"A child's learning is the function more of the characteristics of his classmates than those of the teacher." James Coleman, 1972

Monday, August 11, 2014

Charter School Education in the U. S.: It's All About the Real Estate

When ignorant or purchased Ohio politicians jumped on the charter school bandwagon almost 20 years ago to "provide more choices for poor families" and to "cut bureaucratic oversight to allow educational innovation," they opened the floodgates for corruption, larceny, and educational fraud promoted under the guise of helping poor kids

As a result, charter kingpin, David Brennan and his White Hat Management Co. have carried off mountains of taxpayer money to fund Brennan's isolating, depressing, and cellar-performing charter storefronts. 

Finally faced with the reality over years of test results, school boards finally began to react and to demand financial transparency where there has been none.  Brennan's response to the boards has been, essentially, go to hell. 

Now the case has reached the Ohio Supreme Court, which will rule on whether or not Brennan's real estate empire built with taxpayer money belongs to him or the taxpayers.

With big implications for other corporate socialists, bottom feeders are lining up behind Brennan. 

From the Beacon Journal:

As for-profit White Hat Management heads to the Ohio Supreme Court to defend its position on owning public charter-school assets, another Akron-based charter-school management company has signed on as a supporter.

Summit Academy Management — a nonprofit company that operates 27 publicly funded and privately run charter schools in Ohio — filed a friend-of-the-court brief last week in support of White Hat.

The high court agreed in March to hear a case that could determine whether taxpayers or private companies — some profit-driven and located outside of Ohio — own the school property purchased with tax dollars.

The assets include the real estate, furniture and computers.

The case pits White Hat against 10 school boards that previously employed the Akron company to run their schools. As the schools produced poor academic results and the boards asked questions about White Hat’s use of public dollars, the company declined to open its books to inspection.

The boards attempted to expel White Hat, but the company responded that it owned the assets and the boards would be the ones to leave.

The school boards have until Aug. 25 to submit to the high court a final brief. Oral arguments have been scheduled for Sept. 23.

The case has implications for many companies that perform government services.

Nonprofit advocacy groups — including the Ohio Coalition for Quality Education, LeadingAge Ohio, the Ohio Association of Community Action Agencies, the Ohio Association of Nonprofit Organizations and the Ohio Community Corrections Association — also have filed briefs in support of White Hat, arguing that public dollars do not remain public when transferred to private contractors.

Should the high court rule that White Hat is not entitled to keep assets purchased with public dollars, the nonprofit groups worry that the implications could be widespread, undermining contracts with private vendors.

Summit Academy, for example, argues that a previous Ohio Supreme Court decision involving Akron’s Oriana House settles this matter, and that the school boards suing White Hat are misinterpreting that case.

“This Court [in Oriana House Inc. v. Montgomery] did not state that public funds remain public after being paid to a private entity. Rather, this Court reached the precise result demanded by the plain language of the Ohio Revised Code — private entities receiving public funds may be audited,” attorneys at Day Ketterer of Canton wrote in Summit Academy’s argument.

In that case, Summit County Republicans were attempting to force open the books of Oriana, all of Oriana’s related companies and the personal financial records of the chief executive. State Auditor Betty Montgomery, who was close to county party chief Alex Arshinkoff, launched the effort to open all of the financial records.

While the court agreed that she had a right to audit the nonprofit receiving public money, her authority ended there.

Transparency questioned

The nonprofit groups supporting White Hat add that if the legislature had intended public dollars to remain transparent in charter-school management companies, then it would have legislated so 17 years ago when the schools were created.

“And tellingly, the legislature did not define the [management] fees as public money or otherwise restrict management companies’ rights to purchase property,” wrote an attorney for the Ohio Coalition for Quality Education, a charter-school advocacy group. “Management companies are private and the money they are paid is private, just as with any other vendor that provides services to a school or some other public entity. Property purchased by a management company thus belongs to it, not anyone else.”

Summit Academy and White Hat have accumulated significant assets by receiving money transferred from local school districts.

The two companies collected $110,837,594 last year, according to the Ohio Department of Education. County records indicate Summit Academy owns at least half of the 27 schools it manages in Ohio. These properties are worth more than $7 million.

IRS tax fillings show Summit Academy has grown its total assets from $10,541,324 in 2010 to $17,372,299 in 2013.

While Summit Academy puts its name on property deeds, White Hat uses affiliated for-profit companies to purchase its school properties, then charges the school boards rent, the amount of which is not public record.

Low enrollment

In Akron, White Hat cited low enrollment as the reason for closing Brown Street Academy, a property owned by the Cleveland Diocese. It did not, however, close the lower performing University Academy, which had roughly the same enrollment but sits on Arlington Street property owned by Lumen Arlington Realty, LLC, a company of White Hat.

The Ohio Coalition for Quality Education and Summit Academy, which filed separate briefs, argued that the school boards, which received the state funding, entered into “arms length” agreements with White Hat, a company described as “independent” of the schools, free of conflicts of interest.

But several board members at White Hat-managed schools in Akron and Cleveland have told the Beacon Journal that the company recruited them to serve. They also said that they have not considered contracting, or hiring, any company other than White Hat.

Doug Livingston can be reached at 330-996-3792 or dlivingston@thebeaconjournal.com.

1 comment:

  1. Anonymous12:24 PM

    And I thought when I left Wall Street to go into education, it would be a world of good people who care about the next generation, little did I know the world of the education industrial complex is actually worse than Wall Street because at least with Wall Street you know it is always about the money. With the children, crooks can hide behind the man tra of doing good while profiteering of other people's children.