Are Charter Schools The New Enron?
Preston Green, Bruce Baker and Joseph Oluwole have a new publication forthcoming in the Indiana Law Journal:
Are Charter Schools the Second Coming of Enron?: An Examination of the Gatekeepers That Protect against Dangerous Related-Party Transactions in the Charter School Sector.
Are Charter Schools the Second Coming of Enron?: An Examination of the Gatekeepers That Protect against Dangerous Related-Party Transactions in the Charter School Sector.
The authors map the roles that gatekeepers played in the failure of Enron with parallel processes that are occurring within the charter sector. The following segment summarizes concerns outlined in the piece and underscores the need for greater attention to oversight procedures as current policy trends push toward unchecked charter growth:
“Enron’s collapse was significant because it exposed the deficiencies of gatekeepers that had the responsibility of protecting the integrity of the markets. These gatekeepers included Enron’s auditor Arthur Andersen, independent analysts, credit rating agencies, corporate boards,and the Securities and Exchange Commission (SEC). In the case of the Enron debacle, all of these watchdogs failed to detect the dangers caused by Fastow’s conflict of interest.Related-party transactions are now posing a threat to the charter school sector. Charter schools are a deregulated departure from traditional public schools because they are exempted from laws governing budgets and financial transparency. Similar to Fastow, unscrupulous individuals and corporations are using their control over charter schools and their affiliates to obtain unreasonable management fees for their services and funnel money intended for charter schools into other business ventures.In spite of this evidence, the federal government has consistently attempted to increase the number of charter schools without pushing for oversight. This policy approach is alarming because it will create more opportunities for illegal related-party transactions. Also, this approach runs the risk of harming students in low-income and minority communities – the very children whom charter schools are supposed to serve. Therefore, charter school gatekeepers must learn from the Enron debacle by becoming more prepared to guard against the dangers posed by related-party transactions. These gatekeepers include auditors, Are Charter Schools The New Enron? | EduResearcher:
