Archives for category: Scandals

Once again, a state audit has uncovered waste and misspent funding at a charter chain, in this case, the Richard Allen Charter Schools in Ohio. Among other findings, the head of the school leased a Maserati with public funds.

A new state audit of the Richard Allen charter schools includes multiple findings of improperly spent money in 2016-17, and allegations of ethics violations and conflicts of interest that have triggered an ongoing special investigation.

The audit comes 15 months after the Dayton Daily News published an investigation into lack of oversight at Richard Allen, which operated four schools in 2016-17 and now has buildings on Salem Avenue in Dayton and Shuler Avenue in Hamilton.

Last year, the state attorney general’s office did not know that Michelle Thomas — whom the state sued, alleging $2.2 million in misspending — was still running the schools.Thomas, who is still the Richard Allen superintendent, on Tuesday called the audit process “a complete farce.”

School leadership “strongly objected” to the state auditor’s findings in their official response.

Auditor of State Keith Faber’s office said Tuesday that it stands by its work.

The documents released Tuesday cover the 2016-17 school year, as multiple years of Richard Allen audits have been delayed.

The audit’s findings include:

• The schools overpaid their former management company (the Institute of Management and Resources, which was also run by Thomas) by $852,618 in 2016-17 — $139,277 for Richard Allen Academy, $613,870 for Richard Allen II, $15,686 for Richard Allen III in Hamilton and $83,785 for Richard Allen Prep.

A finding for recovery seeking repayment of those funds was issued against IMR, which filed for bankruptcy protection more than two years ago, and against former treasurer Brian Adams and eight school board members: Alphonse Allen, Michael Brown, Gerald Cooper, Laquetta Cortner, Wanda Mills, Lonnie Norwood, Rhonda Ragland and Kelli Vaughn.

• The school also overpaid those eight board members by $1,110 to $1,375 each for attending meetings. The state filed findings for recovery against those eight and Adams for a total of $10,725 on that charge.

• Thomas improperly served as the superintendent of Richard Allen schools while serving as director of IMR, the school’s management company.As the Dayton Daily News reported last year, the audit shows IMR leased a 2015 Maserati for Thomas, while claiming that Thomas made the lease payments. But elsewhere in the audit, the state makes clear that IMR “failed to provide a detailed accounting” of the services it provided to the school, bringing into question how its management fees were spent.

Wendy Lecker is a civil rights attorney who writes often for the Stamford (Ct.) Advicate. she writes here about the disgraceful double dipping of charter schools in Connecticut, taking funds designated for public schools, then seeking and getting federal funds intended for small businesses.

Are charter schools to be defined as public schools or private businesses? When it’s time to get public money, they insist they are public schools, even though they are controlled by private boards. But when the money is for private businesses only, they line up to get the money. They are shape-shifters.

Lecker writes that the charters got their share of money intended for public schools:

With the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, Congress provided federal aid to public schools, and specifically directed that charter schools receive aid as public schools. Connecticut public school districts and charter schools are receive comparable aid under the CARES Act’s Elementary and Secondary School Emergency Relief Fund (“ESSERF”). For example, New Haven will receive about $8 million, so a little more than $400 per student, and Amistad and Elm City charters, part of the Achievement First chain, will get similar per-pupil amounts. Bridgeport will receive about $9 million, or about $450 per student and Achievement First Bridgeport will be allocated a similar per-pupil amount. Hartford will get a little more than $10 million, or about $547 per student, and Achievement First Hartford will receive about the same per pupil. The per pupil amounts in Stamford’s public schools and charter school are similar as well. Stamford will receive $2.74 million for its approximately 16,600 students and Stamford Charter School for Excellence will receive a little more than $100 per pupil for its approximately 395 students — about the same as Stamford’s per-pupil allocation.

But that was not enough for the charters. They went for the federal Paycheck Protection Program to claim more money.

Lecker writes:

These charter schools, however, decided that when it comes to going after more federal dollars, it pays to be private entities as well. So each of these charters applied for and received significant forgivable Paycheck Protection Program loans offered to small businesses in dire need as a result of the crisis.

Amistad Academy was approved for a loan of $2.7 million. So Amistad, a charter with a little more than 1,000 students, will receive a forgivable loan for more than the entire ESSERF allocation for Stamford Public Schools’ more than 16,000 students. Elm City’s loan is for $1.24 million; Achievement First Bridgeport’s loan totals $1.4 million, Achievement First Hartford’s loan is for $2.36 million and Stamford Charter School for Excellence’s loan is for $520,648. All these loans are forgivable, thus unlikely to be repaid.

