Charter schools are a form of private contracting, but across the 45 states which have authorized charter schools, the state laws that created these schools are different. Some states let school districts themselves authorize charter schools; other states override local authorization through state authority or permit other outside authorizers.  And the amount of and quality of oversight varies. The original goal was to stimulate innovation by reducing what charter proponents alleged was the bureaucratic regulatory straitjacket that, they claimed, constrains traditional public schools.

Charter schools originated in the early 1990s, and now, nearly three decades later as the charter school sector has matured, we discover what might have been predicted in an education sector paid for with public tax dollars but at the same time operated privately with little oversight. The Network for Public Education has set up a web page to track the hundreds of scandals reported year after year across the United States in local newspapers.

But there are also the stories of larger and more shocking scandals, often involving mismanagement by the chains of charter schools, some of them operated by charter management organizations (CMOs).  Here are four examples reported just this spring.  Three of the scandals are financial; one involves the violation of students’ rights in a CMO that made its reputation with zero-tolerance discipline.

• In early March, the Columbus Dispatch reported that the Electronic Classroom of Tomorrow (ECOT), a giant, online charter school put out of business in the winter of 2018 after years of charging the state per-pupil fees for, it turns out, students who were not participating in its online program, was still in court trying to block the state of Ohio from recovering $80 million, only a portion of the money the enterprise had ripped off over nearly two decades of operation: “ECOT appealed… (a lower court) decision to the Ohio Supreme Court, and justices heard oral arguments from both sides on Tuesday (March 2)….  It could take several months for the court to issue an opinion.” ECOT was technically a nonprofit, but its owner, William Lager, owned the two for-profit companies that operated the school and provided its curriculum.  Lager is still trying to protect his profits.
• Also in March, a prominent New York City chain of charter schools was fined $2.4 million in a federal district court case, this time for violating students’ rights: “Charter school network Success Academy, which touts its commitment to children ‘from all backgrounds,’ has been ordered to pay over $2.4 million on a Judgment in a case brought by families of five young Black students with learning and other disabilities who sued after the children were pushed out of a Success Academy school in Brooklyn.  Success Academy’s efforts to oust the children even included the creation of a ‘Got to Go’ list, as reported by the New York Times in October 2015, which singled out the students they wanted to push out, including the five child plaintiffs.” New York City’s Success Academy Charter Schools have established a reputation for a regimented school culture. For years, however, parents have complained that instead of helping students thrive, the school has established a pattern—for children who don’t fit the school’s culture or for children whose test scores will likely bring down the school’s overall average—of severely punishing the students or repeatedly suspending them until their parents pull them out of the school.
• In late April, CNBC’s Dan Mangan reported that Seth Andrew, who founded the Democracy Prep charter schools in New York City’s Harlem and later worked as an education adviser in the Obama administration, was arrested for trying to steal $218,005 from the charter network: “Seth Andrew, who served as an education advisor in the Obama White House, was arrested Tuesday morning on charges of scheming to steal $218,005 from a public charter school network that he founded, federal authorities said. Andrew, 42, was busted in New York City, where he and his wife, CBS News anchor Lana Zak, have a residence valued at more than $2 million. The founder of Democracy Prep Public Schools is accused of using more than half of the allegedly stolen money from that network to maintain a bank account minimum that gave him a more favorable interest rate for a mortgage on his and Zak’s Manhattan residence.  Zak was not charged in the case. Prosecutors said Andrew, in 2019—more than two years after severing ties with Democracy Prep—looted  a series of escrow accounts he had previously set up for individual schools within Democracy Prep’s network, and then used their funds to open a business account in the name of one of the schools at a bank.”  A Washington Post‘s report adds: “Andrew’s career straddled the education field and government. In 2013, he joined the (Arne Duncan) Education Department. He later became a senior adviser in the Office of Educational Technology, a position at the (Obama) White House.”
• Finally, just this week, we can read about the latest scandal at the huge IDEA charter school chain which, Diane Ravitch reported a year ago, had 49,500 students in 91 schools across Texas and in Louisiana. The co-founder and CEO at that time, Tom Torkelson resigned when the media learned he had purchased a private jet with IDEA dollars for the use of its executives and their families and after it was reported that he had used $400,000 annually of IDEA’s money (collected from public tax dollars) on luxury sky boxes for sporting events for the schools’ employees. Now a year later, the Houston Chronicle reports that the woman who replaced Torkelson as CEO, JoAnn Gama, and IDEA’s Chief Operating Officer, Irma Munoz, “have been fired after a forensic review found ‘substantial evidence’ that top leaders at the state’s largest charter network misused money and staff for personal gain… The firings followed an anonymous tip received after the departures last year of two other high-ranking IDEA leaders, former CEO Tom Torkelson and former CFO Wyatt Truseheit… IDEA board members chose Gama, who co-founded IDEA in the late 1990s with Torkelson, as the organization’s next CEO. Around the same time, IDEA’s board members promised to make several financial and governance reforms, such as banning private air travel, curbing executive benefits, and ending business deals with leaders and their family members.”

It is mind boggling to try to imagine reining in a publicly funded but privately operated education sector whose oversight depends on the actions of 45 different state legislatures, whose members are are the targets of well-paid lobbyists hired by charter school advocates and school operators. One possible source of public leverage, however, is the federal Charter Schools Program, which the Network for Public Education’s Asleep at the Wheel report shows has awarded $4 billion in federal tax dollars to start or expand charter schools across the states and the District of Columbia. NPE reports that this federal program dating back to 1994 has provided some funding for 40 percent of all the charter schools across the United States. The Clinton, Bush, Obama, and Trump administrations have treated this program as a kind of venture capital fund created and administered by the Department’s Office of Innovation and Improvement to stimulate social entrepreneurship by individuals or big nonprofits or huge for-profits as a substitute for public operation of public schools.  NPE’s report documents the U.S. Department of Education’s chronic failure to oversee this program—created and sustained by people who believe in innovation but who lack commitment to careful public stewardship.

Just a year ago, for example, the IDEA charter school network received a large federal Charter Schools Program grant in a special category of grants for large multi-school operators. Commenting on the release of the names of 2020 Charter Schools Program grants, Chalkbeat‘s Matt Barnum reported: “The U.S. Department of Education awarded more than $200 million in grants to help 13 charter school networks from across the country expand. The largest grant, $72 million over five years, went to IDEA charter network, which has been rapidly growing throughout Texas and into other states and has already netted over $200 million in federal awards.” Less than a month after the 2020 Charter Schools Program awards were announced, Tom Torkelson resigned as CEO, and a year later his replacement and her CFO have been fired—all for financial mismanagement.

President Joe Biden and Education Secretary Miguel Cardona should work with Congress to eliminate the federal Charter Schools Program.