Pennsylvania Cyber Charter School (6,500+ students)

PERFORMING ARTS SCHOOL BUILT WITH LITTLE OVERSIGHT, June 18, 2007, Ellwood City Ledger (PA)

MIDLAND -The Lincoln Park Performing Arts Center was built with public money but very little public oversight, and included funding from Midland School District, a process one public school solicitor described as improper.
In recent months, The Times has been looking into a state grand jury investigation of the Midland education industry created by borough school Superintendent Nick Trombetta. Lincoln Center's construction is part of that investigation, according to witnesses who have been called to testify.
The Times has found that Lincoln Center's costs totaled at least $28.7 million, money supplied by the state, Beaver County, the Midland Pennsylvania Cyber Charter School and Midland School District.

A nonprofit organization, also known as the Lincoln Park Performing Arts Center, was expressly created to build and own the center. Its board of trustees was responsible for overseeing the organization, including all aspects of building construction.

But the board played virtually no role in its planning and had only limited involvement in the construction and oversight of expenses during initial construction phases, according to a review of board meeting minutes and interviews with board members.

In fact, the board members who were interviewed seemed to know very little about specific details of the project.

When asked who was in charge of it, former Lincoln Center board President Marvin Bahm indicated that it was Trombetta, who also serves as executive director of Lincoln Center.

"It was his program, his idea, his everything, so he really was the leader of the whole thing," Bahm said.

Pittsburgh lawyer Jack Owen, who specializes in the field of nonprofit organizations, said nonprofit boards have a duty to oversee all aspects of their organization's operations.

"Ultimately the board of directors is there to be a watchdog," he said. "You want to have people on your board who are sophisticated. The board represents the community."

In its first meetings in 2003 and 2004 - years in which the center was planned and construction began - the Lincoln Center board met just three times. Minutes from the two 2003 meetings reflect no action regarding the building. The board had no record from the lone meeting in 2004 other than an agenda, which made no mention of the building…

"There's no way that I know of that a school district can spend public funds on a project that belongs to someone else," Weiss said. "I certainly wouldn't have approved it. A school district can't spend money on a project it doesn't own, just as it can't go out and build somebody a house."

Trombetta and Stephen Catanzarite, Lincoln Center's managing director, refused recent requests for an interview, saying they would answer questions only by e-mail…

The Pennsylvania Cyber Charter School, which Trombetta also heads, paid a $10 million prepaid lease in cash to Lincoln Center. Both schools' payments were made before Lincoln Center's board had even met; before official lease agreements were in place; and, as a cyberschool auditor pointed out in 2005, before fair-market assessments were done on the value of the leases.

The funds from Midland School District and PA Cyber were used for Lincoln Center's construction.

State charter schools may receive and disburse funds for charter school purposes only, state Department of Education spokeswoman Sheila Ballen said when asked whether public schools can fund outside entities. She refused to comment specifically on PA Cyber, citing the attorney general's investigation…

Trombetta opened PA Cyber in 2000, and it is now the largest cyberschool in the state, with more than 6,500 students and a projected $50 million budget.

He went on to guide Lincoln Center; Lincoln Park Performing Arts Charter School, which also leases space inside Lincoln Center and opened last fall; and the nonprofit management foundation National Network of Digital Schools, which provides services to the other four Midland entities, as well as educational entities Trombetta has created in other states…

The month after Ellsworth's letter, on May 9, 2005, PA Cyber's board voted to hire Michael Kuhlman of Commonwealth Real Estate, and also the county's chief assessor, to appraise Lincoln Park Center.

According to PA Cyber's 2003-04 audit, which includes subsequent events dating to May 2005, the school entered into the official lease agreement in May 2005. The agreement took effect in November 2005.

By then, the audit said, PA Cyber had already paid Lincoln Park Center $6.21 million, and would pay the remaining portion of the $10 million by March 2006.

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CYBER-SCHOOL EMPIRE UNDER ATTACK: BEAVER COUNTY EDUCATOR FIGHTING GRAND JURIES, SUITS AND LEGISLATORS, March 18, 2007, Pittsburg Post-Gazette (PA)

In the past seven years, Nicholas Trombetta has climbed from small-town Beaver County school administrator to the head of a sprawling educational network fueled by millions of taxpayer dollars.
Now this onetime wrestling coach finds himself grappling with a ring of powerful opponents -- from law enforcement agencies to the state Legislature to litigators -- who are imperiling the empire he built from scratch.
Detractors claim Dr. Trombetta has misused the public's money and engaged in a range of questionable business practices at his booming Pennsylvania Cyber Charter School and affiliated entities. Those include the Lincoln Park Performing Arts Center, a $23.5 million jewel that sits across from Dr. Trombetta's office on the main drag of Midland, population 3,000.
Although it is not clear exactly what state Attorney General Tom Corbett Jr. is investigating, a statewide grand jury whose term recently ended heard testimony over several months about alleged financial shenanigans within Dr. Trombetta's network. Prosecutors are expected to continue presenting evidence to a new grand jury next month.
Subpoenaed witnesses have provided the grand jury with information they say points to possible violations of a range of laws concerning charter schools, campaign finance, corporate governance and nonprofit organizations…

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FOUNDER OF CYBER CHARTER SCHOOL IN BEAVER COUNTY QUITS POSTS, June 16, 2007, Pittsburgh Tribune-Review (PA)

The founder of Pennsylvania's largest cyber charter school is giving up two key positions of an educational conglomerate based in Midland.
Nick Trombetta is stepping down as superintendent of the Midland School District and as president of the National Network of Digital Schools, a management consulting firm.
He will remain chief operating officer of the Pennsylvania Cyber Charter School. A state grand jury continues to investigate allegations of double billing, excessive management fees, questionable payments to building contractors and misuse of tax dollars at the cyber school, which has more than 6,000 students…

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And fyi…
SANTORUM SCHOOL FLAP CONTINUES, November 19, 2004, Pittsburgh Tribune-Review (PA)

U.S. Sen. Rick Santorum should reimburse $100,000 to the Penn Hills School District for taxpayer money used since 2001 to cover online charter school tuition for his children, four school board members said Thursday.
The senator will not respond until the board makes a formal request, said Santorum's deputy chief of staff, Robert Traynham.
"He has done nothing wrong," Traynham said. "The Penn Hills School District for the last four years has paid for (Santorum's) children to attend the charter school and have seen nothing out of the ordinary. They have basically said, 'This is OK.' "
Questions over his residency prompted Santorum to announce Wednesday that he is withdrawing his five school-age children from Pennsylvania Cyber Charter School in Midland, Beaver County. The No. 3 Republican in the Senate, Santorum owns a $106,000 home next door to his wife Karen's parents in Penn Hills, but he and his family split time between there and a $757,000 house in Virginia. Santorum's annual Senate salary is $157,000.
"He's admitted he's not a resident. I'm going to put up a motion for him to pay back the entire amount," said Penn Hills School Board member Erin Vecchio, chairwoman of the local Democratic Committee.