Created by the AFT in conjunction with In the Public Interest, the site provides documentation of what the groups believe to be egregious monetary and political actions taken by charter school operators. Below, we’ll look at two more of the organizations profiled on the site, and provide an analysis of what we can take away from this type of reporting.
White Hat Management
Founded by Akron businessman David L. Brennan in 1998, it is one of the oldest education management organizations in the state. Brennan played a big role in pushing for Ohio legislature to allow charter schools.
Today, White Hat works through three different educational platforms: Life Skills High Schools (which are alternative learning high schools), Academies (which are more traditional charter schools), and DELA: Distance & Electronic Learning Academies (which is essentially a tool for homeschooling).
Continual questions about academic performance and clouded accounting is what brought White Hat Management to national attention. Board members and parents began to question what the company was doing to ensure student success — and, more specifically, how it was spending the public money it was paid to run the school.
When some members of the public asked for contracts and documents to show how money had been spent, the company refused. While all charter schools are technically public bodies and can be FOIAed at any time, the management company is private and therefore not subject to FOIA law.
White Hat Management’s lawyer, Charles R. Saxbe, is quoted in the ProPublica article saying, “If I’m Coca-Cola, and you’re a Coca-Cola distributor or a Coca-Cola purchaser, that doesn’t entitle you to know the Coke formula or find any financial information you’d be interested in learning from the Coca-Cola company. And that’s kind of what they’re [the public] demanding.”
According to Saxbe, White Hat Management was complying with the law. Once the public funds entered White Hat’s accounts, they became private, and therefore no longer open for public scrutiny.
“Governing boards are purchasing the service and whatever it takes to deliver that service from White Hat. And if White Hat loses money, that’s their risk. And if they make money, that’s their upside,” Saxbe said.
This mentality did not sit very well with board members and parents. Board members expressed concerns that if the schools did not perform academically, then they would be blamed and not White Hat Management.
“We give the management company 96 percent of the revenues from the state, and they do not have a transparent means for us to see what’s happening with the money,” a board member at a school managed by White Hat told ProPublica.
In the end, 10 White Hat schools and the state of Ohio sued the company, arguing that it did not academically prepare children and was not transparent in how its funds are spent.
A judge ruled in 2011 that White Hat must make its financial information public and turn its records over to its school boards. However, White Hat appealed the decision all the way to the State Supreme Court, which has yet to hear the case. Thus far, no financial information has been provided.
Founded in 2000, K12, Inc. is one of the largest for-profit virtual schools in the nation, currently operating in 27 states and the District of Columbia.
While K12, Inc. is monetarily quite successful — its 2012 annual report estimated a revenue of $708.4 million and, according to the Washington Post, CEO Ron Packard took home $5 million in 2011 — its track record of academic gains is not as triumphant.
A 2012 study by the National Education Policy Center, found that K12 Inc. students were “falling further behind in reading and math scores than students in brick-and-mortar schools.”
The company, however, received the most public scrutiny following a 2011 investigative piece by The New York Times. After analyzing a number of interviews, performance records, and school finances from K12 Inc., the article questioned whether the company was benefiting children and taxpayers.
“Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards,” the Times reported.
According to the article, in Pennsylvania, about 30,000 students were enrolled in online schools at an average rate of $10,000 per student. Jack Wagner, the state’s auditor general said those numbers are double or more what it should cost for an online company.
Limited accountability leaves room for mismanagement. Since charter schools are not as accountable to the public, critics have a difficult time reconciling public dollars going to private organizations where transparency is not promised. This is the line of thinking for many of the articles documenting charter school misspending.
On the other side of the coin are charter school advocates who believe anti-charter sites and articles don’t give the full picture.
“What’s always missing from those stories is the positive aspects that some of the education support providers give to the movement, schools, and children," said Lynn Norman-Teck of the Florida Consortium of Public Charter Schools. "Plenty of the management companies that are listed on the site [Cashing in On Kids], have great academic outcomes and great graduation rates, specifically for minority students.”
For Norman-Teck, paying private management companies fees seems fair if the stellar results — as seen at Academica schools — follow.
While the AFT’s accusations of the various companies have been documented and verified through outside news sources, charter advocates like Norman-Teck are quick to point out an important fact: The AFT has an agenda because it is a teachers' union. To look at Cashing In On Kids without acknowledging bias would be the same as talking to someone like charter school investor and advocate Reed Hastings and not acknowledging his own bias.
The topic is highly contentious in the United States right now, so discerning a source's bias quickly becomes the focus of the conversation, versus the actual facts at hand. And this is where the real problem lies on both sides of the debate.
All people, regardless of how they feel about the state of public education, should be taking ownership of the dialog and not relying too heavily on the AFT or charter advocates to be leading the conversation.
Reading a website, skimming a news article or talking to a charter consortium is ultimately not going to change much in terms of policy. We live in a time where we can essentially iPod our news, and if you like charter schools, for example, you may only read certain things. If you don't like them, you may stick to something else. This is dangerous and ultimately not helping our children get the education they deserve.
If individuals want to see changes in the nation's education system, they need to own it. Charter advocates and opponents should both be encouraging families and school stakeholders to take more of a role in the dialog surrounding our schools. We should be encouraging people to attend board meetings, send in FOIA requests, and take more of a role in the public discourse. That way, when questions arise, it can be less about bias or where the information is coming from and more about the facts at hand.