FEDERAL COURT RULING AGAINST CHARTER MANAGEMENT ORGANIZATION RESONATES THROUGH THE CHARTER MOVEMENT; Too many CMO’s seek to install "clueless" board members who won't ask probing questions.

By Allie Grasgreen With help from Stephanie Simon in Politico Morning Ed | http://www.politico.com/morningeducation/0215/morningeducation17126.html

A JUDGMENT RESONATES: A recent federal court ruling against a major charter school operator [http://bit.ly/1yw6Mwa ] could shake up the charter school movement. U.S. District Judge Nanette Laughrey last month ordered Imagine Schools, Inc. to pay $1 million to the school board that nominally ran Renaissance Academy, a Kansas City, Mo., charter managed by Imagine. In a scathing ruling, Laughrey blasted Imagine for installing ineffective and unqualified people on the school board and then directing them not to ask questions as Imagine proceeded to arrange a real-estate lease that enriched the company while leaving the school with precious few resources for the classrooms. "This clearly constituted self-dealing," Laughrey declared. Imagine Schools has run into problems on this front before. Several years ago, the St. Louis Post-Dispatch published a memo from co-founder Dennis Bakke arguing that the company needed to do a better job picking more pliable board members. But this was the first financial judgment of its kind. (Imagine has since reached a confidential settlement with the board and thus won't appeal.)

"The million-dollar judgment catches the eye , and that is important," said Greg Richmond, president of the National Association of Charter School Authorizers, "but what this underscores is the absolute necessity for charter schools to have independent boards to exercise appropriate oversight." Richmond acknowledges that authorizers don't always take the time to make sure boards can meet that standard. Charter management companies put together impressive proposals, and some authorizers find it hard to turn down such slick applications, even if it's evident a board was thrown together at the last minute and lacks appropriate expertise, Richmond said. "The charter school community is moving in the right direction on this," he said, "but I wish it were moving more quickly."

The ruling might prod more board members to stand up to their charter management companies, said Gary Miron, an education policy professor at Western Michigan University. But Miron is doubtful much will change. He notes that 45 percent of charter students attend schools run by management companies, both for-profit and non-profit. And he said too many of those companies still seek to install "clueless" board members who won't ask probing questions. To counteract the trend, Miron urges authorizers to make sure every board has the power to fire its management company; to hire its own lawyer, auditor and accountant; and to put big contracts out for competitive bid. "The board represents the public interest," he said. "They represent the taxpayer."