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.
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.
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:
Finally, the Ohio Auditor issued a finding that provides more shocking details about Lager’s compensation and services provided:
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:
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 2004 (when, in year three of the five-year contract, the management fee mysteriously jumps to 14%):
And one more time, in 2007:
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:
- Ohio’s Largest Taxpayer-Funded Charter School, ECOT, Receives Bonus Check (12/8/2013)
- ECOT Founder Living VERY Well Off Ohio’s School Funding Dollars (12/10/2013)
- Ohio’s First Public School Hundred-Millionaire: ECOT Founder William Lager (12/29/2013)
For all of our ECOT stories from over the years, click here.