Education Reform For-Profit Fraud Virtual Charter Schools

ECOT and Payoffs to Ohio Politicians: How to Avoid Any Accountability

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I have posted many times over the years about the giant fraud called the Electronic Classroom of Tomorrow in Ohio, or ECOT. Ohio doesn’t permit for-profit charters, yet ECOT was set up–like many “nonprofit charters”–to produce huge profits for its owner, William Lager, who owned companies with which ECOT contracted. Lager opened ECOT in 2001, and it was closed down in January of 2018 after collecting about $1 billion from the state. It was the largest school in the state. Lager gave generous contributions to politicians, mostly to Republicans, and in exchange, his school was never held accountable or audited. After a major expose in the New York Times showing that ECOT had the lowest graduation rate of any school in the nation and that Lager’s related companies were making large profits by providing goods and services to the school, Ohio officials began to take a closer look at ECOT. The major newspapers in Ohio began to criticize the cushy political deal that enriched Lager and delivered a subpar education to thousands of students.

When the State Auditor Dave Yost (who had received campaign gifts from Lager) conducted an audit, ECOT could not account for students it claimed. ECOT said in court that a student should be counted even if they didn’t get any instruction. The state tried to “claw back” $80 million for only the last two years of ECOT’s operation, ECOT chose to go bankrupt instead. Since 2001, ECOT has collected over $1 billion from the state of Ohio, all of it money that was subtracted from the state’s public schools, but ended up instead in the pockets of Lager and his friends in high political office.

What is striking is how little it cost to buy the Republicans! For a few thousand dollars in campaign contributions, they let this guy take hundreds of millions away from public schools.

Here are some examples of ECOT pay for protection from accountability:

see here.

Andrew Brenner, chair of the House Education Committee (who says public education is “socialism”) was a Lager favorite. He didn’t “take a dime” from ECOT, but he took lots of dimes from Lager.

Kasich has received over $30,000 for his campaigns from Lager, along with key legislative leaders. Kasich gave the ECOT commencement speech in 2011.

The state auditor got Lager cash and spoke three times at ECOT graduation ceremonies. Jeb Bush gave the commencement address to ECOT graduates in 2010.

Here is the most recent list of the candidates who received campaign gifts from Lager.

This is the background of the names on this list:

Looking at the list, here are the backgrounds of the top five individuals in the order that they appear.

1. Cheryl Grossman, former Ohio House Majority Whip
2. William Batchelder, former Ohio House Speaker who later became a lobbyist for Lager and other charters https://janresseger.wordpress.com/2015/02/27/ohios-term-limited-house-speaker-becomes-lobbyist-for-notorious-charter-operator/
3. Matt Huffman, currently Ohio state senator
4. Barbara Sears, former Ohio House Majority Floor Leader
5. Jim Buchy, former Ohio House member

Other noteworthy pols on the list include
Jon Husted, Secretary of State now running for Lieutenant Governor
Cliff Rosenberger, former Ohio House Speaker who went on an all-expense trip paid by the Niagara Foundation, part of the Gulen chain. His home was raided by the FBI just two months ago! https://www.daytondailynews.com/news/fbi-agents-are-rosenberger-house-and-storage-unit/u8X9Apyx9g3rs0u63n3mBL/
Josh Mandel, Ohio Treasurer
Andrew Brenner, Chair, House Education Committee currently running for Ohio Senate
Shannon Jones, former Ohio senator and author of the notorious SB5, which was designed to strip public employees of their collective bargaining rights. http://action.weareohio.com/page/content/sb5history/
Mike Dewine, currently Ohio Attorney General and candidate for Governor (running with Jon Husted – above)
Mary Taylor, currently Ohio Lieutenant Governor – defeated by DeWine in the Republican primary in May)
Dave Yost, currently Ohio Auditor of State now running for Attorney General. COULDN’T MAKE THIS ONE UP – Yost gave ECOT an Excellence in Bookeeping Award in 2016. He also was an ECOT commencement speaker: https://ohiodems.org/today-ohio-history-dave-yost-gives-ecot-third-award-bookkeeping-2016/
Troy Balderson, currently member of Ohio House and candidate for Congress.

Jan Resseger brings the story up to date in this post.

Here is how the Ohio Supreme Court hearing—five months ago today—concluded, according to the Columbus Dispatch‘s Jim Siegel: “As ECOT attorney Marion Little finished his arguments for why, under the law, the online school should get full funding for students even if they only log in once a month and do no work, Chief Justice Maureen O’Connor interjected. ‘How is that not absurd?’”

Now, you would think that by now the Ohio Supreme Court could have arrived at a decision on ECOT’s final appeal to stay in business—a case in which lower courts had found against ECOT at every level. But as citizens of Ohio, we await ECOT’s death without any kind of closure even though we all know that the school has already been shut down—totally. The school’s assets have been sold off in a widely publicized auction and it no longer provides services for students. The Supreme Court decision matters, because ECOT’s officials hope—if the Supreme Court finds for ECOT—the school wouldn’t be required to repay as many tax dollars and because the same officials say they hope to resurrect the school.

In just the past month, as we await the high court’s decision, and the state remains mired in the ECOT scandal: here are some things we’ve been learning.

For the Associated Press, Kantele Franko reports that 2,300 of ECOT’s supposed students are apparently unaccounted for. Nobody knows whether they have dropped out or left the state or perhaps re-enrolled someplace else. Franko explains that a thousand of the students were likely 18 years of age or older, but that 1,300 were school-age youngsters who ought to be considered truant if they are not re-enrolled. Franko quotes Peggy Lehner, chair of the Ohio Senate Education Committee: “I think this just illustrates the whole problem that we’ve had with ECOT… You not only can’t tell how long the students signed on, you can’t even tell for sure if they even exist, so I am not surprised that there are students that they can’t track.” So far, however, the Ohio Legislature hasn’t passed any new laws to better regulate attendance at Ohio’s e-schools.

Thousands of ECOT’s students, at least those who are actual people, have enrolled at another virtual school in the state.

The primary beneficiary of ECOT’s closure and of this new law is Ohio Virtual Academy, a for-profit online school that took in 4,000 ECOT students mid-year. That boosted its enrollment more than 40 percent, along with its income and potential profit. With 12,000 students, the school is now Ohio’s online giant, replacing the mammoth ECOT.” Ohio Virtual Academy is the state’s affiliate of the notorious K12, Inc., a national, for-profit, online-charter empire. The legislation to protect schools serving students abandoned when ECOT closed was added quietly as an amendment to another bill just before the Legislature adjourned for summer break, and was opposed by several prominent Democrats. O’Donnell quotes Toledo Representative Teresa Fedor, the ranking Democrat on the House Education Committee: “Children move in and out of schools because of choice every day. It’s outrageous that Ohio taxpayers have to foot more profits for e-schools and then give them safe harbor.”

To add to the comedy/tragedy, Ohio’s State Attorney General Mike DeWine has suddenly decided it is time to go after Lager and try to recover millions. DeWine is running for governor. The current Governor, John Kasich, protected ECOT for years, as did DeWine.

What everybody wonders is why DeWine, who has been Ohio Attorney General since 2011, only decided to go after ECOT now in the summer of 2018—as he, Ohio’s 2018 Republican candidate for governor, actively campaigns. DeWine claims to have waited until another case set a precedent for cracking down on such conflicts of interest involving a charter school—this time a smaller charter school in Cincinnati. Now, says Mike DeWine, he can be assured that as the State Attorney General he has standing to crack down on charter school fraud.

Clearly, the ECOT scandal has become hot potato for Republican candidates seeking state office in the November 2018 election. Democrats across the state, reminding the public of William Lager’s huge political investments in Republican campaigns over the years, are also reminding voters that key Republicans including Mike DeWine—currently attorney general and Ohio’s Republican gubernatorial candidate in November, and Dave Yost—currently state auditor and Ohio’s Republican candidate for attorney general in November, have been ignoring for years Lager’s compromised position as the founder and agent of nonprofit ECOT who is also making huge profits by steering business to his own for-profit contractors.

Will Ohio’s voters remember in November that the state Republican party enabled Lager to shift $1 billion from their public schools to ECOT?

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