Minimum wage going up
Minimum wage going up
Voters have decided it’s time to give Colorado’s minimum-wage workers a long-overdue raise. Amendment 70, a measure...
Voters have decided it’s time to give Colorado’s minimum-wage workers a long-overdue raise.
Amendment 70, a measure that would increase Colorado’s minimum wage to $12 an hour by 2020, was passing by a 10-percent margin. Minimum wage in the state is now $8.31 an hour.
With 25 of 64 counties reporting, the vote-count as of this posting was 55 percent yes to 45 percent no.
In a crowded, jubilant second-floor conference room at the Westin Downtown, a group of minimum wage earners, business owners and advocates celebrated.
“Amendment is going to help our local economy,” said Edwin Zoe, proprietor of restaurant Zoe Ma Ma. “When low income workers do well, we all do well.”
The amendment alters the state constitution to increase the minimum wage by yearly 90-cent increments until it reaches $12 in 2020. In 2020, it will be fixed at $12, except for yearly adjustments to account for inflation.
Who pushed it over the finish line?
Supporters of the increase coalesced in mid-2016 into a group called Colorado Families for a Fair Wage, a coalition of unions, economic justice advocates and progressive policy analysts. Many of them had been part of an informal consortium of anti-poverty groups called The Everyone Economy that came together to strategize about raising the minimum wage back in February 2014. Partnering with Democratic legislators, they advocated for a pair of bills in the 2015 legislative session to help low-wage workers. One would have allowed municipalities to set their own minimums, and the other would have created a ballot measure to reach a $12.50 per hour minimum by 2020. Republicans killed both bills in the Senate.
Democrats floated another bill in 2016 to allow cities to set their own minimum wages, which met the same fate as its predecessors. After that, Everyone Economy members decided they had no recourse but to pursue a ballot measure themselves and formed Colorado Families for a Fair Wage.
What does it mean that it passed?
The work is just beginning for Colorado labor unions and low-wage worker advocates. Most CFFW members acknowledge that $12 per hour is not in fact a living wage for workers with families in some parts of Colorado. Most estimates put a living wage for a single parent of two children in Denver at around $30 per hour. But advocates also believe that the current $8.31 per hour is inexcusable, and any more than $12 was not politically viable this time around.
But for some, the increase means a change in their lives. April Medina currently makes $11 per hour in assisted living. She works 60-70 hours per week, leaving very little time to spend with her four children. She brought her 9-year-old daughter, Jasmine, to the Westin Downtown to celebrate Amendment 70’s passage.
Medina said she was thrilled by the news.
“I’m excited to go to some basketball games,” Medina said.
How much firepower was against it?
Keep Colorado Working had a slower start raising funds, but raised $1.7 million in the last reporting period. It has spent just under $1.4 million as of the most recent campaign finance filings, primarily on television advertising and consultants. About half of its funds ($650,000) come from the Alexandria, Virginia-based Workforce Fairness Institute. It has also gotten $525,000 from Colorado Citizens Protecting Our Constitution, a committee that has donated hefty sums to pro-fracking campaigns and to a 2013 effort to recall legislators who had passed gun-control legislation.
CCFW outraised its rivals almost 3 to 1, raising about $5.3 million in donations, much of it from out-of-state groups like its largest donor, the Center for Popular Democracy, which has kicked in over $1 million. Its second-largest donor is the Palo Alto-based Fairness Project, which has contributed over $960,000 to CFFW and is also supporting minimum wage ballot measures in Maine, Arizona and Washington, D.C.
Keep Colorado Working wants to make sure you know that some of CFFW’s donors are not from Colorado. Virtually all of its communications use the terms “wealthy out of state special interests” liberally.
According to the most recent campaign finance filings, CFFW has spent $4.6 million on television and digital advertising, outreach efforts like canvassing and hosting events, mailers, polling and research.
By Eliza Carter
Source
The #MeToo Movement and Everyday Industries, Part 2
The #MeToo Movement and Everyday Industries, Part 2
The Center for Popular Democracy reports that 18 percent of women have upper-management positions, even though they...
The Center for Popular Democracy reports that 18 percent of women have upper-management positions, even though they make up 60 percent of first-line supervisors. People of color, namely black and Latino, are also delegated to low-level, low-paying positions, such as cashiering. Older, experienced employees often do not receive benefits or long-term rewards, according to The Washington Post.
