Vahan Gureghian's For Profit Charter Chain CSMI Ready To 'Do AC'

It sure has been a busy week in education news in New Jersey. The education blogosphere has been burning up with posts about Governor Christie's executive order regarding PARCC and Common Core, here, here, here, and here. It's been covered in all the major news outlets too, and there was even a press release to explain how the DOE will implement the Executive Order.

With all this chatter it's pretty likely that yesterday's press release about the five charters awarded their final charters, giving them the green light to open in September, will go all but unnoticed. The Star Ledger's Peggy McGlone covered it, but pretty much just regurgitated a few clips from the press release. 

Yawn. 

Here are the five charters Commissioner Hespe has determined are worthy of your tax dollars.

For now let's take a look at one in particular. I hope you'll forgive me, but the details surrounding the approval of the Atlantic City Community Charter School (ACCCS) had slipped my mind. 

Afterall, it's hard to keep track of a charter approved in January of 2011. Yes, you read that right, ACCCS was originally approved more than three years ago.

ACCCS was one of 23 charters approved in one of Christie's blockbuster charter application rounds when he was still riding high on a wave of ed reform. Every year since then ACCCS has been given planning years. 

In July 2011 the DOE stated ACCCS and 20 other potential charters needed "additional time to plan and develop."

In July 2012 ACCCS and 9 other charters "failed to demonstrate sufficient progress towards readiness."

By July 2013 the DOE stopped reporting how many charter DIDN'T make the cut for final charters in their press release, but ACCCS was one of 8 not ready for prime time last year.

Finally, it looks like 2014 is their year!

Why did the NJDOE allow ACCCS to take not one, not two, but THREE planning years? Allow me to explain. In 2011 another charter was approved with a very similar name - Camden Community Charter School (CCCS). 

CCCS just completed its first year in operation. My good blogging buddy Jersey Jazzman wrote a few posts about CCCS before they opened their doors, and I wrote about them once too, specifically to highlight the for-profit CMO that manages CCCS. That would be none other than CSMI LLC, which also manages the Chester Community Charter School in Chester, PA.

This excerpt from a September, 2013 Philly Inquirer article really tells you all you need to know about CSMI's business practices. 

CSMI, the firm that runs the Chester and Camden schools, is a for-profit company founded by Vahan Gureghian, a politically connected Gladwyne lawyer who donated more than $300,000 to Gov. Corbett's gubernatorial campaign and served on the education committee of his transition team.

CSMI has fought to prevent public disclosure of its finances - including how much taxpayer money ultimately goes to company officials. The company has argued that, unlike public schools or some other charter schools, its finances are a "trade secret" or "confidential information," because CSMI is a private company managing a school, and not a school itself.

In 2009, Gureghian attorney Edmond George - listed in public records as a founder of the Camden Community Charter School - sought to silence the Inquirer by asking a judge to order the paper to "refrain from public comments" about the company, the school or Gureghian. The motion was denied. In a separate matter, a CSMI lawyer tried unsuccessfully to bar a reporter from an arbitration hearing in open court.

The school has sued the cash-strapped Chester Upland School District - which was in danger of shutting down last year due to lack of funding - for millions of dollars in disputed payments. The case was appealed up to the Supreme Court but eventually was settled out of court.

A harsh audit 

Last month, in an audit report, state Auditor General Eugene DePasquale said the Chester charter school had improperly received nearly $1.3 million in state lease reimbursements - including payments for school buildings that had been owned by Gureghian.

"It's like paying yourself for renting your own house," said DePasquale, who wants the school to return the money.

DePasquale also criticized CSMI for what he called a lack of transparency.

"Minus national security, you should always err on the side of more transparency with taxpayer dollars," he said. "I'm not sure how [CSMI] believes in trade secrets. If they're doing something that's good, that helps kids get educated, please share it. (emphasis mine)

Clearly, CSMI plays serious hardball, and now this for-profit CMO has not one but two charters in NJ. 

How'd this happen? 

Well, notice how the first part of that quote mentions that Gureghian donated $300,000 to Governor Corbett in PA? Gureghian has yet to throw that kind of money around in NJ, but the money has certainly started flowing.

Jersey Jazzman pointed out that in 2013 Gureghian's money fed the Democratic machine in the southern part of New Jersey. But guess what else?

Gureghian and his wife Danielle, who just happens to be CSMI's Executive Vice President and General Counsel, have contributed over $6,000 directly to Camden's own Senator Donald Norcross.

