CHARTER SCHOOL SCANDALS

A compilation of news articles about charter schools which have been charged with, or are highly suspected of, tampering with admissions, grades, attendance and testing; misuse of funds and embezzlement; engaging in nepotism and conflicts of interest; engaging in complicated and shady real estate deals; and/or have been engaging in other questionable, unethical, borderline-legal, or illegal activities. This is also a record of charter school instability and other unsavory tidbits.

Right Step Academy

CHARTER SCHOOL OWNERS SENTENCED FOR DEFRAUDING SCHOOL TO PAY FOR LAVISH LIFESTYLE, May 24, 2006, Investigative Report, U.S. Department of Justice, United States Attorney, District of Minnesota

MINNEAPOLIS — The former owners of one of the first charter schools in Minnesota were sentenced today in United States District Court for defrauding the school to help subsidize an extravagant lifestyle. William Pierce, age 46, was sentenced to 37 months in federal prison and three years of supervised release. His wife, Shirley Pierce, also 46 years of age, was sentenced to 30 months in prison and three years of supervised release. In addition, Judge Michael J. Davis ordered the couple to pay $489,239.65 in restitution to the Minnesota Department of Education, which, along with the federal government, funded the school.

William and Shirley Pierce, both of Minneapolis, once owned and operated the now-defunct Right Step Academy, a not-for-profit school founded in 1993. In 2000, the St. Paul School Board refused to renew Right Step's charter after an audit disclosed that under the Pierces' leadership, Right Step engaged in financial mismanagement, provided students an inadequate education, and provided unsafe transportation and facilities. Right Step, a publicly funded, tuition-free school created to offer a highly structured, discipline-based alternative education to at-risk youth, soon closed.

Following a fifteen-day trial in October of 2005, a jury convicted William and Shirley Pierce of all charges listed in the thirteen-count indictment filed against them. Those charges included one count of conspiracy, three counts of filing false tax returns, four counts of mail fraud, and five counts of wire fraud.

At trial, the government presented evidence that the Pierces conspired to commit fraud in 1997 when they jointly formed a company known as Right Group, which they represented to the board of directors at the Right Step school as wholly owned by Shirley Pierce. Ms. Pierce then proposed to Right Step that Right Group handle the school's accounting, payroll, and human resource duties. During negotiations, William Pierce, Right Step's president and board director, failed to disclose to the other board members or employees the full extent of his interest in Right Group. Ultimately, William Pierce caused Right Step to enter into a contract with Right Group.

Over the next four years, the Pierces repeatedly billed the Right Step school excessive amounts for services allegedly rendered by Right Group. The court estimates those over-charges at $357,652.65. Moreover, the Pierces diverted for personal use payments made by Right Step to Right Group and, on occasion, took money directly from both Right Step and Right Group. Trial evidence revealed, for example, that William Pierce, a former U.S. Army maintenance worker, paid himself $51,855.54 in excessive compensation between 1998 and 2000 for his role as Right Step's executive director. William Pierce also caused Right Step to issue a check to Right Group in the amount of $12,549.35 for company start-up costs and as a retainer. That money was used, however, to pay for, among other things, a Caribbean cruise vacation for the Pierces. In addition, the couple took Right Step funds in the amount of $17,561.87 to pay off personal credit card debt and $11,125.00 to purchase season tickets to the Minnesota Timberwolves. When asked at trial if the purchase of Timberwolves tickets with Right Step money was in the best interest of the school, William Pierce replied, "I believe so." The court found William Pierce "blatantly lied" when he made that statement. Other court documents reflect that the Pierces defrauded Right Step by having the charter school make payments to SBP Managment without a contract or board approval. SBP Management was a business operated by Shirley Pierce. The court held that payments to SBP Management "represented a continuance of the Pierces' scheme to defraud by using Right Step Academy funds for their benefit."

Trial evidence further revealed that the Pierces committed tax fraud when they failed to include as income on their 1998, 1999, and 2000 federal tax returns approximately $55,701.00 in funds diverted from Right Step and Right Group. The Pierces caused Right Group to pay for their Mercedes Benz automobile, the lease of a Lincoln Navigator SUV, as well as expensive clothing and home furnishings. At trial, Shirley Pierce testified that she liked "very nice things." The payments for the things described above, however, were not included as income on the Pierces' tax returns. In addition, the Pierces had Right Group pay $3,000 in tuition to Wilberforce Academy on behalf of their son. Later that amount was falsely claimed as a business expense instead of income on their tax return. The court found that Shirley Pierce, a former IRS revenue officer and special agent, committed perjury when she testified she was unaware of her tax obligations.

