United Way of Central Indiana to Start the Mitch Daniels/Dennis Bakke/Bart Peterson Handouts to the Corporate School Wealthy

by Doug Martin

While some United Way branches across the Hoosier state are investing in early learning initiatives like Success by Six, the United Way of Central Indiana, now run by former Mitch Daniels, Dennis Bakke, and Bart Peterson operative Ann Murtlow, is planning on handing out cash  to charter schools in Boone, Hamilton, Hancock, Hendricks, Marion ,and Morgan counties.  In a press release to Inside Indiana Business and other outlets, United Way of Central Indiana officials write that “Grants for one to three years can range from $50,000 to $750,000” and will target poverty-stricken schools not doing well on standardized tests.

Even though the United Way of Central Indiana says it plans to also set aside money for traditional public schools, the history of its new CEO raises serious questions.  First off, Ann Murtlow has worked with the fake liberals at the Mind Trust who claim they are out to benefit poor kids and teachers as they connive to funnel money to blended learning schools run by their friends like Earl Martin Phalen (who was just rewarded the Mitch Daniels Leadership Foundation Award) and replace real teachers with boot-camp trained corporate teachers at Teach for America and the New Teachers Project.  Among other things, the Mind Trust plan is actually the pseudo-liberal Center for American Progress and rightwing Fordham Foundation  plan:  eliminate local school boards so that mayors can replace them with people who will hand more taxpayer money to wealthy charter school operators. 

Murtlow used to be the senior vice chair of the Mind Trust, and the United Way of Central Indiana was funding the school privatizing group even before Murtlow was hired to run it.  From 2011 to 2012, the United Way of Central Indiana handed $25,000 to the Mind Trust (page 111 in PDF) and another $25,000 (page 46 in PDF) from 2010-2011.  This is sure to escalate now that Murtlow is in charge.

But United Way of Central Indiana’s CEO Ann Murtlow has ties to other shady characters in the Indiana corporate school complex, specifically Mitch Daniels and Dennis Bakke.  Murtlow is a former bigwig at the Indianapolis Power and Light Company (IPALCO) and previously worked as an AES Corporation liaison at the same time Mitch Daniels was an IPALCO board member, then joined IPALCO in 2002.

AES, IPALCO, Mitch Daniels, and Dennis Bakke—who now steals taxpayer money through his for-profit charter school outfit Imagine Schools—were up to serious monkey business a few years back.  As Ifirst noted in the Indianapolis Star  in November 2010 and later at Bloomington’s Common Errant,  in 2001 Mitch Daniels was on the board of the Indianapolis Power and Light Company, which merged with Bakke’s then-company AES, a monster utility corporation.  Daniels and others on the IPALCO board dumped their own stock before the merger took place. Afterwards, IPALCO stockholders and workers lost millions, including their 401k packages.  In fact, as a result of this merger, both Daniels and Bakke were sued for insider trading together in 2003.  While IPALCO board members and officials went home, “according to the lawsuit filings, with an estimated $43.6 million in profits and golden-parachute benefits,” retirees and IPALCO workers lost $95 million, says a Republican lawyer who represented the workers and shareholders in an insider trading lawsuit against Daniels, Bakke, and others in 2003.  Dan Coats, now an Indiana U.S. senator, and Barry Sharp, who works for Bakke’s Imagine Schools, were also involved.  No criminal charges were ever filed, and the courts, quite conveniently, dismissed the civil lawsuits.

Dennis Bakke is also the billionaire member of the Fellowship, better known as the Family, a Christian Right biblical capitalism secretive group in DC.  His Imagine Schools is one of the most corrupt for-profit charter school outfits in the nation and in Indiana, known for its rent schemes which funnel millions to him and leave kids without textbooks.  Bakke’s outfit runs the Imagine Indiana Life Sciences Academy West in Murtlow’s United Way of Central Indiana’s backyard. The United Way of Central Indiana, headquartered in Indianapolis, has plenty of shady for-profit charter schools in the city to choose from, many of them failing and not being held to accountability, and Imagine Schools is a perfect candidate for a bailout.  

Dennis Bakke knows a lot about government bailouts.  Besides getting $11 million from Obama’s Recovery Act (to supposedly put people back to work after the Dennis Bakke’s of the world crashed the economy), Bakke’s Imagine Schools was allowed to keep millions in Indiana taxpayer money when Ball State (after years of playing dumb so they could get the sponsorship fee) closed Imagine’s Fort Wayne school.  To solve that problem and rake in a few more millions, Bakke and crew merged with the Horizon Christian Academy and will now collect state money through vouchers.  In fact, its $3.6 million charter school taxpayer loans were forgiven by the state and details of the merger with the private Christian school were not released to the public.

Some of the United Way of Central Indiana’s money may indeed go to worthy traditional schools for well-needed programs, but Murtlow’s history with those out to privatize Indiana schools tells me something else is going to happen here and it’s not going to be pretty.  Neither does its board of directors which includes Mitch Daniels sister, Deborah J. and a whole slew of school privatizers and behind-the-scene players: hedge fund Democrat for Education reform lawmaker Mary Ann Sullivan, Mind Trust donor Beverley Pitts, Tindley charter school's John Neighbors, IPS corporate school board member Sam Odle, and Mark Miles.  Miles, if we remember, was crafting the corporate school overhaul in Indiana before even Tony Bennett knew what was going on.  Speaking of hedge funds, the United Way of Central Indiana has $5.2 million invested in them (see page 27 in PDF). In fact, if you turn to page 29 of the group’s tax forms, you see these hedge funds are operated in Central America and the Caribbean.  And let’s not forget this board gave $9,000 to the Mitch Daniels-founded Oaks Academy private school (see page 145 in PDF) between 2011 and 2012 and $10,000 in (page 50 in PDF) from 2010 to 2011.

