Center for Immigration Studies in Washington, D.C., “They could end up paying more in interest than the (cost to construct the school).”

Figuring out just who is getting paid what is complicated and is not readily available in one place. Take, for example, Lowcountry Montessori School in Port Royal, a charter school that serves about 400 students in preschool through the 11th grade.

Through a controversial federal program called EB-5, the school received $1.5 million from three foreign investors to build its school building that opened last school year on Broad River Drive.

Critics have long charged that the program allows rich immigrants to buy their way into the country. And in recent years, cases of fraud and concerns about national security have also plagued the program.

The Port Royal school’s financial arrangement was put together by American Charter Development, a Utah-based company, that secured another $4 million for the new building and constructed the school.

The school is now leasing its $5.5 million building from ACD at a whopping 9 percent annual rate of the school’s construction costs. If the school were to make only the minimum payments over the course of the 20-year lease, $5.6 million of its $10.3 million in lease payments would be interest, according to the school’s most recent audit.

Worked into those lease payments is another key player — Utah-based Education Fund of America, a for-profit company which is receiving a 7.3 percent annual fee on the $1.5 million it secured in EB-5 funding for the school.

And then there are the three unnamed foreign entrepreneurs who actually invested the $1.5 million. The school will pay them back as well, likely including a small return on their investment of around 1 percent, say those familiar with the EB-5 program. The repayment is also included in the lease arrangement.

By comparison, the Beaufort County School District is paying just 1.6 percent interest on its construction bonds for its new May River High School that opened last year.

Read more here: http://www.thestate.com/news/state/south-carolina/article151566537.html#storylink=cpy

Larry Cuban posted this article by Benjamin Herold, who writes for Education Week about technology, on his blog.

https://larrycuban.wordpress.com/2017/05/21/personalized-learning-what-does-the-research-say-benjamin-herold/

The term “personalized learning” has been captured by the technology industry to represent computer-based instruction. Some people think it would be justifiable to refer to computer-based instruction as “depersonalized learning” since a computer is a machine and not a person.

The other terms the tech industry has used for marketing purposes are “individualized” and “customized.”

Herold’s review is balanced and appropriately critical, distinguishing between independent research and marketing.

The studies seem to use test scores as the best indicator of success. These scores may gauge of whether sutudents learned what the computer taught them, but says nothing about whether they could pass a test of similar material that the machine didn’t teach them.

And that’s without going into what should be the lasting effects of education: the ability to think independently, to ask questions, to think outside the box, to accomplish tasks for intrinsic purposes, rather than to win a prize.

Many educators think that the goal of computer-based instruction is to develop classrooms without teachers; a paraprofessional could be available to answer questions about the technology. Is that where the tech industry is headed? Consider this recent article in Bloomberg News which hailed the development of ships without sailors. “Doing away with sailors will make the high seas safer and cleaner.”

It sounds like a ghost story: A huge cargo vessel sails up and down the Norwegian coast, silently going about its business, without a captain or crew in sight. But if all goes as planned, it’s actually the future of shipping.

96% of all marine casualties are caused by human error. Solution: get rid of the humans. Problem solved.

Fabiola Santiago has a stunning story in the Miami Herald about the deep corruption in the state’s charter industry.

Several key legislators are financially connected to charter schools.

He writes:

Florida’s broad ethics laws are a joke.

If they weren’t, they would protect Floridians from legislators who profit from the charter-school industry in private life and have been actively involved in pushing — and successfully passing — legislation to fund for-profit private schools at the expense of public education.

Some lawmakers earn a paycheck tied to charter schools.

One of them is Rep. Manny Diaz, the Hialeah Republican who collects a six-figure salary as chief operating officer of the charter Doral College and sits on the Education Committee and the K-12 Appropriations Subcommittee.

Some lawmakers have close relatives who are founders of charter schools.

One of them is the powerful House Speaker, Richard Corcoran, the Land O’Lakes Republican whose wife founded a charter school in Pasco County that stands to benefit from legislation. He was in Miami Wednesday preaching the gospel of charter schools as “building beautiful minds.”

Other lawmakers are founders themselves or have ties to foundations or business entities connected to charter schools.

One of them is Rep. Michael Bileca, the Miami Republican who chairs the House Education Committee and is listed as executive director of the foundation that funds True North Classical Academy, attended by the children of another legislator. Bileca is also a school founder.

These three legislators were chief architects in the passage of a $419 million education bill that takes away millions of dollars from public schools to expand the charter-school industry in Florida at taxpayer expense.

