GREASY, GRYMES-Y CAMPAIGN CONTRIBUTIONS

The list of contributors to Cheryl Grymes’ 2016 campaign for reelection to the Duval County School Board looks, at first glance, unremarkable. A number of contributors are from Jacksonville and a number of contributions are from other places. Closer inspection reveals that a large percentage of her contributors live elsewhere in Florida and several list Nashville, Tennessee as their home, a 10-hour drive from Jacksonville. These out-of-town contributions add up to half the $18,000 her campaign has raised this year.

Why would someone in central Tennessee be interested in the (currently unopposed) District 1 candidate for the Duval County School Board? For that matter, why would someone in Orlando, Cooper City, Winter Park or Miami be so interested in the race that they donate $1,000 to Ms. Grymes’ campaign? Most people probably have some trouble recalling their own school board member or the board district in which they live. School board activities generally revolve around myriad but often dull details of overseeing a billion-dollar business. School board work is important but generally does not prompt broad public interest. Even more rarely would school board business generate $1,000 campaign donations.

But there is a very good reason why these individuals and companies want to lay out their hard-earned cash for this campaign and it all revolves around pecuniary interests — in other words, money. More specifically, money diverted from traditional public schools to charter schools.

When you think of public schools, you probably imagine a humble classroom full of students at cookie-cutter desks doing their schoolwork led by a modestly compensated teacher. The same image arises when we think of charter schools. A classroom full of children does seem an unlikely profit center. But the potential for profit is not in the single classroom or the individual teacher. Rather, revenue is generated by collecting hundreds of thousands of taxpayer dollars for charter classrooms filled with students.

For instance, currently around 13,000 Duval County students are enrolled in 35 charter schools, diverting more than $100 million tax dollars from traditional public schools to those schools. Each year, a few more charter schools open in the county, expanding the stream of dollars flowing to such schools.

Many of these charter schools are managed by large education management organizations, collecting per pupil funding for hundreds of thousands of students. Charter Schools USA — one of Ms. Grymes’ contributors — enrolls more than 5,500 students at its seven charter schools in Duval County. Each of these students brings with their transfer to a charter school the thousands of dollars dedicated to educate them.

Education entrepreneurs operating in the charter school universe have added a new wrinkle to enhance this revenue stream by either creating or partnering with companies providing other services to charter schools. A lot more money can be made if these management companies keep the provision of all services the charter school needs within their own network of companies and partners.
The recent indictment handed down by an Escambia County grand jury against four companies opens a window into these relationships between charter school operators and other service providers.

Newpoint Education Partners and three companies providing services to Florida charter schools, including two in Duval County, allegedly fraudulently billed a Pensacola charter school for hundreds of thousands of dollars for services provided by the three other companies. The indictment is not for poorly managing classrooms, but for using these other companies partnering with it to allegedly defraud Florida of tax dollars for services not rendered and supplies never delivered.

While the Newpoint activity has led to a grand jury indictment, many other organizations managing charter schools legally partner with or create companies to provide supplies, consulting work, management services and property to lease to their charter schools. Rather than the school contracting with independent companies to run its cafeterias, provide it with buildings and land to lease, or generate a sound curriculum, these management companies and/or their affiliates provide the services themselves and collect the profit.

In this expanding opportunity to pocket tax dollars, the relevance of Cheryl Grymes’ contributors comes into focus. Those companies and individuals are part of a network of management companies, vendors, leasing companies and advocacy groups all working to expand charter schools and divert ever more millions of dollars to fund the services they provide.

Here is a current list of charter school-related donations to the Grymes campaign: Miami-based S.M.A.R.T. Management ($1,000 donation) plans to open a school in Duval County in 2017-’18 and begin that tax dollar revenue stream. School Development HC Finance of Miami ($1,000 donation) lends money to charter school operations; it’s owned by the Zulueta family, which also owns Academica Corp., an education management organization. Academica, in turn, operates several Somerset Academy charter schools in Duval County. These two schools generated more than $3 million in per pupil funding last school year. Ignacio Zulueta also donated $1,000 in his own name to the campaign. Charter Schools USA ($1,000 donation) from Ft. Lauderdale operates seven charter schools in Jacksonville, taking in more than $31 million last school year. Contributing to her campaign seems to be an exercise in sensible self-interest. ALS Education, located 600 miles north of Jacksonville in Nashville, Tennessee, donated $500 to the Grymes campaign, along with some ALS execs donating in their own name: Greg Engeman, Angela Whitford, and Randle Richardson. Cumulatively, their contributions totaled $2,000 – more than 10 percent of the campaign contributions Grymes has thus far collected in 2016. ALS Education operates Lone Star and Biscayne High Schools that were given almost $4 million last school year. According to the Florida Auditor General, ALS takes 97 percent of all per pupil funding to teach students, maintain the physical plant, lease the building, etc.

MG3 Developer Group out of Hollywood, Florida ($1,000 contribution) seems an odd company to donate to a district school board race. But it builds charter schools in Florida and, goodness knows, we will see more charter schools being built in Duval. It should be noted this company has a lobbyist registered at Jacksonville City Hall.

Mountain Moving Strategies ($1,000 donation) sounds like a household moving company but is actually a consulting company out of Lake Worth, providing unspecified services to charter schools. The Arza family owns the company. Ralph Arza was a South Florida legislator who, according to the Miami Herald, was criticized a decade ago for not revealing his paid consulting work with the Academica charter school management organization while sponsoring a handful of bills benefiting charter school management organizations. Arza was forced to resign from the Florida Legislature, according to the Miami Herald, for witness tampering and allegedly leaving an expletive-laced message on a colleague’s answering machine.

Of course, Ms. Grymes is not responsible for the behavior of her contributors and the business interests of half of her contributors do not suggest improper behavior by her. However, when more than half of a candidate’s campaign donations come from a single interest group – charter schools and the enormous industry now profiting from charter schools – notice should be taken.
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Birdsall, an adjunct professor at Florida State College at Jacksonville, is a retired FAA air traffic controller.

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