Archives for category: Fraud

Donald Cohen is a specialist in the study of privatization. He reports regularly on his online site “In the Public Interest.”

This article appeared on Huffington Post.

He points out that pro-charter forces based in Wall Street spend more than $2 million on ads during the Olympics that were beamed to viewers in Massachusetts.
The purpose of the ads was to promote Question 2, the expansion of privately managed charters in Massachusetts.

The ads are deceptive, pretending that the vote is about improving public schools when it is about diverting funding from public schools to charters.

Cohen notes that the surprising victory of public school supporters in Nashville should give hope to their peers in Massachusetts. The same corporate forces backed a pro-charter slate in Nashville and lost, despite an overwhelming advantage in funding.

Supporters of public schools in Massachusetts, keep up your organizing and tell the public the facts about Question 2 to combat the propaganda on television. #NoOn2

Chester Finn, Jr., Bruno Manno, and Brandon L. Wright declare in the Wall Street Journal that public schools and elected school boards are dying a slow death and being replaced by charter schools. All three are associated with right wing think tanks (Thomas B. Fordham Institute and the Walton Family Foundation).

Bear in mind that some 50 million children attend public schools, and fewer than 3 million attend charter schools. Bear in mind also that voters have never voted to replace public schools with privately managed charter schools. Americans have never been asked whether they want to pay their taxes to private corporations to run schools that can choose their students. The charter movement has flourished because of massive investments by billionaires like Gates, Broad, and Walton, political support by right wing groups like ALEC, right wing governors, and the unfortunate support of the Obama administration.

Public education, open to all, has for many years been considered an essential democratic institution and a basic cause of the great economic, social, and cultural success of our nation. Finn & friends hope for and celebrate its demise. They tacitly acknowledge that charter schools don’t get higher scores than public schools. They note that some charter operators are frauds. What they don’t admit is that they welcome the Hyper-segregation of American society. One of the reasons our society functions as well as it does is because public schools bring children from different backgrounds together, across lines of race, religion, class, gender, and ethnicity. It doesn’t happen enough, but the authors don’t care if it happens at all. They welcome the return of segregation as a step forward, not retrenchment from our ideals.

Similarly, they see no value in democracy. Elected school boards are a fundamental exercise of democracy. They are established in state constitutions. Yet the authors would wish them away and replace them with privatization.

This article and the book it is based on comes at a time when the privatization movement is staggering. Charters were just recently criticized by the NAACP and the Movement for Black Lives, a collection of 50 organizations. Charter scandals are breaking into the mainstream media, most recently with the admission by an online charter founder in Pennsylvania that he stole $8 million from the school. And the CREDO study finding that students in online charters learn close to nothing. And then there was the John Oliver program on the shoddy and corrupt practices of charters that close overnight and charters that steal and cheat taxpayers. And there was the Washington State and NLRB decisions that charters are not public schools.

When the charter movement began, Finn and Manno wrote about the promise of charter schools: in return for public money, they would be held accountable for better results at lower costs. Now we know that charters are not held accountable, do not produce better results unless they cherrypick students, and do not cost less.

They write:

“America’s devotion to local control of schools is dying, but it is also being reborn as a new faith in charter schools. These independently operated public schools—nearly 7,000 across the country, and counting—provide a much-needed option for almost three million youngsters in 43 states.

“As students return to school, the enterprise responsible for educating them is changing in ways that few people are aware of. Charters are fomenting a quiet revolution in governance in public education.

“The prevailing arrangement in America’s 14,000 school systems starts with an elected board. The board appoints a superintendent, who manages more-or-less uniform public schools staffed by a unionized workforce of government employees. This setup functioned well for an agrarian and small-town society in which people spent their entire lives in one place, towns paid for their own schools, and those schools met most of the workforce needs of the local community.

“This arrangement does not perform nearly so well in a country of mobile and cosmopolitan citizens, where states make most education rules and furnish most of the money, where government intrudes in myriad ways, and where discontent with education outcomes is rampant. It doesn’t meet the requirements of people who change neighborhoods and cities as well as jobs and careers, and it’s ill-suited for an era of fervent agitation about equalizing—and compensating for—the treatment of children from different backgrounds, locales and needs.

