Archives for category: Fraud

This editorial appeared in the Fort Wayne Journal Gazette, a newspaper that has paid close attention to the scandals and frauds in the charter industry.

It begins:

Operators of two Indiana charter schools spent nearly $86 million in tax dollars at businesses in which they had ties. The money came from state tuition support for students who, in some cases, were never enrolled in the schools.

This is the school choice Indiana lawmakers celebrate – a breathtaking violation of the public trust.

A special report by the State Board of Accounts was released last week, based on an investigation of Indiana Virtual School and Indiana Virtual Pathways Academy. Chalkbeat, an online education news service, first reported in 2017 that one of the online schools collected nearly $10 million in 2015-16 while graduating only 5.7% of its seniors – the lowest graduation rate in the state. Chalkbeat revealed a web of business interests between school founder Thomas Stoughton and AlphaCom, a for-profit company he operated while charging the school millions for management services and rent for offices in a suburban Indianapolis office park.

State auditors found public funds misappropriated through “malfeasance, misfeasance, and/or nonfeasance.” The complexity of the scam required a diagram to lay out ties among Stoughton, other charter officials and 14 private companies that shared in ill-gotten school funds – almost $69 million.

 

Chalkbeat’s reporting found discrepancies in enrollment now confirmed by the state. In more than 4,700 examples, children reported as enrolled completed no courses. Another 3,811 were flagged with just one or more course completions. The ghost enrollees included individuals who died or moved out of state, students withdrawn for lack of participation and some who did nothing beyond requesting information on the school. Counted as enrollees, they drew thousands of dollars each in state support that was, in turn, funneled to connected vendors. In the 2017-18 school year alone, the audit identified $15.5 million in overpaid tuition support.

Asked about the State Board of Account’s report, House Speaker Brian Bosma defended the virtual school program and pointed to Daleville Community Schools, the tiny public school district that granted its name as authorizer of the charter schools, and the Department of Education, overseen by Indiana schools chief Jennifer McCormick. The Republican state superintendent, whose office was eliminated by the legislature effective next year, has been outspoken in calling for greater accountability for schools of choice.

Blaming the Department of Education for the abuses of charter school operators is like blaming the BMV for the actions of a drunk driver. Responsibility for lax regulations and oversight for both charter schools and voucher schools falls squarely on Bosma and the GOP supermajority. In cozying up to the deep-pocketed school-choice community, they ignored glaring examples of corruption here and elsewhere. It was almost 11 years ago when The Journal Gazette first reported on the suspicious real estate deals surrounding two Imagine Inc. charter schools in Fort Wayne – schools that eventually shut down with $3.6 million in outstanding state loans.

Charter school scandals are so common that the Network for Public Education began collecting them on a website and tagging them on Twitter: #AnotherDayAnotherCharterScandal.

“There is a crisis of charter corruption in the United States and sadly the powerful charter lobby stops every attempt to enact reform,” said Carol Burris, executive director of the organization. “In 2019 alone the Network for Public Education identified four major virtual charter scandals, including Indiana’s two schools. A California virtual scandal cost that state’s taxpayers over $50 million. Virtual charter schools have a pattern of ‘cooking the books’ when it comes to attendance and enrollment, and have the worst outcomes when it comes to student achievement.”

Do Indiana taxpayers care?

The principal of the Discovery Creemos Charter School pled guilty to inflating enrollment and stealing $2.5 million from the state and federal governments. 

The former principal of the shuttered Discovery Creemos Academy pleaded guilty Friday to participating in a $2.5 million scheme to inflate enrollment at the defunct charter school.

Harold Cadiz, 55, faces up to 12 ½ years in prison after pleading guilty in Maricopa County Superior Court to two counts of felony theft during the 2016-17 and 2017-18 school years. He’s scheduled to be sentenced March 27.

Cadiz is the second administrator from the Goodyear charter school, also known as the Bradley Academy of Excellence, to admit to participating in the scheme to defraud the state and federal governments by inflating the school’s enrollment by hundreds of students.