Read the full article here.
Bankers and Economists Fear a Spate of Threats to Global Growth
Bankers and Economists Fear a Spate of Threats to Global Growth
GRAND TETON NATIONAL PARK, Wyo. — In the decade since the financial crisis, economic policy makers, professors and...
GRAND TETON NATIONAL PARK, Wyo. — In the decade since the financial crisis, economic policy makers, professors and protesters have gathered here every August to argue about the best ways to return to faster economic growth.
This year, they gave up.
Read the full article here.
Chicago Activists, Lawmakers Deliver Petitions To SEC For Action On 'Toxic' Interest Rate Swaps (VIDEO)
Chicago Activists, Lawmakers Deliver Petitions To SEC For Action On 'Toxic' Interest Rate Swaps (VIDEO)
Chicago community activists and local elected officials delivered 88,000 petition signatures to the U.S. Securities and...
Chicago community activists and local elected officials delivered 88,000 petition signatures to the U.S. Securities and Exchange Commission's (SEC) regional office Thursday morning, urging the agency to investigate complex financial agreements called interest rate swaps.
Those who delivered the petition signatures, collected online by the Grassroots Collaborative and several other organizations, say cash-strapped local and state governments are being squeezed by the "toxic swaps" they entered into with banks before the Great Recession. The complicated deals, which come with hefty penalties and termination fees, were intended to save taxpayer-backed organizations money, but they backfired when the economy crashed.
"These are the same toxic swaps that have drained millions of dollars out of our city, state and (Chicago Public Schools) budgets and are hurting cities and states across the country," Saqib Bhatti, director of the ReFund America Project, said outside the SEC's Chicago regional office, 175 W. Jackson Boulevard.
Illinois State Reps. Robert Martwick (D-Chicago), Emanuel "Chris" Welch (D-Westchester) and Chicago Ald. Carlos Ramirez-Rosa (35th Ward) joined activists at the petition delivery.
Petitioners want the SEC to "investigate the 'toxic swaps' Wall Street is using to impoverish our cities and towns -- and make bankers return all ill-gotten profits from deceptive and fraudulent sales."
The state of Illinois has already paid $684 million for interest rate swaps and could be forced to pay an additional $870 million in November if "the state does not sue or renegotiate these deals," according to the Grassroots Collaborative.
Interest rate swaps, Ramirez-Rosa said, have cost the city of Chicago and CPS over $1 billion in combined payments, plus $600 million in costs associated with terminating the agreements.
"That $600 million in ransom to the banks went to go pad their bottom line," Ramirez-Rosa said. "The banks don't need more money. Our neighborhoods desperately need these funds. ... The SEC can act now to recuperate some of that money for the city of Chicago and the Chicago Public Schools, and they can act now to defend the state of Illinois from further payments, from paying a larger ransom, to these banks."
Welch said he is "disgusted" that "big banks continue to profit at the expense of our most vulnerable." He urged Illinois Gov. Bruce Rauner, Chicago Mayor Rahm Emanuel and CPS CEO Forrest Claypool to join the push for an SEC investigation into swap agreements.
"We ask the governor and our leaders in this city to stop putting banks before books," Welch said.
Here's more from the lawmakers at the petition delivery:
Organizers and the elected officials dropped off the petition signatures at the SEC's Chicago office, where a receptionist said she would give the documents to the regional director.
In addition to the Grassroots Collaborative, the online petition was circulated nationwide by Americans for Financial Reform, the Center for Popular Democracy, CREDO Action and Rootstrikers.
Read Progress Illinois' past reporting on how interest rate swaps work and their financial impact on the state, city of Chicago and CPS.
by ELLYN FORTINO
Source
Protesters On Hunger Strike For 17 Days Ask Education Department To Help
Two Chicago protesters who have been fasting for 17 days over the future of a local high school traveled to Washington...
Two Chicago protesters who have been fasting for 17 days over the future of a local high school traveled to Washington D.C. this week to take their fight to the national stage.
The protesters, joined by civil rights leaders and the presidents of the nation's two largest teachers unions, held a press conference on Wednesday and delivered a letter to Secretary of Education Arne Duncan, asking him to take action so city officials will make a decision about Chicago's Dyett High School, which closed in June due to low enrollment rates and test scores.