The October contribution of $1,000 came less than 2 weeks after the September 24th ribbon cutting for CCCS, which was attended by both Mr. Gureghian and Senator Norcross.

Gureghian and Senator Norcross, in a photo from the Senator's Facebook page

The official ribbon cutting

Clearly Gureghian knows where to put his money to get things done in Camden. 

And guess who got almost $8,000 from Gureghian in 2013? The Senate and Assembly candidates from the 2nd Legislative District, which is, big surprise, Atlantic City.

I wonder why a lawyer from Pennsylvania would want to donate to the campaign of politicians in Atlantic City?

A May 2013 report from Press of Atlantic City reporter Diane D'Amico, who clearly seems to get that something very fishy is going on with CSMI in Atlantic City, provides the trail of breadcrumbs.

The Casino Reinvestment Development Authority on Tuesday approved plans to negotiate a lease agreement with Atlantic City Community Charter School in a move officials said was intended to allow the new school to open by September.

And who has lots and lots of dealing with the Casino Reinvestment Development Authority (CRDA)? Why, that would be Senator Whelan (for example, here, here and here).

But see, the trouble was there was already a charter school in the space the CRDA was looking to lease to CSMI. Luckily for CSMI, Oceanside Charter School was abruptly closed in June, 2013. 

Again, D'Amico has the story.

The school will officially close at the end of the month after the state Department of Education did not renew its charter this year.

Just a few blocks away, at the All Wars Memorial Building, representatives of the brand new Atlantic City Community Charter School, or ACCCS, rushed to enroll enough students to meet the state requirement of having 90 percent of its proposed enrollment of 150 students in grades K-5, in place by June 30. If it gets final state approval in July, the new school, managed by CSMI Education Management in Chester, Pa., will open in September at Oceanside’s site.

Anyone else conjuring up images of vultures circling over Oceanside?

Back in D'Amico's May report, it could not have been more clear that ACCCS was poised and ready to swoop in and take over Oceanside. Gureghian actually had the temerity to contact the founder and lead administrator of Oceanside, Jeanine Middleton.

Middleton said she also got a call Tuesday from Vahan Gureghian, founder and CEO of CSMI, saying he was interested in hiring some of her staff and also asking for her help in setting up a meeting with parents. Middleton said she will cooperate in the interest of the children. 

"This is a bitter pill," she said. "But I'll do what I can to be an advocate for the children and the staff."

I've been researching and writing about charter issues in New Jersey for over three years now, and I have never read something this blatant. While there have certainly been other recent examples of well connected charter chains seemingly jumping in after a questionable recent closure of a mom and pop charter (see Camden's City Invisible Charter School and Newark's Greater Newark Charter School), this story really takes the cake. 

It defies logic to think that Oceanside was not closed so that ACCCS, controlled by politically connected and ridiculously loaded Gureghian, could swoop in and take its place. I can find no evidence that Oceanside was ever put on probation, making it's sudden closure after 14 years in operation all the more perplexing, especially when the evidence to support the closure offered up by the DOE was so weak.

Officials from Oceanside say that new renewal requirements were put into place last July that now compare Atlantic City's charter schools' test results to all of Atlantic City's public schools.  Middleton said that in her renewal application her school outperformed many of the public schools from the areas that her students live, but that Oceanside does not perform better than the Atlantic City School District as a whole.

Middleton explained, "Suddenly when we're 10 to 15 percentage points above...we are no longer.  We are now a percentage point or two below them, as a district."

CRDA's Do AC logo

Oh, well, why didn't you say that Oceanside's test scores were "a percentage point or two lower" than the district's? Clearly, the DOE had no choice but to close them down...

What complete and utter poppycock. 

Ultimately, even though ACCCS pretty much had a school full of kids handed to them on a silver platter, they were not able to generate sufficient enrollment to open in 2013.

Yet somehow, here they are in 2014, poised and ready to "Do AC" in September, after three full years of being unable to open.

I don't know about you, but I'm disgusted. It's abhorrent that this DOE has invited a for-profit CMO that considers its business practices a "trade secret" and "confidential information" to make a profit on the backs of the most vulnerable children in this state.

I would never stand by and watch as the likes of Gureghian opened a charter in my town, so how can we sit by and watch it happen in Camden and Atlantic City? We need to demand a full investigation of Gureghian's connections to politicians and officials in the NJDOE, and complete and utter transparency regarding his involvement in and operations of the charters in Camden and Atlantic City.

Anything less is a travesty.