While GateWay Academy officials deny any impropriety and law enforcement officials aren't saying much, letters and interviews reveal the Fresno Police Department, Fresno County Sheriff's Department and the FBI are looking into the charter school. The probes, in part, apparently focus on GateWay's spending, school sites and its parent corporation.
Khadijah Ghafur, GateWay's superintendent and a founder of its nonprofit parent Heritage Development Corp., says it all is a "misunderstanding."
She believes the spotlight on GateWay is prompted by fears and rumors about Muslims following the Sept. 11 terrorist attacks. Problems worsened once word spread that one campus is located within a Muslim community in the Tulare County foothills about 60 miles east of Fresno.
Says Ghafur: "What's happened is that 9/11 changed all of our lives, and no one knows how to have relationships with anyone anymore. It made everyone afraid of one another."
In addition to the law enforcement investigations, education officials are questioning the operational and financial condition of GateWay -- the state's fastest-growing charter school. For example:
State Superintendent of Public Instruction Delaine Eastin is threatening to cut off funding if GateWay can't answer allegations that some satellite sites are teaching religion or charging tuition, or were converted from private schools. Ghafur says some sites recently were "purged" but declined to elaborate.
The Fresno Unified School District, which granted the GateWay charter, is examining the allegations and school finances. GateWay officials have until Friday to submit an itemized account of 2000-01 spending and explain its $1.3 million debt, or the district board may yank its charter.
Educators are lobbying to close loopholes that allow charter schools to open satellite sites outside their home county. This is mainly in response to GateWay, which had operated as many as 14 satellite sites from the Bay Area to Southern California.
Beyond educational circles, letters and interviews confirm the existence of several law enforcement probes. In a November letter to Fresno Unified, the Sheriff's Department requested a long list of documents -- on matters from personnel to financial information -- about the charter school.
The letter came from the Special Investigations Division, a unit responsible for intelligence-gathering as well as investigations into major narcotics operations and vice. Sheriff Richard Pierce declined comment.
Fresno Unified documents also show interest by the Fresno Police Department. GateWay's district offices are in Fresno, and it also operates four sites within the city.
Lt. Dwayne Johnson of the Special Investigations Bureau says the probe is in its infancy. Johnson says the department is awaiting documents from the district, adding: "At this point there is nothing proven at all."
Fresno Unified officials also confirm that they have been contacted by the FBI. A spokesman for the FBI says the agency does not comment on whether it is involved in an investigation.
County Schools Superintendent Pete Mehas says he has been approached by law enforcement but would not elaborate. In a letter to Eastin, Mehas wrote:
"While the law enforcement officers were cautious in the information they disclosed to me, it was apparent that they had developed substantial evidence of possible financial improprieties if not by the charter school itself, then certainly by the parent organization."
But GateWay Superintendent Ghafur says the charter school is simply experiencing typical growing pains and money pangs associated with starting a school. State charter development experts also say it is not uncommon for new schools to borrow heavily.
Ghafur says all the information about the school has been open to Fresno Unified and that GateWay will comply with district requests for more.
When the community realizes that "Gateway does a lot with little money, they'll likely set up donation boxes around town" to further the mission of student enrichment and empowerment, she says.
Founding of charters
That mission started more than a decade ago after a group of parents banded together to figure out how to improve education for students who weren't in school or whose educational needs weren't being met.
Heritage Development was formed in 1996. In articles of incorporation filed with the state, Heritage states in part that its purpose is to provide education and social services to students and their families.
Under the GateWay name in 1998, the corporation asked Fresno Unified to grant a charter for a school and satellite sites. That was about five years after the state Legislature approved the charter concept.
Charter schools are independent campuses established by parents, teachers or others interested in alternative forms of education. They are exempt from many bureaucratic rules, and that freedom is expected to encourage new approaches. But charter schools must abide by some state laws, such as those that require regular academic testing and prohibit religious-based teaching.
Like other public schools, charter schools are paid by the state largely based on enrollment. The charter essentially is a contract with a school district that outlines goals and procedures.
Approving the charter
Fresno Unified struggled with GateWay's request, mainly because a school voucher proponent was listed on Heritage's board of directors. But ultimately, the charter was approved on a 4-3 vote.
The district's paper trail shows GateWay opened with three sites and about 242 students in September 2000. By November 2001, GateWay had grown to about 1,000 students in 14 sites between Sunnyvale and Pomona.
