CCSA: Charters are public schools, except when they are corrupt, then they’re private.

Danyela Egorov, Regional Director of the Santa Clara County California Charter Schools Association disagreed with the recent San Jose Inside post that discussed charter school corporations.  She posted the following comment:

Charters are not corporations they are public schools. Public school students whose families chose charter schools are entitled to the same public dollars as students who attend traditional public schools. In California, the overwhelming majority of charter schools are organized as non-profit organizations and are held to state and federal laws governing nonprofits.  Danyela Egorov, Regional Director of the Santa Clara County California Charter Schools Association

This argument, that charters are public schools, has always baffled us.  Charters are run by private corporations.  Some are for-profit, others are non-profit, but all independent charters are controlled by private corporations, with privately appointed boards.  Oddly, the California Charter School Association argued in court just 2 years ago that charters are indeed private corporations.  The technically inaccurate argument that charters are public entities is apparently politically expedient, except when it’s not!

In 2013, the California Charter Schools Association (CCSA) filed an Amicus Brief in defense of Eugene Selivanov, who was sentenced to 4 years in jail for embezzling public funds through the charter school he and his wife founded (Ivy Academia Charter Schools). In that Amicus Brief, CCSA representing attorney Paul Minney argued that Selivanov committed no crime by “embezzling school funds, laundering the money and filing a false tax return” (from KPCC http://www.scpr.org/blogs/education/2013/12/16/15414/charter-school-operators-ordered-to-pay-300k-in-re/). Here are a few of the points in the Amicus Brief:

1) “Charter schools are ‘private’ entities and not a public entity”

2) Charters are “are private entities under contract with local school districts and are not the state, nor a county, nor a city, nor a town, nor a district, nor any other ‘public agency’ of the state. Moreover, if the money held by the nonprofit operator was ‘public money’ it could not be gifted over to any private party upon the closure of the charter schools—but as demonstrated above the nonprofit operator of the charter school is required to resolve all liabilities of the school it operates as well as retain the right to distribute net assets upon dissolution to another private entity. Consequently, ‘public moneys’ were not involved in the actions of the defendants as defined in Penal Code §426.”

3) “There was No Crime Here; Defendant’s Conduct Did Not Constitute Misappropriation of Public Funds under Penal Code”

(you can read the full brief at: http://laschoolreport.com/wp-content/uploads/2013/10/13-09-30-CCSA-Amicus-brief-Final.pdf)

Los Angeles Superior Court Judge Stephen Marcus responded to the CCSA brief by saying (also from KPCC):

“This case has to make the public wonder, are these new charter schools just a means to defraud the public tax payer?” Marcus asked. “Again, I don’t think this is the case. But to defend Selivanov and Berkovich simply because they run a charter school is not appropriate.”   Los Angeles Superior Court Judge Stephen Marcus speaking about the CCSA Amicus brief defending convicted charter embezzlers.

Does that mean they are public schools sometimes, and private entities other times? Are they private only when they are in court convicted of corruption, but then public when not facing corruption charges?

This is more than just semantics or rhetoric. There’s large sums of public tax dollars at stake here (I think we can agree that the money is public, even if the schools are not). For example, Rocketship school facilities are owned by Launchpad Inc. It’s a private corporation with no contact info, no website, no public board members, they don’t respond to public records requests, and they currently control $51 million in publicly financed real estate and received $5.5 million dollars in tax payer revenue in 2013 (according to tax returns). We Santa Clara County taxpayers pay a hefty 20% facility fee through Rocketship to Launchpad that will eventually fund all those properties. But who owns them at the end of the term? If Rocketship were really a “public school”, then the public would own them. If a Rocketship closed, the facility would be liquidated into the public coffers. But that’s not the case. Even Rocketship doesn’t own them. They are owned by a secondary or tertiary firm, either Launchpad, or in some cases Andre Agassi (yes, the tennis star). Agassi’s for-profit charter real estate firm, Turner-Agassi has a billion dollar for-profit hedge fund to build charters, including Rocketship Spark Academy in Franklin-McKinley. Check out the terms on the lease agreement:
http://www.stoprocketship.com/2014/10/09/agassi-makes-millions-tax-payers-confidential-deals/

The Turner Agassi deal terms are contractually required to be confidential (i.e., not public, but publicly funded), but even more worrisome is the buyback provision. Charters may opt “to purchase the Facility from Landlord during the period beginning 36 months and ending 53 months after the Commencement Date”. If the newly formed charter doesn’t have cash to buy the facility within the first 5 years, then after it’s payed for, it’s owned by Andre Agassi. Rocketship board documents suggest that they have an MOU with Andre Agassi’s firm, but, as to my knowledge, it’s not public.

Charter schools do not have publicly elected school boards. If you look at “public” school board websites, you’ll find each board member has a phone number and email listed (for example, SJUSD: http://www.sjusd.org/community/board-of-education/). Charters, on the other hand, don’t list their board members contact info, i.e. they aren’t public (for example: http://www.rsed.org/meet-us.cfm). In fact, Reed Hastings told the CCSA national conference last year that that charters were “getting better because they have stable governance — they don’t have an elected school board. And that’s a real tough issue. Now if we go to the general public and we say, ‘Here’s an argument why you should get rid of school boards’ of course no one’s going to go for that.” That got thunderous applause from the thousands of CCSA members present. That doesn’t sound like an argument in favor of charter schools as “public schools”.