Franklin Towne Charter High School

BUTKOVITZ CITES CHARTER SCHOOL PROFITEERING, April 7, 2010, Philadelphia (PA) Inquirer

City Controller Alan Butkovitz's investigation of 13 Philadelphia charter schools found repeated examples of complex real estate arrangements in which charters leased or rented facilities from related non-profit organizations.
"The way the charter law is written and not enforced--there is a gigantic loophole through which people can profiteer," Butkovitz said. "This is not supposed to be a vehicle for maximizing profit for operators and related parties."
Butkovitz began his special fraud investigation of charters several months after The Inquirer reported allegations of financial mismanagement and conflicts of interest at Philadelphia Academy Charter School in April 2008.
His staff has been sharing information with the U.S. Attorney's Office, which is conducting a criminal investigation of at least nine area charter schools, according to sources with knowledge of the probe.
Butkovitz's complete report, which will include findings on the School District's oversight of 67 city charters and recommendations for tightening state law, is scheduled to be released Thursday afternoon.
The charters Butkovitz focused on include Harambee Institute of Science and Technology Charter School in West Philadelphia. Butkovitz released part of his report March 30 after 6ABC reported a nightclub operated inside Harambee on weekends.
"The fact there were significant issues at 13 out of 13 raises the likelihood you would see many of these same issues found in a much larger sampling of the schools," Butkovitz said.
Among those 13 schools, four were the subject of extensive focus by Butkovitz for complex real estate maneuvers, apparent conflicts of interest and CEO salary arrangements, according to a draft of the report obtained by The Inquirer:…
Franklin Towne Charter High School
Located at 5301 Tacony St. in Bridesburg, Franklin Towne opened in 2000. After Joseph Venditti, an attorney, stepped down as board president in 2005, he became the school's chief executive with a $108,173 salary. His salary and benefits rose rapidly, and his total compensation was $236,281 in 2008.
At Franklin Towne, the controller's office also found several questionable practices, in addition to Venditti more than doubling his compensation in three years.
The charter with 929 students owns its building in the former Frankford Arsenal and rents the property to Franklin Towne Holdings LLC. Venditti created that for-profit company which sublets the building back to the school. Venditti signed the lease and sublease as manager of the company and CEO of the school.
The circular arrangement enables the school to obtain state rent reimbursement. Venditti did not respond to e-mail and phone messages.

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