13 Philly charter schools being investigated for profiteering.

[madfloridian]

Apparently turning schools over the private sector to run and deregulating them is not going to work much better than when we turned our economy over to the same unregulated sector.

13 Philly Charter Schools Under Investigation

The City of Brotherly Love might as well be re-named the "City of School Management Profiteers". The well-documented Edison debacle - one of the first experiments in privatization of public schools - is giving way to a second round of questionable education practices and profiteers, this time in the form of unregulated charter schools. Of course, one can only wonder how a public school managed to hold a bar/nightclub without scrutiny for such a length of time, but, then again, the public oversight of these private operators is about as effective as the SEC regulators looking over the securities industry.

Butkovitz is one of the few that recognizes the problem, and the man is taking action. 13 of the districts 67 charter schools - roughly 19% - had "significant issues", and 9 of those are also being investigated by the U.S. Attorney's Office.

More on these schools from the Philadelphia Inquirer. Looks like the US Attorney's office is conducting criminal investigations of 9 of those schools.

Butkovitz cites charter school profiteering

City Controller Alan Butkovitz's investigation of 13 Philadelphia charter schools found repeated examples of complex real estate arrangements in which charters leased or rented facilities from related non-profit organizations.

"The way the charter law is written and not enforced--there is a gigantic loophole through which people can profiteer," Butkovitz said. "This is not supposed to be a vehicle for maximizing profit for operators and related parties."

Butkovitz began his special fraud investigation of charters several months after The Inquirer reported allegations of financial mismanagement and conflicts of interest at Philadelphia Academy Charter School in April 2008.

His staff has been sharing information with the U.S. Attorney's Office, which is conducting a criminal investigation of at least nine area charter schools, according to sources with knowledge of the probe.

Interestingly enough one charter school chain even has its own real estate arm.

Some of the shenanigans of Imagine Charters are mind-boggling.

Imagine Charter Schools sells 5 schools for 44 million...will have them leased back to them.

The company (NYSE: EPR) purchased five new charter schools from Imagine Schools Inc. of Arlington, Va., at a cost of $44 million and agreed to finance expansion of two others at a cost of $4 million. Entertainment Properties Trust, which is based in Kansas City, will lease the five new schools back to Imagine Schools, a leading operator of public charter schools.

Entertainment Properties Trust’s portfolio now includes 27 charter schools that Imagine Schools operates in nine states and the District of Columbia.

“We are excited to add to our public charter school portfolio and enthusiastic about the prospects of Imagine and this investment category,” Entertainment Properties Trust CEO David Brain said in a release.

In an interview, Brain said the Imagine Schools transaction announced Friday fulfilled Entertainment Properties’ 2007 commitment to make at least $200 million worth of acquisitions from Imagine. It also increases Entertainment Properties’ footprint in what Brain called “a huge new category” for private real estate investment.

“Public charter schools are now a 4 or 5 percent slice of a couple trillion dollar public education real estate market,” Brain said.

Imagine's own real estate arm, Schoolhouse Finance.

...But it is not only in Florida that there have been objections to, and problems with, Imagine Schools. In Texas and Nevada, concerns have been raised about Imagine Schools' finances and complex real estate deals that have led to the charters spending up to 40% of their entire publicly funded budget on rent to for-profit companies, including Imagine's real estate arm, Schoolhouse Finance, leaving them with tight budgets for necessary materials like textbooks. In the interest of comparison, many other charter schools spend in the neighborhood of 14% of their public funding on building rent. The real estate deals, where the charter run by Imagine leases the building from Schoolhouse Finance, who then sells the property to a real estate investment trust who then leases it back to Schoolhouse at a lower rate than what the charter pays, have proven very lucrative for owners and investors in the two companies. Former Imagine School principals who inquired into the real estate expenditures were subsequently fired. But, naturally, they have also drawn sharp criticism from boards of education.

Charter schools are privately run and publicly funded.

Wheeling and dealing in real estate.....being done with public taxpayer funds. It is time to pay attention.

[Dinger]

1. Thank You For This madfloridian

More info for the file. Hope I can put it to good use some day.
Key point: "Charter schools are privately run and publicly funded. "

[rurallib]

3. And ripping off public funds is something that GOoPers do so well.

[madfloridian]

4. "Charter schools are privately run and publicly funded." Exactly.

