BADA BING BADA BOOM! That's It, It's All Taken Care Of: A Tale Of "Urgency" MARK NOSS DID NOT STEP DOWN FROM ACADEMY BOARD BEFORE SPECIAL MEETING'S CRUCIAL VOTE TO FIRE SMART SCHOOLS MANAGEMENT, INC. AND HAND $4.0 MILLION DOLLAR CONTRACT TO NOSS & HIS FULL SPECTRUM MANAGEMENT COMPANY; HABERMEHL NAMED CHAIR, SIGNS FULL SPECTRUM CONTRACT

IS THERE A COVER-UP?
 
MARK NOSS WAS ACADEMY BOARD CHAIR DURING CRUCIAL VOTE AT EARLY MORNING "SPECIAL MEETING" TO FIRE SMART SCHOOLS MANAGEMENT, INC. AND TRANSITION TO HIS OWN MANAGEMENT COMPANY; HABERMEHL NAMED CHAIR, NOSS AND HABERMEHL SIGN FULL SPECTRUM CONTRACT SAME DAY, EXACT TIMING STILL UNCLEAR

Back on May 23, this blog examined comments made during the Grand Traverse Academy's May 2 Board of Directors meeting. The official meeting minutes show Attorney Doug Bishop explained the "contract with Full Spectrum was done out of urgency". 

Although it appeared that a "tick-tock" precisely describing the process employed to transition from federally-indicted Steven Ingersoll's Smart Schools Management, Inc. to former board president Mark Noss's newly-minted Full Spectrum Managment, LLC was unavailable, a recently released document Grand Traverse Academy Board document provides an important clue.

Back in May, I wondered how "urgency" drove the board's decision to hire former board president Noss, when it had been firmly established both on this blog and in the Traverse City Record-Eagle that the Academy's board and legal counsel had prior knowledge of Ingersoll's $2.38 million dollar management fee "overpayment"?

While I may not be able to fully answer that question, I did learn one thing: Mark Noss was still in charge of the 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—a vote that resulted in Mark Noss being awarded a two-year contract to management the Grand Traverse Academy that could pay him up to $4.0 million dollars.

Conflict of interest, you say? What a surprise!

The Academy resolution, acquired after a Freedom of Information Act request, shows 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."
 
Later in the day (4:31pm, according to the fax time stamp), Noss filed an application with the State of Michigan to form Full Spectrum Management, L. L. C., and Michigan business entity records show March 20 as the new company's official formation date.

So, while I don't know precisely when Steven Ingersoll officially informed the Board of his impending federal indictment—an indictment Ingersoll's attorneys had been working to avert with plea deal negotiations that stretched over the previous year—I can tell you that Mark Noss filed an application to form his new management company the same day the Academy Board voted to boot Ingersoll from the building.

At a "special" 7:45am Board meeting, Noss, Brad Habermehl, Larry DeYoung, Lesley Werth and Kim Elliott all voted Ingersoll's Smart Schools out.

And then, with a little "presto change-o rearrange-o", Noss was out (from the Board) but back in control of the Academy.

But don't worry about Steve Ingersoll and Mark Noss...the duo still has the Excel Institute!

And Mark Noss still has Smart Schools' Gretchen Ingersoll (Steven Ingersoll's daughter-in-law) handling financials for Full Spectrum.

Breaking up is hard to do, I suppose!

Miss Fortune will update the transition "tick-tock" as soon as more information becomes available...

OH...I WRITE ABOUT SCIENTOLOGY, TOO!

Many readers have discovered this blog after finding story links on other sites, like these comments from a recent Tony Ortega story. 

Welcome, everybody!

LIPSTICK ON A PIG: Not Chanel's $35 'Vamp'!

To put "lipstick on a pig" is a rhetorical expression, used to convey the message that making superficial or cosmetic changes is a futile attempt to disguise the true nature of something.

And with the recent activity at the Grand Traverse Academy, it has to be really red lipstick on a really snorty pig.

Like a row through a sewer in a glass-bottomed boat, it's crystal clear that the road apples bobbing below are winking back at you in derision—if you believe that contemptuous mockery and ridicule can come from something that sticks to your hiking boots.

I'm not suggesting the "Smart Schools Repayment Plan" was a swindle, but according to the International Association of Professional Con Artists, Grifters, Flim Flammers and Scallywags, that plan is known as 'The Dough Boy' - convince people you're the boy rebating money and in rolls the dough! - and it's exceeded in popularity only by the Pigeon Drop and the Three-card Monte. 

