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Trifecta of Articles on For-Profit Charter School Shenanigans

December 15, 2015

Over the past week I’ve come across three articles that describe the shenanigans of for profit charter schools— articles that underscore the corruption that naturally occurs when the profit motive and public services collide.

Nate Resnikoff, a writer for Al Jazeera, offers an overview of charter school corruption inches article offering a summary of a report from the National Education Policy Center (NEPC) at University of Colorado Boulder which describes charters as a “gravy train”. The deregulated environment that charter schools operate in allows the owner-operators to pay the “CEOs” outlandishly high salaries while short changing the teaching staff, and taking advantage of “…a host of real estate and tax laws that were not put in place with charter schools in mind, but that the owners of charter school enterprises are using in order to profit”. The primary remedy recommended in the report is that charter schools be subjected to “...stricter financial disclosure rules“.

Blogger Edushyster interviewed Rutgers Professor Bruce Baker, who elaborated on the way charter operators use real estate transactions to profit from the loopholes inherent in the current environment. The author with Gary Miron, of Understanding the Policies that Charter Operators Use for Financial Benefit, Baker describes the way various charter chains take advantage of real estate laws to turn a profit, and it’s not easy to follow. In response to a question from the blogger asking for some specific examples of how charter profiteers use public funds for private gain, Baker elaborates:

Chains like Imagine and Charter Schools USA actually have real estate acquisition as a big part of their business. Charter Schools USA has Red Apple Development, LLC; Imagine has School House Finance, LLC.

The great thing about Imagine schools is then when School House Finance purchases a property, it then gouges Imagine itself for the lease payment. Once they’ve got it paid off, they flip it to Entertainment Properties Inc., which is a for-profit Real Estate Investment Trust. They take the charter school revenue in the right hand and hand it off to the left hand, the land acquisition entity. These chains have basically managed to rough ride the whole system around them. They’re growing in places where they can control the authorizers: Ohio, Michigan, Kansas City. They’ve strong armed the authorizers and they appoint the boards that end up hiring them, so who’s going to shut them down?

Well if the charter school operates in Ohio it’s not going to be their state’s government! A recent report in Ohio.com describes the convoluted logic behind a decision to not conduct a further investigation of a former state education employee who manipulated charter-school data (and whose wife is the governor’s presidential campaign manager). The opening two paragraphs are an indication that Ohio operates in a fashion that only Lewis Carroll could understand:

The Ohio inspector general says he will not investigate a former state education employee who manipulated charter-school data and whose wife is the governor’s presidential campaign manager because, the inspector says, the state auditor already is looking into it.

The state auditor, however, says he’s not looking into the employee.

Oh… that’s clear… especially given this report later in the article:

Auditor Yost has said publicly that his office would not investigate Hansen because throwing out F grades for charter schools, although undermining the state’s accountability system, did not result in additional state spending.

Had the Plain Dealer newspaper not discovered the manipulation, however, spending could have been affected.

So… if the Plain Dealer had not ferreted out the manipulation the spending would have been affected so thanks to the investigative work done by the newspaper everything’s just fine in the State Department of Education?



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