Cadiz’s plea calls for a prison sentence of 3 to 12 ½ years and up to 7 years of probation.

Arizona public schools are funded based on the number of students, meaning each additional student a school reports to the state brings more tax dollars.

Daniel K. Hughes, president and CEO of Discovery Creemos, was the first executive at the school to cut a plea bargain with the Arizona Attorney General’s Office, admitting to theft and conspiracy in November 2018. He faces a presumptive prison sentence of five years.

The school closed January 2018, just after the 100th day of the school year, ensuring it would receive as much state money as possible before it closed.

A few months before Discovery Creemos Academy closed, Hughes had assured the Charter Board that he would turn around the financially and academically failing charter school. Reviews by the Charter Board for the 2013-14, 2014-15 and 2015-16 school years found the school did not meet its financial performance recommendations.

Hughes has admitted that during the 2017-18 school year, his school reported an enrollment of 528 students, but 453 of them were fraudulent. In 2016-17, the school reported it had 652 students, but 191 were fraudulent.

 

 

 

The biggest and worst charter scandals are perpetrated by virtual charter schools. Why do states tolerate their waste, fraud, and abuse?

The only online charters should be operated and supervised by public officials, not by grifters and entrepreneurs.

Indiana was just scammed of more than $68 million by two virtual charters. This was money that should have spent on children and in classrooms to reduce class sizes and pay teachers.

Why did the authorizer ignore the graft? Could it be that it was getting paid a commission for each student supposedly enrolled in these “schools”? Enough fraud to pay off almost everyone.

Early estimates of just how much money two online schools stole from the state of Indiana were wrong, according to a report filed Wednesday by the Indiana State Board of Accounts.

A special investigation into malfeasance by Indiana Virtual School and Indiana Virtual Pathways Academy found that the schools inappropriately received more than $68.7 million collectively.

Last summer, state investigators revealed that the charter schools had inflated their enrollment to defraud the state — by enrolling students who’d simply requested information on the schools’ website, re-enrolling students after they’d left the schools or, in one case, by keeping a deceased student on their books more than a year after their death.

The state funds public schools — which include virtual charter schools — based on the number of students enrolled each year. At the time, investigators estimated overpayments to be around $40 million.

The new report details widespread fraud, misuse of state funds and a severe lack of oversight by school officials and the schools’ charter authorizer, Daleville Community Schools.

 

 

Charter advocates have reacted with astonishment and outrage at the Trump-DeVos decision to fold the federal Charter Schools Program into a block grant to the states, along with 29 other programs. The Trump administration’s goal is to shift federal funding to states and let them decide how to spend the money.

Matt Barnum of Chalkbeat writes the story here, detailing the administration’s rationale and charter advocates’ reaction. 

Jim Blew, formerly of the Walton Family Foundation, which claims to have launched one of every four charters in the nation, brushed off the charter lobbyists: 

“The federal lobbyists for charter schools sound a lot like the lobbyists for all of the other competitive grant programs,” Assistant Secretary Jim Blew told Chalkbeat in a statement. “In their desperate communications, they have exaggerated the importance of CSP — just like other lobbyists,” he added, referring to the Charter Schools Program.

It’s not clear that the program is in real jeopardy, since Congress has previously disregarded the Trump administration’s proposed budgets. But the budget proposal and combative rhetoric suggest that charter advocates do not have as staunch an ally in the administration as they previously believed.

“We are saddened and puzzled by the Department of Education’s comments,” said Nina Rees, president of the National Alliance for Public Charter Schools, which has receivedfederal charter dollars. “We advocate for the federal Charter Schools Program because we believe it is a lifeline for students.”

Rees formerly was education advisor to Vice President Dick Cheney and to entrepreneur MIchael Milken, who engaged in education philanthropy after serving a term in prison for financial crimes.

Strangely, Barnum refers to Democrats for Education Reform (DFER) as “left of center,” which is laughable since they were founded by and funded by hedge fund managers, some of whom are billionaires and may not even be Democrats. DFER’s funding has gone to supporters of school choice, and their beneficiaries show no interest in funding, class size, teachers’ salaries, integration or other issues that matter to progressive Democrats.