They get public money without much oversight at all.

[catzies]

18. Socialize the costs, and privatize the profits. SOP.

:puke:

[madfloridian]

24. Good way to put it.

That is about the truth of it.

[dotymed]

25. My Daughter,

a Presidential scholarship recipient and of course, a straight A student, will graduate from college next year. She wants to be a teacher, despite the salary and the NCLB rules that hinder teaching students. It is her passion, she will be great at it, if she doesn't burn out over the bureaucracy. Anyway, She is doing her student teaching at private school, in Tn. When we talked the other night, she was telling me about it. The wealthy students and the lack of gangs, etc.. I asked her if she might want to teach there. She said that the teachers were paid considerably less and there was no Union (good girl). It sickens me to see how these private schools even discriminate at the school level. I am not sure this is a "charter" school, but it is definitely a grooming school for the elite to learn how to economically control "the help." Unfortunately, my nephew attended a "christian private school" in the same area. The head of this school had been my band teacher in junior H.S. She used to let me hang out in her office (at 12) and smoke cigarettes during class time. She was gay, which did not matter to me and should not to anyone(her sexual preference is irrelevant), but can you imagine those "christian" parents knowing this? The bad part is that since she ran a "christian school", she did not have to meet a lot of the state requirements for public schools, although his tuition was expensive. I don't think (not sure) that the school was accredited, but my nephew was small and he had endured a lot of bullying in public schools...
Our education system is so fucked up. I don't know the answer. I do know that "for profit schools" are alot of the problem. They may have "non-profit" status, but so does "Goodwill" and I have seen how they profit. I am sure they do help alot of people (Goodwill), but they definitely profit (excessively) from it... Unfettered capitalism is one of the biggest nightmares this world faces. To me, it ranks with Nazism. The damage they do is not of the same type (even though I am sure there have been many deaths because of it), it does not compare to the holocaust. Nothing really does. I hope that this era is universally seen for what it is. Subjugation of all but the elite, and that our history books warn future generations. I hope, but I think we are currently losing.:banghead:

[Dappleganger]

16. Don't forget to add "With Self-Oversight." nt

[msanthrope]

20. Philly charters are overseen by the Philly School District.....who are complicit in this mess. n/t

[Solly Mack]

2. k/r

[dwilso40641]

5. Is it the gop

or arne's Chicago way?

[madfloridian]

6. They are one and the same, I fear.

Arne is pushing the agenda that Bush wanted. I hate to say it, but it is true.

Free market schools, the dream of Newt Gingrich.

[LisaM]

17. Yeah, well get a load of the posited Supreme Court nominee

They tout how liberal he is - until it comes to charter school and school vouchers.

http://www.miamiherald.com/2010/04/08/1569091/obama-has-plans-for-asian-american.html

Oh, and by the way - 6 unrecs? WTF?

[defendandprotect]

7. We keep hearing these schools are failures in every way ... but Dems are pushing them still--!!

[madfloridian]

10. Since 2000 at least it has been the goal of the DLC/PPI think tanks.

The Democratic Leadership Council (DLC) is now calling for reforms including school choice and merit pay for teachers.....America is a tale of two public school systems: one that works reasonably well, although it could certainly be better, and one that is by almost any standard a disaster," says From.

.."From argues that the public school system too often serves the interests of teachers and administrators at the expense of the students themselves. It is a "monopolistic" system that "offers a 'one-size-fits-hardly-anyone' model that strangles excellence and innovation" he says.

Characterizing charter schools as "oases of innovation," From writes, "The time has come to bring life to the rest of the desert-by introducing the same forces of choice and competition to every public school in America."

From also says Democrats should work to redefine the very notion of public education itself.

"We should rid ourselves of the rigid notion that public schools are defined by who owns and operates them," he writes.

New Democrats call for school choice.

[defendandprotect]

11. What's "PPI" ... ? Obviously corporate-DLC is poisonous for the Dem Party . . .

[madfloridian]

12. Progressive Policy Institute....used to be tabbed from the DLC

Now I see it just connects to The Third Way website.

http://www.ppionline.org/

They advocated for the charter schools as well. It was a Democratic plan.

