New evidence surfaces on charter school scam

CLEVELAND – New evidence that charter schools provide inferior education but lucrative opportunities to scam the public has surfaced in a report issued Wednesday.

The report, “Public Good vs. Private Profit: Imagine Schools, Inc. in Ohio” by Policy Matters, a highly respected research group based here, details operations of Imagine, the largest for-profit charter school management company in the U.S. The report’s author, Piet van Lier, is a well-known journalist and writer on educational issues.

According to the report, Imagine runs 71 schools in 11 states and the District of Columbia. Its CEO, Dennis Bakke, former chairman of AES, a global electric power company, has been a long-time leader of efforts to privatize public education and a major contributor to John Kasich, Republican candidate for governor of Ohio. Bakke is also a member of “The Family,” the right-wing Christian cult of prominent businessmen and politicians embroiled in scandals surrounding its “C Street spiritual haven” in Washington.

By law, charters to run taxpayer-funded schools in Ohio are issued only to nonprofit groups, but these groups are permitted to contract with private management companies, such as Imagine, to run the schools. Last year Gov. Ted Strickland attempted to ban this practice but was blocked by Republican legislators. The report shows that Imagine, with headquarters in Arlington, Va., takes 90-98 percent of the state funds provided to the 11 schools it runs in Cleveland, Columbus, Toledo, Dayton and Akron.

Since the 2005-2006 school year the performance of these schools has been dismal. The Ohio Department of Education has so far rated six Imagine-run schools. Five of the schools have received the lowest possible rating of “Academic Emergency,” while one has gotten the slightly better rating of “Academic Watch.” These ratings are “substantially worse” than nearby neighborhood public schools, the report charges.

Because of its poor performance Imagine is barred from opening new schools in Ohio under standards recently established by the Strickland administration.

Imagine has received $115.7 million in state and federal funds over the past five school years for its Ohio operations. It is actively seeking to increase enrollment to increase its public funding, although the report found that its academic performance has fallen as it increased its size.

The proportion of its funds spent on actual instruction is far below national standards, the report states. Teachers are paid less than in charter schools without for-profit management, and about half what union teachers in Cleveland public schools receive.

On the other hand the proportion spent on rent and maintenance paid to Schoolhouse Finance, Imagine’s real estate subsidiary, is twice the national standard. In one case, the report cites a church building Imagine acquired in Fort Wayne, Ind., where it charged its charter $90,000 a month, eight to ten times the appraised value.

The company also charges excessive amounts to lease equipment and pay development costs and siphons profits through complex real estate deals involving land acquisition, building construction, sales and leasing arrangements with investment funds.

This has been the target of criticism in other states, and prompted Texas Board of Education member David Bradley to ask if the company was in the real estate or charter school business.

Charter schools supposedly operate under governing boards selected by their sponsors. However, even this cozy arrangement is too much for Imagine. In a 2008 memo CEO Bakke made clear his view that the schools were his private domain and administrators should disregard appointed governing boards.

Board members at one school near Columbus resigned in protest over this policy, especially after failing to get answers about over-priced lease agreements.

The report concludes with a number of recommendations including banning for-profit management companies from running charter schools and guaranteeing the independence and authority of governing boards.

The full report is available on the Policy Matters Ohio website.





Rick Nagin
Rick Nagin

Rick Nagin has written for People's World and its predecessors since 1970. He has been active for many years in Cleveland politics and the labor movement.