Twelve protesters have been participating in a hunger strike since Aug. 17 in an attempt to convince the Chicago Board of Education to reopen the school as an open-enrollment public school with a focus on science, which they say will best serve the needs of the community. The board is weighing various plans to reopen the school, but protesters say this process has been slow and inconsistent, and worry that the board will ultimately allow the school to remain closed.
Since the start of the hunger strike, four protesters have had to receive medical attention, according to the Chicago Sun-Times. Last week, a group of medical professionals asked Chicago Mayor Rahm Emanuel to intervene, calling the situation "a health emergency."
Only two of the protesters made the trip to Washington. The letter they delivered to Duncan on Wednesday asks him to "act swiftly to avert the further harm." An excerpt from the letter states:
"One of the challenges facing African American parents and students in Chicago is the lack of response and accountability from elected and appointed officials. Affluent neighborhoods receive selective enrollment and well-resourced schools. However, communities comprised of predominantly low-income and working families have to contend with under-resourced schools and privatization models that undermine the integrity of the community. We compel you to act on behalf of the residents of Bronzeville who have been rendered voiceless in this process."
At Wednesday's press conference, protesters Jitu Brown and April Stogner were joined by American Federation of Teachers President Randi Weingarten, National Education Association President Lily Eskelsen García, Advancement Project Co-Director Judith Browne Dianis, Schott Foundation President John Jackson, Coalition for Community Schools Director Martin Blank, and members of the Alliance for Educational Justice and the Center for Popular Democracy.
"Sometimes you have to put your own health on the line to get the attention of the world," said García.
The protesters want the Board of Education to choose their proposal for the school's future, which would reopen the school as the Dyett Global Leadership and Green Technology High School.
"We’re going to do whatever is necessary to keep this school and have an open enrollment school in our community,” said Stogner, a protester who has three grandchildren. “I’m hungry. But I’m not really hungry for food -- I’m hungry for justice. I’m hungry for justice for my grandbabies, for all the kids in my community."
“We live in a city where we are not valued as black and brown people,” she added.
Earlier this week, protesters met with Emanuel and officials from Chicago Public Schools to discuss the strike, but the meeting did not lead to any resolution.
"The mayor appreciates there are strong feelings about Dyett, and he understands there is a desire for a quick resolution about its future, however what's most important is the right decision," said a statement from the mayor's office. "CPS is engaged in a thorough review of Dyett, and while they are closer to a decision, they continue to weigh all the factors at play in an effort to achieve the best outcome possible -- one that will ensure a strong Bronzeville and a strong future for our children."
A spokesperson for Duncan said Department of Education leaders plan to meet with the protesters to hear their concerns.
“We respect the efforts of this group and worked to accommodate their plans to hold a press conference outside our building," said Department of Education press secretary Dorie Nolt in a statement. "Senior leaders at the Department will meet with representatives of the group today to hear more about their concerns. While this is squarely a local issue, we always welcome the opportunity to engage with concerned students, parents, educators and community members.”
Source: Huffington Post
Why Labor and the Movement for Racial Justice Should Work Together
Why Labor and the Movement for Racial Justice Should Work Together
The Movement for Black Lives (M4BL) has made tremendous strides in exposing and challenging racial injustice, and has...
The Movement for Black Lives (M4BL) has made tremendous strides in exposing and challenging racial injustice, and has won real policy victories. The policies, while often imperfect, are a testament to the strength of the organizing and activism of the moment. Not coincidentally, this uprising comes at a time when income and wealth inequality are at peak levels and the economy for most black people looks markedly different than the economy for their white counterparts.
Just as we are in a critical moment in the movement for racial justice, we are in a critical moment for the right to unionize. Unions, which have been a major force for economic justice for people of color in the past 50 years, have been decimated to historically low levels.
Labor should work alongside the Movement for Black Lives, a coalition with more than 50 organizations, to usher in a radically new economic and social order. The path won’t be easy. But recent history has shown that one of the ways to get at this new reality is through union bargaining. Consider the example of Fix L.A.
Fix L.A. is a community-labor partnership that fought to fund city services and jobs alike, using city workers’ bargaining as a flashpoint to bring common good demands to the table. The coalition started after government leaders in Los Angeles drastically cut back on public services and infrastructure maintenance during the Great Recession. The city slashed nearly 5,000 jobs, a large portion of which had been held by black and Latino workers. Not only did these cuts create infrastructure problems—like overgrown and dangerous trees and flooding—but they also cost thousands of black and Latino families their livelihoods.