During that time, the district dealt with one formal local complaint about GateWay. Tomas Gonzalez, who ran Gateway's Oscar Romero Learning Center in Fresno, complained last summer about cash flow.
Gonzalez told the district that GateWay returned about 22% of the money he believed was generated by the school's enrollment. GateWay officials say they offered him a contract similar to one accepted by leaders at other sites. The contract included a 50-50 split of state enrollment reimbursements, but Gonzalez declined and said he needed more money to operate.
Eventually, GateWay officials say they paid several staff salaries and offered to cover materials used by students. Fresno Unified accepted the explanation, largely because there is no requirement that all enrollment money flow back to the site where it was produced, district officials said.
Gonzalez says his school now runs under another Fresno Unified charter. Today, GateWay has 11 sites and about 620 students.
But historically, Fresno Unified has had trouble tracking sites because they have popped up in far-away cities, says Marilyn Shepherd, who oversees the district's charter schools department.
District documents show that several sites seem to have changed names, addresses or moved from one city to another during the past year. Says Fresno Unified board president Mike O'Hare: "It became a logistical nightmare for the school district to keep up with them and their expansion. We don't have the time and the personnel for it."
But in hindsight, board member Ray Baker says, the district probably could have tried to control the growth and better manage remote sites. Ghafur believes some problems may be related to the relative youth of the charter law and district inexperience.
Joe Lucente, president of California Network of Educational Charters board of directors, says planning can limit problems. For example, districts can require charter schools to tell them of new sites by writing that into the contract.
"If they do a good job in the chartering process, they can eliminate 90% of the problems," Lucente says. "The rest can be taken care of with good oversight."
Ghafur traces GateWay's fast growth to interest in its mission. She says news about the school spread by word-of-mouth and that GateWay was flooded with admission requests. That drove explosive growth and the need for loans.
California charter school experts say loans are common for new schools because little state cash is available for start-up necessities such as buildings or equipment.
Eric Premack is co-director of the Charter School Development Center at California State University, Sacramento. He says: "It's not uncommon for charter schools to borrow and to sometimes borrow very heavily."
And, "for schools starting up or rapidly expanding, they generally have huge cash flow problems."
Premack says GateWay officials attended center workshops on charter school development. He says the center spends a substantial amount of time on finance.
State records show that GateWay applied for and received a $250,000 start-up loan. While GateWay applied in July 2000, state education officials say its paperwork trickled in slowly. The loan was granted in May 2001.
Money is a key element in Fresno Unified's inquiry. Charter school manager Shepherd says the district has asked for a complete rundown of financial documents for the past school year.
In part, officials are interested in GateWay's September request for a $630,000 loan from a Sacramento investment firm. That firm, Delta Public Finance, had doled out $900,000 to GateWay a few months earlier. Delta granted the $630,000 loan in October, Shepherd says.
In mid-September, GateWay presented unaudited budget figures to the district that showed a debt of $1.3 million.
District staff saw a few red flags in those numbers, including the more than $806,000 used by GateWay for capital outlay, which usually includes items such as desks and chairs. The amount is considered high for a school of that size, says Fresno Unified's spokeswoman Jill Marmolejo.
GateWay's annual report for 2000-01 shows three property purchases: space on West Dakota Avenue, its main campus; an office complex on West Shields Avenue, which contains a small learning center and administrative offices; and a duplex on East Clinton Avenue, used by out-of-town staff members for GateWay business. Purchase prices were not noted.
The report repeatedly mentions money as a roadblock to achieving GateWay goals. But officials sketched ambitious plans for 2001-02: estimated student enrollment of 1,450 and annual revenue of $7.35 million, compared to $6.37 million in expenses. That caught Fresno Unified's attention.
Awaiting audit report
District leaders are reviewing operational documents and awaiting GateWay's audited financial report. If complete information isn't provided by Friday, Shepherd will ask the district's board to terminate the charter.
Information already provided to Fresno Unified includes a list of trustees and the annual report. The board includes Ghafur; Kehinde Solwazi, an instructor at Fresno City College; and Doug Hurt, an attorney in Visalia.
GateWay's annual report paints a picture of 2000-01. In part, school officials say they have created a caring and respectful learning atmosphere, incorporated a structured curriculum tailored for student needs and established fine arts and foreign language programs.