In total, these loans total more than $8.2 million, covering 4,544 students. To compare, New Haven’s $8.5 million in ESSERF aid has to spread over 20,6675 students.

Public schools are in dire financial straits. Charters are not.

Lecker writes:

Are these charter schools really private small businesses in dire need? Last year, claiming charter schools were public schools, Dacia Toll, CEO of the Achievement First charter chain, complained that her schools were “starving” without more state funding. Looking at the most recent publicly available federal tax documents, Amistad has more than $30 million in net assets and reserves. Elm City, another Achievement First school, has more than $34 million in net assets and reserves, Achievement First Bridgeport has more than $6 million and Achievement First Hartford has almost $2 million. Stamford Charter School for Excellence has more than $2 million in net assets and reserves.

Meanwhile, public school districts across the state are facing massive funding cuts — some predicting cuts as high as 30 percent of their budgets. They also face steep increases in costs associated with reopening — from ensuring a clean and safe environment, to addressing the increased academic, social and health needs of their students. And now, with Gov. Ned. Lamont’s order that public schools reopen fully, in person, in the fall — without any promises to increase state aid — public school districts are in an even more precarious financial position. Public school districts are funded by local, state and, to a small extent, federal dollars. They have no options to tap into money intended for private businesses. Because public schools are public.

When charter schools are allowed to act as both private businesses and public schools, taxpayers end up paying twice. In these dire financial times, there are surely better uses for public funds than to double pay to pad the reserve funds of well-resourced charter schools.

The greed of the charter industry is shameful.

Tom Torkelson, c-founder of the IDEA charter chain, has stepped down as CEO and will be replaced by the other co-founder JoAnn Gama.

Based in Texas, IDEA is a favorite of Betsy DeVos, who has sent hundreds of millions of taxpayer dollars to the chain to help it expand. Less than two weeks ago, DeVos gave another $72 million to IDEA. The chain previously had received more than $200 million from DeVos. She sure likes IDEA.

Torkelson and Gama arrived in the Rio Grande Valley aspartame’s ofTeach for America and started IDEA in 2000. It has become a charter behemoth in the past two decades.

The chain attracted bad publicity for its free-spending ways. One of its worst ideas was leasing a private jet for nearly $2 million a year for exclusive use of its executives and their families. After getting negative press, the board canceled the lease, and now the executives fly first class.

Jacob Carpenter wrote in The Houston Chronicle:

Torkelson’s resignation caps a remarkable run for the charter pioneer, whose ambition, charisma and results-driven approach helped propel IDEA’s remarkable expansion over the past 20 years. In recent months, however, Torkelson’s push to lease a charter jet and the disclosure of questionable financial practices under his watch prompted scrutiny of the charter.

IDEA students, the vast majority of whom are Hispanic and come from low-income families, routinely score well-above average on state standardized tests and enroll in college at high rates compared to their peers. Skeptics argue IDEA’s success is inflated by high academic standards that deter families from enrolling students with more intensive academic and behavioral needs.

Torkelson and Gama started IDEA in the late 1990s while working as teachers in the Rio Grande Valley, opening a single school together in the border city of Donna. After meager growth in its first decade, IDEA rapidly expanded in the 2010s in the Valley, San Antonio, Austin, El Paso and Fort Worth.

The network operates 91 schools in Texas enrolling 49,500 students, along with five campuses in Louisiana. IDEA is scheduled to open its first four Houston-area schools this year on two sites in northern Harris County.
Torkelson served as a key figure in IDEA’s expansion, pushing to enroll 100,000 students across the country by 2022. Earlier this year, Torkelson told the Houston Chronicle that he wanted IDEA to become “the largest high-performing school system in the United States of America.”

Torkelson also played a significant role in fundraising for IDEA, which has received tens of millions of dollars from philanthropic groups to aid its expansion.

However, some of Torkelson’s financial and operational moves led to criticism over the past several months.
Torkelson’s desire to lease a charter jet as a method of reducing travel hassles between the network’s hubs drew sharp backlash in December 2019.

One month later, more scrutiny followed the disclosure that IDEA spent about $400,000 annually on luxury boxes and tickets for events at San Antonio’s AT&T Center. IDEA officials said more than 1,000 employees received tickets each season as a reward for performance, with the “lion’s share” allotted to campus-level staff and students

During Torkelson’s tenure, several relatives of IDEA executives and board members also engaged in business dealings with the charter, including a company co-owned by Chief Operating Officer Irma Muñoz’s husband that billed more than $600,000 for uniforms, other clothing and gear.

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!

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.

 

 

 

 

A Corporate Reform group in Tennessee released its own poll claiming that most voters in the state approve of annual testing.

The group called SCORE was created in 2009 by former Republican Senator Bill Frist to promote the Common Core State Standards. Being fast to accept CCSS before they were finished or even released put Tennessee in an advantageous spot for Race to the Top funding. The state won $500 million from Arne Duncan’s competition. $100 Million was set aside for the Achievement School District, which gathered the state’s lowest performing schools, located mostly in Memphis and Nashville, and handed them over to charter operators. The ASD promised to raise the state’s lowest-performing schools into the top 20%. The ASD was a complete failure. It did not raise any low-performing schools into the top 20%. Most made no progress at all.

Tennesse’s SCORE is a member of the rightwing network called PIE (Policy Innovators in Education), created by the Thomas B. Fordham Institute to connect groups that were disrupting and privatizing public education. Like other members of PIE, SCORE favors charter schools.

The board of SCORE is loaded with millionaires and billionaires who should be supporting the state’s public schools, which enroll nearly 90% of the state’s children, but prefer to disrupt and privatize them.

Five years ago, a public school parent blogger called out SCORE for making money off Common Core products. Open this link to see some eye-popping financial transactions, where RTTT money goes into the coffers of corporations owned by board members, who in turn make campaign contributions to Republican Governor BillHaslam. (Former Governor Haslam is now on the board of Teach for America.) The Gates Foundation helped to fund SCORE.

In addition to the oligarchs identified in the preceding post, the SCORE boards includes these super-wealthy Tennesseans:

Pitt Hyde of the Memphis Hyde Family Foundation. Owns AutoZone and the Memphis Grizzlies. The Hyde Family Foundation is the largest funder of the Tennessee Charter School Center.
 
Janet Ayers of the Ayers Foundation, also a funder of Common Core. 
 
Dee Haslam, married to the former governor’s brother. They own Pilot gas stations and the Cleveland Browns. Worth $1.8 billion, according to Wikipedia.
 
Orrin Ingram of the local billionaire family that has pushed charter schools.

Apparently the only plan that SCORE has for Tennessee’s public school students is to inflict Common Core and standardized testing.

SCORE has lots of money, but no imagination and no sense of the public good.

It is committed to charter schools, privatization, and accountability (but only for public schools).

 

 

 

 

 

The Chronicle of Philanthropy published a fascinating story about a  young woman who worked in the development office at MIT when the institution was seeking Jeffrey Epstein’s money. She knew it was wrong, but she was young, a newcomer, and who would care what she thought.

Development support staff are rarely in the limelight, even within their own organizations. But Signe Swenson has had a whirlwind of a week. The former development associate at the MIT Media Lab helped inform New Yorker reporter Ronan Farrow’s exposé about the center’s financial ties with the late Jeffrey Epstein, the financier and convicted sex offender.

In previous interviews, Swenson recalled her and her colleagues’ concern that young women who accompanied Epstein on a campus visit and looked like models may have been victims of trafficking. “We literally had a conversation about how, on the off chance that they’re not there by choice, we could maybe help them,” she told NPR. Employees even checked the trash for any pleas for help scribbled on napkins and discarded. Among the lab’s staff, she told Farrow, “All of us women made it a point to be super nice to them.”

Swenson was in her mid-20s at the time and left the lab in 2016. Now director of marketing and operations at an education nonprofit, she spoke with me about what happened when she initially raised concerns to leaders and why she felt like she was one of the only people who could blow the whistle on Epstein’s relationship with the institution. This transcript has been edited for length and clarity.

What follows is a Q and A. Here is one answer:

I expressed that I was aware of Epstein’s conviction and that I thought working with him was a terrible idea. I remember learning that if I chose to take the job, this was not going to be my choice, or necessarily Peter’s [Peter Cohen, director of development and strategy]. I did say that I guess it would be OK as long as I’m never in a room with Epstein. I sort of was drawing a line in that moment, but it’s interesting looking back. Clearly, I wanted the job very badly and did speak up, but it does feel as if I was just tested to see how confidential I could be. This was five years ago, and I was less confident than I should have been about my beliefs of what was unethical.

When it comes to fund-raising, there are no ethical standards in higher education or in the museum or library sectors. When robber barons or pedophiles have millions to cleanse their reputation, the institutions will take their  money.

The biggest battle in the fight against privatization has been to persuade the Democratic Party that it had been hoaxed by Republicans into adopting the Republican agenda. According to this article in The Washington Post, Democratic support for charter schools has evaporated, at least among the candidates.

