CPD IN THE NEWS

Ali, a green card holder and father of three young daughters in Baltimore, was driving his friend home when they were pulled over by police in a routine traffic stop. Ali's friend, who was undocumented, had a baggie of marijuana in his possession, and Ali, wanting to save his friend, took the blame. Ali believed his own immigration status would protect him even if convicted of possession. But a year later, he was threatened with deportation. He was arrested and, lacking a lawyer, detained for months, keeping him away from his family. Without a breadwinner, his wife, who was undocumented and unable to work, and children were evicted from their home.

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With only a week to conduct its high-stakes investigation into the sexual misconduct allegations against Brett Kavanaugh, the FBI has already contacted the second woman to accuse the Supreme Court nominee, her lawyer said.

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A new report by two groups that oppose reforms that are privatizing public education finds fraud and waste totaling more than $100 million of taxpayer funds in 15 of the 42 states that operate charter schools.

The report, titled “Charter School Vulnerabilities to Waste, Fraud, & Abuse,” and released by the nonprofit organizationsIntegrity in Education and the Center for Popular Democracy, cites news reports and criminal complaints from around the country that detail how some charter school operators have illegally used public money. It also makes policy recommendations, including a call for stopping charter expansion until oversight of charter operators is improved. Released during National Charter School Week, it notes that despite rapid growth in the charter industry, there is no agency at the federal or state level that has the resources to provide sufficient oversight.

The Obama administration has supported the spread of charter schools but has also called for better oversight. Proponents of charter schools say they provide choices for parents and competition for traditional public schools, but critics note that most don’t perform any better — and some of them worse — than traditional public schools and take resources away from school districts. Some critics see the expansion of charter schools as part of an effort by some school reformers to privatize public education.

The report details cases from state after state, among them:

*In Washington D.C.:

In the fall of 2008, the U.S. attorney’s office issued a subpoena for school financial records related to L. Lawrence Riccio’s “alleged criminal activities” at the School for Arts in Learning (SAIL). Known internationally for his work in the education of youth with disabilities, Riccio founded the Washington, DC charter school in 1998, but by 2007, a memo by a financial consultant to SAIL’s former chief financial officer describes complete disarray of financial matters. Though grant money had been flowing in, staff members were not allowed to purchase supplies, rent went unpaid, and funds from one Riccio-led organization paid expenses for another. Financial statements showed that SAIL and sister organizations paid a $4,854 credit card bill to cover Mr. Riccio’s travel -related expenses in Scotland, as well as membership dues and dinner tabs at the University Club, a premier private club. SAIL covered expenses for travel to Boston, Denver, Houston and New Orleans; grocery stores, drugstores, wine and liquor stores and flower shops, cafes and restaurants, a salon and spa, Victoria’s Secret and at a glass, paint and wallpaper shop in France, where Mr. Riccio and his wife maintain a private residence.

and

Former leaders of Options Public Charter School are under Federal investigation for possible Medicaid fraud and other abuses. They are accused of exaggerating the needs of the disabled students, bilking the federal government for Medicaid funds to support their care, and creating a contracting scheme to divert more than $3 million from the schools for their own companies, including a transportation company that billed the Federal government for transporting students to the school, but apparently offered gift cards to students to increase ridership on the buses. Additionally, a senior official at the D.C. Public Charter School Board allegedly received $150,000 to help them evade oversight.

*In Ohio:

Ohio Auditor of State Dave Yost, speaking about nearly $3 million in unsubstantiated expenses amassed by the Weems Charter School, said: “This is a heck of a mess…Closed or not, the leadership of this school must be held responsible, and the money must be returned to the people of Ohio.”

* In Wisconsin:

In 2008, Rosella Tucker, founder and director of the now-closed New Hope Institute of Science and Technology charter school in Milwaukee, was convicted in federal court of embezzling $300,000 in public money and sentenced to two years in prison. Tucker acknowledged taking U.S. Department of Education money intended for the school, which she started through a charter agreement with Milwaukee Public Schools. She spent about $200,000 on personal expenses, including cars, funeral arrangements and home improvement, according to court documents. Tucker has argued that the remainder of the money she received was legitimate reimbursement for school-related expenses. Tucker embezzled the $300,000 from 2003 to 2005. The Milwaukee School Board voted to close New Hope Institute of Science and Technology in February 2006, amid problems that included unpaid bills and lack of appropriate teacher licensure.

* In California:

Steven A. Bolden pleaded guilty on January 2, 2014 to stealing more than $7.2 million worth of computers from a government program. Between 2007 and 2012, Bolden invented more than a dozen education non-profits, including fake charter schools, to benefit from a General Services Administration program that gives surplus computer equipment to public schools and non-profits. In July 2012, a GSA undercover investigator was contacted by Palmdale Educational Development Schools, one of Bolden’s organizations, and sent Bolden 9 laptop computers, which Bolden sold via Craigslist.

Here’s the report:

Charter School Vulnerabilities to Waste, Fraud, & Abuse

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Democratic presidential front-runner Hillary Clinton said she would support changes to the top ranks of the Federal Reserve, an issue recently championed by progressive groups amid debate over how long the central bank should keep supporting the American economy.