And with other recent revelations, including an extensive analysis of the claims made by Grand Traverse Academy Board president Brad Habermehl, as of this writing it appears that parents who attended the July 18 Board meeting may never learn the "answers to the questions and concerns" presented at that meeting.

The Academy Board is still "working diligently to form comprehensive answers"—their words, not mine.

Back in the day when Times Square hookers wore stockings, business questions were answered expeditiously.

But times—and the Square—have changed.

If there are any questions you'd like answered before Friday's Grand Traverse Academy Board meeting, please send them to Miss Fortune at: tcmissfortune@yahoo.com

I'll try my best to provide you with an answer before the meeting starts:

September 12, 2014 - Onyx 1
11:30 am Finance Committee; no Instructional Committee today (Secondary Conference Room)
12:30 pm 2014-15 Annual Meeting (Onyx 1)

NARCONON PER WICKSTROM: David Love Examines 'A Lineup Of Mug Shots and Threats'

"L. Ron Hubbard's 'Fair Game' and 'Dead Agent' policies are still being enforced by Scientology and a "henchmen of Per Wickstrom's evil empire," Mark Hergert."

David Edgar Love is a former graduate of Narconon Trois-Rivieres, a Canadian branch of the Scientology organization’s drug treatment program. He experienced first-hand how Narconon is used a recruitment tactic for Scientology. More disturbingly, he also witnessed the dangers involved with the program.

Love has turned his focus to Michigan's Per Wickstrom, in a hard-hitting story he calls "Narconon Per Wickstrom: Lineup of Mug Shots and Theats". Love takes a comprehensive look the revolving rogue's gallery of convicted criminals surrounding Wickstrom in his Narconon-based drug treatment empire.

He has said "When I was at Narconon (2008-2009), people were taken away in ambulances and had to spend days in the hospital. People have died in the Quebec facility. The vitamin and sauna treatments are horrible. Patients regularly vomited and had diarrhea."

In Quebec, where Love briefly worked at Trois-Rivieres, he gained access to the center's records and learned that not only were Narconon's claims of an 80 percent success rate completely bogus, but patients were being force-fed Scientology's concepts so they could be recruited by the church. 

He left, and took with him thousands of documents. He spent the next two and a half years explaining Narconon to Quebec officials, who finally shut down the center in April 2012. 

In the post, Love reveals threats made to Miss Fortune, especially those made by Wickstrom associate Mark Hergert, including his acquisition of "anitasenkowski.com".

But what about a "roguette's gallery", Miss Fortune, you might ask.

Sisters are doing it for themselves! 








Regular readers of this blog may remember Arlene Donnelly, the convicted embezzler (mugshot above) who's now working as a Case Manager at A Forever Recovery, featured in the post called "Belles With Balls".

Donnelly plead guilty in October 2012 to embezzling more than $14,000 from the Northwest Athletic Boosters, a parent group supporting athletic teams and athletes at Northwest Community Schools in Jackson County.

Donnelly reportedly paid some bills, but mostly used the money to eat and shop, visiting Taco Bell, Wendy’s, Rue21, Aeropostale and other mall stores.

Jackson County Circuit Judge Thomas Wilson sentenced Donnelly to 300 days in jail and five years probation, although she served less than eight months and was released on August 8, 2013.

And on August 26, 2013, with no experience in substance abuse treatment and hardly enough time to wash the stink of jailhouse bologna from her hair, Donnelly began working at Per Wickstrom's A Forever Recovery.

Donnelly describes her role as an AFR Case Manager: 

I am Arlene Donnelly, a Case Manager at A Forever Recovery.  I am married to the love of my life and we have four children, ages 16, 14, 12, and 3. 

I have done a lot of volunteering throughout our older children’s education. In doing this I found my passion in helping others achieve their goals. 

Here at A Forever Recovery I facilitate groups at our withdrawal center. I enjoy being one of the first people that our clients meet as they begin their stay with us. In doing this I have a unique opportunity to see each and every one of our client’s grow and change throughout their stay. 

I have my Bachelor’s Degree in Business Administration. I am beginning to work on my Master’s in Mental Health Counseling. Though I have never struggled with addiction myself, I have been the support system for some of my loved ones through their addiction.  This role and my own life experiences have given me an insight into the addiction process.  

