Monday, July 22, 2013

Another Christie Crony Gets A Charter (And !SURPRISE! It's Managed By a Guy At The Center Of The BIGGEST Charter Failure In US History!)

The announcement of the six charters receiving final approval to open in September was four days off schedule.  The press release is full of platitudes about how well vetted these schools were, and how confident Commissioner Cerf is that these schools will be stellar.
"We must hold a high bar for any school that serves New Jersey students, and we are confident that these schools have the academic and operational components in place to provide a high-quality choice on day one," said Commissioner Cerf.
It's going to take me a while to demonstrate how the approval of Jersey City Global Charter School (JCGCS) proves, without a shadow of doubt, that these words are absolutely meaningless.  I hope you'll stay with me until the end, cause it's a hell of a story.

And it starts in St. Louis, MO.  

Imagine Schools Closure In St. Louis Largest In US History

At the end of the 2011-2012 school year six Imagine Schools charters were shuttered in St. Louis. Those six schools enrolled 3,800 students, approximately 11% of the city's school children.
In fact, the decision this week by Missouri's Board of Education to shutter six Imagine charter schools in St. Louis will likely result in the largest charter school closure of its kind nationwide, according to the National Alliance for Public Charter Schools. "This is definitely one of the biggest that I'm aware of," said Todd Ziebarth, of the alliance. "It's complicated enough when it's a single school of, lets say, 300 kids."
The schools were closed by the Missouri Department of Education for  a combination of poor academic performance and fiscal management. The St. Louis Dispatch, particularly education reporter Elisa Crouch, did an incredible job of publishing every detail of Imagine's betrayal of the public trust.  An editorial titled "Children deserve better than real-estate scams disguised as education," published well before the decision to shutter the schools, left no doubt that Imagine Schools was running a scam on the people of St. Louis.
When it comes to slick property deals that use public money to enrich private investors in real estate trusts, Imagine Schools Inc. of Arlington, Va., has been clever and creative.
The photo of an Imagine school
child by Christian Gooden
When it comes to ensuring that non-profit boards of charter schools don't interfere with Imagine's for-profit business, the national management company has been disciplined and focused.
But when it comes to actually educating children, Imagine has been betraying the trust of thousands of St. Louis kids who are eager to learn — like the child in Christian Gooden's photograph with this editorial. Imagine has betrayed the trust of parents who thought that Imagine would provide a good education and give their kids a chance at a better life.
The editorial goes on to detail Imagine's every transgression, including "elaborate multi-party real estate deals" that result in outrageous facilities payments for the schools, sometimes totaling more than 20% of the state funds they receive.  (Read Ken Libby's amazing analysis of Imagine's real estate shenanigans for more on this subject)

I was riveted by the story, and followed it closely. Especially when I saw this.
Ms. Crouch also reported on Imagine's unsettling relationship with Samuel Glasser, a local real estate developer and convicted felon. He has been involved in Imagine's convoluted property transactions and renovations at some of its local schools.
Ms. Crouch discovered records for historic renovation tax credits for Imagine buildings that showed thousands of dollars of payments to a New Jersey bank and referencing the name "Sam Howard." A Samuel Howard is an Imagine executive vice president with responsibility for company operations in Missouri, Georgia and the northeast U.S.
Mr. Howard, who lives in New Jersey, told Ms. Crouch that he was unaware of the references and had no idea what they meant. As Ms. Crouch reported on Thursday, Imagine has placed him on administrative leave. (emphasis mine)
When I read that the man at the center of this debacle was from New Jersey, my radar went off and I started to research if Imagine had set its sites on my home state.  And sure enough, they had.  And none other than Sam Howard, the guy accused of taking kickbacks from a 'real estate developer and convicted felon' was the one doing the leg work. 

Here's what I found in a Star Ledger article from October 2010, a short year and a half before the announcement of the St. Louis closure, about charter applications that had been submitted to the NJDOE.
 Among the proposals were some with ties to out-of-state charter school networks, like Imagine Schools, which helped local residents write applications in Jersey City, Newark, Camden, Trenton.
Imagine serves 40,000 students in 72 schools in 12 states, according to its website. "New Jersey is an area that is favorable for (education) alternatives," Samuel Howard, Imagine School’s executive vice president, said.
Christie has said he hoped to attract charter networks to New Jersey, but out-of-state companies face a roundabout process. A local group must first win approval for a charter then, if it wants to outsource the operation, must ask for bids. (emphasis mine)
Just ONCE I would really appreciate it if my suspicions weren't confirmed.  JUST ONCE! 