The Fed is led by a seven-member board of governors based in Washington and a dozen regional bank presidents based across the country, from New York to Kansas City to San Francisco. The governors are nominated by the White House and approved by the Senate, but regional bank presidents are selected by their boards of directors, whose occupants are chosen by the banking industry and by the Fed governors in Washington.

In a statement to The Washington Post, Clinton’s campaign said she supports removing bankers from the boards of directors and increasing diversity within the Fed.

"The Federal Reserve is a vital institution for our economy and the well-being of our middle class, and the American people should have no doubt that the Fed is serving the public interest,” spokesman Jesse Ferguson said. “That's why Secretary Clinton believes that the Fed needs to be more representative of America as a whole and that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.”

The statement puts Clinton on the same page as her rival, Vermont Sen. Bernie Sanders. In an op-ed in the New York Times in December, he said removing bankers from the Fed’s governance would mean “the foxes would no longer guard the henhouse.”

On Thursday, Sanders and top Democratic lawmakers called on the Fed to increase the number of minorities in leadership positions. They also urged the central bank to consider the high unemployment rate among some racial groups as it debates whether to keep pulling back its support for the American economy.

In a letter to Fed Chair Janet Yellen, the lawmakers argued that more minority representation would help broaden the Fed’s internal discussions about the health of the economy. In addition to Sanders, 10 senators signed the letter, including banking committee members Elizabeth Warren of Massachusetts, Jeff Merkley of Oregon and Robert Menendez of New Jersey. More than 100 congressmen joined the effort, which was led in the House by Michigan Rep. John Conyers and gained support from California Rep. Maxine Waters, ranking member of the House financial services committee.

“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country, cannot be understated,” the letter states. “When the voices of women, African-Americans, Latinos, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected.”

Donald Trump, the GOP’s presumptive nominee, did not return a request for comment.

The leaders of the Fed are responsible for steering the ship of the American economy, setting a benchmark interest rate that can influence the cost of borrowing money for everything from a car, to a home to a factory. They also regulate the country’s biggest banks and help ensure the nation's financial system can withstand another crisis, making them among the most influential policymakers in the world.

Those officials tend to be white males. Yellen is the first woman to serve as chair in the central bank’s 101-year history. Only three Fed governors have been African American, and there have been no black regional bank presidents. No one now in the top brass is Hispanic.

In addition, an analysis by the progressive Center for Popular Democracy found that 83 percent of the boards of directors are white and three-fourths are male. The group also found that 39 percent of directors come from the financial industry, while 11 percent are from community groups, labor organizations or academia.

There are nine seats on the boards of directors. Under current law, three are required to be filled by representatives of the banking industry. However, they are not allowed to participate in choosing reserve bank presidents — the officials who would be responsible for setting the nation’s monetary policy. The bank president must also win approval from the Fed's politically appointed board of governors, based in Washington.

In a statement, a spokesman for the Fed’s board of governors said it is committed to fostering diversity of all types within its leadership and that its track record has improved.

“To bring a variety of perspectives to Federal Reserve Bank and Branch boards, we have focused considerable attention in recent years on recruiting directors with diverse backgrounds and experience,” the statement said. “By law, we consider the interests of agriculture, commerce, industry, services, labor, and consumers.  We also are aiming to increase ethnic and gender diversity.” 

The criticism comes in the midst of a controversial debate within the central bank. The Fed hiked interest rates in December for the first time since the Great Recession, citing the strength in the U.S. recovery. It had anticipated increasing rates four more times this year but has since downgraded that expectation amid weakness in the global economy. Investors around the world are now carefully watching to see what the Fed will do when it meets again in June.

Federal Reserve chief Janet Yellen was joined by her three predecessors Ben Bernanke Paul Volcker and Alan Greenspan at a discussion in New York City on the global economy. (Reuters)

The Center for Popular Democracy and its activist coalition, Fed Up, are pressuring the central bank not to raise its benchmark interest rate until the unemployment rate falls to 4 percent. Sanders has endorsed that target in the past, though the letter released Thursday said only that the central bank should give “due consideration” to the unevenness of the recovery.

“It is unacceptable that discussion of the job market for these populations would be an afterthought, or worse, ignored entirely, and we are concerned that the lack of balanced representation may be a significant cause of this oversight,” Democratic lawmakers said in their letter to Yellen.

Democrats have generally supported the central bank’s aggressive stimulus efforts following the 2008 financial crisis, but the prospect of higher interest rates is prompting some to question the Fed’s stance. In congressional testimony earlier this year, Yellen said there are limits to the central bank’s ability to help disadvantaged communities.

"It’s important to recognize that our powers, which involve setting interest rates, affecting financial conditions, are not targeted and can't be targeted at the experience of particular groups,” she said. “I think it always has been true and continues to be true that when the labor market improves, the experience of all groups does improve."

The Fed established an internal diversity office in 2011 as part of sweeping congressional reforms of the country’s financial system. The latest annual report for the Washington-based board of governors found minorities made up just 18 percent of top management in 2015, down from 21 percent the previous year. However, more than half of mid-level managers and administrative and support workers are minorities.

The report outlines several steps the Fed is taking to improve the recruitment and promotion of minority employees, such as a teaching and mentoring partnership with Howard University, a prestigious historically black college in the District.

By Ylan Q. Mui

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