New Jersey Expose, Part 3: How Charter Operators Collected Hundreds of Millions from a Federal Fund for Building Public Schools
Northjersey.com and USA Today New Jersey are publishing a five-part series of the abuse of taxpayer funds by charter operators. This is part 3 of an investigation called “Cashing In on Charter Schools,” written by Abbott Koloff and Jean Rimbach.
“Hundreds of millions of dollars in federal aid was steered to New Jersey’s largest charter school management companies over the last decade, helping them to create a network of school buildings that are privately owned.
“In other parts of the country, the same aid programs provided interest-free loans to both traditional public schools and charters to construct and renovate buildings. But a much different model emerged in New Jersey as Gov. Chris Christie’s administration gave the state’s entire share of the federal aid — bonds worth more than a half-billion dollars — to charters and other non-traditional public schools.
“More than three-quarters of that money was awarded to the state’s two largest charter school operators, KIPP New Jersey and Uncommon Schools, which used it in ways that strayed far from the intent of the aid programs.
“The companies fashioned complex financial structures that allow them to exploit the bonds by tapping into the aid as a steady stream of income over decades, using methods that in some cases have drawn the scrutiny of federal investigators.
“The result is a string of school buildings that were built with taxpayer money but remain in private hands. The companies that own them were created to purchase real estate and renovate buildings for charter schools, but they are kept legally separate from the charter schools that send millions of dollars their way each year in rent.
“Charter schools rent these buildings indefinitely. Leases do not contemplate a time when rent payments would end or when the buildings would be turned over to the public charter schools, even after the debt is paid.
“The deals involve related companies that are created to lend money to one another — an arrangement that is not CONTINUE READING: New Jersey Expose, Part 3: How Charter Operators Collected Hundreds of Millions from a Federal Fund for Building Public Schools | Diane Ravitch's blog