“Nor does local control mean what it once did. Some 90 school districts today struggle to educate more than 50,000 students each in systems sprawling over many miles and run by massive bureaucracies. The Houston Independent School District is responsible for 215,000 pupils, Chicago for 400,000, Los Angeles for 700,000 and New York City for more than a million. The governance of these systems doesn’t work well when elected boards have evolved from panels of public-spirited civic leaders into gaggles of aspiring politicians and teachers-union surrogates.

“The feebleness of traditionally governed public schools explains the burgeoning alternatives. Yet far from undermining local democratic control, these new schools are reinventing it—down to small communities of families that now run their own schools, each with six or seven board members.

“Because these boards function more like nonprofit organizations than political bodies or public agencies, their members need not stand for election. Being generally union-free, they don’t have the headaches of collective bargaining. And with freedom to engage and deploy principals and teachers, and to adjust budget, curriculum and instruction to do their students the most good, charter schools are attracting to their boards selfless citizens and community leaders who see a plausible chance to promote change.

“The charter phenomenon is also reinventing the school district. Instead of geographically bounded municipal units run in top-down fashion, “charter management organizations” comprise virtual networks—confederations, really—of similar schools that may be located hundreds of miles apart, that mostly run themselves, but that can draw on the organization for expertise and services that individual schools may not be able to muster for themselves. The Knowledge Is Power Program (KIPP) started as a single classroom in Houston and now boasts 200 schools in 20 states. Eva Moskowitz’s high-performing Success Academy began in Harlem and now has 41 schools in four boroughs of New York City.

“Charters don’t answer every education prayer. Their test scores are all over the place, though the best studies show strong, positive effects for poor and minority children. Funded with about three-quarters of the per-pupil dollars that traditional schools receive, many charters have trouble making ends meet and rely heavily on private philanthropy and entrepreneurial energy.

“Established education interest groups—always more attentive to adult jobs than to kids’ learning—fight them relentlessly, as do a few civil-rights groups aligned with the unions. Some charter leaders and board members have been guilty of self-dealing and corrupt behavior.

“But that’s where democracy comes in. While autonomous in many ways, charters are ultimately accountable to public authority. They’re a new species of school, but they remain public schools, open to all comers, paid for by taxpayers and licensed by the state. If they fail to meet standards of academic performance and fiscal soundness, charters—unlike district schools—are supposed to be closed or restarted under fresh leadership. More than 1,200 charters closed between 2010 and 2015 even as more opened. Some states are still figuring out how to make this work, but most are getting better at it.

“Twenty-five years from its beginnings, chartering portends profound changes in the structure of American public education. That’s why the battles around it are about more than market share, test scores and discipline codes. They’re proxies for what’s really in dispute: power and control over a K-12 education behemoth that spends more than $600 billion a year and employs some six million adults.

“Local control as we’ve known it is growing obsolete. Let’s hail the kind of local control that charter schools embody. And welcome back to school, girls and boys.”

Messrs. Finn, Manno and Wright are the authors of “Charter Schools at the Crossroads,” out from Harvard Education Press in October.

Charter Schools Are Reinventing Local Control in Education
http://www.wsj.com/articles/charter-schools-are-reinventing-local-control-in-education

Karen Wolfe reports here on the surprising dilemma facing the Los Angeles school board: Whodunnit?

As has been reported, the principal of the El Camino Real Charter High School used the school’s credit card for his personal expenses. Apparently, there were other school officials who racked up heavy bills at the taxpayer’s expense. The principal billed the school credit card for first-class air travel, expensive meals, hotels, wine, and other luxuries. Now the school has been given a month to straighten out its financial mess.

Some commenters on this blog have said that if this were a public school principal, he would have been fired, not given a month to make things right.

At the recent school board meeting, defenders of the school said the school should not be blamed. They said that the school’s problem were the fault of the district for its failure to supervise the charter school!

Really!

This is like the old story of the man who murders his parents and then begs for the court’s mercy because he is an orphan.

Jonathan Pelto warns residents of Connecticut that their children will be forced to take the “new” SAT despite serious charges that the test is ill-designed and invalid.