It’s not known yet how much money Murtlow is raking in by running the United Way of Central Indiana, but the past CEO made over $250,000 in total compensation in 2012 (see page 18 in PDF) And let’s not forget, college-drop out and school privatizer Bill Gates is a major funder of the United Way across the U.S.  I am sure Murtlow would like some of that Gates money to increase her take-home pay.  

 

 

 

 

Old (Unreported?) News

I sure didn't see any news coverage of it at the time, but Imagine Schools' CEO Dennis Bakke gave $1,000 to Sharron Angle's political action committee in August of 2010.  Via the FEC:

Angle recently started a new political action committee (everyone's doing it these days!)

Scott's Transition Team: Rhee, Bakke, Kirtley, Hage, etc

The ever-perky princess of education deform appeared on the Colbert Report last night, and, unfortunately, Stephen continued to disappoint when it comes to skewering corporate school propagandists.  The interview - neither enlightening nor entertaining - was a great way for Rhee to generate some positive PR in the wake of her ousting from the DC schools.

But Michelle is undoubtedly keeping herself busy.  And it looks like she'll be focusing on Florida now that Gov.-elect Rick Scott has appointed her to his education transition team.  Here's the rest of the list, courtesy of the Orlando Sentinel:

Michelle Rhee – Former Chancellor, Washington, DC Schools

Patricia Levesque – Executive Director, Foundation For Florida’s Future

MaryEllen Elia – Superintendent, Hillsborough County Schools

Ed Moore – President, Independent Colleges and Universities of Florida

J. David Armstrong, Jr. – President, Broward College and Former Chancellor of Community Colleges of Florida

John Kirtley – Chairman, Step Up For Students

Liza McFadden – President, Volunteer USA Foundation

Frank T. Brogan – Chancellor, State University System of Florida

Dr. Fred Lippman – Chancellor, Health Professions Division – Nova Southeastern University

Dennis W. Bakke – President and CEO, Imagine Schools

Dr. Judy Genshaft – President, University of South Florida

Julio Fuentes – President, Florida State Hispanic Chamber of Commerce

Carlos Curbelo – Miami Dade School Board and State Director for Sen. LeMieux

Mindy Cunningham – Principal, J Strategies

Gary R. Chartrand – Executive Chairman, Acosta Sales & Marketing Company and Board of Directors, KIPP Schools Jacksonville, Florida

Dr. Don Pemberton – Director, Lastinger Center For Learning University of Florida

Mindy Lafevers-Hodge – World History Instructor, Florida Virtual Schools

Jonathan K. Hage – President and CEO, Charter Schools USA

Yes, that's right: Scott appointed Dennis Bakke, CEO of the Imagine Schools, to his transition team.  Maybe he can get Imagine to answer some of the state's lingering questions about his company's nonprofit status, or clarify the confusion about whether or not Imagine is an education service provider (ESP).  Imagine currently operates 17 charters in Florida.

Scott also saved a spot for another for-profit CEO, Charter Schools USA's Jonathan Hage, and the executive director of Jeb's foundation, Patricia Levesque.  Another appointee, John Kirtley, a venture capitalist who also chairs the Florida School Choice Fund, generally donates to Republican candidates, but he made an exception for the folks at Democrats for Education Reform.  Kirtly is also on the board of the Alliance for School Choice.

Keep in mind that Scott's team has reportedly considered Rhee for the state's education commissioner position.

Imagine Schools: PR Spin Hides Ohio Failure; FL, AZ Schools in Trouble

This is a recent PR piece from the Imagine Schools:

Three Imagine Community Schools Demonstrate Great Strides

Another Year of Focused Academics Produces Stronger Results

Aug 27, 2010 – Today, with the release of academic ratings for the 2009-2010 school year, the state of Ohio found significant academic improvement for three Imagine community schools. Imagine Harvard Avenue Community School, Imagine Clay Avenue Community School, and Imagine Academy of Columbus jumped two rankings attaining “Continuous Improvement,” meeting adequate yearly progress, and demonstrating value

added with “above” one year of learning gains.

Amy Buttke, Regional Director for Imagine Schools, said, “These academic achievements by Imagine community school students is a tremendous testament to the academic rigor of each school, especially considering that many of the students entered the school at least one grade level behind.”

Marlene Mills, Regional Director for Imagine Schools, commented, “These Imagine community schools demonstrated marked improvement over the last year and are on the right academic path. Parents also took notice of their children’s academic gains (on average 74% of the students gained more than 1 year’s growth in reading and math), which drove high re-enrollment (85% average) at all three schools. Parents know quality, not only for academic study but also for safety and positive character development integrated into every aspect of the Imagine community school.”

In addition to state testing, every Imagine school conducts fall and spring testing in order to measure how much each student learned in reading and math during the year. These same student learning gains allow assessment of how well a school helps students learn, as contrasted with year-end proficiency tests that measure only what students know at a point in time, which may be attributable to a former school where students have fallen behind grade level.

Imagine Harvard Avenue Community School opened in 2006 and serves nearly 600 Cleveland students in grades K-7. Imagine Clay Avenue opened in 2007 and serves over 350 Toledo students in grades K-6. Imagine Academy of Columbus opened in 2005 and serves 350 students in grades K-8.

