Charter Titans' Political Contributions Keep Ohio Charters Unregulated

In Policy vs. Politics: Which Will Prevail in the Looming Ohio Charter School Reform Fight? researchers from the Ohio Charter School Accountability Project examine the connection between political contributions made by David Brennan and William Lager—Ohio’s two largest charter profiteers—to prominent Republican state legislators and the passage of Ohio laws that keep Ohio’s charter schools unregulated. The Ohio Charter School Accountability Project is a joint effort of the Ohio Education Association and Innovation Ohio.

The new report documents the profits reaped by Brennan and Lager and the size of their political donations over the years: “Between the two of them, they have contributed about $6.4 million to Ohio politicians and committees since 1998. Of that, less than 3 percent went to Democrats…. Since charters were launched in Ohio in the 1998-1999 school year, taxpayers have sent charter schools $7.3 billion. Of that, $1.76 billion have gone to schools run by Brennan and Lager. Schools run by these two men have collected 1 out of every 4 dollars ever spent in Ohio since charter schools first opened.”

Founded by William Lager, the enormous Electronic Classroom of Tomorrow (ECOT) serves 14,561 students, reports the Columbus Dispatch. “ECOT, whose students take classes from home on a computer, grew by 122 percent during Ohio’s eight-year moratorium on new online charter schools. Some of its strongest growth was in elementary grades, including kindergarten. ECOT now has more students than Canton, Dayton, Dublin or Westerville schools. It is the state’s 10th-largest district. And growth came for ECOT despite its consistently low state report-card results: It ranks among the worst-performing schools in the state.” While the average high school graduation rate across Ohio’s school districts is 77 percent, ECOT’s graduation rate is only 38 percent. The Dispatch reports that 90 percent of funding for ECOT—$112.7 million last year—comes from Ohio tax dollars. Here is how ECOT spends some of that money: ECOT paid $21.4 million in 2013 to the two for-profit companies Lager established to provide all services to the school—IQ Innovations and Altair Learning Management. Plunderbund has documented that Lager has earned profits of over $100,000 million from these companies (via Ohio tax dollars) since 2001.

David Brennan owns White Hat Management, the for-profit company that provides all services for 32 supposedly non-profit Life Skills Academies and Hope Academies in Ohio. In what Pro-Publica has called a “sweeps contract,” privately held White Hat collects—up-front—over 95.5 percent of the funding for the schools it manages, leaving a very small percentage of the state’s money under the oversight of the board. Ten schools managed by White Hat were forced to sue the management company, a case not yet decided. They wished to fire White Hat and choose new management companies. They were forced to sue to try to recover equipment purchased with state funds, but White Hat Management claims ownership of the equipment it says it has purchased. The Akron Beacon Journal adds that, “Because White Hat had trademarked school names and bought up real estate through affiliate companies, the renegade boards couldn’t force White Hat out of the building.”

The Ohio Charter School Accountability Project’s new analysis connects the political influence of Lager and Brennan to specific laws that have protected charter schools from regulation. For example: “Perhaps the most insidious example is one Brennan had the legislature institute for dropout recovery schools—of which his Life Skills centers constitute the state’s largest group. Life Skills had been consistently the worst-rated schools in the state…. However, the state couldn’t close them because they had been exempted from the state’s closure law…. Brennan will have no difficulty living up to state standards. That’s because a loophole in the law allows a dropout recovery school to stay open even if it doesn’t meet state standards as long as the school improves its graduation rate by 10 percent a year for two consecutive years. However, that would mean Life Skills of Northeast Ohio would only need to improve to a 1.52 percent graduation rate, or graduate 2.4 students rather than 2 out of 155. In other words, Bernnan doesn’t have to graduate even a single new student to meet this ‘standard.'” And as reported by Brent Larkin in the Cleveland Plain Dealer, in the state budget correction bill passed in 2014, the legislature inserted language that allows such students to continue at White Hat Life Skills Academies and the state’s other designated “dropout recovery schools,” at state expense, until they are nearly 30 years old.