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The California Legislature is considering four bills to reform the state’s massive charter school industry (1,300 schools, mostly unregulated and unsupervised). One of the bills would prohibit school districts from authorizing charters in other districts. The following story is a classic example of rural school districts authorizing online charters in San Diego and Los Angeles, solely to get the commission attached to each student. In this case, the online charters were cash cows for their owners. [A personal aside: Last February, I was in Newport Beach, California, having breakfast at a hotel. The man at the next table was loudly discussing his schools with someone who was selling athletic services, $5 a student. When he got up to leave, I asked him if he was “in the charter school business.” He said, “Yes,” and said he owned 40 schools under six different corporate names. I asked him his name. He said, “Sean McManus.” I should have asked him to join us. He is one of the key figures in the following article.]
The San Diego Union-Tribune reports that eleven people connected to online charter schools have been indicted for “criminal charges of conspiracy, personal use of public money without legal authority, grand theft and financial conflict of interest.“
The online charters operate in San Diego and Los Angeles, but were authorized by other districts that get a slice of the revenues. This is one of the corrupt practices that have been rampant in California, where lax state law allows sharp operators to get public money and cheat students with no consequences. The Legislature is currently debating a proposal to stop allowing District A to authorize a charter in District B, a practice that is mercenary and predatory. Until now, the powerful California Charter Schools Association—enriched by billionaires like Reed Hastings and Eli Broad—has fought all accountability for charter schools.
At the center of the allegations are leaders of the charter school management corporation A3 Education, a Newport Beach corporation whose leaders control 13 charter schools across California, according to an indictment filed May 17.
A3’s chairman, Sean McManus, and president, Jason Schrock, essentially owned and operated the charter schools throughout California at the same time that A3 contracted with those schools, according to the indictment.
McManus and Schrock operated multiple businesses that charged their own charter schools millions of dollars for services. Then they channeled money from those businesses into their own charitable trust and personal bank accounts, according to the indictment.
A3 Education and the businesses affiliated with McManus and Schrock together have invoiced at least $83.3 million from the 13 charter schools, according to the indictment.
From the affiliated businesses, at least $8.18 million went into personal bank accounts, some in Australia, and into charitable trust accounts for McManus, Schrock and their wives, and $500,000 went to a family member of McManus, according to the indictment.
McManus and Schrock also used $1.6 million of A3 Education’s funds to buy a private residence for McManus in San Juan Capistrano, the indictment states.
Also according to the indictment, six people, including McManus and Schrock, conspired to collect state money for students who were listed as being enrolled in Valiant Charter Schools but were not receiving services.
The two Valiant schools will close permanently on June 30. Several thousand students will need to find new schools. The San Diego online charter was authorized by the Dehesa School District, and the one in Los Angeles was authorized by the Acton-Agua Dulce Unified School District.
The children were not assigned to teachers who have state-required professional certificates, the indictment said. The students were not in contact with the schools or provided with educational services during the summer months, as some of the co-conspirators claimed, according to the indictment…
Also indicted is Nancy Hauer, who is superintendent of Dehesa School District, which authorized several charter schools, including Valiant Academy of Southern California. The Dehesa district office did not immediately provide a comment Tuesday.
Also among the indicted is Steve Van Zant, a former Mountain Empire Unified superintendent who three years ago pleaded guilty to violating conflict-of-interest laws, after he brokered deals with charter schools to operate in other school districts, prosecutors said at the time.
Valiant Academy had 43 students two years ago, 726 last year, and 2,250 this year. It’s academic performance was so poor that even the California Charter School Association recommended that it be closed.
Betsy DeVos says that parents always know what’s best. Why were they enrolling their children in these failing “schools.”?