# # #

Imagine Schools is an organization, comprised mostly of teachers, that operates 73 public charter schools in 12 states and the District of Columbia. Imagine Schools serves over 5,600 in 11 Ohio community schools.

Imagine runs 11 schools in Ohio - and there's a reason they didn't mention the other eight. Imagine Academy at Sullivant, Imagine Bella Academy of Excellence, Imagine Harrisburg Pike Community School, Imagine Klepinger Community Schools, and Imagine Romig Road Community School all landed on the Academic Emergency list. Imagine Madison Avenue School of the Arts, Imagine Groveport Community School, and Imagine Great Western Academy ended up on the Academic Watch list.

Imagine School at St. Petersburg (FL) was put on probation for their second consecutive F rating. This is the same school that is in heavy debt to Imagine ($963k in the red last year), and they've been paying over $800k for their building, which is owned by SchoolHouse Finance (Imagine's real estate arm). The district's charter supervisor called the situation a "death spiral." Enrollment dropped from 376 to 320 last year, and the district says the school needs 590 students to be financially viable. That enrollment threshold is unlikely to be met given their rating. What does the future hold for this school? Either Imagine forgives some of the debt, other schools make up for the budget shortfall, or the school closes. This is not a pretty picture.

The Imagine School at St. Petersburg utilizes the Project CHILD curriculum, which claims (italics are not mine):

Three teachers form cluster teams -- one teacher for reading, one for writing, and one for mathematics. Clusters teams work across three grade levels - K-2 for a primary cluster and 3-5 for an intermediate cluster. Teachers work with the same students for three years.

The principal's page on the St. Petersburg website says the school is expecting at least 13 new teachers (see August 17th posting). High teacher turnover, of course, means teachers are unlikely to stay with the same students for three years. One has to wonder how the Project CHILD curriculum can be implemented with fidelity given the high turnover among staff.

In Arizona, the elementary school at the Imagine School at Coolidge was labeled "underperforming" for their work in 2010. The state known as the Wild West for charter schools is home to 14 Imagine-run schools. Good luck finding financial information on the Coolidge school: they're operated by a subsidiary or affiliate of Imagine Schools Non Profit, Inc. The Florida State Board of Education clearly stated: "ISNP is not acting as a non-profit organization." And this "non-profit" does not have 501c3 status. Arizona, of course, is the only state to allow for-profit companies to hold charters, but the real point here is that financial information on this school simply isn't easily available to the public.

For one last Imagine tidbit, here's a document filed in April of 2010 - and bearing CEO Dennis Bakke's digital signature - that confirms (once again) that Imagine is a for-profit corporation (click to enlarge):

Imagine will still claim they do "not operate for profit," but they'll file legal documentation that specifically claims they're a for profit corporation. This is some very sneaky language: Imagine's FAQ page says they do not operate for profit, but that's not the same as being a nonprofit (although most readers would assume that not operating for profit means they're a nonprofit organization).

Just How Full of S**t are the Bakkes?

Here's a little snippet from Stephanie Strom's recent NY Times article on Imagine:

Mrs. Bakke said her company “is operated as a not-for-profit.” But Imagine is not a nonprofit group, and it has so far failed to gain status as a charity from the I.R.S.

Imagine applied for federal tax exemption in 2005 and has repeatedly said approval is imminent. It typically takes four to six months for such approvals. “We’re not sure why it’s taking so long,” said Mrs. Bakke, who is 56. “We suspect it’s because we’re trailblazers in a sense, and they haven’t had an application quite like this.”

Imagine has registered both a non-profit and a for-profit company in Virginia. That's likely what makes their application a trailblazer, if you want to call it that. Below are snapshots of the annual reports for both Imagine Schools, Inc and Imagine Schools Non-Profit, Inc. (click on imagines to make them bigger):

Trailblaze on, Dennis and Eileen. Can't wait to see more of your trailblazin'.

"A Great Deal for Taxpayers"? Or, $$$ for EPT?

Dennis Bakke and his cronies at Imagine Schools are on the defensive in the wake of Stephanie Strom's excellent article. Here's the latest from the NY Times:

To the Editor:

We are appalled by your depiction of Imagine Schools in “For Charter School Company, Issues of Spending and Control” (front page, April 24). The true tests of successful schools, whether charter or traditional, are parent satisfaction and student achievement.

Why not spotlight the 37,000 Imagine Schools students who are learning character and leadership along with reading, history and math? Most students enter Imagine’s schools below grade level and make larger academic strides compared with peers in traditional schools.

Why not highlight the great deal for taxpayers? Imagine delivers a high-quality education for 70 percent of the money that schools run by the government spend. Why not feature satisfied parents? The fact that some at four schools were unhappy does not a trend make when most parents at 70 campuses are highly satisfied, most schools are full and over 90 percent of students re-enroll. This is the true measure of Imagine Schools’ effectiveness and success.

Dennis Bakke
Eileen Bakke
Arlington, Va., April 26, 2010

The writers are the founders of Imagine Schools.

The "great deal for taxpayers" that Bakke claims is actually a great deal for Entertainment Properties Trust, the owner of a number of Imagine Schools. On Monday EPT held a conference call for investors and published the transcript of the call (full thing available here):

In the first quarter of 2010, we continued to execute our plan of acquiring high quality properties in our two primary asset classes - theatres and public charter schools. Furthermore, our existing portfolio continued to demonstrate its resilience in today’s economic environment. I will discuss overall performance later, but first, I would like to discuss the major acquisitions for the quarter.