A student exchange program also is in the works, and six students were sent to the International Scholarship and Athletic Games in New York. Board members traveled to South Africa to establish an operating process for the exchange program.
GateWay also provided an updated list of sites. The Bee attempted to contact officials at all 11 campuses last week. One telephone number was disconnected, two officials declined comment and six others didn't return calls. GateWay administrator Naazim Hamed also did not return calls.
Two site officials did speak to The Bee. An official who runs the foothill charter site says the school has about 60 students drawn from the community. The school is open to kindergarten through 12th-grade students.
The Emmanuel Learning Center is near downtown Fresno. Michael Black, a teacher at the campus with about 54 students, says Emmanuel began in 1992 as a private Christian school.
It ran as a Christian school until GateWay approached Emmanuel leaders and took it over in 2000, he says. Under state law, it's illegal for a private school to convert to a charter school. Fresno Unified has yet to look into the issue.
Black says the campus has been running smoothly, and stopped teaching with religious overtones when it linked with GateWay. He said neither scripture nor holy books are used.
Some complaints
Fresno Unified officials say they have visited local sites and have not detected any obvious problems. But there have been complaints -- such as religious-based teaching -- about remote sites.
According to Shepherd, Ghafur was told in early December that the Silicon Valley Academy in Sunnyvale was teaching the Quran and calling itself a religious school. The academy had been a part of GateWay's network since August.
Ghafur and administrators quickly severed ties to the Sunnyvale academy and told the district that any enrollment money generated by the site during that time would be refunded, Shepherd says.
Two other sites also were "purged" from GateWay, Ghafur says. She would not elaborate, saying only that they likely didn't comply with GateWay's goals or couldn't be supported financially.
Ghafur says no school sites teach religion.
The flap over the Sunnyvale site helped spark the interest of state Schools Chief Eastin, who asked Fresno Unified to investigate various allegations of wrongdoing.
"We're prepared to withhold their February apportionment if [the district] tells us that this is true because we don't send good money after bad," Eastin said in a telephone interview.
State officials say GateWay received roughly $1.1 million last academic year based on average enrollment of 265 students. It has received about $672,900 so far this academic year.
Ghafur thinks the negative attention springs from rumors about Baladullah ("City of the Creator"). Focus was drawn to the community in August, when a man who had briefly lived there was arrested and charged with shooting Fresno County sheriff's deputy Erik Telen about 10 miles from the property.
GateWay's parent organization, Heritage Development, is listed as owner of at least part of the property. More speculation surfaced when word spread after Sept. 11 that a GateWay site was located in the community.
Tulare County sheriff's Capt. Mike Gutsch says the village has not been a problem and characterized the department's relationship with Baladullah as positive and cooperative. He says he is not aware of any sheriff's investigation involving the community.
While Ghafur has doubts about motives, Fresno Unified officials insist their inquiry is prompted by legitimate concern. Board Member Bill Riddlesprigger, who teaches at Fresno City College, says he was approached by GateWay board member Solwazi and asked to ensure that GateWay wasn't being treated unfairly because some members are Muslim.
GateWay's annual report says about 44% of its students are African-American. Roughly a quarter are Hispanic and 25% are Asian-American.
Riddlesprigger says he assured Solwazi -- who did not return telephone calls from The Bee -- that there is no racial or religious bias behind the questions. He adds that he has talked to several parents of GateWay students who praise the education their children are receiving.
Riddlesprigger also says all 10 charter schools overseen by Fresno Unified have been asked to produce the same documents.
Two others -- Renaissance Charter School and Fresno Prep Academy -- have not fully complied. They also have until Friday to produce all documents or risk losing charter status.
Meanwhile, legislators such as Assembly Member Mike Briggs, R-Clovis, want hearings on the charter issue. Mehas is pushing for authority to conduct charter school financial audits and to limit satellites to the charter's home county.
Mehas, who supports the charter concept, says: "There are some loopholes that, in the rush to have charter schools, they [legislators] didn't close."
California has about 120,000 students in an estimated 360 charter schools. Eastin, also a fan of charters, says of the system: "On the whole, I think it is working well. But I do believe that there are some downside risks to having this kind of wide-open system for spinning off additional charters.
"I don't think that is a good idea, and I do think that stronger accounting for the public dollars is something we should have."
The reporters can be reached at eolvera@fresnobee.com, cfontana@fresnobee.com or 441-6330.
