Search results for: ""white hat" ohio"

A new, for-profit charter chain named Pansophic is planning to take over charter chain schools in Ohio. The linked story was published in June, but there have been no follow-ups since then. Either the deal was completed or is pending.

Pansophic is a new company founded by Ron Packard, formerly of McKinsey, Goldman Sachs, and the online giant K12. As CEO of K12, Packard was paid $5 million yearly.

The company also expects to acquire charters run by for-profit Mosaica in Ohio. Pansophic will become the biggest for-profit charter chain in Ohio.

“Akron-based White Hat Management reportedly sold off management of 12 elementary charter schools Friday to an out-of-state, for-profit company that could acquire a third charter school company, an attorney for the charter schools’ public boards said.

“The two deals would make Pansophic Learning the largest for-profit operator of Ohio charter schools, which has become a taxpayer-funded $1 billion private industry.”

White Hat has produced poor academic results for 20 years.

Now, Ohio’s for-profit charter schools will be outsourced to a Virginia corporation that also focuses on the bottom line: profit.

Are these for-profit schools really public schools or are they profit centers that hoodwink parents to enroll their children?

This is what Ohio’s charter law says (thanks to reader Bethree):

“Opening paras of Ohio charter school law: “3314.01 (A) (1) A board of education may permit all or part of any of the schools under its control, upon request of a proposing person or group and provided the person or group meets the requirements of this chapter, to become a community school… (B) A community school created under this chapter is a public school, independent of any school district, and is part of the state’s program of education…”

Is a school owned by a for-profit corporation in Virginia still a “community” school? Is it a “public” school?

How much more of this flimflam will the voters and taxpayers of Ohio tolerate? Do they care about the education of their children?

We like to think that judicial decisions are the result of a thoughtful perusal of case law and precedents.

Stephen Dyer, former legislator and current policy analyst, suggests there may be other issues involved.


“Today, the Ohio Supreme Court ruled that White Hat Management — the state’s worst performing large-scale charter school operator — gets to keep all the equipment it uses public money to buy, even if the school was shut down for being one of the state’s worst performing schools.

“White Hat — run by Republican mega donor David Brennan — can sell the equipment how it sees fit, even if it was its own incompetence and failure that led to the school’s closing.

“While this opinion may seem somewhat surprising, what isn’t surprising is that the Supreme Court Justice who wrote the opinion has taken $5,000 in campaign contributions from Brennan and his family. Justice Judith Lanzinger received that money in 2004.

“Chief Justice Maureen O’Connor — whose political career started in Brennan’s Summit County backyard — received money every year she was up for the court in 2002, 2008 and 2010 when she ran for the Chief Justice seat. She has received a total of $11,900. Surprised she signed onto Lanzinger’s opinion?

“Justice Judith French received $7,200 last year when she ran for the high court — as the White Hat lawsuit was pending. Any surprise she voted to uphold White Hat’s right to profit from their failed school management?

“I credit Justice Terrence O’Donnell for recusing himself from the case. He received more money than any other sitting Justice — $15,000.

“Justice Paul Pfeiffer took money from Brennan in the early 1990s, but hasn’t recently and dissented from the Lanzinger opinion.

“The opinions on this case are complex and complicated, with many of the Justices trying to seem like they are with White Hat on some things, but not others. Don’t let them fool you with their strained efforts. On the only thing that mattered — allowing Brennan to profit from his failed operations — they were lock step behind their benefactor.”

The other big charter operator in Ohio, William Lager, received $100 million last year from the state. All of his schools received Fs and Ds. He also gave to the campaigns of Lanzinger, French, O’Connor, and O’Donnell.

Money talks in a loud voice. What about the taxpayers’ dollars? What about the children?

Forget about it. A contract is a contract.

The Ohio Supreme Court ruled that property purchased by the for-profit charter management corporation White Hat using public funds belongs to White Hat, not the public.

I’m no lawyer, but this decision says to me that the schools’ stuff does not belong to the public, but to a private entrepreneur. I take that to be an acknowledgement that White Hat privatized the assets of the school. More evidence that charter schools are not public schools. If they were, their stuff purchased with public funds would belong to the public.

White Hat was sued by the boards of 10 of its charter schools, all of which have closed for poor performance.

“A charter school operator – not the schools themselves – own the classroom desks, computers and other equipment purchased with state-provided tax dollars, the Ohio Supreme Court ruled today.