On January 21, we completed an additional investment of approximately $48 million with Imagine Schools. This transaction involved five schools with a cost of approximately $44 million, located in Florida, Indiana, and Ohio, as well as a commitment to provide approximately $4 million of expansion capital for two schools. The investment was structured as an addition to our existing master lease, which is tripled-net in design and pass a substantially all of the obligations for the expense and operation of the property to our tenant.

And:

Mortgage and other financing income was $12.6 million for the quarter up $2.1 million from last year. This increase is due to our January 2010 acquisition of five public charter schools as well as increased real estate lending activities during 2009.

And you can hear the financiers drooling over the potential for more and greater earnings as Obama/Duncan's pro-charter stance opens up new markets for the morally corrupt, deep-pocketed crooks (off of our tax dollars, by the way):

Rich Moore – RBC Capital Markets

The same thing on the charter school side of things, I remember you had said I think Dave that you thought there would be 400 to 500 schools built a year. That gives you pretty good pickings for finding new opportunities. Is that accelerating as well?

Dave Brain [EPT President and CEO]

I don’t really have any statistics on 400 to 500. We know that’s been the run rate. My guess is that given the political climate it probably is going to pick up, but yes we are usually looking at things that have been open 2 to 3 years Rich, so it is still picking out of that pool that have established enrollments. It is a large opportunity set. The momentum is positive in the industry I will tell you.

And:

As we discussed in our last call, our 2010 capital plan calls for additional investment spending of approximately $100 million, with the majority of that number targeted for the latter half of the year. I’m very pleased to report to you that we are looking at a number of significant opportunities that could materially accelerate this time frame. These opportunities exist for both theatre and public charter school acquisitions. However, as with previously anticipated transactions, we do not discuss specifics until we have a definitive transaction, or we are otherwise compelled to disclose it legally.

Don't you love that positive momentum and opportunities (translated as $$$$ for EPT) generated by the plan to privatize education and turn property over to Wall Street investors? Such a great deal for taxpayers, right Dennis?

Non-Profit, or For-Profit?

Dennis Bakke and his Imagine Schools management organization have responded to Stephanie Strom's recent NY Times article with a letter posted on their website. As expected, Imagine denies any wrongdoing and accuses Strom of biased coverage.

And, once again, Imagine denies they're a for-profit company and - once again - claims they're really, really close to getting 501c3 status (seriously, they've been saying this for AGES).

It was back in 2005 that Dennis was interviewed by the Washington Business Journal. In the interview, Bakke claims, "And we're close to converting to nonprofit status." But Dennis followed up that line with an equally perplexing statement: "I spent 20 years telling Wall Street that profit is not God, and now I'll probably spend 20 years in education telling people it's not Satan, either." [Imagine is registered as a nonprofit in VA; they still lack the federal 501c3 status. They're also registered as a corporation in DE with 60,000 shares as of 2008]

How you can claim to be converting to nonprofit status and then follow up that claim by supporting for-profit education is rather perplexing.

"For Charter School Company, Issues of Money and Control"

Excerpt from the New York Times:

For Charter School Company, Issues of Money and Control

By STEPHANIE STROM

When the energy executive Dennis Bakke retired with a fortune from the AES Corporation, the company he co-founded, he and his wife, Eileen, decided to direct their attention and money to education.

Mrs. Bakke, a former teacher, said she had been interested in education since the summer she was a 12-year-old and, together with a friend, opened the Humpty Dumpty Day School, charging $2 a week in “tuition” to parents of the children attending. Mr. Bakke was eager to experiment with applying business strategies and discipline to public schools.

The Bakkes became part of the nation’s new crop of education entrepreneurs, founding a commercial charter school company called Imagine Schools. Beginning with one failed charter school company they acquired in 2004, they have built an organization that has contracts with 71 schools in 11 states and the District of Columbia. Imagine is now the largest commercial manager of charter schools in the country.

But as Imagine continues to expand, it is coming under growing scrutiny from school boards and state regulators questioning how public money is spent and whether the company exerts too much control over the schools.

The concerns are being raised as charters, designed by education reformers to create alternatives to hidebound and failing public schools, are becoming an indelible part of the nation’s education landscape. Such schools are among the biggest beneficiaries of the billions of dollars the Obama administration plans to spend to improve public education.

[Continued here]

The only downside of the article? It didn't get the many, many pages needed to fully outline and document the myriad of problems with Imagine, but particularly the real estate deals and management fees (not to mention how these concerns relate to their governance).

Three cheers for Stephanie Strom. We certainly don't get this kind of coverage very often.

Imagine Settles Discrimination Suit

Imagine will continue to preach about their shared values of Integrity, Justice, and Fun, but there sure seems to be a lot of teachers, principals, and parents with an awfully different take on the culture of Imagine.

From Diane Stafford at KansasCity.com:

Charter school operator to pay $570,000 to settle pregnancy discrimination suit

Imagine Schools, a charter school operator in Kansas City, has agreed to pay $570,000 to settle a pregnancy discrimination lawsuit.

The Equal Employment Opportunity Commission sued the company in U.S. District Court in Kansas City, alleging discrimination when Imagine failed to retain two qualified employees who were pregnant.