It is ironic that the Republican-dominated charter industry will now have to count on Democrats in the House to save the federal Charter Schools Program, which DeVos has used to fatten avaricious corporate charter chains.

The federal CSP has funded a large proportion of the nation’s charter schools, acting like “the Small Business Administration” for charters entrepreneurs, as NPE executive director Carol Burris said recently on Twitter.

Barnum wrote:

A recent presentation from the Department showed the figure was slightly higher: as of 2016, more than 3,100 existing charter had received such a grant, with the program helping to fund close to 45% of all operating charters. (Morabito, the spokesperson, acknowledged the error when asked about it by Chalkbeat.)

For charters that opened between 2006 and 2016, the share was even higher — 60% had received a federal grant.

Studies of the federal Charter Schools Program by the Network for Public Education found that it was riddled with waste, fraud, and abuse. More than 1/3 of the federally funded charters either never opened or closed soon after opening. This is a program that should be eliminated.

What will the Democrats do?

 

 

Professor Jim Scheurich read a recent article in the rightwing, anti-public school journal “Education Next” about Indianapolis, which he thought was fundamentally flawed.

He sent the following analysis of what’s really happening in Indianapolis:

 

A RECENT ARTICLE IN EDUCATION NEXT

COMPLETELY MISREPRESENTS

THE RECENT HISTORY OF INDIANAPOLIS K12 EDUCATION

Dr. Jim Scheurich

Urban Education Studies Doctoral Program

Indiana University – Indianapolis (IUPUI) Professor

President, IPS Community Coalition

 

Unfortunately, a recent article in the pro-charter, pro-neoliberal “magazine,” called Education Next, is a thorough misrepresentation of the recent history of Indianapolis K12 education (see https://www.educationnext.org/hoosier-way-good-choices-for-all-indianapolis/).  I know because, as a university professor and a community activist, I have spent the last seven years working against the pro-charter, pro-neoliberal efforts in Indianapolis, mainly through the IPS Community Coalition, a citywide grassroots organization, and through anactivist research group of doctoral students, community members, and university faculty.  Below, I am going to point out eight ways this Education Next “story” is distorted and deceptive.  

1. The real cause of the “schooling crisis” in Indianapolis was racism and desegregation as many whites who could afford to do so moved out of the city, as did much business and capital, along with the ongoing effects of local, long-term racist policies and practices.  

In the Education Next (EN) article, there is not a single reference to race, desegregation, and racism.  Indeed, these words are never used (except as labels in one chart) even though the history of Indianapolis schooling cannot be accurately and fairly storied without these. In addition, there is no mention of the ongoing racism in law enforcement and imprisonment, housing, education, medicine, employment, banking, and the media, which exists in all cities and is well documented in social science research. These exclusions are a loud absence that is unquestionably remarkable and certainly a mark of weak and/or distorted scholarship.  Why would anyone who wanted to tell an honest “Hoosier” education story leave these out?  At a minimum, it certainly makes one wonder about the real nature and agenda of this EN story.

2. No mention of the pro-charter neoliberal movement that has “Mind Trust” and “Stand for Children” like organizations in every major city and several smaller ones in the U.S.

The Mind Trust and Stand for Children in Indianapolis like to keep their “story” local so those who work for them and the Indianapolis public remain ignorant about their true nature. The Mind Trust and Stand for Children never discuss that they are part of a national neoliberal movement largely funded by conservative and rightwing individuals, organizations, and corporations.  They never discuss the wider agenda of this movement, which includes low taxes for the wealthy, decreased funding for social supports, the privatization of and profiteering off of public services (like public education), efforts to decrease the voting power of people of color, the end of unions (esp. teachers unions) and the benefits unions have developed, among other ways that decrease the quality of life for everyone but the 1% and those who serve them.  Also, Mind Trust and Stand for Children never discuss the strongly anti-democratic nature of the neoliberal movement.  To begin to educate yourself on this national movement, read these highly respected books, in this order, MacLean’s ”Democracy in Chains,” Mayer’s “Dark Money,“ and Lipman’s “The New Political Economy of Urban Education.”  