Fix L.A. asked why the city was spending more on bank fees than on street services, and demanded that it renegotiate those fees and invest the savings in underserved communities.
What was the result of this groundbreaking campaign?
The creation of 5,000 jobs, with a commitment to increase access to those jobs for black and Latino workers, the defeat of proposed concessions for city workers and a commitment from the city to review why it was prioritizing payment of bank fees over funding for critical services in the first place!
Bargaining for the common good
Fix L.A. may seem novel, but the context is no different from many places. We have seen massive disinvestment from public services in a way that disproportionately affects black people. This structurally-racist disinvestment is often driven by the corporate interests that bankroll elected officials’ campaigns and by Wall Street actors that use their influence over public finance to push an austerity agenda. Everywhere you look, public officials are making a choice between paying fees and providing critical services.
Chicago Public Schools paid $502 million to banks in toxic swap fees at the same time that it was slashing special education programs and laying off teachers to close a budget deficit. Detroit raised its water rates and paid $537 million in Wall Street penalties, setting the stage for mass water shutoffs when tens of thousands of poor residents of the overwhelmingly black city could not afford the higher water bills.
Wall Street and other corporations don’t hesitate to profit off of and perpetuate disinvestment in communities of color, and too often we forget to look up the food chain to see that at the other end of community crises there are rich bankers and billionaires lining their pockets. Campaigns, like Fix L.A., that involve direct actions targeting banks, hedge funds, corporations and billionaires are effective.
This sort of organizing can be hard. In order to isolate workers from their broader communities, the other side has done a terrific job of narrowly defining the scope of bargaining as wages and benefits. In many states, labor laws prohibit public sector workers from bargaining over issues that concern the welfare of the broader community or the quality of the services they provide.
The theory of “bargaining for the common good” seeks to challenge this status quo. As articulated by Joseph McCartin of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor, bargaining for the common good has three main tenets: 1) transcending the bargaining frameworks written in law and rejecting them as tools for the corporate elite to remain in power; 2) crafting demands between local community groups and unions at the same time and in close coordination with each other from the very beginning; and 3) embracing collective direct action as key to the success of organizing campaigns.
These may seem like simple ideas, but they stand in complete opposition to the way the power elite expects union bargaining to be done. Therein lies their power.
Therein also lies the opportunity for unions to partner with the Movement for Black Lives. For all of their complicated racial histories, unions are some of the largest organizations of black people in the country. About 2.2 million black Americans are union members—some 14 percent of the employed black workforce.
That’s a huge number of black people who are already members of organizations with the capacity to organize and mobilize. And these black workers, like all black people in America, face real challenges of structural economic racism in almost all aspects of their lives. Their communities have been underfunded; their schools are being dismantled; they face massive poverty and are under economic assault; and they regularly encounter police violence.
Stronger together
Widening the scope of bargaining in Los Angeles led to real wins for the city’s black and Latino communities. The rest of the labor movement should take note. Imagine the power that could be added to the Movement for Black Lives if unions, recognizing the trauma that systematic racism wreaks on their membership, brought solutions that have been elevated by the Movement for Black Lives to the bargaining table in negotiations with employers ranging from the City of Baltimore to private equity giant Blackstone.
But unions cannot do this unilaterally and expect unconditional support from the black community.
Unions must make the effort on the front end to build a real relationship with Movement for Black Lives groups and members, and partner with them in developing common good bargaining demands that start to go on the offense against Wall Street and the structurally-racist economic power structure. There are groups of people organizing for racial justice under the banner of the Movement for Black Lives near every union local in the country. The onus is on labor leaders and rank-and-file union members to reach out to those groups and start to build a strong relationship where one does not exist. This process will not be easy, especially because of the history of racism that plagues unions, especially police unions. But the truth remains that there is a real opportunity to leverage the power of both movements to win real gains for black people and other people of color through a strong partnership.
It is exciting to imagine potential bargaining demands major unions could undertake alongside racial justice organizations. For example, they could demand that their employers make a commitment to job training programs to strengthen the pipeline for black workers; city and state workers could demand progressive taxation measures that raise funds from corporate actors to fund schools and services in black communities; teachers could demand school districts enact restorative justice policies to stem the school-to-prison pipeline; hospital workers could bargain for targeted health care access programs in communities of color; retail workers could demand that their employers “ban the box” and let the formerly incarcerated work. The list is almost infinite.