They crafted the most important parts of education bill HB 7069 in secret, acting in possible violation of the open government laws the Legislature is perennially seeking to weaken. There was no debate allowed and educators all across the state were left without a voice in the process.

It’s no wonder it all went down in the dark. It’s a clear conflict of interest for members of the Florida Legislature who have a stake in charter schools to vote to fund and expand them. Their votes weaken the competition: public schools.

This issue has nothing to do with being pro or against school choice. It’s about the abuse of power and possible violations of Florida statutes.

Read more here: http://www.miamiherald.com/news/local/news-columns-blogs/fabiola-santiago/article151418277.html#storylink=cpy

When people ask you how you can possibly be against charter schools, think of this story.

Jennifer Berkshire (the writer formerly known as EduShyster) is one of the best education writers on the national scene.

In this article, she describes the evangelical roots of the present school-choice movement, as personified by Betsy DeVos.

You will meet some very peculiar people who loathe “government schooling” and prefer to home school their children. Some will be familiar to you, like the far-right billionaire Robert Mercer and his daughter Rebekah, who bankrolled Steve Bannon and Breitbart News. Daughter Rebekah homeschools her children to keep them free from the contamination of both public and private schools.

Berkshire notes that the Mercers funded an odd Oregon politician named Arthur Robinson.

She writes about Robinson:

In Oregon, Robinson is known as a kooky Tea Party-ish chemist who has been stockpiling urine as part of his mission to improve health, happiness, prosperity — and boost student test scores. He’s also a perennial GOP congressional candidate whose long-shot bids have been mostly underwritten by the Mercers.

In Christian homeschooling circles, Arthur Robinson is a household name. The Robinson Self-Teaching Curriculum, developed by Robinson and his six home-schooled children, teaches children to “teach themselves and to acquire superior knowledge as did many of America’s most outstanding citizens in the days before socialism in education.”

Robinson fleshed out his views on education during his 2016 run for Congress, releasing an education platform called “Art’s Education Plan!” He called for a nationwide voucher program, providing every student in the United States with the “freedom and resources to apply to any school in our nation, public or private.”

There was also a bold plan for Congress to shut down the schools of Washington, DC, for three months, long enough to fire the “unionized deadwood” and create a model in which students and parents are customers rather than “vassals of school administrators.”

She describes the ultra-conservative financiers and their faithful political vassals who have turned Florida into a mecca for publicly funded religious education, even though the Florida Constitution explicitly forbids it, and even though the state’s voters turned down a Jeb Bush effort to strip the state Constitution of its anti-voucher language in 2012.

Yes, there are some far-right extremists in the school choice movement. But, notes Berkshire, it was not DeVos that put school choice into the mainstream. It was Democrats who called themselves “reformers.”


DeVos and her allies are aided in the efforts to dismantle public education by Democratic education reformers who’ve spent the past two decades doing essentially the same thing. It is “progressive” reformers, after all, who’ve led the charge to convince parents and taxpayers that there is no meaningful difference between a public school and one that’s privately managed. That parents don’t care who runs their schools as long as they’re good is a standard reform talking point, along with the reminder that “charter schools are public schools….”

School choice has been legitimized, not by DeVos et al, but by the likes of Corey Booker, Rahm Emanuel and other reform-minded Democrats. If saving public education is to be a key plank of the #resistance, Democrats will have to join the fight or be swept aside.

I recently posted a story about Eagle Arts Academy Charter School in Palm Beach, Florida, which seemed to be in chaos. There was financial mismanagement, constant turnover, and multiple snafus.

Peter Greene dug deeper and exposed the back story. He calls it “Florida Charter Scam: Part 23,174.”

He writes:

“Gregory James Blount was a 40-ish-year-old former model and events producer who was working his way out of bankruptcy by teaching modeling and acting classes when he decided that getting into the charter school biz seemed like a fine career move. He recruited Liz Knowles, a teacher and private school chief, to run the school and write his “Artademics” curriculum. But Knowles walked away from Blount soon after (final straw– discovering he had created a Artademics company to cash in). Knowles recalled Blount’s argument for her to stay. “Don’t worry, :Liz. You’ll be rich.”

“The Eagle Arts Academy opened up, and Blount was cashing in. What’s repeatedly impressive about these scam schools is that even people with no education experience or even successful business experience can still figure out how to make big money at this game. Blount was no exception.