Look Out Jersey City, You're Next!

And sure enough, I looked at the applications in those four districts, and Sam Howard's name was on a document submitted with the JCGCS application regarding the lease for their proposed facility. Howard was meeting with and negotiating the deal with the Jersey City Redevelopment Agency on behalf of JCGCS.


Notice that the letter confirms that the property will be leased to Imagine, but JCGCS will be the 'actual tenant.' In April of 2012 the New York Times published a scathing article about Imagine Schools, detailing how they conduct their real estate transactions.
Imagine typically buys or leases buildings through a real estate arm, SchoolhouseFinance, and uses those properties to attract groups wanting to open charter schools that then pay to rent them.
Last year, Imagine sold 27 of its school buildings to Entertainment Properties Trust, a real estate investment trust that is the country’s largest owner of movie theaters, as part of a deal that won the company $206 million. The buildings that were sold were leased back by Imagine, which then subleased them to the schools that occupy them.
Guess the facility is the pot 'o gold at the end
of Imagine's rainbow! 
This is an actual photo from the Schoolhouse 
Finance page of their website!
Here is Imagine's description of how Schoolhouse Finance works.
Schoolhouse Finance generally leases the buildings for at least 15-25 years in order to provide a long-term, stable location. The individual school then sub-leases the building from Schoolhouse Finance only for the period that its individual charter is valid (usually 3-5 years). Therefore, the school is not taking on a bigger or longer term obligation than it can handle, and the financial burden of securing a stable, long-term and high quality building is shouldered by Schoolhouse Finance.

Sounds almost altruistic when they describe it, right? Except here's how it played out in St. Louis.
All six Imagine charter schools in St. Louis are paying a higher percentage of their budgets toward rent or mortgages than any other charter school in the city. For example, the three schools that operate under the Imagine Academy of Careers charter spent almost 21 percent of their revenue on rent in the 2009-10 school year. In contrast, City Garden Montessori spent less than 4 percent of its revenue that year to rent part of Tyler Place Presbyterian Church on South Spring Avenue.
Imagine officials stand by their real estate strategy, saying it produces a respectable environment for its schoolchildren.
"You want to treat them like first-class citizens," said Sam Howard, executive vice president for Imagine... (emphasis mine)
There is our friend Sam Howard again, and there is another big piece of the puzzle. The six Imagine schools were the lowest performing in the city, and all six of them were paying the highest rents in the city. To me, if you want to treat a kid like a "first-class citizen" you provide them with a solid education, not an over priced facility that enriches the bottom line of a CMO. 

Makes it pretty clear where Imagine's priorities lie, doesn't it?

But let's get back to JCGCS.  The charter was approved in January of 2012. This was just two short months after Howard was placed on administrative leave in the wake of the kickback allegations and just three short months before the decision to close them all down.  

Did the NJDOE just miss the fact that the man and CMO negotiating the lease for JCGCS founders was at the center of the nation's largest charter school failure, or did they just not care?

Imagine Pulls Out Of New Jersey, Sam Howard Starts His Own CMO With Another ex-Imagine Employee

For undisclosed reasons, Imagine Schools didn't "ultimately chose to pursue" any of the charters they were assisting with applications in 2010, including JCGCS. This was confirmed for me via email by Rhonda Cagle, Imagine Senior Vice President of Communications.  Cagle also confirmed that Sam Howard is "no longer employed with Imagine Schools."

But Howard was undaunted by the end of his relationship with Imagine, or the wreckage he left behind in St. Louis.  Like a phoenix rising from the ashes, Howard founded 

Athena Community Education Partners (ACEP) Management Group. And sadly for Jersey City, ACEP has been hired to manage JCGCS.

Seems he established his relationship with JCGCS as an Imagine executive, and cemented it with his own newly formed CMO. Which again, begs the question, has the NJDOE not figured this out, or do they just not care about Howard's past in St. Louis with Imagine? 

Angie Chiaravalloti, another former Imagine employee, is also listed on the JCGCS website as an employee of ACEP. Just like Howard, there is no mention of her time at Imagine in her bio. Why are they burying their Imagine pasts? Rhonda Cagle confirmed that Chiaravalloti is no longer employed by Imagine, and that Imagine has "no relationship with Athena Community Education Partners."

As a point of interest, Sam Howard's wife, Paula Howard, is the former Superintendent of Plainfield Public Schools. Surrounded by speculation, and some controversy, Paula Howard resigned her position in June of 2007. In 2006 Chiaravalloti was listed in board minutes as Paula Howard's Chief of Staff, and when Paula Howard resigned, so did Chiaravalloti. Prior to their employment in Plainfield, records show Paula Howard and Chiaravalotti were employed together in the Newark Public Schools as far back as 2002.