Bargaining for racial justice is a radical idea and will not be easily won. It will require concerted direct action targeting the real decision makers in both the public and private sectors that have a vested interest in keeping racial inequities in place. The Movement for Black Lives has proven that it can execute effective and creative direct actions backed by solid demands. They are also innovating creative tactics that move beyond traditional marches and picket lines to new types of disruptive actions that make power holders directly confront those they are harming. By combining the vision and militant tactics of the Movement for Black Lives with the membership and resources of the labor movement, we can usher in a more just and equitable society
BY MAURICE WEEKS AND MARILYN SNEIDERMAN
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Philadelphia Hopes to Become Next Major City to Pass Fair Workweek Legislation
Philadelphia Hopes to Become Next Major City to Pass Fair Workweek Legislation
It is part of a larger, nationwide effort that has already been introduced in San Francisco, Seattle and New York....
It is part of a larger, nationwide effort that has already been introduced in San Francisco, Seattle and New York. Those cities passed similar legislation after increasing their minimum wage. Adding fair workweek standards was the logical next step, according to Rachel Deutsch, senior staff attorney for worker justice at the Center for Popular Democracy. “Some companies are stuck in this philosophy that labor is the most malleable cost,” she said. “But there has been a ton of data that shows there are hidden costs to this business model that treat workers as disposable.”
Read the full article here.
Warren calls for diversity in Federal Reserve leadership
Warren calls for diversity in Federal Reserve leadership
WASHINGTON – The latest crusade in the name of diversity commenced on Thursday, this time aimed squarely at the makeup...
WASHINGTON – The latest crusade in the name of diversity commenced on Thursday, this time aimed squarely at the makeup of the Federal Reserve’s leadership and spearheaded in part by Elizabeth Warren, the senior U.S. senator from Massachusetts.
The Cambridge Democrat recently linked up with fellow Democrat, Michigan U.S. Rep. John Conyers, to send a letter to Janet Yellen, chair of the Federal Reserve Board of Governors, asking the former Clinton administration adviser to take action. They cited a 1977 law that requires the bank regulator to reflect the nation’s diversity.
The progressive duo began their missive by praising her work under President Barack Obama before stating that they “remain deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation.” Instead, they said, the central bank’s leadership “remains overwhelmingly and disproportionately white and male,” and is drawn mainly from major banks and corporations.
The letter cites a statistic reported in February by the left-leaning Center for Popular Democracy that indicates that “83 percent of Federal Reserve head office board members are white” while “men occupy nearly three-fourths of all regional bank directorships.”
The lawmakers assert that the discussions among Fed leaders regarding labor market conditions never once mentioned the situation confronting blacks in 2010, the most recent year for which full transcripts are available. The lawmakers point out that the unemployment rate for blacks that year never fell below 15.5 percent, while the nation’s average jobless rate hovered just below 10 percent during most of that post-recession period.
Fellow Massachusetts U.S. Sen. Ed Markey put his signature on the letter, alongside those of more than 120 other Democrats in Congress
Warren and Conyers later took to social media to rally the public around the cause:
Former Secretary of State Hillary Clinton, the frontrunner for the Democratic presidential nomination, was also quick to throw her support behind the call for diversity:
“The Fed needs to be more representative of America as a whole,” Jesse Ferguson, a Clinton campaign spokesman, told the Associated Press Thursday, adding that Clinton also opposes the fact that three private-sector bankers currently sit on each regional Fed bank board.
The Fed is actively working to further diversify its ranks, bank spokesman Dave Skidmore said in a statement provided to AP.
“Minority representation on Reserve Bank and Branch boards has increased from 16 percent in 2010 to 24 percent in 2016,” Skidmore told AP. “The proportion of women directors has risen from 23 percent to 30 percent over the same period. Currently, 46 percent of all directors are diverse in terms of race and/or gender (with a director who is both female and a minority counted only one time).”
“We are striving to continue that progress.”
By BY EVAN LIPS
Source
Report: Millions of Dollars in Fraud, Waste Found in Charter School Sector
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste...