“The technique is familiar. The non-profit school hires other companies, and that’s where you make your money. Blount set up a business that he called a “foundation,” though it was not registered as one. The foundation sold uniforms to students at hefty prices, and that money went to Blount. Blount’s company also ran a profitable after-school tutoring program on school grounds, rent free. And when Knowles walked away from writing the school’s curriculum, Blount set up a company to do that; the school paid him for that as well– even though the curriculum was both late. A third company charged the school for consulting services as well.

“The Eagles Arts charter did include a clause saying that no board members of the school could profit directly or indirectly. Blount apparently got around that by simply resigning from the board during the periods that he was making money through his companies.

“So, does this story end with Blount disgraced and in handcuffs?”

No, he is opening for a second year in August.

The wonderful world of school choice, brought to you by Jeb Bush and Betsy DeVos.

The American Association of School Administrators commissioned a report about the pending legislation in Congress that would diminish funding for public schools and create generous profits for donors to voucher plans. This is a raid on public schools’ funding to benefit private and religious schools.

This is the press release from AASA.

Report: Private School Voucher Proposal Creates Tax Shelter for Wealthy; Would ‘Starve’ Public Schools of Critical Funds

Alexandria, Va. – May 17, 2017 – Legislation pending in Congress would create new opportunities for corporations and successful investors to earn huge profits by transferring public funding to private schools, according to a report released today by AASA, The School Superintendents Association, and the Institute on Taxation and Economic Policy.

The legislation—the Educational Opportunities Act—would put two new federal voucher tax shelters within reach for many more Americans and lead to an explosion in funding for private schools. It would also keep in place an existing federal loophole that permits savvy taxpayers to benefit from ‘double dipping’ practices, where they receive a federal deduction and state tax credit on the same donation to a private school entity. At present, high-income taxpayers in nine of the 17 states offering voucher tax credits can turn a profit using this technique.

The report, Public Loss, Private Gain: How School Voucher Tax Shelters Undermine Public Education, describes how boosting resources for private schools while simultaneously providing tax breaks for wealthy taxpayers and corporations will greatly undermine public education.

The expanded voucher tax shelter proposal under consideration would allow the federal government to reimburse wealthy taxpayers (with tax credits) in return for providing funding to private schools on the government’s behalf. Further, the report says the legislation would “starve” public education of critical funding at a time when available federal resources are already limited.

“We are hopeful that our policymakers considering this legislation will continue to recognize the critical role that public education plays in keeping our nation moving forward,” said Daniel A. Domenech, executive director, AASA. “Rather than push education privatization schemes forward during tax reform, Congress must take action to address current loopholes that enable wealthy individuals and private schools to profit on the backs of America’s neediest public school students.”

“Supercharging the tax subsidies offered to people who donate to private school voucher organizations has created a host of problems,” said Carl Davis, research director, ITEP. “Even taxpayers who may have little or no interest in private schools are able to profit, at the public’s expense, by making heavily tax advantaged ‘donations.’ The Educational Opportunities Act would expand the potential for that type of profiteering.”

The report affirms:

The Educational Opportunities Act would create a risk-free profit of up to 100 percent (up to $4,500 per year for individuals or $100,000 for corporations) in states with voucher tax credits.

Seventeen states divert more than $1 billion per year toward private schools via school voucher credits. When combined with a federal tax loophole, nine of these states’ credits are so lucrative that they allow some upper-income taxpayers to turn a profit on contributions they make to fund private school vouchers.

Details of this voucher tax shelter are unknown to most of the public, though private schools and savvy tax accountants have been advising wealthy taxpayers of its existence for years.

To download the report: http://www.aasa.org/vouchertaxshelter/

Click here to access a copy of: Public Loss, Private Gain: How School Voucher Tax Shelters Undermine Public Education.

For specific questions about the report, contact Sasha Pudelski, AASA assistant director, policy and advocacy, at spudelski@aasa.org.

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About AASA
AASA, The School Superintendents Association, founded in 1865, is the professional organization for more than 13,000 educational leaders in the United States and throughout the world. AASA’s mission is to support and develop effective school system leaders who are dedicated to the highest quality public education for all children. For more information, visit http://www.aasa.org.

About ITEP
ITEP, the Institute on Taxation and Economic Policy, is a non-profit, non-partisan research organization that works on federal, state, and local tax policy issues. ITEP’s mission is to ensure that elected officials, the media, and the general public have access to accurate, timely, and straightforward information that allows them to understand the effects of current and proposed tax policies. For more information, visit http://www.itep.org.

The California State Board of Education accepted its staff recommendation and voted not to renew the Oxford Preparatory Academy charter school in Chino. The school will close June 30.

Parents defended the school, and one member of the board made a last-ditch plea for the school but he was outvoted.