“The ruling represented a victory for the charter-school operator, White Hat Management Co., and a defeat for 10 now-closed schools in Northeast Ohio that claimed they owned the property since it was bought with public funds.

“Justice Judith Ann Lanzinger wrote in the majority opinion that charter school operators perform a governmental function and establish a fiduciary relationship with the schools they manage in purchasing school equipment, contrary to the position taken by White Hat.

“That finding should allow the public to obtain charter-school operator financial records that long have been withheld, said Karen Hockstad, a Columbus lawyer who represented the ex-White Hat charter schools.

“Current law largely does not address the duties of school operators and does not restrict the provisions of contracts between operators and charter schools, Lanzinger wrote.

“Therefore, a provision in White Hat’s contract allowing it to title property in its name and later require the schools to buy back any property they wanted to keep is enforceable, the opinion stated.

“Unless there is fraud, courts cannot save “a competent person from the effects of his own voluntary agreement,” the opinion said.

“The schools were represented by their own legal counsel and they agreed to the provisions in the contracts. They may not rewrite terms simply because they now seem unfair….”.

“The funds were paid by the state to the seven Hope Academies and three Life Skills Centers in the Cleveland and Akron areas that hired White Hat in 2005 to handle operations. White Hat received 95 percent of each school’s state funding to pay teacher salaries, building rentals, utilities and other expenses.

“The schools’ lawyer had argued the funds remained public despite their payment to White Hat and that classroom equipment belonged to the schools.

“About $100 million was paid by the state to the seven Hope Academies and three Life Skills Centers in the Cleveland and Akron areas that hired White Hat in 2005 to handle operations. White Hat received 95 percent of each school’s state funding to pay teacher salaries, building rentals, utilities and other expenses.

“White Hat Management is owned by David L. Brennan, of Akron, one of the early proponents of the publicly funded and privately operated charter schools and a major donor to Ohio Republicans…. ”

Two judges dissented. Their dissents were well-reasoned and common sense:

“There has been no quality education, there has been no safeguarding of public funds, and there most certainly has been no benefit to the children,” Justice William M. O’Neill wrote.

“He concluded that the contracts are not enforceable because they “permit an operator who is providing a substandard education to squander public money and then, upon termination for poor performance, reap a bonus, paid for by public money.”

“Justice Paul E. Pfeifer wrote that the court should have overturned the contract.

“The contracts require that after the public pays to buy those materials for a public use, the public must then pay the companies if it wants to retain ownership of the materials,” he wrote.

“This contract term is not merely unwise as the opinion would have us believe; it is extremely unfair, so unfair, in fact, as to be unconscionable. … The contract term is so one-sided that we should refuse to enforce it.”

This is a comment by Billl Phillis of the Ohio Equity and Adequacy Coalition:

Follow the money-yes, tax money

Tax funds have likely made White Hat Charter school operator David Brennan and ECOT operator Bill Lager very, very rich. (Some out-of-state charter operators are also cashing in on Ohio’s Wild, Wild West charter industry.)

The charters, that these fine, civic-minded gentlemen operate, generally speaking, perform at a pathetically low level.

Brennan’s total take on tax funds for charters since the beginning is in the range of $1 billion. Lager has not been in the business as long but is within reach of $1 billion total. This is money extracted from school districts thus, harming school district students. This enormous financial drain from school districts would be more tolerable if their schools were outperforming school districts.

With their respective stables of lobbyists and their multimillions in campaign contributions, they leverage legislation which expands their charter school empires and profits.
Although they contribute a lot to political campaigns, these donations constitute a small percentage of their cost of doing business.

Plunderbund, in a July 7, 2015 issue, posted the donations that Brennan and Lager made to certain House and Senate leaders.

Speaker of the House Cliff Rosenberger:

$12,155.52 from David Brennan in 2014
$24,311.04 from Bill Lager in 2013-14

Speaker Pro Tempore Ron Amstutz:
$67,500 from David Brennan (and his wife, Ann) between 1998-2012
$30,000 from Bill Lager in 2010-12

Majority Floor Leader Barbara Sears:
$10,000 from David Brennan in 2012
$40,000 from Bill Lager in 2010-13

Assistant Majority Floor Leader Jim Buchy:
$31,543.70 from Bill Lager in 2012-13
Senate President Keith Faber
$32,156 from the Brennan’s in 2012-14
$25,500 from Bill Lager in 2010-13

This pay-to-play scenario probably explains why House leadership derailed HB 2 with Senate amendments. This derailed legislation has a modicum of charter reform, some of which would likely affect the bottom line of Brennan and Lager.