The spark that set off this latest controversy about the SAT is a devastating critique by Manuel Alfaro, who until recently was Executive Director for Assessment at the College Board, which is responsible for the SAT. The SAT was redesigned at the direction of David Coleman, the architect of the Common Core standards. Alfaro became angered by what he saw and he became a whistle blower. Just last week, the FBI raided his home in search of evidence that he might have been the person who leaked 400 SAT questions.

Alfaro has been writing on Linked In, and he posted these statements on August 28.

The first is an Open Letter to David Coleman, letting him know that Alfaro is defiant and will see him in court. He accuses Coleman of perpetrating a “global fraud.”

Alfaro wrote to Coleman and said (in part):

You have done an excellent job discrediting me so far. You have stopped news organizations from investigating my statements and allegations of the global fraud you have committed against millions of students and their families, College Board members, state governments, and the federal government. You have convinced the heads of the Department of Education using the SAT for accountability that—to use the words of your Chief Administrative Officer and General Counsel—I’m “a disgruntled former employee who has expressed anger at the college Board in a very public way. Though his employment ended over a year ago, he has not “moved on.”” However, even with all your resources, I feel that you are still at a disadvantage. So, I’m going to show you one of my cards: in order to properly defend myself against any charges you level against me, criminal or otherwise, a court will have to grant my legal team access to College Board records.

I’ve tried to get help from parents, Senators, House Representatives, the White House, and the heads of the Department of Education of the states using the SAT for accountability without success. Thanks to you and the FBI, I will soon have a path to the College Board records I so desperately need to prove the global fraud you have committed.

The second denounces heads of state education departments for using the new SAT without telling the public that it is invalid.

It begins like this:


Residents of CO, CT, DE, IL, ME, MI, and NH, the heads of the Department of Education of your states have failed to protect the best interests of your students and your families, opting instead to protect their own interests and the interests of the College Board.

As these officials are elected (or appointed by an elected official), you can demand their immediate resignation or you can vote to replace them immediately to ensure that the department of Education in your state is headed by an individual willing to put the interests of your students and your family first.

In the paragraphs that follow, I will describe how the current heads of the Department of Education have failed you and why they lack the judgment (and common sense) to protect the best interests of your children.

On May 7, 2016, I wrote a letter to the heads of the Department of Education in CO, CT, DE, IL, ME, MI, and NH to let them know that the College Board has committed global fraud against their states and the federal government. In that letter, I offered to meet with their legal teams to expose the fraud. Instead of meeting with me (or asking me for additional information), they approached the College Board about my statements and allegations. According to a Reuter’s story, published on Friday August 26, 2016, here is what some of the states had to say about my statements and allegations:

A spokesman for the Michigan Department of Education, Bill DiSessa, said the state “checked with the College Board” and decided not to look into Alfaro’s claims. Jeremy Meyer of the Colorado Department of Education said the state discussed Alfaro’s email with the College Board and was “satisfied with the response we received.”

Kelly Donnelly, spokesperson for the Connecticut State Department of Education, said the state considered Alfaro’s email to be “replete with hyperbole, but scant on actual facts. We did not take further action.” Donnelly said the state hadn’t reviewed Alfaro’s detailed posts on LinkedIn.

Although I have not seen any of the explanations the College Board may have provided, I can assure you that none included the following critical fact: The College Board, ETS, and the Content Advisory Committee did not have time to review all the items prior to pretesting, as the College Board has repeatedly claimed they do.

It is very hard to be a whistle blower. It is difficult to walk away from a lucrative job. Manuel Alfaro did it. I name him to the blog’s honor roll for his courage and integrity.

Carol Burris writes in Valerie Strauss’s Answer Sheet about the growing number of charter school scandals. She concludes that what they love best–no supervision, no oversight, no regulation–will be their undoing.

She notes that John Oliver was apparently the first major media figure to react with astonishment to the fraud and graft that has become a recurring theme in the charter movement.

And she describes the major scandals that have occurred in the few days after John Oliver’s broadcast: the charter school in Detroit that abruptly closed, stranding its students; the flight of 500 students from the Livermore charter schools in California back to their public schools; the financial scandals at a Los Angeles charter school where the principal charged tens of thousands of dollars in personal expenses to his school credit card; the guilty plea by the founder of a Pennsylvania cyber charter school who admitted stealing $8 million in public funds.