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste totaling more than $200 million of uncovered fraud and waste of taxpayer funds in the charter school sector, but says the total is impossible to know because there is not sufficient oversight over these schools. It calls on Congress to include safeguards in legislation being considered to succeed the federal No Child Left Behind law.
The report, titled “The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And Abuse,” was released jointly by the nonprofit organizations Alliance to Reclaim Our Schools and the Center for Popular Democracy. It follows a similar report released a year ago by the same groups that detailed $136 million in fraud and waste and mismanagement in 15 of the 42 states that operate charter schools. The 2015 report cites $203 million, including the 2014 total plus $23 million in new cases, and $44 million in earlier cases not included in last year’s report.
It notes that these figures only represent fraud and waste in the charter sector uncovered so far, and that the total that federal, state and local governments “stand to lose” in 2015 is probably more than $1.4 billion. It says, “The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.”
The report makes these policy recommendations:
■ Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers. ■ Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability. ■ Increase transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
It also says:
State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.
The charter school sector has expanded significantly in the last decade and now educates about 5 percent of the students enrolled in public schools. The Obama administration has supported the spread of charter schools; President Obama’s proposed budget for fiscal year 2016 includes $375 million specifically for charters, a 48 percent increase over last year’s actual budget.
Proponents say charters offer choices for parents and competition for traditional public schools. Critics say that most charters don’t perform any better — and some of them worse — than traditional public schools, take resources away from school districts, and are part of an effort to privatize public education.
The report says that any “effective, comprehensive fraud prevention system” should include:
■ Taking proactive steps to educate all staff and board members about fraud; ■ Ensuring that one executive-level manager coordinates and oversees the fraud risk assessment and reports to the board of directors, oversight bodies, and school community; ■ Implementing reporting procedures that include conflict disclosure, whistleblower protections, and a clear investigation process; ■ Undergoing and posting a fraud risk assessment conducted by a consultant expert in applicable standards, key risk indicators, anti-fraud methodology, control activities, and detection procedures; and ■ Developing and implementing quality assurance, continuous monitoring, and, where necessary, correction action plans, with clear benchmarks and reporting
The report details cases across the country, among them:
The District of Columbia In February 2015, the DC Public Charter School Board unanimously voted to revoke the charter of the Dorothy I. Height Community Academy Public Charter School. The DC Attorney General is suing the founder, Kent Amos, for diverting public education funding to a private company for his personal profit. That private management company paid Amos more than $2.5 million over the last 2 years. Over the past 10 years, the school has paid the private entity more than $14 million and, while costs to the private company declined over that time, management fees rose. The charter board’s oversight report showed “no pattern of fiscal mismanagement.” Members of the DC Public Charter School Board have described their limited ability to oversee for-profit management companies, which face no requirement to disclose salaries or other pertinent information.
Michigan In April 2014, Steven Ingersoll, founder of Grand Traverse Academy, was convicted on federal fraud and tax evasion. He did not report $2 million of taxable income in 2009 and 2010. The school’s audit revealed a $2.3 million prepayment to Ingersoll’s school management company. The school’s later decision to write down $1.6 million of the loan put the school in a deficit position for the first time. Ingersoll then used half of a $.8 million loan for school construction to pay down some of his debt to the school.13 After the founder’s ouster, his daughter-in-law continued to handle the finances of the school.
Ohio In January 2015, the state auditor released a report of the results of unannounced visits by inspectors to 30 charter schools. In nearly half of the schools, the school-provided headcount was significantly higher than the auditors’ headcount. Schools are funded based on headcount, so these inflated figures amount to taxpayer dollars siphoned away from students. Among the seven schools with the most extreme variances between reported head count and the auditors’ headcount, almost 900 students were missing, at a cost of roughly $5.7 million.16 Auditors identified eight other schools with troubling, but less significant variances. In June 2014, a grand jury indicted the superintendent and 2 board members of Arise! Academy in Dayton of soliciting and accepting bribes in exchange for awarding a “lucrative” consulting contract to a North Carolina-based company. The contract was worth $420,919 and the charter personnel received kickbacks in the form of cash, travel, and payments to a separate business.
California In July 2014, the Los Angeles Unified School District performed a forensic audit of Magnolia Public Schools. They found that the charter-school chain used education dollars to pay for six nonemployees’ immigration costs and could not justify $3 million in expenses over four years to outsource curriculum development, professional training, and human resources services that the school itself reported doing.
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