Ohio Charter School Corruption
A political education

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When charter schools emerged on the Ohio educational scene more than a decade ago, they were hailed by many, including this newspaper, as a potentially innovative and lower-cost alternative to the state's disturbingly mediocre public school system.

What was not envisioned is that charter schools - officially known as community schools - would become cash repositories to be siphoned of sponsorship and management fees, in some cases by politically connected individuals.

Take Sally Perz, the former Republican state representative from Toledo who wrote the legislation creating charter schools in the mid-1990s, and who now makes a handsome living monitoring charter schools and lobbying for the cause. She works for her daughter, Allison Perz, the $105,000 a year executive director of the Toledo-based Ohio Council of Community Schools, which oversees 45 charter schools around the state.

Charter school sponsors are permitted by law to charge the schools fees of up to 3 percent of their per-pupil allotments of state aid, $5,238 in the last fiscal year. Together, the Council of Community Schools and the Lucas County Educational Service Center, which sponsors 75 schools, collected $3.4 million in fees this year.

In addition, many of the schools shell out up to 12 percent of their income to private companies that manage them on a day-to-day basis. One such management firm, the state's largest, is White Hat, run by David L. Brennan, an Akron industrialist who is a major Republican campaign contributor. Ms. Perz formerly was a White Hat lobbyist.

According to an analysis by the Columbus Dispatch of audits conducted under a new law, White Hat makes about $1 million a year for each of the 34 charter schools it operates in Ohio. Altogether, the firm got $109 million in tax dollars, including 97 percent of the schools' state aid last year.

How much is profit is somewhat unclear, since charter schools typically refuse to divulge details of their management contracts. A new state law requires that some details be made public through audits but the state's position has been that the information is a private matter, even though the money - about $450 million in total state aid this year - comes from the public.

An argument could be made that the same amount of money charter schools spend on sponsorship and management fees would be paid out in administrative salaries if the charters were ordinary public schools, but that is only conjecture.

Moreover, the machinations of lobbyists like Sally Perz appear no less geared to self-interest than those of Ohio's teachers' unions, whose voracious appetite for taxpayer dollars in the form of higher salaries continues to drain the state treasury.

Ohioans reap no benefit from a commercial enterprise that diverts scarce public dollars from the intended goal- the education of Ohio's youth - and into the pockets of those with no direct connection to classroom learning but an abiding pecuniary interest in state funding.

Less attention might be paid to such political maneuverings if the result was a better educational outcome, but that isn't the case.

In the most recent state "report cards," issued last fall, 60 percent of 264 charter schools then in operation were ranked in "academic emergency," the lowest academic rating, compared to just 8 percent of public schools.

In short, the unseemly scramble to stake a claim to public money leaves the promise of charter schools as an educational innovation still unfulfilled.

"Coingate" scandal

Lucas County GOP leader, ex-Taft aide give testimony
Republican chief tries to distance party from Noe
By MIKE WILKINSON, TOLEDO BLADE STAFF WRITER

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A former high-ranking aide to Gov. Bob Taft has testified before the federal grand jury investigating presidential campaign contributions and Tom Noe, The Blade confirmed yesterday.

H. Douglas Talbott, a lobbyist and former aide to both Governor Taft and former Gov. George Voinovich, slipped quietly into the federal courthouse, unnoticed by local media.

Afterward, he would not discuss what he said to the grand jury.

"I can't disclose what I said. It's private. It's a secret proceeding," Mr. Talbott said.

Like the other witnesses who appeared Wednesday and again yesterday, Mr. Talbott contributed money to President Bush's re-election campaign. He gave $2,000. However, Mr. Talbott was the only witness to appear who was not from the Toledo area.

The Blade reported yesterday that Mr. Talbott said he accepted $39,000 from Mr. Noe so he could buy a home in Lakeside, Ohio.

Mr. Talbott said he accepted the money as a "loan" from Mr. Noe in September, 2002 - after leaving the governor's office in May, 2000, to become a lobbyist. Mr. Talbott said he has not repaid the money to Mr. Noe but plans to do so.

Yesterday, the grand jury resumed hearing testimony and heard from five other people, including Sally Perz, leader of the Lucas County Republican Party.

