Public education in Florida is under attack on so many fronts it can sometimes be hard to keep track.
The Republican-led legislature is creating new programs that will use public funds for private- and religious-school education, adding to several programs that already exist. An effort has been made in the legislature to require school districts to share with charter schools money that voters chose in a referendum to go to school districts, but it is unclear how that will end. And this week, the state legislature voted to allow teachers to carry guns at school despite opposition from many school districts.
That’s why veteran educator Peter Greene, on his Curmudgucation blog, wrote, “Florida Really Is The Worst.”
I will look at all of that in a separate post, but this piece is devoted to the mess that is the charter-school sector in Florida.
This was written by Carol Burris, a former New York high school principal who now serves as executive director of the Network for Public Education, a nonprofit advocacy group. She was named the 2010 Educator of the Year by the School Administrators Association of New York State. In 2013, the National Association of Secondary School Principals named her the New York State High School Principal of the Year.
Burris has been chronicling problems with modern school restructuring and school choice for years on this blog. She has also written about problems with charter schools in California and other states.
Most recently she co-authored a report published by her organization saying that the federal government has wasted up to $1 billion on charter schools that never opened, or opened and then closed because of mismanagement and other reasons, and that the Education Department does not adequately monitor how its grant money is spent.
By Carol Burris
Schoolsforsale.com claims to be “the largest school brokers in the United States that you will need to call.” Its owner, Realtor David Mope, is a broker for private schools, online schools and preschools. He will also help you start your own virtual school by providing certified teachers, marketing expertise, and assistance in securing accreditation.
Mope is not a newcomer to the for-profit school world. He was the owner and CEO of Acclaim Academy, a military-style charter chain. Acclaim’s “cadets,” who were predominantly minority students from low-income homes, wore army fatigues and engaged in drills. The schools’ education director, Bill Orris, had previously led a charter school that was shut down after its management company abandoned it.
Warning signs of failure were there from the beginning. The chain aggressively attempted to open new schools in multiple districts before establishing a track record in its two existing schools. Most districts saw red flags, but two did not. In the fall of 2013, two more Acclaim schools were approved, bringing the total schools in the chain to four.
As school grades came in, unsurprisingly, the Acclaim Academy charter schools were rated “F.” In 2015, three closed their doors, leaving families in the lurch in a manner that parents described as chaos. Although Florida’s State Board of Education had allowed the schools to stay open to finish the school year, Mope filed for bankruptcy, sending students out on the street scrambling to enroll in another school with only a few weeks left in the school year. Vendors would never be paid. Parents helped teachers pack up. Nevertheless, Mope pretended the schools were solvent and continued to broker a deal to purchase hundreds of thousands of dollars of equipment.
How could Acclaim Academy ever open in the first place? Who would give this risky charter chain the seed money to get started? The American taxpayers did. A U.S. Department of Education Charter Schools Program (CSP) grant for $744,198 helped get the Acclaim Academies off the ground.
Acclaim Academy charter schools were among 502 Florida charter schools that received grants from the Department of Education between 2006 and 2014. All but two came from federal money given to the state for distribution. According to the CSP database, these Florida charter schools were awarded a total of nearly $92 million in federal funds between 2006 and 2014.
At least 184 (36.6 percent) of those schools are now closed, or never opened at all. These defunct charter schools received $34,781,736 in federal “seed” money alone.
One of the primary reasons for the explosive growth and failure of Florida charter schools is that nearly half are run by for-profit Charter Management Organizations (CMOs). The nonprofit charter school becomes a “pass thru” for the for-profit corporation to staff the school, provide fiscal, procurement and legal operations, and even be the landlord. Two Miami alternative charter schools that were part of the Life Skills charter chain paid 97 percent of their income to their for-profit CMO — the now defunct White Hat Management Corporation of Ohio.
All of the Florida Life Skills charter schools are now closed. When Life Skills Winter Haven was shut down in 2011, its three-member board was sending only 29 percent of its taxpayer funding to the classroom. One of its 72 English language learners graduated.
Nevertheless, between 2006 and 2014, the U.S. Department of Education gave nearly $1.5 million to 10 Life Skills charter schools through the Florida SEA grant.
According to the U.S. Department of Education Charter Schools Program guidance document, for-profit CMOs like White Hat may not directly receive a CSP grant. However, the charter schools that are governed by a for-profit CMO may, as long as the relationship between the entities meet criteria that indicates independence. Were the Life Skills charter schools that turned over 97 percent of their income to White Hat independent of their CMO?
