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Thursday, October 30, 2014

FROM THE MIND OF STEVE DIBERT: No Matter Who Wins The Governor's Race, You're Still Going To Get Treated Like Ned Beatty In Deliverance

Former Michigander Steve Dibert posted this piece about the gubernatorial race on his blog October 15, and here's an excerpt. 
In 2010, Snyder bragged about being the successful CEO of Gateway Computers and how he earned the reputation of being “One Tough Nerd” but what he and the Michigan GOP weren’t telling people in Michigan is that he drove Gateway into near bankruptcy and then came back to liquidate the company and sell the carcass to a Chinese company in Taipei.

As CEO of Gateway Computers, Snyder presided over the company from the mid-1990s until the dot-com bust. The board removed him as CEO for not having the foresight to see the dot com crisis on the horizon.

Snyder returned to Gateway as CEO during the final years of the company’s decline and eventual sale in 2007 to Taipei computer manufacturer Acer. Snyder liquidated the company and sold Gateway’s carcass to Acer for the fire sale price for 2% of it’s high of $84.00 prior to the dot-com bust.

Using his Duke Phillips style mind control powers on elitist Democrats, Snyder coasted to victory in 2010 by convincing these wannabe limousine liberals in Oakland and Washtenaw Counties that he was a moderate Republican and that Democratic Candidate Virg Benaro was too crass and blue collar to sit in the Governor’s Mansion.

You can read Steve's entire post at this link

His writing has a certain flair, don't you think?

Wednesday, October 29, 2014

WE'RE GONNA MAKE THEM AN OFFER THEY CAN'T REFUSE: How An Insular, Private Fiefdom (Supported With Public Tax Dollars) Helped Enable A Multi-Million Dollar Crime Wave!

Part 2-HOW THE CHARTER SCHOOL RACKET OPERATES IN MICHIGAN: Cracks in the Facade-From The Inception to the Deception

Unlike the Mafia, somebody was smart enough to do their dirt without anyone noticing for a very long time...even though it had been “public knowledge” for years.

What taxpayers didn't know couldn't hurt them, right?—logical thinking to a sociopath. 

It's like saying it's not infidelity if your wife never finds out.


On December 20, 2011, Michigan's "great pretender",  Governor Rick Snyder, touched off a charter school boom when he signed a reform bill into law that (among other things) completely eliminated the cap on the number of the state's public school academies after 2014. 

But in an interview today, Snyder said all schools need to be held more accountable.  

“We shouldn’t create silos of traditional schools and charter schools,” Snyder said during the interview in his Lansing office. “I’m all in favor of raising the standards of accountability for all schools.” 

MLive reported that after a summer full of questions about how charter schools operate in Michigan, Snyder today said he doesn’t want the debate about accountability and transparency in schools to devolve further into charter schools vs. traditional public schools. 

Instead, he’d like to see the discussion move more toward how schools are impacting student learning.

“People are always talking about the money,” he said. “It’s adults talking about adults, and we need to talk more about the kids.”

This is what I hear: Snyder saying he is going to continue to allow charters to abscond with taxpayer money with no accountability unless traditional public schools agree to more stringent reporting requirements. So, either traditional schools "do what I say", or charters continue to get their free ride and our money. 

The kind of corruption unfolding in the Steven Ingersoll fraud case shows educational reform is not about "the kids", it's about the charlatans who took advantage of Michigan's poorly written charter school law and cashed in.

Looks like Snyder doesn't have the guts to admit the mistakes that were made in Michigan's DeVos-fueled effort to overhaul public education.

The transformation of Michigan into a center of for-profit schools and the restoration of a class-based education system is a complete reversal of history. According to University of Michigan Professor Jeffrey Mirel, a specialist on the history of education, by the mid-nineteenth century the state had “become a leader in democratizing education, and in creating a public K-16 system.” During this period Michigan State University was founded as the first land grant college in the United States.

All this was in place when the eruption of the American working class in the 1930s, spearheaded by auto workers in Detroit and Flint, led to the formation of industrial unions, a substantial improvement in living standards and expansion of the reach of quality public education to ever wider layers of the population.

According to a court document filed October 14 in Steven Ingersoll's federal fraud case, the government alleges that Ingersoll began helping himself to the Grand Traverse Academy's money sometime in 2009. The missing Academy millions traveled during 2009-2011 from the Academy's bank account to Ingersoll's Smart Schools Management.