How could these things happen over a long period of time with no one noticing?

Burris writes:

In January 2016, four university researchers published a paper likening the proliferation of charters to the sub-prime mortgage crisis. At the time, the paper received scant attention. How ironic that it may be a late-night comedian who might finally alert the nation to the charter crisis. As Oliver noted, “the problem with letting the free market decide when it comes to kids is that kids change faster than the market. And by the time it’s obvious the school is failing, futures may have been ruined.”

The truth is, the deregulation that the high-scoring charter schools love so much, also produces dismal charter failures, taxpayer fleecing and fraud. And that, in the end, could cause the whole charter system to collapse.

Levi B. Cavener teaches in Caldwell, Idaho. He blogs at Idahospromise.org.

Coming soon to a town near you Idaho: Charter school cronyism

In the wake of financial scandals in the Gem State’s education world including the multimillion dollar broadband fiasco, citizens have a right to be leery about cozy relationships between government entities and their business partners.

Take, for example, the recent charter school petition Caldwell School District received from Pathways in Education (PIE). From a public records request, that petition stated that PIE would pay California based Pathways Management Group (PMG), operated by charter entrepreneur Mr. John Hall, to the tune of $127 per student per month for “charter management.”

With a desired enrollment of 300 students and a flexible year-round schedule, that creates a significant contract of $450k for PMG per year. It is unclear what services would be provided for this fee as many of the services listed such as paying utility bills and purchasing electronics appear to be redundant activities the Caldwell district office already performs.

The PIE charter petition also states that the California nonprofit Education In Motion (EIM) will have exclusive ability to appoint PIE’s board of trustees. Pay no attention to the fact that the California Secretary of State also lists Mr. Hall as agent of that nonprofit at precisely the same California address shared with PMG, which he presides over.

In other words: an out-of-state group (with Mr. Hall listed as agent) has the exclusive ability to appoint trustees to the charter — not the local community. Hand-picked trustees then contract with Mr. Hall’s vendor to manage the charter, in perpetuity. Now, that’s a good business model!

Idaho’s laws regarding charters was written to prevent this apparent type of conflict of interest. It states that “No more than one-third (1/3) of the public charter school’s board membership may be comprised of nonprofit educational services provider representatives.”

In this case, an entity under agency of Mr. Hall has the exclusive ability to appoint trustees which subsequently contract his management services. Some would say that means Mr. Hall controls more than the ⅓ share allowed, and in fact, has de facto control of the entire board.

All of which leads full circle back to the loss of local control because an out-of-state entity is not only in charge of an Idaho school, but is also the recipient of a lucrative business relationship with the school. Isn’t that cronyism? You know, favoring close friends, or, yourself?

But wait, it gets better: PIE withdrew its application from Caldwell School District before trustees voted on the charter proposal, and then resubmitted it to the Idaho Public Charter School Commission (IPCSC). That end-around step means that no elected officials will have an opportunity now to vote on opening PIE in Caldwell going forward.

That result is because the IPCSC members who will vote on granting PIE’s charter are appointed by a governor whose tenure has been littered with these types of conflict-of-interest episodes.

And the appointed commission may very well vote to grant a California nonprofit, with Mr. Hall listed as agent, the ability to appoint trustees in Caldwell, Idaho. Which will then engage in a substantial financial contract with an entity also helmed by Mr. Hall. Because that makes sense.

But these are the sorts of things that occur when the public loses control of making fundamental decisions about its local schools when that control is exported to charter schools along with their out-of-state management groups.

And for all the rhetoric about the “freedom” to have “choice” in our public schools, PIE suggests that we have given away every modicum of the freedom to run the schools in our community to a California nonprofit and business partners. Only in Idaho…

Calling John Oliver! The charter lobbyists have been criticizing Oliver for his expose of charter fraud last Sunday. Unfair, they say. Untrue, they say. Slanders charters, they say. Let’s see how they fit this story into their narrative.

