One of his timeless quotes on politics sums up the current state of Michigan's charter schools—on both macrocosm and microcosm scales: “Democracy is the art and science of running the circus from the monkey cage.”
“Government” is a false aggregate—it's merely a collection of people who wield power over other people and the people in those positions are as self-interested as anyone in Washington.
DO YOU KNOW THE DIFFERENCE BETWEEN EMBEZZLEMENT, A DONATION AND A LOAN? NO? YOU'RE PERFECT!
"It doesn't involve Grand Traverse Academy at all," board President Brad Habermehl said to the Traverse City Record-Eagle on March 11, the day after Steven Ingersoll's verdict was announced.
"There's no relationship between that particular case that involved Dr. Ingersoll's personal taxes and Grand Traverse Academy."
Are those comments merely self-deceptive...or is the claim falseness on a scale even Charles F. Richter would laugh at?
Before I answer that question, let's take a context break, climb into the Wayback Machine and take a trip back to 1993 (bad hair, even worse music!).
Who said, "Public education is a monopoly, and monopolies don't work."?
No, it wasn't free market economist Milton Friedman, former president Ronald Reagan...or even Ronald McDonald!
It was Governor John Engler, kicking off a school reform debate in a speech to a Joint Session of the Michigan Legislature on October 5, 1993.
Engler addressed the legislature saying, “No public school teacher should be compelled to be in the union to teach in the classroom.” Engler stood in front of state legislators with a 20-gauge sawed-off shotgun and voiced his support for school choice.
Engler brandished the gun, supposedly confiscated from a student, to dramatize school violence and promote his plan to "allow
parents more leeway in choosing the schools their children attend".
Michigan's charter school system was set up under the explicit assumption that choice and market forces could allow a massive government funded set of private companies to run with only minimal oversight and regulation.
Fast forward to 2015, and this free market fundamentalism has brought us, among others, convicted tax cheat (and charter school management company head) Steven Ingersoll.
But Ingersoll didn't do it all on his own.
Setting the stage for financial fraud was Governor Snyder, who lifted the cap on Michigan's charter schools in 2012, Lake Superior State University's charter office (apparently less interested in the appropriate use of taxpayer millions than getting their 3 percent cut), and the Grand Traverse Academy board.
Every failure of a charter school can be traced back, in some form, to the board that governs the school. Charter school boards have many responsibilities and fiscal oversight of the school is a major charge of each charter’s board.
Instead of zealous public advocacy, the Grand Traverse Academy board appears to have chosen the role of management company defender, insisting that Ingersoll was "rebating" or "donating" money to the school during the years he was really racking up unpaid "related party receivables". The Academy board's stance continued, even years after Doug Bishop, former attorney for the charter school, sent a letter to Ingersoll on June 16, 2013 demanding repayment of the $3.5 million dollars he owed the school.
Michigan's weaker-than-water charter school board "conflict of interest" policy may have played a role.
CONFLICTS OF INTEREST...OR INTERESTING CONFLICTS?
"I do solemnly swear that I will support the constitution of the United States and the constitution of this state, and that I will faithfully discharge the duties of office of member of the board of education of the Grand Traverse Academy according to the best of my ability."
As a public official, each board member is required to be sworn in. In addition, a board member must complete an annual "conflict of interest" questionnaire (shown above).
The questions are superficial, and don't probe for answers that might reveal situations like those that enabled the Traverse City school to write off $1.6 million still owed by Ingersoll as a "bad debt".
For example, how about one that asks: Do you share a copyright with the head of the Academy's management company that could entitle you to share in six-figure annual curriculum licensing payments?
Or how about this one: Do you run a business under the name of a trademark held by the head of the Academy's management company?
Yeah, like those would really be included!
But if they had, we might have an official document from Mark Noss revealing he shared the Integrated Visual Learning copyright with Steven Ingersoll.
But did financial self-dealing and ultra cozy relations between Ingersoll and the board allow his $3.5 million dollar fee overpayment, described so powerfully by Academy attorney Margaret Hackett during her bombshell testimony at Ingersoll's trial as "a substantial unauthorized transfer of funds"?
Let's look at the so-far unexamined (by law enforcement, anyway) "prepayment" scheme: in a nut shell, Ingersoll advanced money from the Grand Traverse Academy's bank accounts to his Smart Schools Management, Inc. account at the beginning of each school year.
Initially based on preliminary budgets, those amounts were later adjusted at year-end, requiring Ingersoll to "rebate" a portion of his management fees to balance the Academy's books.
Although the so-called "rebates" were booked first as "receivables" and later as "related party receivables", the Academy's financial audits reveal that Ingersoll never repaid those overpayments over a period of at least five years, leaving him with a $3.5 million dollar debt to the Academy by June 2013.
Hackett, an attorney representing the Grand Traverse Academy board, testified during Steven Ingersoll’s federal fraud trial that during a May 20, 2013 Academy board meeting, Ingersoll asked the board to characterize his $3.5 million dollar indebtedness to the charter school as a “loan”.
When asked by the prosecution why Steven Ingersoll needed to have his debt “recharacterized”, Hackett said Ingersoll told her he “needed the sums characterized as a loan for reasons related to an IRS investigation and/or audit.” Ingersoll was clearly aware of the ongoing federal investigation into his finances.
Discussing his $3.5 million dollar debt (while referring to spreadsheets detailing the sums he had transferred from the Grand Traverse Academy's accounts to his personal bank accounts and those of Smart Schools Management), Hackett said Steven Ingersoll told those in the meeting that he “could not afford to pay that (his Academy debt) and his taxes all at the same time”, and needed to have the debt characterized as a loan.
But rather than pursue recovery, the Grand Traverse Academy board has instead closed ranks, written off $1.6 million dollars, and still refers to convicted felon Ingersoll's bogus "philanthropy" when discussing the massive loss.
This crazy story leaves Miss Fortune wondering how many undisclosed conflicts are still to be discovered?
Who knows...but I will keep looking!