Charter schools offer an alternative education for students while creating new professional opportunities for teachers. As executive director of the Right Step charter school, William Pierce was entrusted with acting in the best interest of the school and its students. Yet, under his leadership, Right Step failed to meet its obligations pursuant to state law or its charter agreement with the St. Paul School District. Right Step officials were delinquent in submitting financial statements, payroll taxes, and teacher retirement contributions. They also hired unqualified and unlicensed teachers. The court concluded that William Pierce had abused the public trust; and at sentencing, Judge Davis said to Shirley Pierce, "We all like nice things, but we don't do it on the backs of children."

After sentencing, United States Attorney Rachel K. Paulose added, "Charter schools are an important part of the educational system here in Minnesota. Without charter schools, many young people who have difficulty in the public school system would undoubtedly give up on their education and their future. It is therefore critical that the administration of these schools be conducted with the utmost integrity. Through their actions, the Pierces failed the 290 students enrolled at Right Step Academy."

This case was the result of an investigation by Special Agent Steve Makowski of the IRS, Criminal Investigation Division, and Special Agents Dan Pavlokovich and Jon Greenblatt of the U.S. Department of Education, Office of Inspector General. Assistant United States Attorneys John R. Marti and Ann M. Anaya prosecuted the case.

1 comment:

Anonymous said...: I went to that school by no means was an Angel but got my nose broke by a teacher so they say he was blood all over me when I had to catch the bus home so I stopped going the number is to small I had less than a year left to graduate but I couldn't go there anymore and couldn't get in another school so I gave up cuz I didn't like being hit by my teacher in the nose he never came back and I'm a girl so I was not gonna go back and I never went any place else as a result I have seizures and I trust no one in charge there was a few good teachers if they could have made it safe or that they could teach me so I could pass a real ged test I know because I I tryed to test out of school and failed I was good at tests and home work it was so much easier than my other schools I was a kid and didn't get It but I'm an adult now so be careful; September 9, 2013 at 9:03 PM

Inform yourself about the Gulen movement!

1. WATCH KILLING ED, Mark Hall's feature-length documentary about charter schools, corruption and the rise of the Gulen Movement in America
2. READ the "Expose the Gulen Movement" report.
3. WATCH the Gulen Movement 101: Session One webinar presentation (1/22/2014)
4. WATCH the 60 Minutes segment "U.S. charter schools tied to powerful Turkish imam" broadcast. (5/13/2012)
5. READ my response to the 60 Minutes piece.
6. READ my guest article about Gulen charter schools published by The Washington Post. (3/27/2012)
7. WATCH my interview talking about Gulen charter schools, or my presentation at LaborFest (segment between 49:18 min. & 1:07:36 min.)
8. READ my postings labeled "Gulen movement" HERE.

As one observer tweeted, "U.S. media have focused too much on the Islamic nature of the Gulen movement. Real concern is its shady dealings and improprieties."

Please be aware that Gulenists have created a large number of anonymously-operated damage control websites. They started to appear a few months after publication of Greg Toppo's article in USA Today (August 2010).

Remainders

1. Bruce Baker's excellent analysis of whether charter schools are public or private.

2. Jim Horn's Top 10 reasons for why 1%ers support urban charter schools.

3. What reporters covering charter schools need to know about miracle schools, vouchers and all that educational flim-flam (i.e. be skeptical and always follow the money).

4. As of May 2013, only eight states do not have a charter school law: Alabama, Kentucky, Montana, Nebraska, North Dakota, South Dakota, Vermont, and West Virginia.

5. Balkanize: "to break up (as a region or group) into smaller and often hostile units" (Merriam-Webster dictionary)

6. *Phrase coined by John Thompson: "educational civil war"

7. "A system that allows school operators to donate to the officials that regulate them is pretty sorry." h/t "X"

8. Re the Gulen movement. Two important psychological principals of which to be aware: the Backfire Effect and the Black Swan Theory.