3. No mention of the key role of ALEC (American Legislative Exchange Council) in the Mind Trust/Stand for Children story.

ALEC is a conservative-rightwing organization that creates model state-level neoliberal legislation to assist in institutionalizing the state-level neoliberal agenda discussed above in #2.  ALEC considers Indiana to be one of its favorite states, as Indiana Republicans and some Democrats have implemented so much ALEC developed legislation.  The result has been that Indiana consistently ranks high in business-friendly policies and effects and among the lowest in quality of life policies and effects.  Lengthy discussions and critiques of ALEC and its agenda are widely available, but there is no doubt ALEC is pushing a radical agenda that would not be supported if voted on by the general public.  

4. No mention of the “dark money” funding of Mind Trust/Stand for Children supported school board members.  

Since the 2012 board election in Indianapolis, the Mind Trust and Stand for Children have covertly used a Stand for Children 501c4 headquartered in Oregon to funnel national money into the Indianapolis school board race.  Before this, any everyday citizen who could put together funding of $3-5,000 had a chance to win election to the school board.  Starting in 2012, we know that the Mind Trust and Stand for Children started providing around $65,000 to each of their chosen candidates with all of them winning as no one was expecting or prepared for this infusion of such large amounts.  In the next election, 2014, they did the same and took majority control of the board, even though one of their chosen candidates, Gayle Cosby, turned against them once she realized what their real agenda was.  We call this “dark money” because a 501c4 does not have to report where the funds came from or how they were spent and not one of their candidates have publicly admitted this support.  In fact, it took the IPS Community Coalition shouting loudly about this for some time before the local news media paid any attention and still do not sufficiently attend to this, especially since in the last election, our best guess is that they spent over $500,000 on a district wide seat (more on this below).  Recently, the head of Stand for Children, who is widely praised in the EN article, said on social media that the Indianapolis Stand for Children has no relationship to the 501c4 in Oregon, leaving us puzzled as to how the Oregon folks know whom to support.  

5. Even though the “Innovation” schools (stealth charters inside the district) are widely praised, there is no discussion of constant reports to the IPS Community Coalition that the district leadership uses deception, misrepresentations (to put it politely), and threats to stop resistance and garner parent and teacher support for converting a traditional school to an innovation school.  

Either lots of teachers and parents are lying to the IPS Community Coalition, or the districts is using strong arm tactics to institute “innovation” schools.  Indeed, many teachers report to us that they feel afraid of the district leadership, given the district’s rough shod ways of getting what the district wants.  Also, there is no mention of the fact that for their first three years, the “innovation” schools are under easier state accountability rules.  Thus, the Mind Trust and Stand for Children often brag that the “innovation” schools are doing “better” even though traditional schools, which are under the full accountability rules, are actually doing better.  Might we call this dissembling?

6. No mention of the utter failure to successfully  educate Black children, who are the majority of IPS students, and no mention of the use of home schooling and high discipline rates to push out Black children.

Despite that we know that testing experts say we cannot use state accountability exams in the way we do, it is a harsh fact that less than 6% of Black 10th graders recently passed both the state’s language arts exam and the math exam.  If any business (the favorite neoliberal model) had this terrible outcome, that business would be shut down or all the leadership fired.  This is totally appalling—and never mentioned.  In addition, an intrepid local Chalkbeat reporter found compelling evidence that some schools have been counseling the parents of primarily Black students to choose to home school instead of facing a discipline incident result, a move that takes this student off the school’s roles and improves the school’s standing.  That this has the high potential to negatively impact the entire life of these Black students does not seem important to the decision makers, even though local Black activists, like Diane Daniels, have been pointing this out for years.  Furthermore, other schools, sometime called “no excuses” schools, use really high levels of discipline to push out primarily Black students that they see as potentially hurting their schools’ state grade, even though local education activists, like John Harris Loflin, have been making this point for years.  That all of this is totally disastrous for Black students, their families, their communities, and all of Indianapolis does not seem important enough to mention in the EN story.

