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Who Is Profiting From Charters? The Big Bucks Behind Charter School Secrecy, Financial Scandal and Corruption

What we know about the financial incentives offered by charter schools.

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As soon as I went inside, I could see that it was built on the cheap. There was no gym; students just had to go outside throughout the winter. There was no lunchroom. Instead, tables were set up in a hallway, and lunches were brought in from outside the school.

It’s no surprise that for-profit companies, which are motivated solely by maximizing profit, might want to keep overhead costs as low as possible.

And even by the flimsy legal standards in place to protect the public against charter school industry corruption, charter schools across the nation are failing. They are mired in financial scandal—and have become synonymous in many districts for mismanagement. A frequently updated blog called by California-based researcher Sharron Higgins, called Charter School Scandals, provides a running tally of these scandals throughout the country, and they are vast. A quick perusal of the blog suggests that these scandals are happening over and over again, even if few mainstream media outlets are willing to connect the dots about what is going on.

Here are just a few examples of what seems to be a pretty large-scale problem:

In February 2012, an audit showed that Las Mantañas Charter School of Las Cruces New Mexico had over-estimated its actual 2011 assets, including land and large equipment. It must have taken heroic measures to over-estimate anything, since the school also under-reported assets like expensive equipment that cost up to $5,000. On top of this, the school was unable to account for almost $85,000 spent that fiscal year.

In March, Keystone Education Charter Center of Pittsburgh came under fire when the Pennsylvania State Ethics Commission found that a Mercer County charter school director was leasing properties to the schools with no management company approval.

Then, in April, Houston Gateway Academy was found charging illegal fees for student enrollment.

These are not isolated cases of cronyism, misjudgment, mismanagement or treating children unfairly for profit. Higgins’ website suggests that it’s happening over and over, week by week, in every region of the country where charter schools are operating. Chicago Teachers Union (CTU) researcher Sarah Hainds tells AlterNet that lack of transparency makes it hard to untangle all the corruption and mismanagement underway. She says it’s difficult provide a thorough analysis of the effects of public-private contracts in the Chicago area alone, and that it all comes into play in a complicated “web of construction contracts and testing contracts.”

In addition to the work of the Chicago Teachers Union, Hainds says several people are researching profiteering in charter schools, including multiple Chicago reporters, a coalition of more than 100 professors across 25 local universities, called Chicagoland Researchers and Advocates for Transformative Education or CREATE, and a local non-profit called the Better Government Association. She says,“Everyone is trying to figure this out. That’s how hard it is.” 

One company that comes up over and over in discussions about charter education is K12 Inc. or more commonly referred to as simply K12. K12 is particularly influential in Chicago and Philadelphia charter schools, contracting with the school system to provide online schooling with links to the rightwing Christian homeschool movement.

K12 got off its feet under the leadership of Bill Bennett, the frequent CNN commentator and conservative Christian who once offered this crime reduction platform on his radio show: “[Y]ou could abort every black baby in this country, and your crime rate would go down.” Bennett had to resign from the company over this comment, but it’s not clear that his influence has waned. K12 notoriously treats creationism as legitimate science and the Bible as a useful history book. Other educators report racist language and glorification of the Confederacy — again, in a curriculum designed for school proliferation in inner cities.

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