The women were let go when Imagine closed its charter middle school in Kansas City and opened a private middle and high school, Renais

[And a bit more here]

Billionaires, Uganda, and Anti-Gay Legislation

A few days ago, Jim wrote about Billionaire Bill's refusal to address the Uganda "Kill the Gays" bill, a piece of legislation that has most definitely received support from stateside fundamentalists. In a Seattle Times interview, Bill says this:

There's a tendency to think in the U.S. just because a law says something that it's a big deal.

Bill's logic - about as reliable as any version of Windows - simply brushes aside the legislation. "I mean, it just says they'll kill/imprison gays. Doesn't mean they'll do it," is the translation of Bill's verbal meanderings. You're spineless, Bill, spineless.

But there's a different billionaire involved in education with pretty strong ties to the Uganda bill, or, at the very least, with a direct line to the Ugandan government.

Yes, the Imagine Schools CEO, Dennis Bakke, is pretty friendly with Uganda's President Museveni. The picture at the top, which is also printed in Bakke's "Joy at Work," shows Dennis and wife Eileen posting with the African leader, a man that helped Bakke's AES Corp. secure a $500,000,000 project to build a dam in Uganda (according to Jeff Sharlet, author of The Family, AES employee Christian Wright - a man Bakke claims was doing "God's work" - used some good ole' fashion bribery to seal the deal). Museveni is considered The Family's "key man" in Africa - and Mr. Bakke is clearly pretty high up in the Family.

Let's hope Bakke is using his influence (and money) to push Uganda to not pass anti-gay legislation, which, unfortunately, is about as likely as Bill Gates supporting real public schools. So let's be real: Bakke is a wingnut fundamentalist, a "cultural imperialist." His lack of action - at least publicly - to come out against the Uganda bill is just as, if not more, appalling than Billionaire Bill's refusal to stand up for the rights of all human beings.

These are men with money and power. Hell - a simple Twitter posting from Bill would go a long ways, but he doesn't care about laws. Just 'cause they say something - like gay people should be killed - doesn't mean it's a big deal, right Bill?

A Question for Dennis Bakke

"I spent 20 years telling Wall Street that profit is not God, and now I'll probably spend 20 years in education telling people that it's not Satan, either." - Imagine Schools CEO Dennis Bakke, Interview with the Washington Business Journal, 9/9/2005

Dennis Bakke - he's quite the character. The above quote, taken from a September 2005 interview, is puzzling considering the Imagine Schools claim to be a non-profit: the "about us" section of their website claims the group "initiated a process to replace the business entity Imagine Schools, Inc. with the new nonprofit as the operator of public charter schools nationwide." When did this happen? The website claims this began in August of 2005. So he started to convert to a nonprofit, then spoke up about the non-evils of for-profit education. I'm scratching my head - and it's not 'cause my scalp is feeling itchy.

Dennis' claim that profits aren't God should be taken with a major heaping of salt - this is the same guy that pushed for major energy deregulation and forged partnerships with authoritarian regimes like the one in Uganda, which netted his energy company a $500 million contract (AES is one of the largest independent energy company in the world - but it's not about your $16.1 billion in revenue, right?). And, in a case that could match the potential unraveling of Imagine's for-profit chain, some notes from a City Council meeting in Peoria, IL show that one council member had this to say about a company owned by Bakke's AES Corp.:

...citizens were demanding him [Bakke] to be true to his own words by leaving a legacy to this community by letting local citizens and investors regain control of its energy future. He added that only local control would be acceptable.

Mr. Bakke has been involved with "The Family," a fundamentalist group comprised of high-ranking politicians and businesspeople (yes, the ones in the C-street house that recently lost their tax-exempt status; Bart Stupak is part of this group, too). If you're interested in further reading, check out Jeff Sharlet's The Family for a truly horrifying piece of investigative work. One can only wonder how long Mr. Bakke's charter school scam can go on - more on the Imagine Schools sure to come...

So here's my question for Mr. Bakke: what's the real deal here? I somehow find it hard to believe you're the CEO of a non-profit CMO while claiming for-profit education isn't a Satanic idea...

Imagine to Spread in Fort Wayne

Oops, looks like someone in Fort Wayne didn't get the memo about Imagine Schools. A new "visionary partnership" between the charter chain and Master Ralph T. White, a TaeKwonDo instructor and CEO of White's School of the Arts Community Development Programs, Inc, will allow Imagine to provide more of their (lucrative) services in Fort Wayne - presumably with the usual Imagine strings attached. "One might think it would take a huge multimilliondollar school corporation to fill the [school]," the article notes, sans any kind of irony.

From the folks at Frost Illustrated, painfully unaware of Imagine's dubious history and rampant corruption:

White's School, Imagine Schools to partner

FORT WAYNE—The building that sits at 2700 E. Maplegrove Drive is huge. Having once housed Village Woods Middle School, the building is packed with classrooms, a cafeteria, gymnasium and office space. In fact, one might think it would take a huge multimilliondollar school corporation to fill the place. But, Master Ralph T. White is a man with big ideas, big dreams and a big heart to match. While the going has been tough at times, especially when it comes to economics and battles with nay-sayers from a number of quarters, Master White and his supporters and coworkers are ready to take those ideas and dreams to another level, thanks to a visionary partnership with Imagine Schools, perhaps the area’s premier charter school system.