Why are Ohioans not outraged about these shenanigans? Probably because they don’t know about them. Inform your fellow Ohioans.

William Phillis
Ohio E & A

Ohio E & A | 100 S. 3rd Street | Columbus | OH | 43215

Stephen Dyer of the Innovation Institute was sure that the Ohio legislature would pass a bill to reform the state ‘s unaccountable charters. But he was wrong. The Senate passed the bill but it died in the House.


Money. Lobbyists.

“The Real Politick of Ohio charter school reform stems from big campaign contributors William Lager, who runs the nation’s largest for-profit school – the Electronic Classroom of Tomorrow – and David Brennan, who runs White Hat Management, which also has an E-School – OHDELA. Between them, they’ve given about $6 million to politicians since the charter school program began. In return, they’ve collected one out of every four state charter school dollars ever spent.”

Stephen Dyer of Innovation Ohio says that the state senate passed a charter reform bill that could help eliminate some of the scandals in that sector. He warns that if the bill goes to a conference committee, the lobbyists will eviscerate it.

He writes:


A meaningful charter reform bill passed out of the Ohio Senate late last night. While there were a couple changes that would help shelter some of the ways for-profit operators spend their money, it would for the first time have the state track, rate and account for their spending. In addition, it would force charters with Fs AND Ds on the report card that have been dropped by sponsors (authorizers) to have to go to a highly rated sponsor and then have that sponsor join the school at a hearing before the Ohio Department of Education to explain why they should remain open.

In addition, it creates better transparency, forcing charters to actually put who’s on their board on the school’s website, restricting who can be on the board, bans self-dealing, and several other worthwhile provisions. It doesn’t directly deal with tightening the state’s closure law (which has only closed 24 schools in 10 years), nor does it address the greatest issue out there — funding — but it is a big step forward for our nationally ridiculed charter school sector.

Today, the Ohio House was set to send the Senate bill to a conference committee — a secretive negotiation setting — which would have allowed Mssrs. Brennan (White Hat) and Lager (ECOT) to wield their typical legislative “magic”. There was a strong push last night and this morning from me and some friends on the pro-charter and pro-public school side of the ledger to have the House vote to concur in the Senate bill, meaning it would go to the Governor’s desk as is — a far more preferable outcome.

The good news is our work paid off. There were enough Democratic and Republican votes to avoid conference committee. So Ohio House Speaker Cliff Rosenberger, who wants a conference committee, pulled the bill from the House Calendar — literally erasing it from members’ laptops just before they were set to take it up.

The General Assembly is in session Tuesday for the last time until September. We are ratcheting up the public pressure through media outlets and networks to try to convince the House to simply concur with the Senate bill, which while not perfect, is certain to be weakened in conference.

I am asking each of you to reach out to your media friends, your social media contacts, and to your legislators to encourage them to accept the Senate bill as is — in legislative parlance, Vote to Concur. We can’t let the same people who drove our charter school system into the ditch to undo the good work done in the Senate.

For the first time in my memory, Ohio’s charter school law has a shot of not being written primarily by those who profit from it. That is a good step for us. Please help me keep it that way.

Best Regards,

Stephen Dyer
Education Policy Fellow
Innovation Ohio
35 E. Gay St.
Columbus, OH 43215

One of my favorite charter school stories is the one about the Lion of Judah charter in Ohio. When it was learned that more than a million dollars had been transferred from the charter school, the lawyer for the church asked the judge to forgive his client because it wasn’t his fault: he saw the easy money and greed got the best of him, what an original defense!

Here is the latest from Bill Phillis of the Ohio Coalition for Equity and Adequacy:

“Finally, the Ohio Attorney General files a lawsuit in charterland

Extremely late, but it may be a good sign. The Ohio Attorney General is going after individuals and entities who received $2 million from a now-closed charter school-Lion of Judah. Financial fraud has been a continuing thread in some sectors of the charter industry since the beginning.