The Howards go back well over a decade with Chiaravalotti. She seems to always be in a slightly subordinate position to one Howard or the other, and she seems to follow them from job to job. 

The fact that not one but TWO ex-Imagine employees have hung up a shingle in New Jersey is troubling, to say the least. Imagine has developed quite a national reputation, and as you can imagine, it isn't good. While St. Louis may have been their biggest disaster, they have faced smaller closures in other states as well, such as Indiana and Florida.

And when Imagine was trying to open a school in Pittsburgh (again, our friend Sam Howard was on the scene) the good people of that city were VERY wary.
"A lot of my friends in education around the country are very supportive of the charter movement," says Pittsburgh Schools Superintendent Mark Roosevelt. "But I have not had a single person once say to me, 'Wow! Imagine Schools.' It's always been, 'Watch out for Imagine Schools.'" (emphasis mine)

Watch Out For Imagine Schools Indeed

Clearly education professionals around the country are wary of Imagine because of their track record of poor performance and financial management. But Imagine has also become rather infamous for controlling every detail of the schools they manage, to the point that the local boards have little to no say in what happens in the school.

Back in 2008 Imagine CEO Dennis Bakke (pictured above with Sam Howard) sent a hair raising internal memo regarding the role of board members in charters managed by Imagine Schools. (Note that Sam Howard is cc:ed on the memo) I highly suggest you read the whole thing, but here are a couple snippets to whet your appetite.
Legally, I believe "affirming" is the same as voting "yes". The difference is the assumption that we have made a "recommendation" or decision and want the board to agree formally with that decision. Before selecting board members we need to go over the voting process and our expectations that they will go along with Imagine unless the board member is convinced that we are doing something illegal. Of course, we want the board member to vote "no" on any proposal that the board member believes is illegal. However, in non legal issues of judgment , we expect them to argue the issue vigorously, but if they can't convince us to change our position, we expect them to vote for our proposal. It is our school, our money and our risk, not theirs.
None of this will protect you from the person who starts out as an "advisor", but becomes a major problem, thinking he/she are crucial to the success of the school. Sometimes you can protect yourself from board members that you chose, by getting undated letters of resignation from the start that can be acted on by us at any time would also help. Some states allow "founding" boards that can be changed once the school starts. That is a good idea if we can control who stays and who goes. Maybe you make all terms one year (if legal) so that we can re-nominate who we want. Make it clear that we will propose all new board members. Again, when the legal rules seem contrary to what I have been suggesting, seek lots of advice about how to set up the board before you select members. 
There are probably hundreds of other approaches to overcome the "runaway" board problems that can arise if you are not careful. (emphasis mine)
No matter how many times I read this memo, I just can't believe it. These are public schools, teaching public school students with public dollars. Yet the money and the children are being hijacked by a for-profit company that fails children but makes millions on real estate investments.

The memo was egregious enough to get the attention of National Association of Charter School Authorizers Greg Richmond, who blasted Bakke's statement, "It is our school, our money and our risk, not theirs."
He's wrong. It is a public school, it is the public's money, and the risk is being borne by thousands of parents and students who enroll in an Imagine School. 
For once I actually agree with Greg Richmond!  He goes on to define what the role between a board and a management company should be, and all of his suggestions make perfect sense. And they are diametrically opposed to how Imagine Schools run their charters. 

When asked about the memo, Howard had a curious response.
Imagine executive Sam Howard says the CEO's e-mail was merely his "opinion."
"His opinion and the way the schools operate are two different things," he says. After all, he says, local board members "are the boss. How can you tell your boss what to do?"
Howard is clearly a master of towing the party line, but it has become common knowledge that Imagine Schools is "the boss" at most of their schools, not the board. Check out this piece about a few Imagine charters in Indiana which confirms the degree to which Imagine controls the boards of the charters they manage.
For all three schools, no local board has ever taken bids from other management companies, publicly debated Imagine's contract or publicly voted on approving it. Imagine officials filed the incorporation papers for each, applied for tax-exempt status for each and applied for the charter for each.
Greg Richmond, president of the National Association of Charter School Authorizers in Chicago, said it appears Ball State, which granted Imagine's charters in Fort Wayne, failed in its duty to ensure local control.
"That is absolutely unacceptable," Richmond said. "If the governing board is compromised, from that point on everything else has the potential to be compromised."
Huh, kind of sounds just like Bakke's memo, doesn't it?