“But board members grappled over the fate of the high-performing school that might be fatally encumbered with unknown debts accrued by its ousted founder, who is under investigation by district attorneys in two counties for alleged fraud.

“Did the school do wrong, or did an individual do wrong?” asked state school board member Bruce Holaday. “I’m still wrestling with that.

“Holaday offered a motion to approve the school’s appeal, but with a long list of new oversight requirements. The motion died, with a 4-6 vote. No other board members offered another motion, and 14 months after Chino Valley Unified staff first publicly raised questions about the financial health of the school, Oxford Preparatory Academy was out of options…”

“California Department of Education staff recommended that the state school board deny Oxford’s appeal, based on what Charter Schools Division Director Cindy S. Chan called “unrealistic” recovery plans.

“This audit report is horrific,” Chan said of a 2016 report from the state’s Fiscal Crisis and Management Assistance Team, made up of financial staff from districts across the state. The audit accused OPA founder Sue Roche of “laundering” money through Yorba Linda-based Edlighten Learning Solutions, a company she and her family ran.

“An open investigation by the San Bernardino County District Attorney’s Office also factored into the department’s recommendation to deny the appeal, Chan said.

“We are skeptical that any corrective action addressing all of the issues could be put in place” in time for the new school year, she said. “It looks like they’ve made efforts, but it’s just too short of a time.”

“Founded in 2010 by former Chino Valley Unified principal Roche, the school initially had a warm relationship with the district. Superintendent Wayne Joseph urged the school board to approve its initial charter and its first charter renewal request.

“That changed last year, when district officials expressed doubt about Roche setting up for-profit companies to provide services to OPA, using public school tax dollars for private profit.

“An audit commissioned by the school showed Edlighten still controls $900,000 in OPA funds, according to Joseph.

“In part, we included this list of items to follow up on, for law enforcement,” Michael Fine, chief administrative officer of FCMAT, told the state school board Thursday. “We don’t know that fraud has occurred. We believe there’s sufficient evidence that there may have been.”

“Among that evidence is a letter to the Internal Revenue Service, in which OPA reportedly characterized the company as being an integral part of the school. But two months later, to the district and FCMAT, OPA officials “disputed that they were one and the same and that (Edlighten) held assets,” Fine said.”

Is it reasonable to give taxpayer dollars to entities that are deregulated and unsupervised? That are unaccountable and non transparent? What do you think will happen when government funds are turned over to organizations that are basically on their own and who make campaign contributions to legislator who prevent accountability for their donors?

The Center for Popular Democracy explains what you expect under these circumstances: waste, fraud, and abuse.

Here is the executive summary:

“In 2014, the Center for Popular Democracy (CPD) issued a report demonstrating that charter schools in 15 states—about one third of the states with charter schools—had reported over $100 million
in fraud, waste, abuse, and mismanagement since 1994. In 2015 and 2016, we released additional reports documenting millions of dollars in new alleged and con rmed cases of fraud, waste, abuse, and mismanagement in charter schools.

This report offers further evidence that the money we know has been misused is just the tip of the iceberg. With the new alleged and con rmed cases reported here, the nancial impact of fraud, waste, abuse, and mismanagement in charter schools has reached over $223 million since our rst report.

“Public funding for charter schools (including local, state, and federal expenditures) has reached over $40 billion annually. Yet despite this tremendous ongoing investment of public dollars in charter schools, all levels of government have failed to implement systems to proactively monitor charter schools for fraud, waste, abuse, and mismanagement. While charter schools are subject to signi cant reporting requirements by various public agencies (including federal monitors, chartering entities, county superintendents, and state controllers and auditors), very few of these agencies regularly monitor for fraud.

“The rapid expansion of the charter sector in recent years is a particularly important factor in the fraud epidemic. Local and state entities charged with oversight of charter schools are quickly becoming overwhelmed, yet the federal government continues to pour taxpayer dollars into this expansion project. Over the past 20 years, the federal Department of Education has channeled over $3 billion into states to increase the quantity of charter schools without requiring strong oversight systems. As a result, millions in federal dollars have been lost to fraud, waste, and mismanagement. The Every Student Succeeds Act (ESSA), passed in December 2015, required the federal Department of Education to increase the pace of spending signi cantly over the next 10 years, essentially doubling the total federal investment in charter schools in half the time. In 2017, President Trump and his Secretary of Education, Betsy DeVos, have proposed to increase federal funding for charter schools from $333 million in 2017 to $501 million in 2018. This increase comes after a 2016 report from the US Department of Education’s Of ce of Inspector General which found “significant risk” in the US Department of Education’s Office of Innovation and Improvement (OII) charter school grant program.