Why didn’t Ohio’s Attorney General sue White Hat Management several years ago when Scripps Howard News Service documented that the company was receiving funding for students enrolled but not attending? The Scripps report-GHOST SCHOOLS-documented a vast difference between enrollment and attendance. In one case, a White Hat charter school had a 64% absentee rate for the 2004-2005 school year. The Scripps Howard report quoted a former principal of the Life Skills Center of Cincinnati, “It’s a cash cow! We all used to sit around and joke about it.” Further he said, “I spent less than $1 million on a $3 million operation. What the *%@& are they (executives at his former company) doing with the other $2 million?”

A recent report by the State Auditor showed a great disparity between attendance and enrollment in several charter schools. In March 4 testimony before the House Education Committee, State Auditor David Yost admonished the committee to craft legislation to correct this type of abuse and enforce it via criminal penalties.

The Attorney General should be aggressively protecting taxpayers and students from blatant charter fraud. The lawsuit against those associated with the Lion of Judah charter is a good start.

William Phillis.

Ohio E & A | 100 S. 3rd Street | Columbus | OH | 43215

Bill Phillis of the Ohio Coalition for Equity and Adequacy notes that Governor John Kasich has promised to pass legislation requiring accountability and transparency from charters. But will the big campaign contributors who make millions from charters allow any regulation of their profitable enterprises?

Phillis writes:

“Governor: “We are going to fix the lack of regulation on charter schools” – but will ECOT, White Hat Management, K-12 Inc. and other big campaign funders allow it to happen?

“2014 has been the year of exposure of far-reaching financial fraud and educational malfeasance in the charter industry. To cap off the year, reports of two studies commissioned by the pro-charter Fordham Institute were made public. These reports “revealed” what was already known: charters are neither accountable nor transparent and their students lag significantly behind traditional schools in state academic measures.

“What else could the Governor say about charters but that additional regulations are needed? The real test, and the one the public education community should keep on the radar screen, will be the scope and depth of anticipated legislation on charter reform.

“Consider that, of the $57 million increase in charter funding over 2011-2012, the largest increase goes to William Lager’s ECOT and the largest per pupil increase for a charter group goes to David Brennan’s White Hat charters. Brennan and William Lager are among the largest political contributors in Ohio. Will they allow charter reform in Ohio? Charter reform that protects taxpayers and students would put them out of business. What do you think?

“Realistically, don’t expect genuine reform in accountability and transparency in charterland….unless the taxpayers of Ohio demand it. Right now the contest is between campaign contributions and sound public policy.”

William Phillis
Ohio E & A

Governor John Kasich has been charter-friendly, to say the least. Ohio is home to some of the nation’s most profitable charter operators. Think ECOT. Think White Hat. These charters gove generously to friendly politicians (think Kasich and the Ohio Republican Party). But now Imagine charters had some embarrassing publicity about some of their lucrative sale-leaseback deals, and even charter champions are calling them “crony capitalists.”

So ProgressOhio has called for an investigation of Imagine.

““Our ‘fiscally conservative’ governor needs to explain why he’s allowed all this money to be wasted and all these kids to be hurt. And his charter school watchdog needs to go,” said Brian Rothenberg, executive director of ProgressOhio.

“Rothenberg asked why David Hansen, who heads the state Department of Education’s charter-school accountability office, has ignored the problem, noting that he formerly served on the board of an Imagine school in Columbus and should have known about its lease arrangement.

“Hansen, husband of Kasich’s chief of staff, was on Imagine Academy of Columbus’ board and among those recommending that the school be closed because of poor academic performance. The school closed but reopened weeks later as a new Imagine school with the same lease, which directs more than half of its state aid to rent.”

And more:

“The Dispatch reported on Sunday that five Imagine schools in Franklin County received a combined $20.2 million in per-pupil state aid in the 2012-13 school year. A quarter of that money — more than $5.1 million — was spent on rent, all under long-term leases with Schoolhouse Finance, an Imagine subsidiary.

“A sixth school, Imagine Integrity Academy, spent 81 percent of its $440,009 in state aid on rent in the 2011-12 school year, the most recent audit available.”

High profit margin, no?

“Research by ProgressOhio showed that, despite Imagine’s poor academic performance, Imagine and Schoolhouse Finance collected at least $14.4 million in public money last year for their 17 Ohio schools, according to records from the schools and state auditor.

“More than half — $8.9 million — covered rent for long-term leases to Schoolhouse Finance. The $5.5 million balance went to pay “indirect costs’’ to Imagine to provide management services.

“Rothenberg said the arrangement leaves little money for classroom instruction, and administrators for some of the schools complain that low teacher salaries have caused high staff turnover, which further undermines student achievement.”

