“If the state department is doing its job and catching these kind of things, then $10 million doesn’t go poof," Melissa Provenzano, D-Tulsa, said.
The Oklahoman reported Tuesday that Epic Charter Schools founders Ben Harris and David Chaney had been accused in an Oklahoma State Bureau of Investigation search warrant request of unlawfully “deriving profits from State appropriated funds.”
The search warrant request detailed an alleged scheme in which Harris and Chaney inflated Epic’s enrollment in order to collect more money from the state, of which their privately-owned management company kept 10 percent.
The search warrant affidavit said an OSBI agent reviewed bank statements and discovered Harris and Chaney “split profits … of at least ten million dollars” between 2013 and 2018.
Harris and Chaney inflated the number of students reported to OSDE by enrolling and/or retaining “ghost students,” the affidavit claimed. In this context, ghost students refer to students who were enrolled in the charter school but “received little or no instruction from Epic teachers.”
Following the Oklahoman’s story, Hofmeister tweeted that the allegations against Epic Charter Schools were “extremely serious” and “disturbing.” She said the Oklahoma State Department of Education “stands ready to work w/any criminal investigation to determine if … taxpayers have been defrauded.”
On Wednesday afternoon, Rep. Melissa Provenzano (D-Tulsa) said she plans to ask Hofmeister at Thursday’s “EngageOK” education conference about that cooperation pledge.
“I plan to ask her how she is planning to cooperate in a way that hasn’t already been taking place,” Provenzano said. “If the state department is doing its job and catching these kind of things, then $10 million doesn’t go poof.”
She said she believes the investigation will eventually lead to the for-profit management company Epic Youth Services that “Epic filters its money through.”
“Next (legislative) session I think there will be a greater alignment between the accountability standards,” Provenzano said.
Epic Assistant Superintendent/spokeswoman Shelly Hickman did not respond to requests for comment. Steffie Corcoran, spokeswoman for OSDE, told The Frontier in an email that the department had already discussed varying concerns with the OSBI.
“I can assure you there is no question of any of this being a factor, period,” Corcoran said in the email. “We have the utmost confidence in the professional standards of our legal office.”
Epic said in a statement Tuesday that “This latest attack comes at a time when our growth makes status quo education lobbying groups uncomfortable. We are considering legal action to combat what we believe is a coordinated effort to damage our school, our co-founders and our staff.”
The Oklahoman reported Wednesday that Gov. Kevin Stitt was seeking a briefing by the OSBI on Epic’s alleged “ghost students.”
These allegations are extremely serious, disturbing. @OKSDE stands ready to work w/any criminal investigation to determine if #OklaEd and taxpayers have been defrauded of millions of dollars. It is important to let the legal system do its work. https://t.co/62bDhc9vgJ
— Joy Hofmeister (@joy4ok) July 17, 2019
Provenzano has long been concerned about the differences in regulations between traditional brick and mortar schools in the state and virtual schools like Epic. She said she was also concerned about seemingly close existing ties between the OSDE and Epic.
Oklahoma State Department of Education General Counsel Brad Clark used to work for the Hickman Law Group, a Norman-based legal firm operated by Bill Hickman. Hickman represents Epic Charter Schools in multiple lawsuits brought about by former Epic teachers, and his wife is Shelly Hickman, the Epic Assistant Superintendent and spokeswoman. Shelly Hickman was also former head of Public Affairs for the OSDE under former State Superintendent Sandy Garrett.
Hofmeister also received more than $23,000 in campaign contributions from Chaney and Harris.
Provenzano was critical of Clark’s decision last month to release the physical and email addresses of thousands of certified Oklahoma Public School teachers to Epic in a records request made by Shelly Hickman. Hickman requested the information in order to recruit teachers away from traditional brick and mortar schools and into Epic.
Provenzano told The Frontier she did not believe Clark should have released the information to Epic, saying that the request was only fulfilled via a “loophole.” In the email chain between Clark and Hickman, Clark notes that although such information is typically prohibited from being released, he believed that since the teachers had submitted the information to a public body in order to get their certification, it was subject to disclosure.
Provenzano said she planned to ask Hofmeister how she can ensure the OSDE would ethically respond to a criminal investigation, given “that we just had all these teachers unsolicited get recruitment emails from Epic and your own general counsel cited a loophole in order to release that information.”
Provenzano said the “ball was rolling” on the criminal investigation into Epic “and has been rolling for a long time and I doubt it will go away.”
“But I’m concerned about how many people … in the state department (of education) are willing to facilitate this,” she said. “It’s not about the students or the teachers, it’s about who is running the show and the money and could it go to students to increase their graduation rate.”
The Epic Charter School Board of Education was scheduled to hold its regular public meeting in Oklahoma City on Wednesday, but it was canceled early Wednesday the morning.
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