Nicholas Trombetta, founder of the Pennsylvania Cyber Charter School, pleaded guilty to stealing $8 million from the school and diverting it for his personal use. Trombetta’s school was often featured on television as the nation’s first virtual charter. With an enrollment of 10,000 students from across the state, Trometta had receipts of $100 million a year. What to do with all that dough rolling in from taxpayers?

I have written about this scandal on several occasions, from the time Trombetta was charged in 2013. (See hereand here and here. Another cyber charter leader in Pennsylvania, June Brown, who ran the K-12 Agora Charter, was arrested and charged with stealing $6 million.

The Associated Press reports:

“PITTSBURGH (AP) — The founder and former CEO of an online public school that educates thousands of Pennsylvania students pleaded guilty Wednesday to federal tax fraud, acknowledging he siphoned more than $8 million from The Pennsylvania Cyber Charter School through for-profit and nonprofit companies he controlled.

“In entering his plea, Nicholas Trombetta, 61, who headed the school, acknowledged using the money to buy, among other things, a Bonita Springs, Florida, condominium for $933,000, pay $180,000 for houses for his mother and girlfriend in Ohio, and spend $990,000 more on groceries and other items.

“He manipulated companies he created and controlled to draw the money from the school, also spending it on a $300,000 plane, Assistant U.S. Attorney Stephen Kaufman said.

“Trombetta was making $127,000 to $144,000 annually at PA Cyber when he ran the illegal tax evasion scheme from 2006 to 2012. He faces up to five years in prison when he’s sentenced Dec. 20.

“By running the money through the companies or their straw owners, Trombetta avoided income taxes, though prosecutors haven’t said how much. Most of the siphoned money was squirreled away in Avanti Management Group, which functioned as Trombetta’s retirement savings account, Kaufman said.

“This case reflects the priority we’ve placed on protecting against fraud in education,” U.S. Attorney David Hickton said.

“The school, founded in Midland in 2000, had more than 11,000 students across the state when Trombetta was charged three years ago and still has more than 9,000. As a public institution, it’s funded by federal, state and local taxes. Districts across the state pay the school to educate any students who opt to enroll in PA Cyber instead of a bricks-and-mortar school.

“Trombetta almost didn’t plead guilty Wednesday when his attorney, Adam Hoffinger, began sparring with Kaufman, who had to describe the complicated conspiracy to the judge.

“Kaufman said Trombetta used Avanti, the National Network of Digital Schools and other companies in the scheme. The Network of Digital Schools markets a curriculum developed in conjunction with PA Cyber and sold it back to the school, while Avanti provided unspecified management services, the prosecutor said. Avanti had four owners who pretended to be equal 25 percent partners when, in reality, Trombetta owned 80 percent of the firm, Kaufman said.”

As readers of this blog know, deregulation of charters leads to fraud, graft, and abuse. On this site, I have documented scores of examples of fraudsters and grifters who take advantage of weak (or no) oversight to enrich themselves and to strand children in bad schools.

A few days ago, John Oliver ran an excellent segment about charter schools and the fraud associated with them. He barely scratched the surface. Charter supporters are furious and are saying that he “hurt” children, he savaged children, etc. (This is a familiar tactic; when I criticized the improbable test scores in New York City almost a decade ago, I was told that I was “hurting children and their teachers” by questioning the validity of the dramatic rise in scores.)

Fraud is a feature of deregulation, not a bug. When no one is looking, some people steal. Not everyone steals, but many do. That is why Ohio, Florida, Michigan, and California are scamming taxpayers. No one is demanding accountability. Politicians get paid off by charter friends, then cripple any effort to oversee them Ohio and Michigan spend $1 billion a year to subsidize charter schools, which are lower-performing than public schools.

The corporate reformers and privatizers are bombarding John Oliver with tweets and messages attacking his show.

Please let him know you support him.

Please take the time to contact John Oliver by writing him at management@avalonuk.com.

And tweet him @iamjohnoliver.

Don’t let the charter industry intimidate him.

Andy Goldstein addressed the school board of Palm Beach County, where he teaches, at a recent meeting:

Why My Wife and I Are Opting Out Our Daughter From Third-Grade High-Stakes Testing

Transcript of the original text:

Good evening. My name is Andy Goldstein. I’m a teacher at Omni Middle School and the proud parent of an eight-year-old daughter who attends one of our public elementary schools.