Crony capitalism? Yes. Ripoff of public funds intended for children? What do you think?

The largest charter chain in the United States is associated in some way or another with the Gulen movement. This is a political movement in Turkey whose leader is an imam who lives in seclusion in Pennsylvania. No one quite knows why a Turkish imam has some unspecified connection with 150 charter schools. What a country this is! What other country would pay millions of taxpayer dollars to a large chain of schools operated by foreign nationals?

James Pilcher of the Cincinnati Enquirer observed that the Concept charter schools hire an unusual number of Turkish teachers.

“Horizon Science Academy in Bond Hill has the usual classrooms, books and lessons to teach kids seeking an alternative to regular public and private schools.

“The charter school also employs seven foreign teachers, mostly from Turkey, brought to the U.S. on H-1B visas for jobs it says Ohio teachers are unqualified to fill.

“Concept Schools, founded by followers of a Turkish Islamic cleric secluded in the Poconos, already is under federal and state scrutiny for possible irregularities in teacher licensing, testing and technology contracts.

“An Enquirer investigation has found that Chicago-based Concept Schools, which runs Horizon and 17 other charter schools in Ohio, annually imports dozens of foreign teachers in numbers that far surpass any other school system in the state.

“At least 474 foreign teachers, again mostly from Turkey, have arrived at Concept’s Ohio schools between 2005 and 2013. The schools are collecting about $45 million in state funds annually to educate 6,600 children in kindergarten through high school.

“Critics say H-1B visas were designed to help companies temporarily employ highly skilled foreign workers in biotechnology, chemistry, engineering and other specialized fields – not K-12 teachers.

“The Ohio Department of Education is weighing complaints from former Concept staffers that unlicensed, foreign teachers were used.

“Ohio teachers, meanwhile, say plenty of qualified teachers are available for jobs being filled by the foreigners, especially since about 40,000 are still without teaching jobs because of the recession…..

“Academically, Concept students perform no better or worse than children at the nearly 300 other charter schools in Ohio.

“Ten of the Ohio Concept schools – more than half – received Ds on the state’s most recent performance index, a measure of how many students passed key achievement tests.

“Horizon Science Academy was one of the schools getting a D….”

“In May and June, the FBI raided 19 Concept charter schools, offices and other businesses in at least four states, including the Cincinnati Horizon and three other schools in Ohio. The raids came as part of a multistate investigation into possible financial fraud involving a federal Internet technology-funding program.

“Ohio education officials, meanwhile, are weighing whether to launch a full-scale investigation into whether Concept Schools is using unlicensed foreign teachers. At a state hearing in Columbus in July, several former Concept teachers complained that some Turkish teachers were working without the required licenses….

“One former teacher at a Cleveland Concept school, however, has said he was forced to pay tributes under the table to the movement and was even required to visit Gulen at his residence in the Poconos in northeast Pennsylvania. Mustafa Emanet told The Enquirer of being required to pay back some of his salary in cash to school administrators during his stay between 2006-09.

“Emanet was hired on an H-1B visa as an IT network administrator. But after he arrived, he said he was presented with a “secret” contract that required a tribute to the Gulen movement.

“He said his initial H-1B visa called for him to be paid about $44,000 annually. When he arrived, he was told he would be making less than $30,000 a year.

“Later as his pay rose, he said he was required to give up to 10 percent of his salary back to school administrators in cash as a “himmet,” or a tribute to Gulen and the overall movement.

“It got to the point where I was paying $900 to $1,000 a month,” said Emanet, who eventually got his green card and is now a software developer in the Cleveland area.

“Ucan dismissed Emanet’s claims as being from a “former disgruntled employee” and says there is no such pressure or secret contracts or tributes at any of the company’s schools….

“Concept has become the fastest-growing charter school operator in Ohio – growing to 18 schools from only two a decade ago. In the 2012-13 school year, Concept schools enrolled 6,329 Ohio students in kindergarten through high school, drawing about $45 million in state funding a year. Overall, it operates 31 schools in Ohio, Indiana, Illinois, Wisconsin, Michigan and Missouri.

“Concept also is Ohio’s second-largest charter school operator, trailing only Akron-based White Hat Management. White Hat operates 29 schools in Ohio with an enrollment of 6,660 in the 2012-13 school year. That company received $53.2 million in public funding that year…..”