Think of the Children: Fraud and Minnesota Charter Schools

Earlier this month, a report put out by The Center for Popular Democracy and the Integrity in Education project found that since charter schools first appeared in the early 1990s, they have been responsible for costing taxpayers $100 million in fraud, abuse, and waste.

In the introduction of the nearly 50-page document, the authors list three prototypical examples of the type of fraud the report focuses on, two of which are taken from Minnesota charter schools.   In one of the noted cases, quoting from the official Federal Department of Education website:

“The former owners of one of the first charter schools in Minnesota were sentenced today in United States District Court for defrauding the school to help subsidize an extravagant lifestyle. William Pierce, age 46, was sentenced to 37 months in federal prison and three years of supervised release. His wife, Shirley Pierce, also 46 years of age, was sentenced to 30 months in prison and three years of supervised release. In addition, Judge Michael J. Davis ordered the couple to pay $489,239.65 in restitution to the Minnesota Department of Education, which, along with the federal government, funded the school.”

The report mentioned another fraud case from Minnesota, in which local Fox 9 News found that “Joel Pourier, 40, of Shakopee pled guilty to eight felony counts of theft by swindle. Pourier had worked as the financial director and executive director at Oh Day Aki Heart of the Earth Charter School between 2002 and July 2008.” Bank transactions indicate he had “embezzled over $1,380,000 from August 2003 through July 2008.”

In another instance of local charter school fraud Eric Mahmoud, who runs the Harvest Prep and Best charter schools, is implicated in a variety of violations, including using his school’s letterhead in asking for gross overpayment in a real-estate deal, paying employees as contractors instead of employees, and frequent unclear payments between himself and his publicly-funded organizations.

Charter schools distinguish themselves by not being held to the same standards and oversights required of public schools. Financially, this allows for-profit charter schools to take public money and for non-profit charter schools to oversee their own finances.

It’s worth speculating about the possible connection between, on the one hand, Minnesota’s special status as both where the charter school movement got its start and its #1 ranking as the best state for charter schools in the country and, on the other hand, Minnesota’s disproportionate number of high-profile cases of charter school fraud.

We at Classroom Struggle are deeply critical of the top-down authority structures and the all too common lack of meaningful community control within public education. However, charter schools’ further eschewing of accountability mechanisms has lead directly to corporate executives who run charter schools misappropriating large sums of money for personal gain. What would an education system look like in which the refrain “think of the children” inspired us to empower kids instead of making it easier to steal from them?

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