As Sam Howard told the Star Ledger, Imagine was involved in the application process for several charters in New Jersey, and clearly, JCGCS was one of them. Yet Imagine is not mentioned ONCE in the application.  Why is that? Why did the founders of JCGCS not reveal Imagine's involvement in the application process more directly?

Only the letter above from the Jersey City Redevelopment Agency directly reveals Imagine's involvement, but if anyone reading the application was savvy enough to know that Schoolhouse Finance is a part of Imagine, this paragraph in the application would have given it away, too: 

The application does make it clear that there will indeed be a CMO, it just pretends that there will be a Request For Proposal to select one. Check out the lengthy list of responsibilities for the CMO.

The application claimed a CMO had yet to be selected, but a pretty hefty figure for an "operating fee" is in the budget. In fact, it is the second largest line item, second only to teacher salaries.

It seems pretty clear that Imagine was well positioned to be the CMO for JCGCS, even though the founders were not forthright with this information in the application.  After all, it's Imagine's school, Imagine's money and Imagine's risk, not JCGCS's.

So what happened?  How did Howard's ACEP get the gig and not Imagine?  And why did Imagine pull out of New Jersey all together? 

If Richmond Is Unhappy, Cerf is Unhappy

I have written pretty extensively about the bromance between Commissioner Cerf and Greg Richmond. They are partners in NACSA's One Million Lives campaign, and Richmond wrote a presumptuous op-ed about how New Jersey should move forward with our charter program. Richmond has spent an inordinate amount of time heaping praise on Cerf, and vice versa. The latest NJDOE press release linked above says the department "increased its oversight and accountability for charter schools" thanks to their "partnership" with NACSA.

And as demonstrated, Richmond is no fan of Imagine. My guess is Richmond has put them on the national naughty charter list, and in turn Cerf made it clear that Imagine Schools was not welcome in New Jersey.

NACSA has made the St. Louis Imagine Schools closures a central focus of their One Million Lives campaign. In fact, the closure was the subject of an entire panel discussion at NACSA's 2012 conference.  

The panel was VERY revealing, both in terms of what went wrong with Imagine in St. Louis, including some pointed dialogue about Sam Howard, and how to avoid another mess like this in the future.

At about 10:15 in this video, in response to a question from an audience member, you can hear Robbyn Wahby, education liaison for St. Louis Mayor Francis Slay, clearly state that Sam Howard was under investigation for his dealing with one of Imagine's developers.

Question: The panel eluded to the fact that the management of the school was, dare I say, incompetent. So my question is, did any of the school's management rise to the level of criminality, and if so, what can be done about it now that the school is closed?
Wahby:  Well, actually, I think there is an investigation ongoing on one individual.
Through the reporters investigation found that one of the regional managers -- the regional manager -- actually took money from a developer that was helping with their real estate issues. So that's actually been under investigation, and so has the developer. 
Doug Thaman, executive director of the Missouri Charter Public School Association, also participated in the panel and at about the 10:00 mark he had some fabulous advice about how to avoid another St. Louis/Imagine debacle.

Thaman: And then the other thing that I think we need to do better is these schools shouldn't have opened in the first place. We really need to pay attention to the applications that are coming through, our processes and the decisions that are made before you allow a school to open. It's not because they're bad people. It's just these were not quality schools for the get-go and so we really have to focus and drill down on understanding what applicant groups come through really stand the best chance of success.  And the other ones, find other ways for them to be involved in education, but not allow them to open a school. (emphasis mine) 
I could not agree more. 

I think this quote from Thaman is crucial to understanding why it is such a huge mistake to give JCGCS the green light with Sam Howard at the helm. From what I have seen there is nothing in the JCGCS application that can possibly overshadow the fact that they have made the woeful decision to hire a CMO run by the man central to the mismanagement of six schools that lead to the largest charter closure in US history.  

This school SHOULD NOT be allowed to open with ACEP as the CMO. There may be another role for Howard in education, but he SHOULD NOT be allowed to manage another charter school. If the NJDOE believes he should be allowed to manage a charter school in New Jersey, I for one would like to hear them explain why.  Commissioner Cerf and his Office of Charter Schools need to do more than just throw words like "accountability" around in press releases.
"Accountability is important, and we have and will continue to hold every charter school accountable both for the quality of its educational program and for equality of access to all students," said Commissioner Cerf.
Now would be a great time to put those words into action and insist that JCGCS ditch ACEP or not open.

Why Did JCGCS Get A Final Charter?

