By Dennis J. Willard
Beacon Journal Columbus bureau
Published on Friday, Mar 28, 2008
COLUMBUS: The Ohio Federation of Teachers has asked the Internal Revenue Service to examine the non-profit status of charter schools managed by White Hat Management, the company established by Akron entrepreneur David Brennan.
The union, which has a long history of challenging Brennan's company, is asking the IRS to determine whether the schools under White Hat's umbrella can properly register as a 501(c)(3) tax-exempt firm.
Lisa Zellner, an OFT spokeswoman, said the union does not expect an immediate answer, but a ruling against the White Hat charter schools would force the company to pay taxes ''like the rest of us,'' and possibly jeopardize their standing, because state law requires all charter schools to be nonprofit.
Through Columbus-based public-relations firm Falhgren Mortine, White Hat issued a statement calling the OFT's accusations a publicity stunt that recycles points previously raised and addressed.
''The Internal Revenue Service is aware of the community school structure and White Hat Management's contract provisions making the management company responsible for all start-up and day-to-day operations of its contracted schools,'' the press release noted.
The public-relations firm also stated that White Hat is a target for groups like the OFT that are seeking to promote their own interests.
Brennan, a large contributor to Republican candidates, was instrumental in pushing then-Gov. George Voinovich and the Republican majorities in the Ohio House and Senate in the mid-90s to pass laws allowing charter schools to open in the state.
White Hat currently operates 38 Life Skills schools geared toward high-school dropouts in Ohio, Colorado, Michigan and Florida.
Initially, White Hat established Hope Academies for elementary students, but after opening 12 in Ohio, the company has been focused on Life Skills, which are considered to be more lucrative.
OFT points out to the IRS that at least 25 charter schools operating under White Hat have qualified for tax-exempt status with the Ohio auditors' office.
Zellner said a number of the schools have also applied for and received nonprofit status through the federal government.
Don Mooney, an attorney representing OFT, wrote the IRS that documents indicate that the for-profit White Hat company controls the non-profit charter schools that pass through 95 percent of all their tax dollars to Brennan's firm, which amounts to about $84 million annually. . . .