Because of concerns regarding the relationships between charter schools and their CMOs, the Office of the Inspector General (OIG) of the U.S. Department of Education conducted an audit of those relationships in three states from 2011-2013. One of the selected states was Florida.
Three of the five Florida charters that the OIG examined belonged to Academica, a for-profit charter management company with schools in five states and the District of Columbia. It services 126 charter schools in Florida alone, including the SLAM charter chain, started by the rapper Pitbull.
Two of Pitbull’s SLAM charter schools received CSP funds totaling $400,000. This is how the for-profit Academica describes its relationship with SLAM.
As a charter school management company, Academica serves in a similar capacity to a school district’s staff and board’s role in managing a traditional public school.
The OIG audit of three Academica schools — Excelsior, Mater High and Mater East — raises additional questions. The auditors found that the Board of the Excelsior charter school, which ended its relationship with Academica in 2013, allowed Academica to find, design and procure facilities, recommend staff, conduct the day-to-day running of the school, assume responsibilities for accounting, budgeting and produce its financial forecast. The for-profit CMO participated in all charter board meetings and made recommendations to the board.
OIG’s audit of the two Mater charter schools identified related party transactions between the for-profit Academica and a real estate company that leased both buildings and security services to the schools.
Although the audit is difficult to follow due to extensive redactions, it is clear that the investigation found inappropriate transactions among the CMO, School Development HG II, L.L.C., School Development East L.L.C., Duke School Properties, L.L.C. and the charter schools.
School Development Corporation HG II owned and leased a building to Mater High School while School Development East owned and leased a building to Mater East. School Development Corporation was owned by a Panamanian company, the Wolfson Hutton Development Company. The directors of the Wolfson Hutton Company were the Zulueta brothers, the founders of both the Mater Academies and Academica. The details of the complex for-profit web can be found here in an earlier investigative report by the Miami-Dade Public Schools.
According to OIG, there was no evidence that the relationship between the CMO and the real estate company was disclosed to the charter school’s board of directors at the time of the original lease; nor was there any “evidence of a discussion regarding the renewal of the management agreement with Academica or the reasonableness of CMO services or fees.” The original real estate transactions took place while Fernando Zulueta served on the Mater Board.
By 2010, the Zulueta brothers controlled more than $115 million in Florida tax-exempt real estate with the companies collecting about $19 million in lease payments. Many of the charter schools paid rents well above expected rates. Academica not only benefited from renting real estate it owned, it also sold payroll, employer services, construction services, equipment leasing and school services to the schools.
Considering the complicated web of conflicts of interest and raw profiteering, one would think that Academica would have been scaled back. Not at all. Deep-pocket contributions to Florida lawmakers have shielded Academica and other for-profit CMOs from regulations that inhibit their ability to make a profit off taxpayer funds. And then there are the legislators who are profiting from charter schools.
Until 2016, Academica’s closest ally in the capital was Fernando Zulueta’s brother-in-law, [former Florida House Rep.] Erik Fresen. Fresen, a former lobbyist for Academica, served as chairman of the House Education Appropriations even while working as a consultant for a firm called Civica which had contracts with Academica schools.
During his eight years in the legislature, Fresen never bothered to file his taxes, resulting in a 60-day prison sentence after he left office.
Academica continues to expand. The Somerset charter chain, like Pitbull’s SLAM and Mater, is one more charter chain that uses Academica as its CMO. It recently pushed its way into the Parkland School District by claiming the charter was needed to accommodate neighborhood growth. The growth numbers presented were wildly inflated. Misinformation regarding teacher certification as well as a claim that the charter would provide a “special enrollment period” for those who live closest to the school (such privilege is not allowed state law) resulted not only in controversy, but an organized effort by residents to stop the charter school. The school was approved anyway.
The “pitchman” for the school was developer Frank Biden, Joe Biden’s brother, who was previously associated with another Florida for-profit charter chain known as Maverick. Nearly every Maverick charter in the state has closed.
There are some who might think that residents of the Sunshine State are getting what they deserve due to their unwillingness to rein the for-profit charter sector in. But consider this:
Maverick schools received nearly $3 million in start-up and dissemination funds from the U.S. Department of Education’s Charter School Program, and schools that use the for-profit Academica CMO received over $20 million.
We are all subsidizing the charters that feed the for-profit chains.
As the recent Network for Public Education report demonstrates, the U.S. Department of Education has been asleep at the wheel when it comes to managing the over four billion dollars that have flowed through its charter school program. In 2016, despite all of the known problems with Florida charter schools, the department gave the state a three-year grant for almost $71 million.