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.

Indiana charter schools (real estate profiteering concerns)

CHARTER SCHOOLS AND VULTURES; April 18, 2011; The Journal Gazette

When the Texas Board of Education reviewed the application for a charter school to be operated by Imagine Schools Inc., board member David Bradley had a question for company CFO Barry Sharp.

"So are you in the real estate business or the charter (school) business?" Bradley asked.

A great question. It's one the Allen County Property Tax Assessment Board of Appeals is asking, as well. Based on an Indiana Supreme Court decision from December, the board is reviewing the property tax exemption for the Imagine MASTer Academy in Fort Wayne.

In a review of the school's complex real estate arrangements, I came across a fascinating observation by Brent Van Alfen, who has advised charter schools on financing. He warns of the relationship between education management organizations like Imagine Schools Inc. and real estate investment trusts:

"There are many of these REIT/(education management organization) partnerships that remind me of a couple of vultures feeding off of an emaciated carcass."

* * * * * * * * * * * * * * * * * * * * * * * * * * * * *

A TAXING TALE / COUNTY SCRUTINIZES CHARTER SCHOOL PROPERTY TAXEXEMPTION; April 17, 2011; Fort Wayne Journal Gazette (IN)

The news about charter schools, their owners, and the money they make goes back to December to the state Supreme Court. In reversing a decision by the Indiana Tax Court, the justices ruled that a property owner doesn’t automatically qualify for a tax exemption even if property is used for a charitable or exempt purpose.

From that one decision, some charter school books are being opened in Fort Wayne. Taxpayers can learn where some of their tax dollars are going, and a lot of them leave the state and end up at a company boasting of attractive profits from a “reliable cash flow.”

A company is summoned. Based on that Supreme Court decision and a January memorandum from the Indiana Department of Local Government Finance, Allen County officials summoned JERIT CS Fund LLC, the real estate investment trust listed as owner of the Wells Street campus of the Imagine schools, to defend its property tax exemption…

The tangle of leases and subleases, for-profit management organizations, charter school boards and real estate investors involved in some of the state’s existing charter schools begs for transparency before more tax dollars start flowing out of state.

Statewide, a lot of money is spent. Taxpayers will spend more than $3.2 million in rent this year on just four Indiana charter schools. Most of the dollars are flowing to a Kansas City, Mo., real estate company that earned $84.7 million in profits last year. And while the Allen County board is scrutinizing the property tax exemption sought for the company’s property on North Wells Street, Entertainment Properties Trust can’t lose: Its triple net lease agreement makes the tenant – Indiana taxpayers – responsible for maintenance costs, utilities, insurance and taxes…

JERIT (see box on cover) bought the Wells Street campus from Schoolhouse Finance for $5.5 million – $2.6 million more than North Wells Schoolhouse paid the YWCA for the property just two years earlier and about $1 million more than its assessed valuation…

Steve Zacher, president of The Zacher Company, a Fort Wayne commercial real estate company, said in an interview that there was no market explanation for the rent increases.

“It seems like someone is making a killing,” he said. “People can get a fair return on their investment, but somebody is getting a way-above-normal return.”

Bryant appeared at the PTABOA hearing alongside Fink. He characterized the complex real estate deals as a means of leveraging investments to acquire more charter school facilities…

Why the court ruling matters. The Indiana Supreme Court decision that prompted the review might well result in the exemption’s being denied. A denial would set up the first test of the ruling. It holds that a property owner – not just the tenant – must demonstrate the property is owned for a tax-exempt purpose.

That could be a tough case for Entertainment Properties Trust (see box on cover) to make. In a video annual report posted on its website, the publicly traded company boasts returns to shareholders of almost 40 percent, citing public charter schools as a promising sector in a portfolio of specialty real estate that also includes megaplex theaters, water parks, ski resorts and vineyards…

Ohio is a laboratory for Imagine Schools Inc. Imagine Schools Inc. has become the largest charter school operator in the nation, with 73 schools. Policy Matters Ohio, a nonpartisan think tank, examined Imagine Schools’ model in a comprehensive report released last May.

“Schoolhouse Finance spent a combined total of $6 million to buy five Ohio properties that now house four Imagine schools,” according to Piet van Lier, the author of the report.

“Within 22 months of the purchase date for each property, Schoolhouse Finance has sold all five properties to one of three REITs for a combined total of more than $26 million. According to state audits and lease documents obtained through public records requests, the non-profit charter schools run by Imagine continue to operate under long-term leases with Schoolhouse Finance, paying hundreds of thousands of dollars in rent each year to the Imagine subsidiary.”…

No comments:

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."
----

"The idea of regulating charter schools makes no sense because deregulation is the justification for the policy." -- Jim M., retired teacher

------

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?

-----------------

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.

-----

The demise and death of our institutions of social support:

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

-----
"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...

Pages

Indiana charter schools (real estate profiteering concerns)

No comments: