CA: Audit links politicians to failed charter schools

Monterey Herald ^ | 4/14/05 | Jim Wasserman - AP

[NormsRevenge]

SACRAMENTO - As the California Charter Academy grew into the state's largest charter school, it developed close ties to various local and state politicians who accepted campaign contributions and pushed the academy's political interests, according to a state audit released Thursday.

Between 1999 and its collapse last summer, the Victorville-based school placed members of a tightly woven band of Republican politicians in California's High Desert on boards and gave them jobs and money. In many cases, they responded.

In 2003, Assemblywoman Sharon Runner, R-Lancaster, carried a resolution for the California Charter Academy that urged state lawmakers to support adult education programs. Campaign records showed she'd received $3,000 in political donations from CCA's private management firm, Educational Administrative Services Corp.

The school, she said, was "a huge employer in the High Desert. ... Hundreds of people give me money and unfortunately, some of them might be doing something inappropriate, but I can't investigate them all."

Sharon Runner also joined CCA that year at a lavish expensive gala at the Disneyland's Grand Californian hotel, handing out employee awards alongside San Bernardino County Supervisor Bill Postmus, Jr., and Victorville City Council Member Joann Almond. Later, the firm placed Runner's husband, Sen. George Runner, R-Lancaster, on the board of its National Association of Independent Charter Schools, a group that apparently had no role, according to investigators, but mysteriously helped move $3,500 through various corporate entities.

George Runner said Thursday CCA asked him at least two years ago to join the board, but said the board never met and he received no pay. He said he didn't know about the $3,500.

"The CCA was a significant educational institution in not only that area, but across the state," George Runner said. "I certainly was acquainted with and appreciated the work that I saw."

Postmus received $25,450 in campaign contributions for his 2000 race for supervisor from EASC and its founder, CCA chief C. Steven Cox. Investigators said that was a potential conflict of interest since Postmus served on the CCA boards at the time of the contributions. Almond, too, received $250 in campaign funds from the company while occupying its board seats.

Last year, Postmus voted to let San Bernardino County award the school a $77,000 contract to provide after-school programs. In 2003 and 2004, Postmus granted $7,000 to the school to buy uniforms. That money came from a discretionary account controlled by the supervisor.

Postmus and Almond did not immediately return telephone messages left by The Associated Press.

Some of the report's most serious criticisms are levied at Hesperia Mayor Pro Tem Tad Honeycutt and Keith Olberg, a former Republican assemblyman and the party's 2002 nominee for secretary of state. Investigators said charter affiliates paid Olberg $375,000 across three years to develop an honors program "that was never fully developed."

Olberg could not be reached for comment Thursday.

Auditors criticized Honeycutt's management of a subsidiary that charged "significantly inflated costs" for supplies to the charter schools and plowed surplus funds into "non-school related business enterprises," including a $3,906 personal loan to Honeycutt.

Another Honeycutt company, Maniaque Management, received more than $270,000 for marketing work it didn't do and never repaid the money, the audit said.

Honeycutt said Thursday he was only an EASC employee, not an owner or board member.

He acknowledged having a close business relationship with Cox but accused the auditors of trying to justify state Superintendent of Public Instruction Jack O'Connell's "forcing CCA out of business."

But auditors also questioned $27,000 paid by EASC to a new Honeycutt-run firm days before the charter school enterprise failed, saying it "raises the question of whether the payments constitute a gift or a misappropriation of funds."

Honeycutt charged company credit cards for non-school items, investigators reported, including $18,000 for two jet skis.

He said the jet skis were "registered to EASC and used by all the employees. All those expenses ... were legitimate business expenses."