Over the past couple of weeks, we’ve been exposing the astounding misuse of taxpayer dollars by Ohio’s largest charter school, Electronic Classroom of Tomorrow (ECOT).  The original founder of ECOT, William Lager, created private companies to provide various services to ECOT from it’s inception; companies that have now been paid over $100,000,000 since the school first began operations.  While we knew that Lager has had the expendable income to be able to donate over $200,000 annually to political campaigns, we did not have specific details about how much Lager himself was receiving in compensation and just what work Lager was performing for ECOT.

Until now.

In today’s post, we’re going to rely on original source documents help tell the story.

Early audits available through the Ohio Auditor of State’s website confirm that William Lager received a salary of over one million dollars in the very first year of ECOT’s operations, 2000-2001, as the CEO of Altair Learning Management LLC, the company he created just prior to founding ECOT.  In the creation of ECOT, Lager secured a five-year contract that specified that Altair would receive a fee of 10% of the school’s funding.  Not bad for someone with no prior experience in an untested enterprise.

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That first audit, however, found that while Altair (i.e., Lager) was paid the full fee, much of the work was actually performed by employees who were paid by ECOT directly:

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Finally, the Ohio Auditor issued a finding that provides more shocking details about Lager’s compensation and services provided:

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Summarizing the section of the audit above we learn that Altair was paid $1,060,069 during that first year and, according to the Auditor, all of that money went directly to “Mr. Lager’s compensation”.  Furthermore, in a process that becomes a familiar entry in ECOT audits (third highlighted paragraph), the Auditor found that there was no documentation of what specific services or charges were covered in the money paid to Lager.  As such, the Auditor issued this finding and recommended that ECOT require Lager to provide monthly invoices detailing the services provided, expenses incurred, and charges billed.  Without such documentation, ECOT could not properly track the connection between the million dollar management fee being paid out with any actual services being provided.

The audit issued for the following school year, 2001-2002, documented that many of the same problems were still occurring, yet Lager had gotten a substantial raise of nearly $600,000 as he was still performing all of the services for Altair.  Once again, the Auditor issued the same finding for documenting the work that had not yet been corrected:

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In the first two years that ECOT had been open, William Lager had now been paid over $2.6 million without providing a single invoice detailing the services he had provided.  And despite the annual finding from the State Auditor and the recommendation that monthly invoices be produced, this would continue to occur…

In 2003:

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In 2004 (when, in year three of the five-year contract, the management fee mysteriously jumps to 14%):

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In 2005:

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In 2006:

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And one more time, in 2007:

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Finally, as shown in the final sentence above, ECOT agreed to begin requiring invoices from Altair.

At this point, according to the official audits released by the Ohio Auditor of State, William Lager had received exactly $28,354,426 over a seven-year period without ever submitting one single invoice documenting the services provided by him or his company.

Readers, Lager’s fleecing of Ohio’s taxpayers in order to build his personal wealth under the guise of providing an alternative educational option for children is nothing new; he has engaged in a systematic process of pocketing millions of dollars since he founded this public charter school back in 2000 — over 13 years ago.  William Lager has been drawing an annual salary of over $1,000,000 since his first year as the CEO of the school’s management company.

And so we’ll ask again, don’t you think Ohio’s and national newspapers be running front page stories if a public school superintendent in the state of Ohio was drawing an annual salary of over $1,000,000?  Why is it that William Lager can receive a six-figure, publicly-funded annual salary without a single article questioning this appalling misappropriation of school funding dollars?

It pays, and he pays, to have friends in high places.

If you’ve missed our most recent stories about ECOT, here are the links:

For all of our ECOT stories from over the years, click here.

  • Telchar Bladesmith

    Shouldn’t someone be turning this info over to the FBI? It’s obvious the State Auditor has no intentions of enforcing any laws that might benefit taxpayers. Stop complaining about why no media has covered thi, DO SOMETHING ABOUT IT!!

  • jr6020

    Do we (the taxpayers) have standing to file a lawsuit (perhaps a class action one) under any applicable statutes? And what could those possible statutes be? Any ideas out there?

  • john curry

    Greg, a copy of this research should be presented to every board member of every public school in Ohio. Excellent research and keep up the good work.

  • becca

    Forget turning it over to school boards – it needs to be turned into someone who can take legal action on it.

  • Katietoo

    This is sickening. All while we have people voting down local tax levies because their Superintendent dares to make $100,000/yr and the greedy union thugs, aka teachers, make $56,000. Shameful. Now what do we do about it?!!

  • Katietoo

    And yes – Go Greg!! We need to get Diane Ravitch on this!!

  • kelly wheeler

    This is so sickening! I had to remove the vomit from my mouth after reading over this research. I suppose the Columbus Dispatch won’t pick up this story since they are in the back pocket of KaSICK. I will do my part by leading my colleagues to this excellent report and hopefully we can get the word out about this atrocity! Great job Greg!

  • stryx

    Hmmmm…. This sounds familiar. A well connected player is given a huge amount of state money with no questions asked that is then laundered back into the political system that provides the money.

    Tom Noe was an amateur compared to this guy.

    This is why we need to investigate and document wrongdoing.

    Because if we don’t, when it happens again, people get the idea that this kind of graft is a feature, not a bug.

  • gregmild

    That’s the million dollar question (no pun intended). What, if any, laws has Lager actually broken? When your friends write the laws, it’s quite beneficial…

  • Barb Nied

    This really pisses me off. I went to Kim Wheeler Channel 3 News here in Cleveland, she even came to my home and never did crap over ALL the education laws being broken for children with disabilities. This guy is filling his pockets with money while ecot failing standards of teaching kids with disabilities the state of Ohio go unnoticed turns my stomach. I tried to get people to listen over a year ago. By GOD you keep up this great reporting and fax it to every news station in Ohio!

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