Over the past four years, Master White has defied the odds and critics by taking over the once abandoned school building that many said was too big for a private citizen to manage and maintain, and has been turning the campus into a shining beacon of hope and achievement for young people. Now known as White’s School of the Arts Community Developmental Programs, the facility is home to a number of what the founder calls character building programs, including an educational daycare program, science and other programs as well as the piece that started it all—Master White’s acclaimed TaeKwonDo training program. While many might know the school for the hundreds of trophies they have brought back to Fort Wayne from national and international martial arts competitions, Master White explains that TaeKwonDo, while extremely physical in one regard, isn’t about athletics. It’s about self-control and discipline. And, he explains, if a person can control his or her spirit, temperament and emotions, that person can achieve anything, whether it be academically or athletically. But, he says, it all starts with being studious and learning the proper lessons in life.

“We teach them about the true focus of life—academia breeds athletics, not the other way around,” he explained. “We teach them to get their grades up.”

That philosophy permeates every aspect of the work and programming at White’s School of the Arts—a program he actually started more than 20 years ago, that now has evolved into the comprehensive non-profit White’s School of the Arts Community Developmental Programs Inc. And, while one would think everyone would be thrilled to have and support a program that is about getting the best out of the community’s young people, the going hasn’t always been easy for Master White and his dedicated staff. It takes money to get things done and, in tough times, getting the necessary resources can be a challenge. They’ve also had to fight off legal challenges from overzealous inspectors, whispering campaigns by apparently jealous competitors and other tribulations. But, White will tell you that God provides.

[Continued here]

God, in this case, is not the provider: Bakke's predatory charter chain doth giveth, but the Master should also be aware that which is given can also be taken back - and, in Imagine's case, millions can be taken right to the bank.

NB: Master White's organization looks like it does some good stuff - provides food for children during the summer and winter, operates a free medical clinic two days a week, and offers other educational classes. Kudos for providing badly-needed medical services and food for the hungry.

Imagine Schools, Inc., Pt. III of the Corporate Charter School Story

In this episode of the continuing corrupt adventures of crackpot, Dennis Bakke, and Imagine Schools, Inc., we find out how corporate charters in Texas are owned by corporate charters in Ft. Wayne, all of which are controlled by, that's right, by Dennis Bakke at the home office in Arlington, VA. Clips from the Ft. Wayne Journal Gazette:

FORT WAYNE, Ind. – On Feb. 8, 2008, a curious thing happened.

According to Texas Secretary of State records, Imagine Schools of Central Texas Non-Profit LLC of Georgetown, Texas, was established. That in itself was no surprise, because Imagine charter schools have been popping up all over the country.

What was curious was who owns the corporation and its twin, Imagine Schools of North Texas Non-Profit LLC of McKinney, Texas. The sole member of both limited-liability companies is Imagine-Fort Wayne Charter Schools Inc.

And the Texas entities get their tax-exempt status because each is a wholly owned subsidiary of the Fort Wayne company.

Imagine-Fort Wayne Charter Schools Inc. is the non-profit corporation that runs Imagine MASTer Academy, a charter school at 2000 N. Wells St. in Fort Wayne. Imagine MASTer Academy is a public school whose $2.9 million cost to operate last year was paid for with state taxes.

So why does a Fort Wayne charter school own two charter school corporations in Texas? It’s a question most board members here could not or would not answer, even though in January 2008 they secretly signed documents creating and governing the schools there and, as recently as August, made drastic changes to one of their entities in Texas.

All of these actions were done in secret: According to board meeting minutes provided by the Imagine-Fort Wayne Charter School board, Fort Wayne members never publicly discussed or voted to create the Texas schools, amend the agreements that govern the relationship between the schools or appoint board members to their Southern franchise.

They merely signed resolutions they thought exempted them from the Indiana Open Door Law, although their own bylaws say they are subject to its provisions. The state’s open meetings law does not allow public bodies to make decisions outside public meetings.

Asked about the Texas entities, most board members refused to speak about it. Some referred questions to Imagine Schools Inc., the for-profit management company based in Arlington, Va., hired by the charter schools to handle day-to-day operations. Others didn’t seem to know what they had signed.

"It sounds sneaky and sleazy," said Trent Stamp, who served as the founding president of non-profit watchdog Charity Navigator for seven years.

"Any time something doesn’t pass the basic smell test for a layperson, there’s a problem there."

Not only does the Fort Wayne charter school own the two school corporations there, but the "company agreement" – the contract between the Texas and Fort Wayne corporations that explains how their relationship will work – also gives the Fort Wayne entity the sole power to appoint and remove the Texas board members.

And when board members at the McKinney school objected to the amount of control Imagine’s board would have over their school, they were pushed off the board and new members were appointed, former McKinney board president Don Newsome said.

Newsome’s replacement: Don Willis, a local businessman who founded the three Imagine charter schools in Fort Wayne and is president of the Imagine-Fort Wayne Charter School board.

"I was approached by that board to come talk to them about how boards should be run in the business world," Willis said. "I said I don’t think you can be successful if the board is going to assume the mantel of staffing the school and determining curriculum. … That’s not our role."

What role the Imagine boards should play and do play is what’s in question. Internal Revenue Service regulations say tax-exempt organizations such as this one must have independent, local control.

Imagine Schools President Dennis Bakke said in a 2008 memo that local school boards exist only to give them advice and consent where legally required. And when it comes to using the Fort Wayne school’s tax-exempt status to expand Imagine’s charter schools into Texas, it appears that all the decisions were made by Imagine Schools Inc.

Like the contracts with the schools in Fort Wayne, the Texas contracts put Imagine Schools Inc. – not the local board – in charge of all major decisions. Where the Fort Wayne contracts give Imagine 12 percent of the schools’ revenue, the Texas contracts give Imagine everything left over after expenses. . . . .

