More Charter Profiteering in Palm Beach

money-40603_1280A charter school founder in Palm Beach said he made ‘mistakes’ in the interest of getting the school open last year.  His financial history was not good; he emerged from bankruptcy in 2010 and was running a small business for acting and modeling classes.

Yet, he could get loans to buy a former Christian school, create three for-profit companies and open Eagle Arts Academy.  How it was done is described as ‘legal’, but is it ethical to blatantly skirt the law?  Should the school district have been able to intervene?  You decide…Here are the facts as reported in the Palm Beach Post.  Clearly, the founder’s financial position has improved.

The school founder, Gregory Blount promised an arts curriculum, but he had no educational experience.  He recruited a teacher to help, but she resigned when she discovered he had created a company, Artademics, without her knowledge.  He received a $125,000 contract while he was Chair of the school’s board.  He is still working on the curriculum.  Parents complained.

He created another company, EMPPAC, to sell shirts, at an inflated price, to students at the school.  The school has 680 students, and his profit is substantial.  The company also offered fee-based after school courses.  It used the school facilities at no cost.  This company was called a non-profit foundation; it was not.  The school advertised it as a “pending 501(c)” foundation.  Evidently, he had neglected to file the paperwork.  Clearly, the company was profitable.

His third company loaned the school $39.000 at a compound interest rate of 7.5 percent to pay for consulting services.

The founder, Gregory Blount, knew to resign from the school’s board just prior to the school’s opening.  The law requires that board members cannot profit directly or indirectly from the school.  Once the money came into his companies from the school, he resumed his chairmanship of the board.  Except, of course, there is still money coming in to repay loans he made.

Parents are supposed to vote with their feet and remove their children when things are not right.  Some did.  Not unlike the parents at our local charter school that imploded, many parents are in love with the concept of this school.  They want the school to succeed, but they may have to hope rather than know that it will.  The Palm Beach Post reports that the school is hundreds of thousands of dollars in debt to its management company, iSchools and a contractor.  The Post speculates that a lawsuit may be in the offing.

What can be done to empower the districts to ensure that the letter and intent of the law is followed?  At the very least, the district should be able to approve charter school board members.

 

 

Posted in Charter School Management, Florida.

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