With this knowledge I discovered the desire to help others find the path to sobriety.

Wow...she's gone from stealing money to stealing our hearts!

PUSSYFOOTIN' WITH "PURR": Per Wickstrom's New Stealth Referral Site

Per Wickstrom's launched another sneaky way to get his paws into your wallet!

Wickstrom, CEO of Best Drug Rehabilitation and one of 82 named defendants in the NAFC's massive trademark violation lawsuit against Narconon International and the Church of Scientology, recently launched yet another stealth addiction treatment referral service: LiveToBeSober.com.

Wickstrom’s PR efforts describe the site as a “no-cost 24/7 confidential referral service where trained counselors provide guidance, advice and program information to people who want to help a loved one win their battle against drug or alcohol addiction.”

(The sound you just heard was the snort coming from my surgically-altered nose!)

On July 31, Wickstrom announced that LiveToBeSober.com had entered into a “sponsorship partnership” with country singer Jared Blake. As part of the sponsorship, Blake has created an intimate acoustic break within his high-energy show, where he sits alone on stage and talks to audiences about his personal struggles, and most importantly, about winning back his life – and how others can, too.

Oh, and mentions his “sponsorship partnership” with Per Wickstrom’s LiveToBeSober.com

“I play songs that I've written about those times in my life, and connect my story with my fans in a way that I have never done before,” Blake stated in the July 31 press release. “I am grateful in many ways for Live To Be Sober being a part of this show. This is the most rewarding kind of sponsorship I could have. The whole reason I got sober was so that I could live, and the mission of Live To Be Sober is near and dear to my personal goals. I would not be here today if it were not for people continuing to spread the word about getting help.”

Well, spread something!

Hey, and speaking of “spreading something”, here he is—“Purr” Wickstrom!

“The first thing that that people discover about Jared is that, unlike a lot of folks in the music and entertainment world, he’s the real deal,” Wickstrom commented in the press release. “Raised between the Bible and the belt, he’s never lost touch with his small town roots or surrendered his faith -- no matter how bleak things became. His story is an inspiration, and together we hope to spread awareness that with the right attitude, the right treatment and the right support, overcoming addiction and living sober can really happen!”

And, with “Purr” being Per, don’t think he hasn’t already ‘gone and done it’, to borrow a phrase from Shania Twain.

Enlisting his business partner/friend/twinkly-publicity-lure Herman Moore, Wickstrom and the former Detroit Lion were recently joined by Sean Jordan at a Monroe High School football camp.

The trio cooked and served food, as well as handed out LiveToBeSober.com t-shirts to “remind young people that they have the power to steer clear of drugs and alcohol.”

(There goes that snort again!)

Wickstrom’s Best Drug Rehabilitation donated $5,000 to support both the football camp and Monroe’s Arthur Lesow Community Center.

The site was developed for Wickstrom by Heather and Samual Harrington. Heather Harrington is currently the corporate Secretary of Wickstrom's Tranquility Detox, and the Cheraw, South Carolina-based web developer has registered hundreds of referral sites for Wickstrom and other Narconon-related drug facilities.

Miss Fortune, you may be asking, how can you know that with such certainty? 

Well, looky here: see what happens when you leave the development version of your WordPress "Medicom" theme site live online! Anybody can find it.

Try a little harder next time, eh?

AND THEN THERE WERE FIVE: Grand Traverse Academy Adds Two New Members To Its Board of Directors

With just a week to go until its next meeting, the Grand Traverse Academy Board has added two new members, bringing the total back up to five—the minimum number required by its charter authorizer, Lake Superior State University.

Michael Drilling, a Traverse City photographer and owner of Windbourne Photographic Studios, is joined by Samer Bourdkani.

Bourdkani is a Traverse City CPA and runs Pyramid Tax Accounting & Consulting. 

NEW TRIAL DATE SET FOR STEVEN INGERSOLL: December 2nd In Bay City Federal Court

Another day, another countdown clock!
Court documents filed just before Labor Day reveal December 2 has been set as the new date for Steven Ingersoll's federal fraud trial.




In addition to setting a new trial date, United States District Judge Thomas L. Ludington ordered the following:

Motions Deadline: September 12
Plea Cutoff: October 16
Final Pretrial Conference: November 18 at 2:00 p.m.
Trial: December 2 at 8:30 a.m.

NEXT STOP...MAKING LICENSE PLATES? 