. . . . Newsome, the former McKinney, Texas, board president and a former public school superintendent, said he was approached in 2007 by a group of people known as the "core founders" about serving on a charter school board in McKinney. Over the next two years, Newsome would find himself in a battle with that group after questioning the practices of Imagine Schools Inc.

Newsome was mainly concerned with signing an indefinite contract with Imagine after similar concerns were raised by an attorney with the Texas Education Agency.

"There were some things that just didn’t look right to me," Newsome said. "I could see where TEA was raising a question."

Imagine wanted the board to sign a contract that employed it as the management company for as long as the school existed. Newsome and other board members wanted to draft a contract that would be reviewed every couple of years, to allow for some accountability.

Even though those concerns were raised with members of the school’s founding group, Newsome said they didn’t care and just wanted to get a charter. The group eventually asked for Newsome’s resignation, saying he showed a lack of support for Imagine.

Newsome said he would comply but wanted his resignation letter, which would outline his concerns with Imagine, sent to all the parents who wanted to send their children to the school and posted on the school’s Web site. The group said no.

Newsome said he then received an e-mail that said if he didn’t resign by noon the next day, the founding group would begin the process of removing him from the board, enlisting the help of Willis and the Fort Wayne board.

After the founding group threatened to have a news conference announcing Newsome’s resignation in a negative light, Newsome said, he complied and jointly resigned with three other members of the five-person board. The board now has three members, including Willis.

Among the new board’s first orders of business was to approve the contract with Imagine Schools Inc.

"I see nothing functionally wrong with the contract," Willis said.

Newsome said the question was one of control.

"My concern all along was who’s going to run it and who’s going to have the final say-so," Newsome said. "Well, in my opinion, the organization of it needs to be the local people. … A board needs to have the final say-so, not some organization in Virginia or wherever they are."

ksoderlund@jg.net

dstockman@jg.net

Many thanks to Kelly Soderlund and Dan Stockman for some great reporting. Hope it earns you a Pulitzer.

Imagine Schools, Inc. and School Boards: Your Only Vote is "Yes"

A few days ago, a news outlet in St. Louis received a copy of an e-mail sent by Imagine Schools CEO Dennis Bakke. The letter, addressed to the other high-level Imagine employees, detailed Dennis' take on the role of school boards. I received the same letter about a month ago, sent from an anonymous source, but couldn't get Imagine to confirm or deny the legitimacy of the piece. Mr. Bakke makes it quite clear that Imagine - not the community - owns the schools, and the various school boards can only vote "yes" for the for-profit CMO's proposals.

Here's the e-mail, with my bolds (full e-mail posted by St. Louis Post-Dispatch):

From: Dennis Bakke
Sent: Thu 9/4/2008 10:26 AM
To: #DL All School Developers; #DL All National Principals; #DL All Regional Directors; Alan Olkes; Barry Sharp; Eileen Bakke; Isabel Berio; Jason Bryant; Nancy Hall; Roy Gamse; Sam Howard; Octavio Visiedo
Subject: Boards for Imagine Schools

DRAFT (for internal Imagine discussion purposes only)

This draft note includes some thoughts, observations and suggestions about our local school boards. Please feel free to opine on any of the draft comments I make in this email. This is not a legal pronouncement for Imagine Schools or an announcement of official policy. It is simply some preliminary observations and possible approaches to selecting and caring for these important people who help us educate children.

What are we learning about the selection and care of board members for our schools? Most Board members become very involved in the life of the school. Often, even before the school begins operation, the Board members have taken "ownership" of the school. Many honestly believe it is their school and that the school will not go well without them steering the school toward "excellence". They believe they are the "governing" Board even if that adjective to describe the board has never been used by an Imagine School person. Many become involved in the daily life of the school, volunteering and "helping" teachers and and other staff to get things done. Even those who are not parents, take "ownership" of the school as if they started it. Initially, they are grateful to Imagine (especially Eileen and me) for helping them start the (their) school. I have been to 3 school openings in the last month where I was thanked for helping the local board start the (our) school. In none of these cases did the board have a major role in "starting" the school. They didn't write the charter. They didn't finance the start up of the school or the building. They didn't find the principal or any of the teachers and staff. They didn't design the curriculum. In some cases, they did help recruit students.

Why does it matter? Don't we want local boards to be grateful and helpful and take ownership of the school? "Yes" and "No". I do not mind them being grateful to us for starting the school (our school,not theirs), but the gratitude and the humility that goes with it, needs to extend to the operation of the school. In all three cases of the new schools I visited this past month, I started my talks by responding to the flowery introduction thanking Eileen and me for helping to start the XYZ school, with a thank you to the Board and others for helping Imagine start ITS school. Most people probably missed the serious point I was making. Besides, it was probably too late in most cases to correct the misconception that we had given to Board members and other volunteers about the nature of governance of the school Imagine had created.

"But Dennis, I need strong Board members or the authorizer won't give me the charter" Even though, some authorizers (or their staffs) use this threat to keep control of our schools, I do not believe it is a significant reason that will stop us from receiving a charter or be rejected. If it does, so be it. If an authorizer is using this as the excuse, it is likely about 5th on the list of real reasons for rejecting the application. Also, we need to examine our definition of "strong board member". As much as we heard about board make-up in New York while we went after the charter, in the end it had no bearing on whether we got the charter.