The title of the article is “Democrats abandon charter schools as ‘reform’ agenda falls from favor.” No one has more egg on their faces than the editorial board of the Washington Post, which loves charter schools and defends them at every turn.

Until 1993, Democrats supported equity and federal funding for public schools, while Republicans supported choice, testing, competition, and accountability.

Then Bill Clinton embraced charter schools, testing, standards, and accountability. Then came NCLB and it was endorsed by Ted Kennedy and the entire Democratic Party.

Then the Obama Race to the Top gave total support to the Bush NCLB approach of charters, testing, and harsh accountability, and Arne Duncan spent seven years parroting the Republican line that the best way to improve schools was to get tough on teachers, make tests harder, and open more charter schools.

According to the Washington Post, the Democratic love affair with charters is over. 

The steady drumbeat of scandals and the vivid advocacy of Betsy DeVos have killed the Democrats’ charter love. 

Suddenly, the Democratic candidates for president  seem to have realized that school choice is a Republican issue. Supporting the public schools that nearly 90% of all students attend is a Democratic issue.

This is awkward for Democrats like Governor Jared Polis of Governor and Senator Michael Bennett of Colorado and Senator Cory Booker of New Jersey, and Governor Andrew Cuomo of New York, all fans of charters.

Democrats have long backed charter schools as a politically safe way to give kids at low-performing schools more options. Many supported merit pay for the best teachers and holding schools accountable for test scores.

The presidential contest is proof that’s no longer the case.

If the candidates say anything about charter schools, it’s negative. Education initiatives boosted by the Bush and Obama administrations are nowhere to be found in candidate platforms.

Instead, the Democratic candidates are pitching billions of dollars in new federal spending for schools and higher pay for teachers, with few of the strings attached that marked the Obama-era approach to education.

It adds up to a sea change in Democratic thinking on education, back to a more traditional Democratic approach emphasizing funding for education and support for teachers and local schools. Mostly gone is the assumption that teachers and schools are not doing enough to serve low-performing children and that government must tighten requirements and impose consequences if results do not improve.

As a senator, Joe Biden said private school vouchers might help improve public schools. As vice president, he was atop an administration that made support for charter schools a requirement to access federal grant funding. But when asked about charters — privately run, publicly funded schools — during a recent forum with the American Federation of Teachers, Biden sounded a negative note.

“The bottom line is it siphons off money for our public schools, which are already in enough trouble,” he said….

Bernie Sanders thus far is the only candidate to call for an end to federal funding of charter schools. The safe position for Democrats is to oppose “for-profit” charters, while ignoring the fact that many “nonprofit charters” are operated by for-profit management corporations.

The story continues:

It’s an unsettling development for advocates of the structural changes that have fallen out of favor, and a sharp turn from where many Democrats were just a few years ago. Former presidents George W. Bush and Barack Obama had pushed a bipartisan drive for accountability, and charter schools were the answer for Democrats who opposed private school vouchers but wanted to offer other options to children — often children of color from low-income families — assigned to low-performing schools. They were important to some civil rights leaders and became a central plank in the drive for school accountability….

The American Federation of Teachers has been hosting candidate forums throughout the country, inviting contenders to spend a day with teachers and then answering questions town hall-style.

At the town hall with Biden last month, AFT President Randi Weingarten was so warm and complimentary that it left some with the impression she was laying the groundwork for an endorsement.

“Vice President Joe Biden was our north star in the last administration,” she said. “We didn’t always get along with the Obama administration positions on education, but we had a go-to guy who always listened to us.” She added: “He’s with us because he is us.”

During the Obama administration, the National Education Association was so angry it called forEducation Secretary Arne Duncan to resign, and the other big teachers union, the AFT, came close…

The shift underway has Democrats who support charter schools and related policies nervous. Democrats for Education Reform is circulating results of a poll that show support for charter schools is higher among African American Democrats than whites. But overall, the poll found just 37 percent of Democratic primary voters have a favorable view of charters.

Some like-minded Democrats are working on something they call the Kids New Deal, hoping to find a candidate to support it. The centerpiece of the proposal is to make children a “protected class” under the law, which would make it easier for them to file lawsuits challenging, for instance, tenure for teachers, on the grounds that it hurts children.

“The goal here is to outflank the teachers unions from the left and not from the right,” said Ben Austin, a longtime education restructuring advocate.

