Miami Herald's investigation into charter school: cozy connections = taxpayer paid profits

From the Miami Herald's Naked Politics

Cozy political connections, favorable tax treatment and little public oversight has allowed Miami charter school chain Academica to exploit Florida's laws, build a successful chain of schools, and profit off taxpayer dollars, a Miami Herald investigation has found.

Charter schools have grown into a $400-million-a-year business in South Florida, receiving about $6,000 in taxpayer dollars for every student enrolled but even when charter schools have been caught violating state laws, school districts have few tools to demand compliance.

With some of the least restrictive laws in the nation, charter schools in Florida have become a parallel school system unto themselves, a system controlled largely by for-profit management companies and private landlords — one and the same, in many cases — and rife with insider deals and potential conflicts of interest.

In many instances, the educational mission of the school clashes with the profit-making mission of the management company, the Miami Herald found. The schools also take a disproportionately lower share of black, poor and disabled children, records show. More here.

Read the in-depth investigation by the Miami Herald's Scott Hiaasen and Kathleen McGrory here.

Highlights:

* The South Miami company receives more than $9 million a year in management fees just from its South Florida charter schools — fees that ultimately come from public tax dollars.
* More than two dozen other companies are controlled Fernando and Ignacio Zulueta, including more than $115 million in South Florida real estate — all exempt from property taxes as public schools — and act as landlords for many of Academica’s signature schools, records show.

* These companies collected about $19 million in lease payments last year from charter schools — with nine schools paying rents exceeding 20 percent of their revenue, records show.

* When the board of Doral Academy selected state Sen. Anitere Flores to run a new college proposed by the charter school network, she was sponsoring a bill in the Legislature to create online virtual charter schools, a new school model expected to dramatically expand the charter school industry. Since the proposal passed, Academica has applied for 19 virtual charters — including two with Doral Academy, state records show. More here.

* Rep. Erik Fresen, a Miami Republican, is the brother-in-law of Fernando Zulueta, Academica’s CEO and is a former Academica lobbyist. He now earns $150,000 a year as a land-use consultant for Civica, a Doral architectural firm that has built several schools run by Academica — including schools on land controlled by the Zulueta brothers.

Earlier this year, Fresen drafted language in an education bill barring cities from imposing stricter zoning or building regulations on charter schools. At the time, the city of South Miami was considering zoning regulations that could have inhibited expansion of the Somerset Academy at SoMi, an Academica school.

* From 2002 to 2006, Academica also paid $230,000 to then-Rep. Ralph Arza of Hialeah under an undisclosed consulting contract, records show. At the time, Arza also sat on an education committee in the House. Miami-Dade prosecutors investigated Arza’s ties to Academica in 2007 and 2008, records show. While being paid by Academica, Arza authored or backed at least five bills that could have benefited the charter school industry, according to records compiled by prosecutors. However, they could find no evidence that the Academica contract improperly influenced Arza’s votes. More here.

*The different Academica chains all rely on the same company to perform the property appraisals. And many schools have used the same attorney to negotiate the leases with the Zulueta land companies. That attorney, Charles Gibson, also has ties to Academica and is on the board of the Theodore R. and Thelma A. Gibson Charter School in Overtown — an Academica-run school founded by Gibson’s grandparents. The school has received $415,000 in grants and loans from Academica, records show.

* Several of the schools' principals jetted to an exclusive resort in the Bahamas on a trip paid for with a $25,000 gift from ADP TotalSource, a company that provides payroll and other services for many Academica schools.

* A Miami Herald review found 19 charter schools in Miami-Dade and Broward with rents exceeding 20 percent of their income in 2010 — about one in seven South Florida charter schools renting property that year. One Miami Gardens school spent 43 percent of its income on rent, according to audit reports.

Many of the highest rents are charged by landlords with ties to the management companies running the schools, The Miami Herald found. At least 56 charter schools in Miami-Dade and Broward counties sit on land whose owners are tied to management companies, property records show. More here.

* As statewide budget cuts have hit the bottom line at all public schools, some charters have been accused of cutting costs and boosting revenue at the expense of children and parents.

* In 2008, a legislative report said the state should adopt stronger monitoring methods to detect struggling schools before they reach the brink of closing. Instead, lawmakers relaxed the rules even more. Earlier this year, Gov. Rick Scott signed a bill allowing some high-performing schools to file financial reports quarterly, instead of monthly. The Legislature also reduced the amount of money that high-performing charter schools must pay to school districts to cover the costs of oversight.

* Nationally, about 12 percent of all charter schools that have opened in the past two decades have shut down, according to the National Resource Center on Charter School Finance & Governance. In Florida, the failure rate is double, state records show.

Read more: http://miamiherald.typepad.com/nakedpolitics/2011/12/herald-investigation-into-charter-school-cozy-connections-taxpayer-paid-profits-.html#ixzz1gYRPRQBp