Pleas for charter school oversight

AS U.S. AID GROWS, OVERSIGHT IS URGED FOR CHARTER SCHOOLS; February 24, 2010; New York Times

…The president of one influential charter group told the House Education and Labor Committee that the federal government had spent $2 billion since the mid-1990s to finance new charter schools but less than $2 million, about one-tenth of 1 percent, to ensure that they were held to high standards.
“It’s as if the federal government had spent billions for new highway construction, but nothing to put up guardrails along the sides of those highways,” said Greg Richmond, president of the National Association of Charter School Authorizers…

CHARTER BACKER SAYS HOUSE PROPOSAL WEAKENS OVERSIGHT; April 30, 2011; Columbus Dispatch (OH)

A leading school-choice supporter says the sweeping changes proposed by House Republicans would weaken oversight of charter schools severely and threaten to turn Ohio into a "laughingstock of the nation's charter-school programs.

"It's hard for me to say that," said Terry Ryan, vice president of Ohio programs and policy for the Thomas B. Fordham Institute, which sponsors seven charter schools in the state, including two in Columbus...

It was just last year that Mr. Ryan said, "The charter movement must police itself."
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"The idea of regulating charter schools makes no sense because deregulation is the justification for the policy." -- Jim M., retired teacher

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Perhaps it's finally dawning on some charter school supporters that the whole business is a huge can of worms.

Message to readers

With the systematic privatization of public education being conducted via the rapid expansion of charter schools, I regularly receive messages from teachers and parents who have charter school horror stories they want to share, and/or are in need of advice about a charter school situation in their community (e.g., "The charter school I attended has been closed. Do you know how I can get a copy of my transcript?). I also hear from journalists who are seeking information.

Just so you know, this site is a one-woman volunteer operation. Sorry folks, I'm DEFINITELY NOT union-sponsored.

Welcome

Charter School Scandals (CSS) was launched on May 14, 2010 to provide the public with a source of independently collected information about U.S. charter schools.

For instance, compare what you learn from my entry for the 3,500 student CATO School of Reason to the information provided by the pro-charter Center for Education Reform in their compilation: "Closed Charter Schools by State: National Data 2009" (63 page pdf). In the CER's document, the closure reason is "Management" explained as "Inadequate record keeping, suspect relations with private and sectarian schools," but the true story is much bigger and dirtier than that.

CSS is a non-billionaire funded (and un-bought off!), non-union affiliated (!), one-person operation in the name of transparency and public service to our democracy. I post the information as quickly as I can, but have a massive backlog due to the sheer number of stories. Please check back periodically for new additions.

And as you scroll through these stories, be sure to keep a running tally of the estimated legal costs.

Gulen Movement MUST READS!

Under the radar of the American public, the Gulen movement has been quietly advancing its presence in the U.S. via the establishment of charter schools, "cultural centers", and "interfaith dialogue" centers. Politicians, reporters, academics, community leaders, and charter school families have been strategically targeted, influenced, and given gifts, as the Gulenists have steadily built up their political cover. But how many of these Americans have an understanding of the controversies which surround this secretive movement and its worldwide political ambitions? And how would the public respond to finding out that such a movement is opening more and more charter schools, supported by their tax dollars as part of the GM's primary global project, without being willing to admit the connection?

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LEARN MORE

1. Read about the federal investigation into the Gulen Movement's charter schools.

2. HIGHLY RECOMMENDED: Islam, Secularism and the Battle for Turkey's Future, 23 August 2010, STRATFOR Global Intelligence

3. Video of Joshua Hendrick of the U. of OR and Y. Alp Aslandogan discussing the Gulen Movement. Here are the first 24 pages of Hendrick's 2009 thesis.

4. Charter School Watchdog

5. Gulen Charter Schools (don't miss the entry HERE.)

6. A Guide to the Gulen Movement's Activities in the U.S.

7. Gulen in the International Press

8. "Turkey's survival of the fittest: The Islamic anti-Darwinism movement in Turkey is being helped by an unlikely source - US Christian conservatives," 12 March 2008, ISN Security Watch)

9. "Religious movements in Turkey," 20 December 2010, OpenDemocracy

10. "First Class Revolution: From Medina to Mecca" and "Fethullah Gulen's Missionary Charter Schools Coming under Increasing Scrutiny in the United States and around the World," 24 January 2011 & 26 February 2011, Kurdish Aspect

11. "Turkey: Politics of Identity and Power," 13 August 2010, Congressional Research Service

12. "Turkey's pivotal role in the international drug trade," July 1998, Le Monde diplomatique (more background info)

13. EXTRA CREDIT: Check out the animated Imperial History of the Middle East and this Middle East geography game.

Bad apples, tips of icebergs, and cans of worms

In 2000, the Center for Education Reform wrote:
"A few bad apples shouldn't sour the public on the promising charter school movement, but when a bad apple does turn up, critics of charter schools pounce on it. Charter opponents are quick to claim that "more than a few" schools have closed and even quicker to characterize the movement as one that invites unscrupulous, fly-by-night operators to set up shop.Those mean ol' charter opponents. Isn't it curious how the reformers don't have any problem at all with building up a few negative public school stories into an anti-public teacher-bashing movement of national proportions in order to destroy teacher unions and public schools as a whole?"