I suggest that not one application granted or rejected in Florida or Indiana or DC or anywhere else had anything to do with the membership of the board, the governance approach, or the "quality" of the application. It has taken me about 4 years to convince many of you that getting the charter has almost nothing to do with what you put in the application or who your board members are. And, in the one or two cases where it did matter which board members were part of the application, it was likely a disaster for Imagine Schools just waiting to happen.

Most problems we have with Boards were not, however, caused by our developers or regional directors or executive vice presidents choosing the wrong board members. In many cases, I think we didn't make clear their role as a board member before we selected them. Sometimes we let a self-proclaimed Board chair select the Board (Please do not do that). By "we" I start with my own lack of understanding and poor teaching on this subject. I am learning most of these things right along with the rest of you. Whether or not a person has been on a board or not (with the exception of someone who has experience on the board of a major corporation), most people believe that Boards are "governance" boards. In other words, they are "in charge" of the school.

Without you saying anything to them, they will believe that they are responsible for making big decisions about budget matters, school policies, hiring of the principal and dozens of other matters. This is the way most nonprofit boards work, so no one should be surprised by the assumptions held by the board members you select for an Imagine School.

I suggest that Imagine boards and board members have two significant roles. The first is to "affirm" (vote FOR if legally required) significant items like our selection of the Principal and the budget (if you "need" to give them veto power over our proposed principal, then that would be okay although I don't think in most cases it is essential that they be given that power (check the State law).

Legally, I believe "affirming" is the same as voting "yes". The difference is the assumption that we have made a "recommendation" or decision and want the board to agree formally with that decision. Before selecting board members we need to go over the voting process and our expectations that they will go along with Imagine unless the board member is convinced that we are doing something illegal. Of course, we want the board member to vote "no" on any proposal that the board member believes is illegal. However, in non legal issues of judgment , we expect them to argue the issue vigorously, but if they can't convince us to change our position, we expect them to vote for our proposal. It is our school, our money and our risk, not theirs.

The second and most important role of board members is to advise us on all matters of employment, policies, school climate, shared values, growth, building, academics and financial. We have school principals and regional directors who are not involving their boards sufficiently in this important advisory role. I think this is a big part of the problems we have had in Atlanta. Board members want to be needed (all of us do). The best way to acknowledge your need for a board member is to keep them informed of what is happening and ask them their advice on ALL significant decisions before the school, including hiring and firing decisions. I believe that most of the problems we have with boards are caused not from taking decision making away from them, but not involving them in the advice process. Remember, the advice process shares your thinking with others and brings them into your circle. Some of you aren't even doing an adequate job of asking your colleagues or your staff or your bosses for advice ,so including the board in that way is going to be even more challenging. I told the Pittsburgh school board that if our principal didn't ask for advice on significant issues like hiring and firing and budget, a new building addition and school policies, that they should give me a call. Not asking advice of the appropriate people before making a decision is a good way to lose a job at Imagine Schools.

None of this will protect you from the person who starts out as an "advisor", but becomes a major problem, thinking he/she are crucial to the success of the school. Sometimes you can protect yourself from board members that you chose, by getting undated letters of resignation from the start that can be acted on by us at any time would also help. Some states allow "founding" boards that can be changed once the school starts. That is a good idea if we can control who stays and who goes. Maybe you make all terms one year (if legal) so that we can re-nominate who we want. Make it clear that we will propose all new board members. Again, when the legal rules seem contrary to what I have been suggesting, seek lots of advice about how to set up the board before you select members.

There are probably hundreds of other approaches to overcome the "runaway" board problems that can arise if you are not careful.

Please take this area of Imagine life seriously. The Board of Imagine Schools meets once a year. It is made up of very secure people that I have known for a long time. They do not need to be "in control". They are not power hungry. They are encouragers, advisers and people who want to see Imagine grow and succeed. They realize that society places a significant responsibility on them to ensure that we do not participate in illegal activity or do things that will hurt children. They trust that we will do our best to make Imagine the best for parents and students as possible. They know we can't eliminate all the problems and mistakes, but they also trust us to correct those mistakes and overcome the problems when they arrive. They are ready with assistance and advice when we ask for that, but they are comfortable letting Imagine people do their thing.

That is the kind of board members we want for each of our schools. To get them and keep them, we need to tell potential and current board members the truth about our expectations and keep them involved in all the significant successes and problems that occur in the school. Probably the most important concept that needs to be grasped by potential and sitting board members for our new schools going forward is that Imagine Owns the school, not just the building. Obviously, there are a few legacy school boards for which this will not likely be true, but let's not create new one if at all possible.

Turns out it's real. Very real, and very concerning. But there's more to this story than just an e-mail.

Imagine's CEO and founder Dennis Bakke, (he was founder and CEO of energy giant AES prior to his endeavor into education) is also the author of a book called, "Joy at Work," which claims to revolutionize the workplace. Bakke's philosophy goes something like this: people generally do not enjoy their jobs, employees are afraid to take risks at work, bosses are too controlling, and all this does not fit with the Biblical version of work. I'm serious.

Here is one clip from Mr. Bakke's website:

In Bakke's view, successful business people should be guided by principles and purposes meant to be ends in and of themselves, not techniques to create value for shareholders or to reach financial goals. He is disturbed that society's preoccupation with economics often leads people to calculate their worth as individuals based on their salaries or wealth and to judge their leaders more on financial results than on values.

So, Dennis, the $230 million Imagine Schools made in profits this year was all about principles, not about the money? In another video from Mr. Bakke's site, you can hear the preacher - I mean CMO head - claim, "Every individual is supposed to be a decision-maker" - well, except when they're on one of Imagine's local school boards.