DFER is the hedge fund managers group created to persuade Democrats to act like Republicans and support privatization. It offered big money for candidates who swallowed their line. DFER was condemned by the state Democratic Party in both California and Colorado as a front for Wall Street and corporate interests.

 Ben Austin is one of California’s most aggressive charter school proponents, having run the faux Parent Revolution, whose goal was to convert public schools to charter schools. He spent millions of dollars from Gates, Waltons, and other billionaires, but converted only one or two public schools. If he is behind the “Kids New Deal,”’it is probably another billionaire-funded privatization vehicle.

The great news in this article is that those who have warned Democrats to return to their roots and stop acting like Republicans have won the debate.

 

Peter Greene has a rapier sharp wit, which he wields so deftly that the object of his attention has been beheaded without knowing what happened. If you want to see him at his best, read this mystery: Who is murdering Charter Schools? 

Teachers?

Unions?

Lobbyists?

If you live in the real world, the people fighting privatization are heroic defenders of the commonweal, protecting the public interest against the Waltons, the Koch brothers, DeVos, and other private interests.

 

Jennifer Berkshire and Jack Schneider interview Arizona Republic reporter Craig Harris about the charter school scandals in Arizona, the “wild west” of charters.

Harris was a member of the investigative team that won the prestigious George Polk Award for its coverage of charter schools in their state.

You can listen here.

Or, you can read the interview here. 

Here is a small excerpt, where they begin to interview Craig Harris:

Craig Harris​: It started about a year ago on two fronts. One, there was a relatively prominent charter school, a notorious charter school that abruptly closed on the west side of Phoenix in a town called Goodyear. And the reason that school had gained some notoriety is because a few years earlier, one of the students had gone missing and died. And what happened, now we’re finding out later, is that the school was being fraudulent on its attendance in order to keep it running because people had left the school because of the tragedy. And so the school got shut down. And that piqued our interest.

And then I live on the east side of Phoenix in town called Gilbert, which is kind of like ground zero of where charter schools are. They’re very, very popular out in my neck of the woods. And part of the reason is that a lot of the operators that run the charter schools belong to the Church of Jesus Christ of Latter Day Saints. They’re Mormons. And so a lot of them have developed charter schools and they’ve been able to grow because they have pretty good academics, but they also focus on morality and wholesomeness and things like, so that, that gets a lot of parents to enroll their kids at those schools.

Berkshire​: Well, we are obviously here to talk about some of the less wholesome aspects of Arizona’s charter school industry over the last year. You’ve written one unbelievable exposé after another about the edupreneurs, as I like to call them, who are getting rich off of running charter schools. I know it’s hard to choose, but I want you to pick your favorite scandal for us and just sort of break down for us the nature of the scam.

Craig Harris​: Well, Arizona, depending on how you look at it—if you’re a charter organizer Arizona is considered one of the best states in the country for charter schools because it has some of the fewest and weakest oversight and regulations of any of the 44 states that have charter schools. And so one of the stories I wrote about was a guy named Eddie Farnsworth. And coincidentally Eddie is my state senator. We actually live within two miles of each other. And he ran a series of charter schools called Benjamin Franklin Charter Schools. They built them from the ground up. So what happened is that Mr. Farnsworth, who’s also a legislator who’s been in the office for like two decades, created a nonprofit company with three friends of his, two of whom were lobbyists who got votes from him to favor their clients to buy his schools, and they paid top dollar for those schools.

And he made about $14 million in profit on the sale of his schools, which were privately owned, to a nonprofit company that he set up. And then that nonprofit hired him as a consultant and then also agreed to lease buildings from him and agreed to hire his brother as the chief executive. And so he has gotten extremely rich from this. And then during his time when he was in the legislature, we went back and look and he repeatedly voted on bills that increased funding for charter schools. And at the same time he blocked bills that would have brought more restrictions and oversight on charter schools.

The legislature responded to the series of exposes in the Arizona Republic by promising to pass a law reining in the wrongdoing. But, here’s the catch: the charter lobbyists wrote the “reform” legislation!

Harris said:

The Charter Association, which is a nonprofit business that represents the 500 plus charter schools, their lobbyists wrote most of the bill. And so what happened when the lobbyist for the Charter Association or basically the charter industry wrote most of the bill is the legislation is what critics call window dressing. It doesn’t stop any of the self dealing. It doesn’t stop organizations like another one wrote about, which is an online school called Primavera. Their CEO, he paid himself $10 million over the last year and a half, while having incredibly high dropout rates and very low test scores.

The bill also doesn’t stop self dealing from giving no-bid management contracts that are worth tens of millions of dollars.