Who knows?

KISS OFF?: NAFC's Blistering Response to Per Wickstrom's Best Drug Rehabilitation And Its 'Motion To Dismiss' In Massive False Advertising/Trademark Violation Case

"Best Drug is attempting to make distinctions about its program that serve merely to detract from the reality of the situation. Best Drug is equally involved in the civil conspiracy which stems from the core location in Oklahoma."
 

As I suspected in a May 19 report, Per Wickstrom's saddle is about to get chapped! 

The National Association of Forensic Counselors (NAFC) filed a motion in Oklahoma on September 2 in opposition to Best Drug Rehabilitation's "motion to dismiss" based on lack of personal jurisdiction, and it looks like Wickstrom and Burdge can expect many days in court.

As reported on this blog, Per Wickstrom's Best Drug Rehabilitation, Inc. and the Manistee facility's Deputy Executive Director, Jason Burdge, were among the 82 named defendants in a massive trademark violation lawsuit filed on May 16 in US District Court in Oklahoma's Eastern District by the National Association of Forensic Counselors, Inc. (NAFC) and the American Academy of Certified Forensic Counselors, Inc. (AACFC).

As expected, the suit seeks to blow the lid off a long-rumored Narconon practice: inflating the credentials of staff members by using expired or phony accreditation certificates. 

BACKGROUND

According to court documents, this case "emanates from Defendants’ theft of Plaintiffs’ logos, trademarks, certifications and established business reputation in order to bait vulnerable victims into the Scientology religion."

NAFC and AACFC operate a certification board for forensic counselors, and have established a series of standards, skills, training and competencies required for professionals working with criminal offenders in addictions to enhance the delivery of safe and effective treatment. 

This lawsuit involves the misappropriation and misuse of  logos, trademarks, certifications, and established business reputation by  the defendants for the purposes of marketing Narconon programs for profits and promoting the Church of Scientology. 

Best Drug Rehabilitation, Inc. was added to the complaint based upon its "specific role as a player in the conspiracy to utilize Plaintiffs’ logos, trademarks, certifications, and established business reputation to attract individuals into the Narconon Network and, consequently, the Church of Scientology."

NAFC SEPTEMBER 2 MOTION TO DISMISS

The motion alleges that "Best Drug Rehabilitation is an active contributor in the scheme described in the Complaint by virtue of its participation in the misappropriation and misuse of Plaintiffs’ intellectual property with the obvious goals to further the profiteering of the Narconon Network and the Church of Scientology, at Plaintiffs’ expense." 

In addition, the NAFC claims that Best Drug Rehabilitation "purposefully directed its activities towards Oklahoma and did so in a manner that caused Plaintiffs’ damages through its participation in the civil conspiracy
stemming from Oklahoma."

The May 16 complaint alleges that "Best Drug Rehabilitation is a treatment and rehabilitation facility operating as a part of the Narconon Network run by Narconon International. Best Drug Rehabilitation advertised on its website that Defendant Jason Burdge was a C.C.D.C., when in reality his certification expired in August 2010."

In 2013, Burdge applied for his C.C.D.C. through NAFC, but was refused certification when NAFC discovered Burge had "falsified his application." Despite a cease and desist demanded by NAFC on April 1, 2013, Best Drug Rehabilitation continued to post a scanned copy of Burdge’s defunct NAFC Certificate (shown above) as recently as July 2013 on www.bestdrugrehabilitation.com. 

Burdge's credentials were removed from the ".com"
website, but an active link still remains today on Best Drug Rehabilitation's alternate site, http://www.bestdrugrehabilitation.org/staff-credentials.

The September 2 motion reveals that Burdge (shown at left) received his training at "Narconon’s flagship in Oklahoma before moving to Michigan and beginning to work with Best Drug Rehabilitation in 2012. "


Really? What a shocker!
 
You could never tell from his wardrobe!



NARCONON, PER WICKSTROM & BEST DRUG REHABILITATION

The NAFC response reserves some of its harshest language for Per Wickstrom, who reportedly just opened an unlicensed facility in South Bend, Indiana under the name "Tranquility Detox".

The document accuses Wickstrom's Best Drug Rehabilitation of operating "a confusing scheme of corporations in an attempt
to launder their ties to Narconon, the Church of Scientology and the use of L. Ron Hubbard’s technologies."

