Last month, the state Board of Education granted its approval for two charter schools affiliated with former professional football and baseball star Deion Sanders to open next fall, in Fort Worth and Dallas. A review of recently released public records shows that early versions of the charter’s application contained two business arrangements that appeared to be designed to give school executives opportunities to personally profit off the school.
A spokeswoman for the Texas Education Agency said the suspect deals have since been removed from Prime Prep Academy’s application, after state officials investigated and confronted the school’s executives. Prime Prep’s executive director, Damien L. Wallace, confirmed that the specific contract deals had been excised from the charter’s application.
TEA, the agency that vets new charter schools, says it has beefed up its scrutiny of applicants in recent years. Several of the publicly funded schools have been revealed to be paying executives generous salaries, often through not-exactly-arm’s-length deals with side companies controlled by school officials...
Although Sanders’ name does not appear as an official executive for the school, his name does show up in the application, with his fame promoted as a benefit to the new school. “Deion Sanders’ powerful media presence has been utilized to bring more attention to the plans of bringing a charter school of this type to the DFW area,” the school’s application states.
In newspaper accounts, Sanders said he began thinking about founding a charter school approximately three years ago. Wallace said Sanders has been a personal friend and business associate for many years...
The charter school’s application also contained a “sales/marketing” agreement with a company called PrimeTimePlayer. Primetimeplayer.com’s website promises students help with mentoring and recruiting, and features Sanders’ photo. Incorporation documents filed with the Texas Secretary of State’s office list the company’s managing members as Damien L. Wallace and Chazma Jones — both of whom are also listed as executives for Prime Prep Academy.
The marketing agreement called for PrimeTimePlayer to be paid either $1,000 or $7,500 a month (the contract’s wording is unclear) for its services, as well as a percentage of any money it raised for the school; a 5 percent commission on all “special fundraising events” and a 10 percent commission on “all monies derived from corporate, local business and private donor sponsorships.”
According to the January application, the charter had already lined up commitments for about $200,000 in such donations, including $50,000 from Wal-Mart, $25,000 from Bank of America, and $50,000 from the NFL Network, a channel operated by the National Football League.
The school’s application also stated that Prime Prep’s Fort Worth school would be entering into a lease/purchase agreement for the building the school will occupy. The contract included in the charter’s application called for Prime Prep to pay $5,000 a month the first year, $7,000 the second, and $9,500 a month the third year of its occupancy to a company called Pinnacle Commercial Property Group.
Secretary of State records show the company’s directors as of May 2011 to be Damien Wallace and Chazma Jones.
Ratcliffe said TEA’s review staff also noticed the same contracts in Prime Prep’s application and brought them to the attention of the school’s lawyer. “Our lawyer went to their lawyer and said, ‘We have a problem with them doing business with themselves,’” she recalled, adding: “They didn’t initially reveal all the connections there.”...
There is another claim that has raised questions about the finances of the school. In July 2010, seven plaintiffs filed a lawsuit in Tarrant County District Court, claiming Wallace and Sanders had promised to market high school athletes to college athletic departments, but never delivered.
In the same lawsuit, the plaintiffs, led by Lawrence Smith, assert that Wallace and Sanders “made fraudulent and deceptive misrepresentations to induce Mr. Smith into investing money in a Charter School venture.”
According to the lawsuit, Wallace told Smith and others that if they invested $25,000 in the school, a “revenue sharing agreement” would pay them back $174,600, based on rent collected on a building at 4400 Panola Ave., Fort Worth — the same building in which Prime Prep’s Forth Worth campus is to be located, according to the school’s application.
A lawyer representing Wallace and Sanders declined to comment on the case; Smith’s lawyer, Don Stewart, said in court filings the defendants had denied his client’s allegations and were contesting the claims.
Ratcliffe said Prime Prep most likely will receive its final approval from the Texas Education Agency in a couple of weeks.
...While the board gave its go-ahead in September, SBOE member Michael Soto (D-San Antonio) wasn’t impressed by what he saw in Sanders’ presentation. “I have no idea what the applicant plans to do in the classroom,” Soto said before the vote, according to the Fort Worth Star-Telegram.
Since then, other questions have arisen about some of the school’s financial arrangements — deals that would help its top officials profit from the school’s fundraising and property rental...
The conflicts of interest were uncovered by TEA only after the SBOE approved Prime Prep’s charter, but Soto is concerned by the school’s “incredibly vague” academic plans, and told the Texas Independent he’s been getting concerned calls about the school.
Soto said he was unfamiliar, though, with another possible concern: that where Prime Prep’s plans do get specific about academics, the language is nearly identical to wording developed by some other schools.
The State Board of Education approved eight new charter schools back in September, but only one of them came backed by the star power of Prime Prep Academy, with an emotional presentation by former Dallas Cowboys great Deion Sanders...
The most novel aspect of these charters, though, may be the private funding sources they'll depend on to round out their $10 million-a-year budget: not usual suspects like Bill and Melinda Gates or the Walton Family Foundation, but big brands Sanders has endorsed or worked with over the years, which he name-drops regularly when talking about the school.
Sanders says Prime Prep is a natural extension of TRUTH, a sports-and-study program he's run for the last few years, that has received money from many of these sponsors already. The school's leadership team told the state it had secured pledges from a few of those companies already, but when contacted, many said they hadn't, in fact, pledged money to the school—at least not yet...
What Prime Prep's leaders stress is unique about its plans are its emphasis on sports along with academics, its dedication to serving inner-city kids in low-scoring school districts, and, of course, the big money that Deion Sanders' friends at big brands will throw at the school...
The SBOE approved Prime Prep's application 8-4.
"We met with Direct TV, with Van Heusen, we met with Procter & Gamble, we met Under Armor, we met with the NFL on assisting us with in endeavors and they did a cartwheel," said Sanders.
In its charter application Prime Prep also listed $186,000 in donations that had already been pledged “upon approval of the charter school," including a pair from Walmart and the NFL Network worth $50,000 each.
But as enthusiastic as Sanders said they all were, most of the companies on the list told me this week that they never did pledge money to the school. The other three either didn't return calls or didn't have an answer ready...
Texas Education Agency spokeswoman Debbie Ratcliffe says Prime Prep’s list of pledges doesn't matter much to their application. “Even if a charter applicant says they have pledges for land or services from various corporations or entities, we don’t let them count that as revenue unless they have a signed letter from the donor.”
But while the SBOE grilled other applicants about where they'd be getting startup cash or grants to augment state funding, Prime Prep seems to be running entirely on star power. The only signed agreements in its application at first—a $1,000 loan from a Fort Worth real estate firm and a fundraising agreement with a group called PrimeTimePlayer—were dropped because Wallace and other school officials were aslo in leadership roles at the companies that stood to profit, as the Austin American-Statesman reported last month...