California Charter Schools Fraud

Ex-Charter School Leader Charged with Fraud, Money Laundering: What Would DeVos Say?

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Until 2012, the most celebrated figure in the charter school industry was Ben Chavis of the American Indian Model Schools, a group of charter schools in Oakland, California, that got phenomenal test scores and major national publicity. The networks came to gush over the schools, Governor Schwarzenegger praised them, George Will admired them, and David Whitman called them one of the best paternalistic “no excuses” charter schools in the nation in his book Sweating the Small Stuff (2008). (In 2009, Whitman became Arne Duncan’s speechwriter.)

Chavis was controversial for many reasons, including his outspoken contempt for unions, liberals, multiculturalism, and certain minorities. He also dished out harsh punishments. He was a pioneer of the “no excuses” charter movement. I have written many posts about the meteoric rise and precipitous fall of Chavis (see here and here and here, for example).

If you want to know why Chavis was so controversial, read this article in the Los Angeles Times, written in 2009, when he was at the height of his fame.

The story from 2009 begins like this:

Not many schools in California recruit teachers with language like this: “We are looking for hard working people who believe in free market capitalism. . . . Multicultural specialists, ultra liberal zealots and college-tainted oppression liberators need not apply.”

That, it turns out, is just the beginning of the ways in which American Indian Public Charter and its two sibling schools spit in the eye of mainstream education. These small, no-frills, independent public schools in the hardscrabble flats of Oakland sometimes seem like creations of television’s “Colbert Report.” They mock liberal orthodoxy with such zeal that it can seem like a parody.

School administrators take pride in their record of frequently firing teachers they consider to be underperforming. Unions are embraced with the same warmth accorded “self-esteem experts, panhandlers, drug dealers and those snapping turtles who refuse to put forth their best effort,” to quote the school’s website.

Students, almost all poor, wear uniforms and are subject to disciplinary procedures redolent of military school. One local school district official was horrified to learn that a girl was forced to clean the boys’ restroom as punishment.

When Chavis took over the schools, the enrollment was mostly American Indian. But over time, the American Indians disappeared and were replaced by Asian students. And the scores went up and up.

In 2012, a state audit reported that $3.8 million had been reallocated from the school accounts to Chavis’s business accounts. Chavis resigned the next year and moved to North Carolina to work as a motivational speaker.

There are new developments:

Ben Chavis, the controversial former director of three Oakland charter schools, collectively known as the American Indian Model Schools, was charged with mail fraud and money laundering in connection with the schools’ applications for federal grant funds, federal authorities announced Thursday.

Chavis was arrested Thursday morning in North Carolina and has been ordered to appear in federal court in Oakland. He is accused of requesting more than $2.5 million of federally funded grants in violation of conflict-of-interest rules.

This is not the first time Chavis has been targeted for financial impropriety. In 2012, an investigation by the state Fiscal Crisis and Management Assistance Team found that from 2007 to 2011, Chavis had directed $3.8 million from the school to companies he owned for contracts not approved by the school board. He stepped down from the school in 2013. The investigation’s findings prompted the county superintendent to refer the case to federal authorities.

According to the indictment announced Thursday, Chavis, 59, of Lumberton, N.C., and others devised and put into place a scheme from early 2006 through May 2012 to defraud the California School Finance Authority by requesting federally funded competitive grants for three charter schools in violation of federal conflict-of-interest regulations.

From 2000 to 2012, Chavis served off and on as the director and in various additional capacities for three Oakland charter schools — the American Indian Public Charter School, the American Indian Public High School II and the American Indian Public High School — as well as the schools’ umbrella organization, the American Indian Model Schools, referred to as AIMS.

The indictment, unsealed Thursday, alleges Chavis applied for grants to pay the costs of leasing facilities that he owned or controlled through his companies — American Delivery Systems and Lumbee Properties LLC. He is accused of concealing his interest in the facilities in the grant applications.

The indictment further alleges that the schools obtained more than $1.1 million in federal grants as a result of this fraud and that Chavis used fraud proceeds to promote the fraud scheme at each school.

What would Betsy DeVos say? She doesn’t believe in regulation or oversight of charter schools or voucher schools. Let the free market rule. Chavis no doubt agreed.

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