But Ms. Perz, in remarks after her two-hour appearance, tried to put distance between the local GOP and Mr. Noe, a long-time benefactor.

Ms. Perz, a former state representative, said Mr. Noe "has dragged all of us through this," referring to the burgeoning scandal regarding his coin business and campaign contributions.

"It saddens me, as chairman of the Republican Party, that we have to walk through this dark time," Ms. Perz said in a prepared statement.

She and her daughter, Allison, appeared before the grand jury. Their attorney, Barry Savage, said they cooperated fully with the U.S. attorney's office.

But Ms. Perz, who told The Blade months ago that she has done consulting work for Mr. Noe and who received campaign contributions from him, expressed disgust over recent events surrounding his failed coin investment for the state and the investigation into possible campaign finance violations.

"We are all being dragged through this, and it is very unfortunate," she said.

Allison Perz did not comment after appearing before the grand jury. She runs the Ohio Council of Community Schools, which includes 24 charter schools. Her mother was one of the creators of Ohio's charter school law.

In interviews with The Blade earlier this year, both Sally Perz and her husband, Joe, said Mr. Noe had nothing to do with the $2,000 that each gave to the Bush campaign on Oct. 30.

Mr. Perz was not called to testify, and it is unknown if Sally Perz repeated that assertion during her grand jury appearance, which is closed to the public.

David Bauer, the assistant U.S. attorney in the Toledo office, said little after the grand jury session ended yesterday. "The investigation is continuing," he said.

The grand jury next meets in early July, and it is possible that it could hear additional testimony or reveal other evidence related to the case.

Grand juries are convened to determine if there is enough evidence to indict an individual and can be used to gather information. In addition to the prosecutors, who control the sessions, the jurors themselves can ask questions and request information.

In addition to the Perzes, three others testified yesterday, including former Noe employee Susan Metzger.

Ms. Metzger was an office assistant at Vintage Coins and Collectibles. During the 2004 presidential campaign, she was the chairman of the Lucas County Bush-Cheney effort and in the past, she has been paid by the county Republican Party for consulting.

She declined to comment yesterday, except to say she is unemployed because the coin shop is closed. "Sue Metzger's looking for a job," she said before leaving the U.S. District courthouse.

Two unidentified local businessmen also testified yesterday. Their attorney, Jeff Zilba, said they wished to remain anonymous.

The U.S. attorney's office is investigating whether Mr. Noe broke federal campaign laws by giving money to others in order for them to contribute to the Bush-Cheney re-election campaign. City council member Betty Shultz and Lucas County Commissioner Maggie Thurber testified Wednesday, as did former Toledo mayor Donna Owens. All are Republicans.

Ms. Thurber's husband, Sam, testified Wednesday as well, as did Joe Kidd, a former director of the Lucas County Board of Elections.

The witnesses contributed to the Bush-Cheney campaign in either October or November, 2003. Each contributed $2,000, except for Ms. Thurber and her husband, Sam, who each gave $1,950.

Investigators are reviewing the contributions, made to the Bush-Cheney campaign in 2003, and whether Mr. Noe was the source of those contributions. Many of the contributions occurred at or around a Oct. 30, 2003, fund-raiser in Columbus, which raised $1.4 million for the President's re-election campaign.

Federal campaign laws limit individuals to contributing $2,000 per candidate in each election. It is a violation of federal law to pass campaign contributions through another person to skirt individual contribution limits.

For years Mr. Noe has been a prominent player in both the local and state GOP. Like his wife, he is a former chairman of the county party. He and Ms. Noe have donated thousands of dollars to both local candidates and to the county party. The party still owes Mr. Noe $63,000 for loans made in 2002 and 2004.

It is unclear if or when those loans will be repaid.

Ms. Perz, who took over the chairmanship earlier this year, was asked how the current events will affect the party. "It strengthens it," she said.

Wednesday, Ms. Thurber also expressed anger with Mr. Noe, who she once said was "family" to her. She said she was "shocked, saddened, and deeply disappointed" with the turn of events.

Blade staff writer James Drew contributed to this report.

Contact Mike Wilkinson at:
mwilkinson@theblade.com
or 419-724-6104.

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