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East County News Service

April 17, 2017 (Sacramento) -- A California bill aims to crack down on profiteering by private charter schools that have been pocketing public funds while providing a poor quality education to students, Cal Matters reports.

The actions follow an investigation last year by the San Jose Mercury News which found that K12 Inc., the state’s largest for-profit charter school company, graduated less than half the students it signed up through its online academy. Two-thirds of its students fell below statewide averages for math and half were not proficient in reading. Kids could get credit for being “present” by logging in for as little as a minute.

U.S. Secretary of Education Betsy DeVos and her husband were early investors in K12 Inc.  While chairing the American Federation for Children, a group advocating school “choice,” DeVos pushed for expanding access to online “virtual” schools such as K12, in which she had a financial stake. As Education Secretary, she continues to tout for-profit charters that suck funds out of the public education system. 

K12 has been riddled by scandals, most recently including a securities fraud lawsuit filed by shareholders claiming the company made false or misleading statements to investors, Business Wire reports.

According to SourceWatch, K12 was founded by former Goldman Sachs executive Ron Packard and former United States Secretary of Education and right-wing talk show host William Bennett in 1999. Packard was able to start K12 Inc. with $10 million from convicted junk-bond king Michael Milken and $30 million more from other Wall Street investors.

(For more on this, read PRWatch investigation: "From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers for Phantom Students and Failing Grades", October 2013.)

The American Exchange Council, or ALEC, passed a “model” virtual schools act to tout online schools such as K12 Inc.  In California, ALEC is chaired by State Senator Joel Anderson (R-Alpine).

Studies by the National Education Policy Center in 2012 and 2013 found that nationwide, only 28% of K12 Inc.’s online schools met Adequate Yearly Progress requirements, compared to 52% of public schools that met those standards for academic achievement. Less than 1 in 5 of K12’s schools even managed to obtain satisfactory ratings from states that issued them. Nationwide, while public high schools graduated over 79% of students, only about 37% of K12 students graduated, Source Watch has documented.

San Diego saw its own charter school scandal recently when former Mountain Empire School District Superintendent Steve Van Zant pled guilty to a felony. Known as the “King of Charter Schools,” he violated conflict of interest provisions of the Political Reform Act by setting up 13 charter schools in other districts, overseen by Mountain Empire, a financially struggling rural district that got money for its supervision of charters elsewhere. 

All the while, Van Zant was lining his own pocket in several cases by having those charters hire his consulting firm, EdHive.

Assemblyman Kevin McCarty, author of AB 406, says “When we allow private companies to run public schools, we invite them to focus on shareholders and profit margins instead of on children and student achievement,” Cal Matters reported. 

His bill would outlaw all for-profit companies and management organizations from operating charter schools in California. “Profiting off the public good is bad public policy,” Assemblyman McCarty concludes.

Fighting back, the California Charter Schools Association is backing its own measure, Senate Bill 806, by Steve Glazer.  Their measure doesn’t ban private charters, but instead would prohibit for-profit companies from picking school board members, overseeing teachers or approving budgets. It would also require all charter schools to comply with California’s open meeting laws under the Brown Act as well as open records laws.

Both bills are expected to be considered by education committees in the Legislature next month.