Three former managers of Options are accused of taking exorbitant bonuses and diverting more than $3 million from the school via an elaborate contracting scheme, according to a civil complaint that city officials filed Tuesday. The money was meant to serve 400 of the most troubled students in the District, but the complaint alleges that the money was used instead to “benefit and enrich former executives of the school.” The teachers told The Washington Post that the school’s operations appeared underfunded during the time of the alleged misuse of public money.
At a hearing scheduled for Thursday, city officials are expected to ask a judge to halt payments from Options to the group’s two for-profit companies — Exceptional Education Management Corp. (EEMC) and Exceptional Education Services (EES) — and to appoint a receiver to temporarily oversee the school.
Although it is unclear how much, if any, money the managers personally received — or whether others implicated in the alleged scheme profited from it — D.C. officials have asked a judge to freeze the assets of the former managers.
Donna D. Montgomery, who was the chief executive of Options until she left in July, purchased $1.96 million in real estate in Maryland, Virginia and Florida from April 2006 to April 2013, according to public real estate records. Records in Louisa County, Va., and Hillsborough County, Fla., indicate that Montgomery and a woman with the same name as a former top official at Options had bought two houses together since 2007 — one near Virginia’s Lake Anna and the other outside Tampa — at a total cost of nearly $1.1 million.
Montgomery did not respond to an e-mail inquiry or a message left at EEMC’s Washington office. Her attorney, reached Wednesday night, declined to comment. Montgomery has denied that any of the money was misused.
Anthony Herman, a lawyer who represents Options, called the allegations “very troubling.”
“I have no doubt that the alleged conduct of EEMC has detracted from the quality of the services provided, because if the allegations are true, then they’re more interested in lining their own pockets than they are in educating children,” he said.
Herman said it is also troubling that the D.C. Public Charter School Board wants to initiate a process aimed at closing the school, a move it is expected to take up at a meeting scheduled for Oct. 16. Charter board officials have said Options will remain open at least through the end of the year.
“It’s the kids who stand to lose here. These are kids who really have no other place to go,” Herman said. “One of our goals is to do everything we possibly can to get to the bottom of this to right the ship and to do everything we can to keep the school open for the children.”
Legal motions in the case are scheduled to begin Thursday in D.C. Superior Court, where D.C. Attorney General Irvin B. Nathan is seeking to have Judge Craig Iscoe appoint Josh Kern — a founder of Thurgood Marshall Academy in Anacostia, one of the city’s best-performing charter schools — as the receiver who would oversee Options and ensure that the school makes no further payments to the two outside companies.
The allegations already have had political implications. On Wednesday, D.C. Council member Tommy Wells (D-Ward 6) said he was returning five contributions to his mayoral campaign made by figures associated with Options, including Montgomery. The checks totaled about $3,000, Wells said, and came after a meeting in which he discussed special education with the donors.
Montgomery had been at Options for about a decade. Between December last year and May, just before she left, she allegedly received $185,000 in bonuses, according to court documents.
On April 30, she and another woman purchased a home in Florida for $721,400, according to real estate records. The two women also own the Lake Anna house. Montgomery’s most recent local address was a house in Severn, Md., according to public records.
One of the lucrative school contracts described in the city’s complaint was for bus transportation during the 2012-13 school year. EES was originally supposed to receive a $450,000 payment, with the possibility of a $100,000 bonus if at least 150 students rode the bus regularly.
But payments allegedly ballooned to more than $980,000 because of an unanticipated boost in bus ridership, according to court documents. That is more than 10 times the amount paid to a different company for bus service the previous school year, the complaint says.
In 2012-13, the school promised students weekly $50 cash gift cards if they rode the bus to school each day, boosting ridership. School officials have described the payments as being part of an anti-truancy initiative, but students did not receive the bonus unless they rode the Options-provided bus, according to teachers and parents.
Dell Brown said her daughter received the bonus until she decided to take a public Metrobus. “They told her if she doesn’t ride the yellow bus, they wouldn’t give her the money,” Brown said.
That program — described by teachers, parents and a school document obtained by The Post — was revised to include behavioral expectations after teachers complained that students were coming to expect payment for going to school.
One teacher, who spoke on the condition of anonymity to protect her job, said the school often lacks basic teaching supplies, such as paper to make copies of handouts. Another teacher, among several who quit after this school year began, said she was told that salary increases had to be curtailed.
“I find it odd that you say that you don’t have enough money for certain things — and then I look at the paper and see how much money they did have,” she said.
Molly Evans, who taught middle-school English at Options during the 2012-13 school year, quit in the spring in part because she felt the school was not providing students with legally required special-education services.
Evans said several students — including some with disabilities — spent the majority of the school year in a room for misbehaving kids, overseen by staff tasked with keeping behavior under control instead of by certified teachers.
Evans said that meant students who were legally required to receive certain services tailored to their disabilities missed out on those services.
“These children are not receiving the services they’re legally owed, services that I was not hired to fulfill as a non-special ed classroom teacher,” Evans wrote in her resignation letter, which was obtained by The Post. “In many ways, I feel like I am failing the children by leaving. But after much reflection, I know that I am failing them even more by contributing to Options’ ongoing operation.”
Jeff Smith, who worked for Options until he became director of public affairs for EEMC in July, denied that any children are spending most of their time in the room for misbehaving students. But he said it’s possible that some students did not receive required special-education services while in that room.
Smith, who is not named in the city’s legal complaint, said that he wasn’t sure whether the allegations against his colleagues were true. But, he said, it does seem that “something drastically different needs to happen with regard to governance and monitoring.”
Charles A. Vincent, the executive director of Options, did not respond to a phone message left at his home Wednesday. But in court documents detailing the work of a forensic accountant the charter school board hired to investigate the case, Vincent expressed concern about the financial transactions with EEMC and EES.
In reference to Options staff moving to the private companies and securing large contracts with the school they had just left, Vincent said he “did not think they would get away with it,” according to court documents. He had thought “they would be smarter because after all, this is Washington.”
Mike DeBonis, Paul Farhi and Jennifer Jenkins contributed to this report.