GateWay district ties in jeopardy Fresno-based charter school,
under investigation, misses documents deadline.
By Anne Dudley Ellis
The Fresno Bee
(Published Saturday, January, 5, 2002 5:21AM)
Fresno Unified School District officials are expected to recommend severing connections with GateWay Academy, a Fresno-based charter school that is being investigated by various law enforcement agencies and the state superintendent of public instruction. GateWay, which has four sites in Fresno and seven others up and down the state, failed to meet a Friday deadline to turn over a detailed accounting of its 2000-01 spending. Fresno Unified has been particularly concerned that the school appears to be $1.3 million in the red.(funding terrorist activities ???)
Fresno Unified governing board President Michael O'Hare said the trustees could vote on revoking GateWay's charter at their Jan. 16 meeting.
"They're basically upside down by 50% of their total budget," said Fresno Unified spokeswoman Jill Marmolejo.
"We've seen good teaching, that students are engaged and that there is parent involvement, but on the operational end of the schools, related to financial reporting, health and safety issues and actual student achievement, we have concerns in all those areas."
GateWay Superintendent Khadijah Ghafur could not be reached to comment. A woman who answered the phone at the school Friday said Ghafur was out of town.(someone check the airports)
Marmolejo said the district rejected GateWay's request for an extension until Jan. 15.
Should the school have its charter revoked by Fresno Unified, it could apply to another school district, an official from the state Department of Education said.
GateWay, the state's fastest growing charter school system, has an enrollment of about 620 students at sites from the Bay Area to Southern California. It began attracting statewide attention because one of its sites is located in Baladullah, a Muslim community in the Tulare County foothills, about 60 miles east of Fresno.
There have been media reports that authorities are investigating connections between Baladullah and a terrorist organization.
Concerns raised
In August, a man who had lived briefly in Baladullah was arrested and charged with fatally shooting a Fresno County sheriff's deputy.
Baladullah, because of its Muslim residents, is suffering an intense backlash from the Sept. 11 terrorist attacks, Ghafur has said. She also has said that the school did nothing wrong and that questions about its finances are a "misunderstanding."(then why did you miss the deadline to account for your missing $1 million dollars, and straighten out this misunderstanding???)
Marilyn Shepherd, who assumed oversight of Fresno Unified's charter schools department in the fall, has been concerned about GateWay, and some of the district's other charter schools, for a couple months.
The district at that time began updating records on its 10 charter schools, making sure they were operating within state guidelines and had provided Fresno Unified with necessary documentation.
Charter schools, approved by the state Legislature in 1992, are independent campuses established by parents, teachers or others interested in developing alternative forms of education.
They are publicly funded based on enrollment, receiving about the same amount of per-student funding as regular schools. (the diferrence is they fund terrorists as opposed to teaching kids)
They are exempt from much of the state Education Code, but they are still required to teach to state curriculum standards, administer state-mandated testing and steer clear of religious-based teaching.
Unclear roles
Charter schools must have their charters -- a blueprint for their operation -- approved by a local public school district. But the chartering school district's oversight role has been murky, as has the oversight role of the state Department of Education.
Should the Fresno Unified board cut its ties with GateWay, it would be the first charter to be revoked in the district. Statewide, 14 charters have been revoked since 1992, an official at the state Department of Education said.
Shepherd's office also is expected to recommend the revocation process for two other charter schools, Fresno Prep Academy and Renaissance Charter School. They also did not meet a Jan. 4 deadline to provide required financial documents, Marmolejo said.
But the district is most concerned with GateWay, Marmolejo said.
"The other charters that have not turned in their audited reports are not in the same financial situation," Marmolejo said.
"Our big concern is that [GateWay] is $1.3 million in the hole. Given the funding they receive, it's very difficult to make that up. That's a really tough thing to overcome.
"They absolutely have to have a plan to address that, and that's what we haven't seen."
The district's concerns include:
Two loans totaling more than $1.5 million from Delta Public Finance of Sacramento, a private investment firm.
The more than $806,000 the school spent on capital outlay in the last school year. Such expenditures, usually for items such as desks and chairs, were unusually large for a school of GateWay's enrollment, the district said.
Money spent on salaries. The amount for classified administrators -- $253,000 -- "seems like a big number," Marmolejo said.
The reporter can be reached at aellis@fresnobee.com or 441-6328.