7. Substantial problems with the CREDO and Indiana University (IU) research cited in the EN article are not addressed.

There is no mention of the deep critique of the CREDO report and its methodology, even though the University of Colorado’s National Education Policy Center (neps.colorado.edu) has published more than one critique of the CREDO methodology and their reports.  Also, no mention that the CREDO reports are done by a center that receives large pro-charter funding.  Furthermore, the IU research has been cited locally and nationally but never publicly released, as far as I have been able to determine.  I was able to get a copy of it, but since others have ownership, I cannot release it.  I did a thorough, indepth critique of it, showing it to be flawed in multiple ways but cannot publish since the research continues not to be public.  I mentioned that publicizing but not publishing results was against social science practice and ethics. I even asked that it be released, but they have stopped communicating with me even though I am part of the same university system.  

8. Nothing on the persistent incompetency of the Ferebee administration.  (Ferebee left last year to go to Washington, DC.  Fight hard, everyday DC folks!)

The examples of incompetency are many and large.  First, closing of high schools is almost always a fraught endeavor.  Nonetheless, there are good superintendents around the country who have figured out how to have authentic, transparent conversations with their communities and arrive at collaborative decisions.  I have met and talked to some of these folks.  It is never easy, and some community people are not happy in the end, but overall the community can feel it was done fairly and transparently.  That was not the case in Indianapolis.  Second, without consulting even with their friends and natural allies, like the Chamber of Commerce and the Board of Realtors, Ferebee went public with little time left before the vote with a nearly one billiondollar bond proposal.  Even their friends and allies said, “NO!”  After an inappropriate Chamber study of cost cutting for the district, the district cut to around a quarter of the original amount to get Chamber and other elite support.  In addition, good superintendents know that it takes one to one and a half years of hard work to prepare for a successful bond election, and even that is no guarantee.  Ferebee seemed not to know this.  He did though get his quarter million because he committed most of it to raising teacher salaries, which even his critics supported.  Third, the district’s public budget document was opaque and confusing, even after having been critiqued by a non-political national organization that examines such documents nationwide.  After two years of pushing, we got some improvements.  Fourth, busing has consistently been a mess, which they now think they are solving by privatizing it. Fifth, teachers districtwide have become very afraid of raising any issues because they believe they will be fired.  Sixth, even though there is a large amount of research nationally as to what it takes to create successful urban schools for all children, regardless of race and ethnicity, family income, sexuality, disability status, and immigration status (some of which I have published), the Ferebee administration did not seem to know any of this.  Instead, initiating “innovation” schools and supporting charter schools that replaced district schools seemed to be his only choices.  

The neoliberal so-called education “reform” movement is weaker than they seem despite their millions of dollars and their PR machine.  

The IPS Community Coalition is a multi-race, multi-class citywide coalition of everyday Indianapolis folks and local organizations (see us on Facebook) who started a little over three years ago.  We began with less than eight people sitting in a room together, and now we have over 250 members.  We are very active on Facebook and sometimes have over 6,000 eyes on our posts.  We have no money, and many of our members have little. We do support teachers’ unions and work with the local teachers’ union.  In the 2018 school board election, we defeated two of the Mind Trust and Stand for Children incumbents.  The only race they won was due to the candidate being a non-incumbent.  In our best understanding, they spent over a half million dollars on their districtwide candidate, while the person we supported defeated their candidate on less than $10,000.  Because of their losses in the last election, now they are bringing back some of the most well-known local founders of their movement and trying to fake the community engagement that we authentically do.  They do have millions of dollars, many fulltime and part-time employees, and a large PR machine that falsely uses civil rights language, but they can be defeated.  

Study what neoliberalism is in education and other areas of your community.  

An activated people can defeat money and power.

The charter industry is overrun with scandals because charter laws do not require accountability and transparency. Theft, conflicts of interest, nepotism, and fraud are a feature, not a bug.

