The Ohio Attorney General’s response to the Electronic Classroom of Tomorrow’s (ECOT) June 27, 2018, Memorandum Regarding Assignment of Claims could open a can of worms for the charter industry.

In his “response“, claims that public money can be recovered from the ECOT scheme in three ways:

  • William Lager, the operator of ECOT, had a fiduciary duty to ECOT and thus violated that duty by doing business with the two companies he created. Therefore, all the profits realized via those companies’ dealings with ECOT should be recovered.
  • Lager’s status as ECOT’s agent made him a public official and by virtue of his interests in the companies made the contracts void; thus recovery of payments by ECOT to the companies should be pursued.
  • Lager participated in a pattern of corrupt activity and therefore liable for the injury he caused.

Charter schools are nonprofit by law; however, in many cases, the charters are a mere profit center for a for-profit company. The for-profit management operators should be considered public officials with the same fiduciary responsibility to the charter schools as public school district officials have to their public schools.

If the court buys the Attorney General’s claims, others in the charter industry could be affected. If the court doesn’t adopt his claims, the legislature should move immediately to correct these egregious flaws. All school entities that receive public funds should be held to the same standards of fiscal transparency and accountability.

 

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