Making a short stop at Ingersoll's pass-through shell corporation, Smart Schools, Inc., the money ultimately reached Steven Ingersoll's personal bank accounts.

But after discovering Ingersoll's theft, likely revealed to the Grand Traverse Academy Board during the annual audit, it appears the Board may have attempted to stave off any meaningful public disclosure of the loss. The government alleges Ingersoll took an estimated $3.5 million over the time period at issue, and the Academy's 2012 fiscal audit appears to confirm that, revealing an outstanding $3,548,319 "accounts receivable from related parties" in that year's audit.

In its 2010 audit, the Grand Traverse Academy revealed in Note 4 it was owed $2,715,251, which was classified as "amounts receivable from sources other than governmental units".

There is no description of the source of that receivable, and with the lack of data there's no way to definitively attribute that amount to Ingersoll.

However, by the next fiscal year, the Grand Traverse Academy revealed in Note 4 of its fiscal 2011 audit that it was owed a whopping  $2,500,000 from "related parties", the first use of that classification.

It appears the amount, which ballooned to well over $3.5 million by the 2012 audit, is likely attributable to Steven Ingersoll.

And it's apparent to me that the Academy Board's cover-up campaign was aided by a reclassification found buried within the school's 2013 audit, transforming Ingersoll's remaining "receivable" (a previously uncollectible bad debt) into a $2.38 million "prepaid expense"—camouflaging Ingersoll's misappropriation with the guise of an asset. 

In plain language, the Academy would simply deduct the $2.38 million former receivablein three installmentsfrom Smart Schools' expected future management fees.  

According to the 2013 financial audit, the prepaid management fee “reductions” were scheduled to be received from Ingersoll's Smart Schools Management, Inc. as follows:

2014: $774,000
2015: $960,000
2016: $604,980

It's clear to me now from court documents made public in Ingersoll's federal fraud case that he was aware of the impending charges well over a year ago, and likely made the agreement with the Academy for "repayment" while his attorneys were seeking to negotiate his plea bargain.

Although it remains unclear exactly how much key members of the Academy Board knew and when they knew, I believe they must have been aware. Couple that awareness with the nearly non-existent oversight provided by its authorizer, Lake Superior State University, the Board apparently hoped what it buried would stay buried.

But it didn't.

In addition, the Academy Board's preposterous attempt at "make it go away" crisis PR, designed to remedy the school's earlier lack of communication and transparency regarding repayment of an outstanding $1.67 million dollars owed to the Traverse City charter school by Steven Ingersoll's Smart Schools Management, Inc., has fallen far short its goal: to convince you that the missing money is actually the "remainder of nearly $5.0 million in earnings that SSM promised to pay to GTA according to its needs".

In a September 17 interview with Interlochen Public Radio, Full Spectrum Management's Mark Noss went unchallenged when he objected to the term "prepaid expense", calling it "a terrible description of what that money is."

And if anyone would know about the Grand Traverse Academy and its finances, it would be Mark Noss, the head of Full Spectrum Management. 

In a broadcast email sent on April 28 (shown at left), Noss introduced himself to the Academy community, prominently mentioning his 15 years of Board service and "deep understanding of GTA's history and operations".

Financial operations?

Sure looks like it to Miss Fortune.

Noss continues, burnishing his bona fides by highlighting the financial and management experience he "gained as a business owner of over 30 years"—conveniently leaving out the fact he was (and still is) a business partner of Steve Ingersoll.

If it was "important to sever ties with Smart Schools Management to preserve the integrity of Grand Traverse Academy", why was there no mention of the Academy's pivotal role in Ingersoll's federal fraud charges?

We may likely find out the answer to that question, and many others, when members of the Academy Board are called to testify during Ingersoll's upcoming trial. But, since witness lists are private, we're left to ponder.

In the meantime, you'll just have to wonder how millions leaked out of the Academy's bank account during the years Noss (and other insiders) served on the Board.

And how $704,000 in cash just turned up one day, like an abandoned baby on a doorstep, in the Academy's bank account.

Wonder if anyone noticed that

LET'S MOVE THOSE DECK CHAIRS, PEOPLE! Bay City Academy Closes Old Y Building; Dismal School Count Expected In November

The Edward J. Smith of the Bay City Academy has begun rearranging its remaining deck chairs, but will he go down with the sinking school...or commandeer a life raft from steerage passengers?