It seems like it was just yesterday when my daughter entered kindergarten. At that time, I talked about her at our August School Board meeting in 2013.

I said that my hopes and dreams for my daughter were that she would develop a lifelong love for learning that would serve her well as she learned to construct a life that would serve her and serve others as well.

I told this board that my wife and I were not particularly interested in having her be seen as a data point for others to make money from.

Now, three short years later, which seem to have gone by in the blink of an eye, she is entering third grade.

Tonight, I’m speaking as a parent, who also is a teacher.

In Florida, third grade is the beginning of high-stakes, standardized testing for our children.

What are the high-stakes?

• Our children, on the basis of one test, will receive a number, a 1, 2, 3, 4, or 5, which, will serve to define them.

Some students, may do well learning throughout the year, but do not test well and may receive a 1, a one being the lowest possible score.

Some may come from disadvantaged backgrounds and will receive a 1.

Some may be special needs students, who receive a 1.

These numbers work to define our students as to whom they are. “I’m a one. I’m a Failure.”

This high-stakes testing policy, mandated by state law, works to stigmatize our students and they grow up with a limiting self-concept of who they are and what they are capable of doing and becoming.

• On the basis of this one high-stakes test, some schools—those comprised of the poorest students, who need the most help—are labeled with an “F.” Failures. This stigmatizes these schools, whose faculty and staff may be working hard to meet the high needs of the surrounding neighborhood they serve. It also serves to increase the segregation at these already segregated schools. What parents, given the means to choose what community they will move into, will choose a neighborhood with a school labeled “F.”

• There is a lot of money being made on the part of testing companies, publishers, and vendors, based on this annual imposition of this high-stakes testing.

• This high-stakes testing is part of a corporate agenda, an agenda by the rich and powerful to demonize our public schools and privatize them through the rise of publicly funded, privately managed schools called charters. Our state legislature, bought and paid for by corporate interests, is cheating our children by defunding our public schools.

• “That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital,” says Noam Chomsky, an MIT professor.

• Our third graders are still babies, really. Do they really need the pressures of this high-stakes testing?

Recently, I read one account from a parent recounting the experience of her son when he was a third grader taking the FCAT. He was a good kid. He worked all year to learn. But he missed passing the FCAT by one point. He went to summer school to do more work and took it again. And again, he missed passing the test by one point. His mother was afraid to tell him, but he could tell by her reaction that he had not passed. He was crushed by the sense of failure. His mother, working on making dinner in the kitchen, called him to come down to eat. He did not respond. She had a premonition that something was the matter. She rushed up to his bedroom and found him hanging by a bedsheet. She got him down.

• Is there anyone who thinks this high-stakes testing is worth such a price?

• As a parent, I can answer with a resounding NO!

• My wife and I believe that our public schools should work to develop the whole, creative child in all of our schools, and in all of our communities of all colors and all socio-economic backgrounds.

• For these reasons, I’m announcing to you, our school board, that my wife and I do not support high-stakes testing in Florida, and will be opting out our daughter. Evidence for her learning will be through a portfolio.

• Thank you.

The State Auditor is supposed to be the independent, disinterested official who guards the public interest. Ohio has what may be the most wasteful, politically influenced, and low-performing charter industry in the nation. And as you will see in the following post by Bill Phillis of the Ohio Equity & Adequacy Coalition, no one is protecting the public interest. In a state where hundreds of millions of dollars have been squandered on failed charters, law enforcement should be investigating state officials.

“Day 2 (August 12) of Charter School Summit-State Auditor: “We in the charter movement must speak with one voice”

“The clear message from the State Auditor to the charter school audience on August 12 was that the charter industry must speak with one voice to get more funding for operations and facilities. He noted that traditional public school advocates speak with one voice. Since when?

“While interviewing some high performing charter school students, the Auditor orchestrated a line of questioning which left the impression that charter students are courageous pioneers in a movement that is preferred to the traditional public system. Meanwhile, notwithstanding that state officials have failed to maintain a thorough and efficient system of common schools, traditional schools outperform the charter industry.”

William Phillis
Ohio E & A

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