Investigation of online charter school industry sought

WASHINGTON, D.C. — The electronic classroom and for-profit charter school industry are under scrutiny — and under fire — from the Ohio State Auditor’s office and one of Ohio’s U.S. Senators. And if Sen. Sherrod Brown (D-OH) has his way, the U.S. Department of Education Inspector General will soon be investigating the school for misuse of state and federal funds.

On Tuesday, Brown wrote to DOE Inspector General Kathleen Tighe, calling for a prompt investigation into the Electronic Classroom of Tomorrow (ECOT) and the for-profit charter school industry. Brown’s letter follows Ohio State Auditor Dave Yost’s release of an audit finding that ECOT withheld critical student data to secure more state and federal funding, which Yost referred to Tighe and DOE. Since 2000, ECOT has collected more than $130 million in federal funding.

“Ohioans deserve answers,” Brown wrote. “We trust schools to educate and prepare students, but ECOT, William Lager and his companies have abused that trust to rig the system to enrich themselves.”

Brown also supports Yost’s referral of the audit to U.S. Attorney Ben Glassman’s office and Franklin County Prosecutor Ron O’Brien’s office for a possible criminal investigation into ECOT for misuse of state and federal funds.

In February, following the closure of ECOT, Brown wrote to the Ohio Department of Education and State Board of Education for specific steps Ohio will take to recoup taxpayer dollars from ECOT and its operator, Altair Learning Management.

In his letter to Tighe, Brown wrote, in part:

“ECOT, a massive online charter school that has collected over $1 billion in taxpayer funds since 2000, including $130 million in federal funds. ECOT abruptly closed in January 2018, and left its 12,000 Ohio students hanging in the balance. ECOT’s closure arose after examinations of its lengthy track record of mismanagement which included inflated enrollment numbers.

“Over the life of the school, ECOT made $200 million in payments to Lager’s companies. In the 2015-2016 school year alone, ECOT paid $4.3 million to Altair Learning Management and $17.5 million to IQ Innovations. The more one learns about ECOT’s finances and practices, the more it seems that the school was an enterprise that involved self-dealing and manipulation that lined the pockets of Mr. Lager and his companies. These companies flourished while students received a subpar education and taxpayers were deceived, intentionally and repeatedly,” Brown wrote.

“Unfortunately, Ohio has a long history of for-profit, privately-owned charter schools with poor student outcomes and questionable spending practices. Between 2008 and 2014, over 40 Ohio, for-profit charter schools had audits that uncovered improper spending, with much of the improper spending involving payments to school management companies, vendors and employees. The National Association of Charter School Authorizers once called Ohio the ‘Wild, Wild West’ of charter schools because of the loose standards of accountability and transparency. Despite the strengthening of accountability for charter schools by the Ohio legislature and additional oversight by the U.S. Department of Education’s Charter School Program, there remains a culture of corruption, mismanagement and self-dealing that leaves Ohio taxpayers on the hook and Ohio students without high-quality schools.

“ECOT and William Lager are prime examples of this culture of corruption. Their model was not student-driven, but rather profit-driven, with Ohio taxpayers bearing the costs. Ohioans deserve answers. We trust schools to educate and prepare students, but ECOT, William Lager, and his companies have abused that trust to rig the system to enrich themselves,” Brown wrote.