“DeVos should be particularly familiar with the dangers of fraud and abuse in charter schools. As a staunch advocate for charter schools in Michigan, DeVos has spent millions in campaign donations supporting state candidates who favored “school choice” and opposing increased oversight and regulation. The result of Michigan’s experiment in charters has been a system of failing schools run by for-pro t companies, and millions of dollars lost in fraud and waste.

“With the perpetuation of inadequate oversight mechanisms and the new in ux of federal funding, the amount of federal, state, and local dollars at risk of being lost to fraud, waste, and abuse in the charter sector is only going to grow.

“The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the confirmed cases we know about. Based on the widely accepted estimate of the percentage of revenue the typical charter organization loses to fraud, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $2.1 billion in 2017, up from $1.8 billion in 2016.8 The vast majority of fraud perpetrated by charter officials will go undetected because federal and state governments, as well as local charter authorizers, lack the oversight systems necessary to detect the fraud.

“Setting up systems of oversight that can detect and deter charter school fraud is critical. The money saved by these oversight systems will almost certainly offset the cost of implementation. We recommend the following reforms:

“■ Mandate audits specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers

“■ Design clear planning-based public investment programs to ensure that any expansion of charter school investment also ensures equity, transparency, and accountability

“■ Increase transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud

“State and federal lawmakers should act now in establishing systems to prevent fraud, waste, abuse, and mismanagement. ESSA unfortunately does very little reduce these vulnerabilities in the Charter Schools Program. Without state and local lawmakers passing policies to increase oversight, taxpayers stand to lose millions of additional dollars to charter school fraud, waste, abuse, and mismanagement.”

Here we go with the Great Money Heist in Florida.

HB7069 passed both houses of the legislature and will go to Governor Rick Scott for his signature.

In two posts, Sue M. Legg of the League of Women Voters analyzes the devastating impact of this budget bill for public schools. She hopes that Governor Scott will veto the bill. As she explains, money is being shifted to charter organizations and taken away from traditional public schools. Ten percent of the students in the state are enrolled in charter schools, but the needs of the ninety percent are ignored. The bill reduces base student funding, so that it is lower than it was a decade ago.

She writes:

The provisions to require local districts to share capital outlay with charter schools is untenable. It will cost districts already struggling with aging facilities, millions of dollars. The Schools of Hope proposal allocates $140 million for charter school takeovers of low performing public schools.

Creating charter systems that control groups of charters surely must stress the Florida constitutional requirement for a ‘uniform system of high quality schools’. These systems become their own local education agencies. This is a legal term that is now allocated to elected school boards. The systems would be able to receive funding directly with no oversight from districts.

The shift in the allocation of Title I funds for low income students also is adversely affected by the bill. Low performing schools would get the bulk of the money which then would go with Schools of Hope. The implications are far reaching if money is spread too thinly to support extra reading, tutoring and other services many children need.

Well, this is a new one for me. After I posted Sue Legg’s piece about Erik Fresen, Sue contacted me and told me she had mistakenly sent me her notes, not the finished post.

So, here is the finished post. I must admit. It reads better. And there is a picture of Erik Fresen.

It begins like this:

Remember Representative Fresen, whose sister Magdalena Fresen is Vice President of Academica, Florida’s largest for-profit charter management company? He term limited out of the legislature this year. His next step is to go to jail?

Ethics Florida Style: Go Directly to Jail

The buzz about Florida is that there is more self-interest than public interest than in any other state. Are such allegations warranted? Information is not difficult to find. The Center for Public Integrity ranked states on a corruption index in 2012. Florida was rated an ‘F’ on ethics enforcement agencies. It appears there are rules that are easy to bend and break.

Take the case of former Florida House Representative Erik Fresen who served in the House for eight years. It looks like he will serve in a Florida prison next year. He was Chair of the House Education sub-committee on Appropriations, and a former property consultant for Civica, a real estate company with ties to Academica. Fresen’s sister and brother-in-law operate Academica, the largest for-profit charter management firm in Florida. Their charter school real estate holdings generate over $20 million per year.

Fresen pled guilty this week for failure to file federal income taxes for eight years. During the same period, his House financial record disclosures do not match the IRS income reports. This is simply a culmination of years of questions about Fresen’s ethical behavior.

I just noticed that the words “For-Profit,” “Florida,” and “Fraud” are consecutive in my list of categories. Kind of like “Testing” and “Texas.”