A charter operator in Dallas was sentenced to seven years in jail for taking a kickback, but then convinced the board to give her a bonus of $20,000.

Donna Houston-Woods was convicted of defrauding her own Dallas charter school, but she wasn’t done taking its money for her own benefit, a federal prosecutor said Thursday.

She returned to Nova Academy after her October trial and pocketed a $20,000 bonus. Houston-Woods, the school’s longtime CEO, then asked for another $300,000 in severance, but the school board denied it.

Her actions, the prosecutor said, showed zero remorse and a lack of respect for the law.

A federal judge on Thursday sentenced Houston-Woods to seven years and three months in prison for accepting $50,000 in kickbacks in exchange for steering a school technology contract to a friend, who then botched the job…

Senior Judge Sidney Fitzwater called it “outrageous” that the Nova board of directors, having been “injured” by Houston-Woods, would pay her a bonus before she resigned. He called it “stunning to me” and said the payment was indicative of the school’s management.

Because Houston-Woods defrauded the federal E-rate program out of about $337,900, Nova is ineligible for any future government money to pay for internet services, Fitzwater said.

The business leadership of Dallas wants more charter schools!

Bill Phillis writes about the GOP’s pusillanimous capitulation to its masters and is prepared to sacrifice its public schools to satisfy DC-based Thomas B. Fordham Institute and ALEC, funded by CharlesKoch, the Waltons, and DeVos.

He writes:

School choice zealots seem to be driving the state education policy train
In spite of the harm being heaped on school districts due to corruption in the charter industry and the wild expansion of vouchers, the school choice zealots are in control. State officials seem powerless to establish rational Ohio education policy.
According to current media reports, the voucher “fix” being considered in the Ohio Senate, would lessen the harm to some school districts in the near term but would set the stage for a universal voucher system in the future. The local choice zealots and their big boy moneyed allies, such as the American Legislative Exchange Council (ALEC) and Fordham Foundation, are driving policy that undercuts the very foundation of the public common school. State officials seem to cower when confronted by the choice crowd.
 
Time to march on Columbus.
Before I saw Bill Phillis’ post, I tweeted an article about a temporary “fix” proposed by the GOP.
Jan Resseger wrote to me that the “fix” is a fraud and her own integrated, mixed-income district will be devastated.

She wrote:

I noticed you forwarded the Dispatch piece as though it will help anybody.  The Ohio Senate “solution” will simply leave in place all the damage from current year.  In CH-UH we have 478 percent growth in vouchers this year.  These kids will carry those vouchers out of our district’s budget each year until they graduate from high school. 

We’ll hope that this afternoon the House mitigates this in some way.  Leaves vouchers in place for now—but moratorium on their growth for a while.  Leaves flawed state report cards in place without a deadline to change them.  Expands income cap on the other kind of state funded vouchers.

The mess is embedded right in this so-called “solution.”

–Jan

Carol Burris reviews here the five biggest charter scandals of 2019. 

There were many to choose from.

Numero uno, of course, was the giant charter scam in California:

1. A3 Education: Eleven are indicted over their involvement in a charter scheme that defrauded California taxpayers of more than $50 million.

In May, the California Superior Court for the County of San Diego indicted 11 people on charges that they helped defraud California taxpayers out of $50 million via an elaborate scheme to create phony attendance records to increase revenue to an online charter chain known as A3. You can find a summary of the story with its elaborate kickbacks and fraud schemes here.

The alleged theft took place over the course of several years. In 2016, Jason Schrock and Sean McManus reportedly purchased Mosaica Online learning, which got its start with a $100,000 grant from the federal Charter Schools Program (CSP). They eventually renamed the online schools Valiant. Schrock and McManus managed the schools through the nonprofit Academic, Arts and Action (A3) Charter Academy. Eli Johnson would reportedly approach small, cash-strapped school districts to enlist them as authorizers, for which they would receive an authorizer fee.