[defendandprotect]

19. Ugh!!

Thanks for info, tho --

:)

[madfloridian]

8. Subject line change from the first link....basically says the same thing.

"9 Philly Charter Schools Under Investigation; 4 Others with "Significant Issues"

If they know they have significant issues, then they must be doing some investigating.

Just making clear I know the headline changed, but too late to edit.

[madfloridian]

9. More on this from the Perdido Street School blog site:

http://perdidostreetschool.blogspot.com/2010/04/philadelphia-as-failed-experiment-in.html

"Education reformers had much hope for the success of the charters, but so far, much of the success seems to be in lining the pockets of the charter school operators.

As I detailed here yesterday, 13 Philadelphia charter schools are under investigation by the City Controller's Office for financial abuse and fraud. 9 charter schools are under investigation by the US Attorney's Office in Philly for the same reason.

The most striking example of abuse is at Harambee Institute of Science and Technology, where the operator ran a nightclub out of the school on weekends, handed out $7.5 million in construction contracts to her husband for work on her schools, stole hundreds of thousands of dollars for personal travel and expenses and listed them as business-related, and claimed to work more than 365 days a year when she put in for compensation.

Then you also have the charter school operators of Philadelphia Academy who were caught defrauding the school for close to $1 million dollars and bribed a policewoman with $34,000 to keep quiet. When it became clear investigators were going to arrest everybody involved, one of the charter operators committed suicide. The other pleaded guilty to mail-fraud theft and tax evasion. The police officer, a 25 year vet, was given a year in prison."

[JDPriestly]

13. It's pretty obvious that these real estate scams are what is behind the

drive for charter schools.

I've heard of some similar scams in other non-profit organizations. This is commonly done by for-profits in order to separate the potential liability of the buildings from other aspects of the company and also for tax advantages. So, this is not surprising.

[Hell Hath No Fury]

14. Sue-PRISE sue-PRISE sue-PRISE!

Not. :eyes: The privatizaton of our military (Xe, KBR) should serve as a warning that "privitization" is nothing but a way for the private sector to suck more money from the American taxpayer.

[Dappleganger]

15. Sounds like Duval county schools in FL.

Same shit, different state.

[madrchsod]

21. this is happening because....

the secretary of education and the president of the united states believe this is the correct thing to do.

[madfloridian]

22. “Public charter schools are now a 4 or 5 percent slice of a couple trillion dollar public education.

real estate market."

Public education now considered a "slice" of the "couple trillion dollar public education real estate market."

A slice of the market. That is how they think of education.

Yes, it is happening because it is their goal.

[madrchsod]

23. my friend in the chicago burbs lost her music position for 4 schools...

and is now teaching english and math. she minored in english and just passed her math courses. she really does`t have a clue on how to teach math and there`s no doubt she`ll short change the students. of course their grades will be worse than another class and well..we know the outcome of that.

[Catshrink]

26. They may think it's the correct thing to do

but thinking doesn't cut it. Where is their educational research to back up their privatization scheme? The results from Chicago won't help them. Neither Obama nor Duncan have education experience in the public schools, neither of them understand the issues, neither of them are talking to teachers in the trenches. Until they open a dialog, a meaningful dialog, education will be on a very slippery slope in this country.

Teachers aren't the villians.

[LWolf]

27. Yes. nt

[madfloridian]

28. This is taxpayer money that is profiting these schools....

and the real estate companies.

[JPZenger]

29. Total Lack of Oversight

Good post. There has been a total lack of oversight of Charter Schools in PA, which has led to massive corruption. Family members direct contracts to their relatives. Family members rent buildings from each other. The same person has full-time jobs with 3 different schools.

Part of the reason stems from former Republican House Majority Leader John Perzel, who is now facing criminal corruption charges. He let it be known that he didn't want local school districts asking too many questions. At the time, he was all powerful.

Senator Williams entered the race for PA. Governor very late in the game. Instantly, he had a huge campaign fund. Most of the cash came from pro-Charter School organizations, according to the Phila. Inquirer.

[JPZenger]

30. k and r

[MadHound]

31. Only 13? Only in Philadelphia?

Well I guess it's a start. But frankly almost every charter school is designed to make a profit for its owners, its that simple.

[madfloridian]

32. Maybe other states will start.

I know a few Imagine Schools have been questioned in other states, but not sure it led to actual investigating.

[Overseas]

33. K&R . //nt