While the Bay City Academy's official 2013-2014 Michigan school count reported 551 students at the Bay City and Mancelona locations (North Central Academy), it appears the charter school's Dickensian death knell has begun tolling—the public charter school owned by Steven Ingersoll recently closed its Old Y campus, located at 111 N. Madison Avenue.

And the closing comes after a controversial school year for the Bay City Academy, which experienced unexpected changes in its leadership, poor standardized test scores and the federal indictment of its founder, Steven J. Ingersoll, who is charged with fraud and tax evasion. 

Brian Lynch, shown at left in a photo that appeared this month in the Bay City Times, was appointed by the Academy's board in March as the school's new superintendent and president of educational services (and chief deck chair rearranger). Lynch has worked under the Smart Schools model for most of the last seven years... interrupted in early 2012 when he abruptly left his position as classroom teacher at the Grand Traverse Academy to become an insurance agent in Kalkaska.

Lynch is the son-in-law of Mark Noss, who in March assumed control of the Grand Traverse Academy from Ingersoll. 

As I reported last month on this blog, Noss was still in charge of the Grand Traverse Academy Board when its members voted unanimously during an early morning March 19 "special meeting" to "dissolve" its relationship with Steven Ingersoll's Smart Schools Management. That vote resulted in Noss being awarded a two-year contract to management the Grand Traverse Academy that could pay him up to $4.0 million dollars.

The Academy resolution, acquired after a Freedom of Information Act request, reveals that Mark Noss was still Board chair when the "urgent" decision was made to dissolve the contract with Smart Schools—so that the Academy could execute "a Management Contract with Full Spectrum Management, L. L. C."

Noss actively remained on the Grand Traverse Academy Board, at least through its April meeting—an arrangement that is illegal in Michigan and expressly prohibited by the Academy Board's ethics policy.

Lynch, whose tenure as superintendent of the Bay City Academy is akin to having a defrocked priest say mass at the Vatican, had been issued a Michigan provisional teaching certificate on March 30, 2005. Lynch received a two-year extension in 2010, but let his teaching certificate lapse in 2012.

Brian Lynch, in a Bay City Times interview, said his charter school is "plenty transparent by releasing quarterly financial statements, which are published on the school's website".

"We also have an extra layer of compliance to make sure we're doing everything that's required of us through our charter with Lake Superior State University," he said.

Still, the public cannot access detailed financial information from the school, such as employee salaries and benefits because it's protected behind Smart Schools Inc., the school's management company.

"In that sense, we are similar to a private company," Lynch said.

Following Ingersoll's indictment, the Bay City Academy's Board of Education invited parents to ask questions about the school's future. Lynch said two board meetings have been held this school year and Ingersoll's name hasn't been brought up.

"No one has mentioned it," he said. "We're moving full steam ahead."

Iceberg ahead, Captain Smith!

Monday, October 27, 2014

WE'RE GONNA MAKE THEM AN OFFER THEY CAN'T REFUSE: How An Insular, Private Fiefdom (Supported With Public Tax Dollars) Helped Enable A Multi-Million Dollar Financial Fraud Crime Wave!

Part 1-HOW THE CHARTER SCHOOL RACKET OPERATES IN MICHIGAN: Setting the table for small-town wiseguys

Over the past two decades, Michigan has become “ground zero” for the spread of for-profit charter schools. Our state ranks first in the nation in the percentage of charter schools run by “education management” or  “education service providercompanies that derive revenue from the resources siphoned from public schools. 

A whopping 78.8 percent of these schools are for-profit enterprises in Michigan. The next highest percentage is found in Missouri, having 36.6 percent of its charters for-profit. Largely unregulated and run by politically connected businessmen seeking to cash in on the half-trillion dollar year education “market,” several charter school operations around the country have been exposed as corrupt rackets. 

In July, the Detroit Free Press published the results of an exhaustive year-long study of the financing, operation, oversight and education outcomes of Michigan’s charter schools on its “Freep.com” website. The study, which includes articles, documents, PDF files and videos, is a damning indictment.