In addition to Valiant Academy charter schools, A3 expanded by starting CA STEAM Academies throughout the state. Using the 19 resulting charter schools that enrolled thousands of students, they put their scheme in place. Thousands of summer school students would enroll, some unwittingly, and never take any classes. Meanwhile, according to the indictment, the money flowed into Schrock and McManus’s real estate ventures, bank accounts and the kitty they created for payoffs.

In 2016, I exposed the mysterious growth of the CA STEAM Academies and other charters in which Johnson and McManus were involved here on The Answer Sheet. As part of my investigation, I spoke with Johnson on the phone. He claimed he did not know the name of the company he worked for or who signed his paycheck.

The CA STEAM empire extended into Ohio. Whether it has been investigated in that state is unknown. The A3 investigation and prosecutions continue as they hunt for McManus, who has disappeared.

Read on to learn about the other four members of the Dishonor Roll.

I had the odd experience of meeting McManus a year ago. I happened to be at breakfast in a hotel in Newport Beach, California. My companion and I were seated next to a table where a man was in harmonious discussion with two or three others. He spoke in a loud voice and I heard references to “schools,” “sports,” “$5 a head,” etc.

When their party broke up, I stopped and asked him I’m if he was “in the charter industry.” Yes, he answered, and told me proudly he owned many corporations.

That was Sean McManus, now on the lam.

In case the story is behind a paywall, number 2 was the decision by the board of Texas-based IDEA charter chain IDEA to lease a private jet for $2 million a year. The board reversed the decision in response to public reaction. Now the executives and their wives fly first class.

Number 3 is a small California Charter Chain whose owners somehow became multimillionaires, although their charters are “nonprofit.”

”4. A nonprofit operator of migrant shelters, Southwest Key, coordinated with its for-profit organizations to bleed its charter schools into rat-infested classrooms.

A Texas charter school named East Austin College Prep made national news in 2019 when the New York Times reported complaints of raccoons and rats invading classrooms, rain pouring in through a leaky roof, and furniture occasionally falling through rickety floors. Yet, according to the story, the charter high school pays almost $900,000 in annual rent to its landlord, Southwest Key Programs.

The school, which received a CSP grant of $450,900, is owned by Southwest Key Programs, the nation’s largest provider of shelters for migrant children who’ve been separated from their families at the border….

5.The North Jersey Record uncovered hundreds of millions in taxpayer funds going to buildings owned by private interests, with charter schools paying inflated rents that far exceed building debt.

A 2019 five-part series written by a team of reporters from the North Jersey Record exposed the shady dealings hidden from the public eye that allow developers to cash in on public money and tax breaks by providing real estate to charter schools. The reporters found that information was buried so deeply in documents, it was difficult in many cases to find out who was making the profit.

The report resulted in a federal grand jury subpoena issued to the Thomas P. Marion Charter School in Newark. Its nonprofit “Friends of” organization purchased two public school buildings and flipped them for a profit of nearly $10 million.

I left out the details. Burris’ article includes them. Read it in full if you can. The details are shocking.

 

 

 

Craig Harris, investigative reporter for the Arizona Republic, wrote about the abysmal record of online charter schools. Despite their poor outcomes, they continue to be very profitable.

The biggest of the online charter companies is K12 Inc., whose schools regularly get bad results but whose revenue this year topped $1 billion for the first time.

State regulators mouth complaints about the low quality of online charters yet they are renewed again and again. As Harris points out, even school choice advocates (except for Betsy DeVos) believe that the online charters should be regulated, yet they continue to operate unimpeded.

Harris writes:

SAN DIEGO — By the time authorities brought charges against the owners of A3 Education earlier this year, the online charter school company had bilked California taxpayers out of $50 million, according to indictments handed up in May. 

The state would have lost another $200 million if authorities had not detected the scheme to inflate enrollment in the virtual charter school using names gleaned from youth sports league rosters, said San Diego County District Attorney Summer Stephan. League owners are alleged to have received kickbacks for providing names, according to the indictments.

A3 Education, a nonprofit management company that enrolled tens of thousands of California students at its peak, had sought out small school districts to authorize its online schools, knowing the districts would provide little oversight, authorities said.