But are charter schools really so innocent?

- In 2009, 83 percent of 145 Minnesota charter schools were found to have at least one financial irregularity in their audit.

- In February 2009, a New Mexico state audit found financial problems with 36 of the 44 charter schools in Albuquerque.

- Philadelphia City Controller Alan Butkovitz (April 2010): "The fact that there were significant issues at 13 out of 13 [schools] raises the likelihood you would see many of these same issues found in a much larger sampling of the schools.By May 2010, his probe had widened to 18 charter schools."

Relationships terminated

Charter school promoters live in an abstract world where it's perfectly fine to shutter a school when the "need" arises. This reveals a profound detachment and utter disregard for the emotional lives of the children and families who, as a result, end up being subjected to tremendous disruption, stress, termination of meaningful relationships, loss and grief. Kids need security and dependability.

A school going "out of business" takes a very different emotional toll on families and children than when their local gas station or Denny's restaurant does.

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The demise and death of our institutions of social support:

Family............check!
Church............check!
Neighborhoods............check!
Schools............check!

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"It comes down to what ultimately is in the best public interest here -- supporting the growth of charters or not. Does that support ultimately weaken the rest of the school district? You bet it does." (Fred LeBrun, Albany, NY)

Observations

There is no doubt but that an increasing number of inspectors, auditors, investigators, prosecutors and court rooms (and a lot of time and money) will be needed as more state charter caps are lifted.

Part of the problem is that too many people running charter schools see them as their own little fiefdoms. After all the effort and money put into setting up their schools -- and with political leaders and the mainstream media shining their bright spotlights on charter schools -- the stakes are inordinately high for them to be able to show "success."

Another problem I've discovered by doing this research is that the unmonitored access to millions of public education dollars is drawing unscrupulous people into the "business." At other times, new-found access to funds is proving to be too tempting for some people who were perhaps less criminally-minded.

Additionally, I've now discovered that, in this era of high-stakes testing, the education security business is booming. As one company put it, "Cheating on tests isn't the exception anymore; it has almost become the rule."

On competition

From "Deregulation and Charter School Swindles" by Gary Clabaugh (Educational Horizons, Winter 2009):

Two main ideas inform the charter school movement. The first is that competition is an essential ingredient in school improvement. Charters are said to provide that.

The trouble with this argument is that competition doesn't select the best, only the most popular. McDonald's doesn't produce the best-tasting or most-nutritious food, for instance, but its heart attack specials certainly are popular. A second-rate school might prove similarly competitive if it provides a tawdry but reassuring education to the children of the low-information crowd. Fearful your kids will discover you are an ignoramus? Send them to Alpha Charter where they will never learn to doubt.

Dedication

This Web site is dedicated to Eli Broad, Bill Gates, the Walton family, Arne Duncan, Whitney Tilson, Joe Williams, Reed Hastings, Ted Mitchell, Jack O'Connell, Tom Vander Ark, George Miller, Joanne Weiss, Randy Ward, Arnold Swarzenegger, all Milton Friedman-lovers, and any other free-market, pro-school choice, minimally-regulate-what-goes-on-in-charter school supporters who are also proud self-stated "DISRUPTORS" of public school communities, who have almost never, EVER been part of a public school community or local neighborhood, or who rejected being part of any public school community or local neighborhood long, long ago -- but have ended up deciding to help tear apart the tapestry of basic local human connections anyway.

Visitors

A variety of people have been looking at my blog, probably because of the great Gulen charter school information I've posted. This site is regularly visited by readers from Turkey. I get periodic visits from dhs.gov, doj.gov and ed.gov. I've had visits from house.gov and ed.gov, and at least one visit from someone at eop.gov (? Executive Office of the President). I've had a few visits from a couple of mystery IPs that are supposedly associated with the State Department, specifically the CIA. Hmmmmm...

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Right Step Academy

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