A summary of the Free Press investigation’s most significant findings, include the following:

1. Charter schools spend $1 billion per year in state taxpayer money, often with little transparency.

2. A majority of the worst-ranked charter schools in Michigan have been open 10 years or more.

3. Charter schools as a whole fare no better than traditional schools in educating students in poverty.

4. Some charter school board members were forced out after demanding financial details from management companies.

5. State law does not prevent insider dealing and self-enrichment by those who operate schools.

The Free Press, no doubt in the interest of “balance” and not offending its corporate and political benefactors in both political parties, declares there are some “innovative” charter schools that have “excellent academic outcomes.” It should be pointed out, however, that charter schools, despite their quasi-public character, are selective about the students they accept. Public schools, especially those that service specific neighborhoods and do not require testing to get in, must accept everybody, including students with severe learning disabilities.

However, even with this seeming advantage over public schools, the vast majority of charter schools have not improved the education outcomes for their students … quite the contrary. 

These schools often provide a cut-rate education for students and substandard wages and benefits for their employees, who are in constant fear for their jobs. If a particular venture proves unprofitable, a company can simply move on to greener pastures.


The Free Press report sheds an interesting light on the question of school governance. Charter schools are run by management companies, but there are also “boards of directors,” roughly analogous to school boards. However, in the case of many charter schools, these ostensibly governing bodies are mere window dressing, a rubber stamp for the appropriation of public money by the businesses in whose interest these schools serve.

The case of federally-indicted charter school management company head Steven Ingersoll has been covered in detail on this blog. In fact, some critics have even termed it excruciating detail (like that's a bad thing).

According to the government, the case began in 2009 when Ingersoll “caused another charter school that he owned or controlled—the Grand Traverse Academy—to advance him funds that needed to be repaid”. Counts 6 and 7 of the superseding indictment “relate specifically to those advances and Steven Ingersoll’s personal income tax treatment of those transactions in 2009 and 2010.” The superseding indictment alleges that Steven Ingersoll either mischaracterized or omitted the advances from his personal income tax returns.

Ingersoll, then acting in concert with Roy C. Bradley, Sr., “conspired” to “induce Chemical Bank, an FDIC insured depository institution, to approve a $1.8 million construction line of credit loan to Madison Arts L.L.C. to finance the construction work for the Bay City Academy in Bay City.”  (The shell corporation 'Madison Arts LLC' was formed on December 16, 2010 by Ingersoll.)

Rather than using the loan for the Bay City construction project, Steven Ingersoll used loan proceeds to partially repay the advances from Grand Traverse Academy. The superseding indictment alleges that all five of the defendants “conspired to a series of transactions that diverted at least part of the funds required to be used on the Bay City Academy project to the Ingersolls’ personal bank account at Fifth-Third Bank.”

In an October 22 court filing, Assistant U. S. Attorney Janet Parker outlined much of the factual background of the superseding indictment—revealing this bombshell allegation: cash advances Steven Ingersoll made to himself from the Grand Traverse Academy's publicly-funded coffers may at one point have exceeded $3.5 million dollars.

During an October 8 hearing, Judge Thomas L. Ludington asked whether the Grand Traverse Academy’s board "was aware of the advances that Steven Ingersoll had made to himself from funds belonging to the school."

In response, it was pointed out that “the Grand Traverse Academy was audited annually.”

The government responded, adding that Note 3 to the publicly available audit report for the fiscal year ending on June 30, 2012 for the Grand Traverse Academy contained an entry that stated, “Amounts receivable from related parties $3,548,319.”

And who is that “related party”?  The government alleges it’s Steven Ingersoll.

This extraordinary account is hardly typical, but it encapsulates the rapacious and criminal character of these business “overlays” on what remains of public education in the United States and the ease by which corporate vultures can plunder the public coffer.

The theft of public monies goes hand in hand with a reduction in per-pupil spending, including salaries and benefits for teachers and support staff, in addition to supplies and equipment used for instruction. During 2012-13, average charter classroom spending was $4,893 per pupil, compared with $6,985 for traditional schools.

According to the Free Press, the six largest for-profit operators of charter schools all spend less on each student, in some cases substantially so, than the statewide average. For example, CS Partners, which operates 19 Michigan charters, spent 37 percent less on each student. 

These cost savings go directly to the corporate owners who have a financial incentive to spend as little on students as possible.

Part 2-HOW THE CHARTER SCHOOL RACKET OPERATES IN MICHIGAN: Cracks in the facade (from the inception to the deception)

Unlike the Mafia, somebody was smart enough to do their dirt without anyone noticing for a very long time...even though it had been public knowledge for years.

What taxpayers didn't know couldn't hurt themlogical thinking to a sociopath. It's kind of like saying it's not infidelity if your wife never finds out.