The California case is the latest in a string of allegations of fraud and educational malpractice against virtual charter schools. These have included, among others, multimillion dollar scams in Ohio, Oklahoma and Indiana, and academic or financial problems that shuttered online charter schools in Georgia, Nevada and South Carolina.

California last year banned for-profit charter schools and this year adopted a two-year moratorium on new virtual charter schools. Neither law, however, would have affected A3 Education or its schools.

The Arizona Republic visited seven states to investigate the successes and challenges surrounding charter schools — the publicly funded but privately operated schools that many believed would revolutionize American public education through competition and innovation…

In Arizona, which has the most charter school students out of the states, no online charter school meets the state Charter Board’s academic standards. And Arizona’s largest virtual charter school, Primavera Online, earned the board’s lowest academic ranking and posted declining graduation rates for the last decade. That hasn’t stopped Primavera founder and CEO Damian Creamer from paying himself a combined $10.1 million in 2017 and 2018.

Primavera, which has a total enrollment of 22,000, reported a $10 million profit this year, while spending $6.9 million on teacher salaries. 

“These guys are definitely in it for the profit,” said Macke Raymond, director of the nonpartisan Center for Research on Education Outcomes, or CREDO, at Stanford University.

Negative headlines have, however, prompted prominent charter school leaders to call on regulators to clamp down on virtual charters, and for the industry to cut ties with the schools.

Todd Ziebarth, a senior vice president of the National Alliance for Public Charter Schools, said poor academic performance at virtual charter schools gives ammunition to teachers unions and others who oppose school choice, hurting high-quality charter schools and the broader school-choice movement.

“They make up a small percentage of charter schools, but a huge percentage of negative publicity,” said Tom Torkelson, chief executive of Texas-based IDEA Public Schools, one of the nation’s largest charter school operators. “They add no value. I would never send my kids to one.”

Torkelson argues that it’s time for online charter schools to go out of business.

But few states have enacted reforms, experts note, because when such proposals arise, virtual charter operators — flush with cash — have flooded key lawmakers with campaign contributions.

This proves that when a big charter corporation buys legislators, they stay bought.

Despite poor academic performance, virtual charter schools likely are here to stay because parents want that choice, said Raymond, the CREDO director.

However, CREDO notes in a study, low-performing online charter schools are not keeping their end of the educational “grand bargain” struck about 25 years ago, during the early charter movement.

That deal gave charter operators the freedom to teach kids in innovative ways with minimal red tape. By being allowed to run a school like a business, operators promised they would allow regulators to shut down poor performing schools. 

To fix the problems, Stanford researchers concluded that charter school authorizers “must step up their responsibilities and demand online charter providers improve outcomes for students.” And, states should examine the progress of existing online programs before approving any expansions.

Raymond said she still believes in a “cost-efficient and effective education through online” schools but the system “doesn’t seem to deliver on that.”

University of Colorado researchers agreed that states should slow or halt the growth of virtual and blended schools until their performance has improved, and student-to-teacher ratios are lowered.

But Miron, the Western Michigan professor, said changes are unlikely.

Even when prosecutors, like the San Diego County district attorney, crack down on one virtual school another will quickly pop up because the business is so lucrative, he said. 

“Even if a charter board fires them, it doesn’t affect them. They are not losing a building,” Miron said. “They don’t get punished for risky behavior. It’s a very different model for brick-and-mortar schools.”

 

 

 

This is a very engaging video interview of Tom Ultican, an expert on corporate education reform, explaining the federal takeover of public schools via No Child Left Behind and Race to the Top. Ultican goes into detail about the corporate assault on public schools in the Dallas Independent School District. He names names, starting with the misguided superintendency of Mike Miles, a Broadie who managed to drive out large numbers of experienced teachers. He identifies the funders of corporate funders, both billionaires and the Dallas Chamber of Commerce.

He gives a concise analysis of the money behind the “portfolio model,” charters, and privatization in Texas and Dallas.