Get your popcorn, it's melodrama time

Ohio's tormented charter school scene periodically makes for compelling political drama. Lawsuits seek to break new legal ground, novel appeals sail toward the Internal Revenue Service, baffling legislation is enacted, and important characters engage in the charter debate--including politicians, big-money industrialists, union leaders, philanthropists, and editorial commentators. Ohio is a regular topic of discussion at national charter conferences and Ohio charter stories regularly appear in places like The New York Times and The Wall Street Journal. Consider these recent examples:

Ohio's novel lawsuits not only threaten charters across the land, but non-profit organizations generally. Attorney General Marc Dann is using the state's charitable trust laws to sue a handful of low-performing schools for violating their "charitable" mission as 501(c)3 organizations. If successful, this novel theory of trust law, concocted by lawyers at the Ohio Education Association, would effectively turn the state attorney general into a charter-school prosecutor, judge, jury, and executioner. Under Dann's legal theory, his office would determine whether a school is successful or not, thereby usurping the regulatory authority of the General Assembly, the Ohio Department of Education, and individual charter school sponsors. If the AG gets this authority, observers wonder what would prevent him from determining that non-profit colleges and universities aren't up to snuff and should be closed? Or hospitals? Or any other nonprofit unloved by Dann's political supporters? And why not then in other states, too?

The IRS is being invited to investigate Ohio's largest for-profit charter operator. If the revenuers can bring down Al Capone why not Ohio's most prominent for-profit charter operator? The Ohio Federation of Teachers (OFT) (see here) recently pleaded with the IRS to investigate David Brennan's White Hat Management, Inc. and the 31 charter schools that it operates in Ohio. The union questions whether charters managed by White Hat are truly overseen by independent governing authorities. Under state law, non-profit charter boards are tasked with governing and overseeing the management of the schools. In some cases, they outsource day-to-day operations to firms like White Hat, but the governing authority--not the operator--is ultimately accountable for the school's success. In its letter to the IRS, the union contends that White Hat really runs the show at these schools and that the board members actually work for the operator. This has been a long-running fight between the OFT and White Hat, and now the IRS is being asked to settle it.

Political action committees fined a record $5.2 million. Adding money to the melodrama, the Ohio Elections Commission fined the political action committee All Children Matter $2.6 million for illegally funneling money to Republican candidates in 2006. The commission also fined the All Children Matter Virginia PAC $2.6 million (see here). The amounts levied by the bi-partisan commission certainly turned some heads around the Statehouse. The commission found All Children Matter, a Michigan-based group, illegally funneled $870,000 in campaign contributions through its Virginia political-action committee to its PAC in Ohio. All Children Matter plans to appeal.

Portions of Ohio's tangled charter laws baffle even the most ardent charter supporter. The theory is straightforward--and scrupulously honored in most other states: non-profit governing authorities are accountable for school governance and management. They may outsource daily operations to non-profit or for-profit organizations; they remain the schools' "master," responsible for ensuring academic performance and fiscal probity and answerable to the school's sponsor.

Ohio, however, has introduced its own bizarre wrinkles. State law (see here) makes it legal for an operator, with the sign-off of its sponsor, to fire the governing authority and replace it with all-new board members of its own choosing. As a result, the operator, for-profit or otherwise, not only runs the school, but governs it as well. In effect, it contracts with itself for the outsourcing. Of the 40 states (and D.C.) that allow charter schools, Ohio is unique in allowing school operators to fire and then appoint new governing boards--an astounding case of the fox guarding the hens and a mighty hard situation to explain even to charter friends, much less to skeptics and critics.

Amid all the shenanigans, however, there's also good news. Real improvements are taking place in Ohio's charter sector. The state's first KIPP school (see here) is opening in Columbus in August and more are expected to follow. A growing number of Ohio charters are establishing strong academic records (Citizens' Academy, Cleveland's E-Prep, Ohio Virtual Academy, Horizon Science Academies, the Graham School, and Old Brooklyn Montessori to name but six), and they are steadily expanding their enrollments. The Cleveland Metropolitan School District seems serious about opening new charter schools through the district's Office of New and Innovative Schools (see here), and other districts are quietly looking into ways by which they, too, might gingerly embrace the charter concept. And troubled charter schools are starting to close. The bright stops aren't always easy to see, but they're there and any true appraisal of Ohio's charter scene needs to attend to the good as well as the bad.

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