I think the simplest answer to this question is that Doug Thaman is right.  Despite the hollow reassurances from Commissioner Cerf and Greg Richmond that New Jersey is engaging in quality authorizing, it just is not so. The NJDOE is not paying NEARLY enough attention to the applications that are coming though their office. As we saw with the circus called the Regis Academy Charter School, the NJDOE can miss some pretty big warning signs when approving applications. 

And as we also saw with Regis, it sure doesn't hurt to be a friend of Governor Christie's. Remember this oldie but goodie?

At a Town Hall meeting in Voorhees, Chris Christie denied he knew Amir Khan, the lead founder of Regis Academy, as Khan sat right behind him on the dais.

Amir Khan was not the only friend of Christie's to get a charter school.  Several other members of the Black Ministers Council were also awarded charters.

It appears Christie may be up to his old tricks. One of the board members of JCGCS is Jose Arango.  This is from his bio on the charter's website.
He served as a Senior Advisor to Mayor Bret Schundler for the City of Jersey City and as the Director of Business Development and Retention for the Department of Housing, Economic Development & Commerce [HEDC under Mayor Glenn Cunningham. Mr. Arango is also  an adviser Pro-Bono to Governor Chris Christie on Urban Policies.
Mr. Arango served as a member of the New Jersey General Assembly from 1986 to 1988, where he was voted “Legislator of the Year." (emphasis mine)
Well, isn't that cozy. Arango is a self-proclaimed adviser to the Governor. (I can't find any mention of Arango on the state website) Mr. Arango also happens to be the Chairman of the Hudson County Republican Party, and a big Christie supporter.
Arango campaigning with Christie in 2009
Christie said he expects not to win Hudson County but feels it is important to get votes here, with Hudson County Republican Party Chairman Jose Arango calling Hudson County "Christie country."

"We are going to do much better in Hudson County than past candidates because of support from people like Jose and because of the people running with me," Christie said.
Arango would not be the first influential Latino to get favors from the Governor in exchange for a chance to draw in more Latino voters. Martin Perez, a democrat who crossed party lines to endorse Christie, was recently sworn in as a member of the Rutgers Board of Governors, over the objections of Senators Sweeney, Smith and Buono.

Did Arango's connection to Governor Christie help JCGCS get its final charter?  Who knows, but it's sure does seem to be good to be a Friend of Chris Christie!

What Now?

The NJDOE demonstrates time and time again not only that they are incapable of properly vetting charter applications, but that many charter approvals in this state seem to have more to do with who you know that what you can do for kids. 

I plan to continue to investigate this charter, but I call on education reporters in this state to do so as well. Howard's involvement in JCGCS and the results of the investigation into his activities in St. Louis, must be explored. As an unpaid blogger my time and reach is limited, but there is a huge story here, and it needs to be told fully.

If allowed to open, JCGCS will be managed by a man who is culpable for short changing and disrupting the education of 3,800 St. Louis students. It is simply unconscionable that the NJDOE missed this in their preparedness review, and went ahead and granted them a final charter. 

And as usual, it will be the kids who suffer.


  1. Just brilliant - outstanding work, D!

    Also approved in this round was Camden Community Charter School, which has a history as checkered as JCGCS:

    Stand by as we tie all this together...

  2. Paula Howard is currently Deputy Superintendent in Orange, NJ.

    Thanks for all your hard work!

  3. This comment has been removed by a blog administrator.

  4. I am frequently critical of the Post Dispatch, Ms Crouch, and Doug Thaman. I thought the Imagine story was handled well by the pd, but Thaman's main spin was how great it was that bad charter schools shut down, to be replaced by better ones. Never mind the very real consequences of what happened to 6000 children. The pd is a regular cheerleader for charters, and they have a list of progressive people in education who are taboo to mention....including Diane Ravitch. KIPP has about the same status as the local Catholic diocese, and last week the appointed school board traded them a building in exchange for using their students' test scores to make them look better to the state board of education...they are barely, provisionally accredited.

  5. Great work @Mother Crusader. Ties the well-obscured pieces of the puzzle together very well, demonstrating certain facts and getting my thoughts in gear regarding further items of interest that have yet to be uncovered.

    Thanks for your excellent contributions to unveiling the workings of charter schools in the Garden State that are established specifically to enrich their founders, investors and management company administrators.

    As far as criticism, I just have one: I didn't find the definition of CMO in this report. I'm guessing it means Charter Management Organization but I'd like to be sure.

  6. Outstanding. Positively outstanding. Where is the rest of New Jersey's press on this.

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