Charter school supporters like to tout that Texas charters are non-profit organizations. This blog by Diane Ravitch explains how there is rarely such a thing as a true non-profit. The charter owner sets up a for-profit business and then forces the school to buy everything possible from him, with no requirement for bids. North Carolina: Charter Owner Gets Rich from His Charter Schools by dianeravitch Own a charter school! Own four! The road to riches! ProPublica reporters here tell the story of Baker Mitchell in North Carolina, who has discovered that the free market works very well indeed for those who know how to use it. Mitchell has four charter schools in North Carolina. He is also closely allied with Art Pope, the multimillionaire libertarian. He is connected politically. What could possibly go wrong? He boasts that students schooled at his sprawling, rural campuses produce better test scores at a lower cost than those in traditional public schools. The schools, however, do more than just teach children. They are also at the center of Mitchell’s business interests. Every year, millions of public education dollars flow through his chain of four nonprofit charter schools to for-profit companies he controls. Unlike with traditional school districts, at Mitchell’s charter schools there’s no competitive bidding. No evidence of haggling over rent or contracts. The schools buy or lease nearly everything from companies owned by Mitchell. Their desks. Their computers. The training they provide to teachers. Most of the land and buildings. The schools have all hired the same for-profit management company to run their day-to-day operations. The company, Roger Bacon Academy, is owned by Mitchell, 74. It functions as the schools’ administrative arm, taking the lead in hiring and firing school staff. It handles most of the bookkeeping. The treasurer of the nonprofit that controls the four schools is also the chief financial officer of Mitchell’s management company. The two organizations even share a bank account. Mitchell’s management company was chosen by the schools’ nonprofit board, which Mitchell was on at the time – an arrangement that would be illegal in many other states. As the article points out, his schools get higher scores than the local public schools, but they enroll half as many needy children as the public schools whose money they poach. Two of Mitchell’s former employees told ProPublica they have been interviewed by federal investigators. Mitchell says he does not know whether the schools are being investigated and that he has not been contacted by any investigators. To Mitchell, his schools are simply an example of the triumph of the free market. “People here think it’s unholy if you make a profit” from schools, he said in July while attending a country-club luncheon to celebrate the legacy of free-market sage Milton Friedman. It’s impossible to know how much Mitchell is profiting from his companies. He has fought to keep most of the financial details secret. Still, audited financial statements show that over six years, companies owned by Mitchell took in close to $20 million in revenue from his first two schools. Those records go through the middle of 2013. Mitchell since has opened two more schools. Some people look at Mitchells political activities and his financial rewards, and they see conflicts of interest. Mitchell is making a lot of money. Mitchell says that it is his business how much money he makes. And that is that. My view: all for-profit schools and colleges should be made illegal. They are a ripoff for students and they take money that taxpayers intended for public education, not for investors. Read more here: newsobserver/2014/10/15/4233621_new-charter-rules-benefit-owner.html?sp=/99/102/110/&rh=1#storylink=cpy dianeravitch | October 17, 2014 at 12:00 pm | Categories: Accountability, Charter Schools, Education Industry, Privatization | URL: wp.me/p2odLa-8Rf
Posted on: Fri, 17 Oct 2014 16:21:35 +0000
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