It goes on to state that despite Best Drug Rehabilitation's "self-serving affidavit attempting to claim otherwise", Best Drug cannot
escape the reality of its ties to Narconon. 

January 18, 2013 Screen capture

On one side of the mouth, Best Drug makes the statement that it “is not operating as part of any Narconon Network run by Narconon International.” However, the same paragraph contradicts its self-serving statement when Best Drug admits its use of the Narconon materials. 

Best Drug claims to operate through a separate corporation named My Best Drug Rehabilitation, Inc., which licenses training
materials called “Narconon Book 1” from Defendant Narconon International, and then utilizes Best Drug’s facilities to teach classes using the Narconon training.

Best Drug Rehabilitation's founder, Per Wickstrom, has posted a series of videos on Best Drug’s official YouTube channel which contradict an affidavit attached to its motion to dismiss. 

And here's where it gets funny—the NAFC's response features the unintentionally hilarious  "Purr" Wickstrom video. 

Could the NAFC legal team be reading my blog? Cool!

In addition to being called "Purr" instead of "Per" by interviewer Ingrid Kelley, Wickstrom demonstrated a singular mix of petulance and defiance that hasn't been seen on screen since Pee-Wee Herman (before the weight gain), claiming that his "personal beliefs have nothing to do with the beliefs that I teach at my rehabilitation centers." 

Kelley had deftly set it up, telling Wickstrom that there are "some reports about you being a Scientologist, and actually using your centers as recruitment tools. Would you like to respond to those allegations?"

He pauses and continues: "I am a Scientologist. What religion are you?"

Sometimes this stuff just writes itself!

In the interview with Kelley, Wickstrom directed viewers to www.stopaddiction.com, which is a Narconon Oklahoma website. 

D'ohh!

And in Wickstrom’s Best Drug Rehabilitation Grand Opening video, the camera scans the certifications showing his staff’s qualification, which includes Mr. Burdge’s two-year-expired C.C.D.C. certificate. 

D'ohh! D'ohh!
 
WHAT'S NEXT?

Although the case is in its infancy, the NAFC's response to Best Drug Rehabilitation's motion to dismiss insists "the hijacking of the NAFC's marks and accreditation creates a false aura of expertise
where none exists, and the public, as well as plaintiffs, are damaged as a result."

The document asserts that "litigating this case together in Oklahoma is analogous to having all the pieces of a jigsaw puzzle in one place. Permitting defendants to scatter the pieces of the jigsaw puzzle throughout various jurisdictions across the country will prevent the entire picture, the civil conspiracy, from being exposed and uncovered."

"Exposed" and "uncovered", eh?

I'm on that like a cop on a donut shop!

IF NOT FOR YOU: Miss Fortune Analyzes Grand Traverse Academy Board's Smart Schools Management/Steve Ingersoll Support Statement

With the next Grand Traverse Academy Board meeting coming up on September 12, Miss Fortune analyzes a statement read by Academy Board President Brad Habermehl during the July 18 meeting.

Although some of the claims can be easily verified, it would take a forensic audit—examining bank account transfers, cash flows, and other payments—to uncover the whole truth. 

Some of Habermehl's assertions appear inconsistent and misleading, while others are just bat-s**t crazy.
 
Miss Fortune examined Habermehl's claims, using historic Academy fiscal audits acquired in part by a Freedom of Information Act (FOIA) request, legally vetted information presented in two Academy municipal bond issues (Series 2002: $9,110,000, Series 2007: $16,200,00), the Academy’s charter agreement with its authorizer Lake Superior State University, and contemporaneous news reports. 

The "board minutes" Habermehl referenced in his statement were not examined. Although they were included in my FOIA request, they were not provided. However, meeting minutes are not subject to an audit, like the Academy's financial statements.

The picture that emerges is much more nuanced and complicated and creates more questions than it answers.

THE CONTRIBUTIONS OF KAYE MENTLEY, STEVEN INGERSOLL

If not for the efforts and intellectual contributions of Dr. Steven Ingersoll and Kaye Mentley and Smart Schools’ willingness to rebate its earnings, GTA would not likely exist today.

The Academy opened its doors in October 2000 in a building still under construction. After the school’s original developer, Floyd Schecter of Nashville, went bankrupt, the Academy ultimately purchased the building from Comstock Construction. 

Prior to purchasing the building on December 11, 2002, the Academy had obtained equipment financing (furniture, partitions, etc.) from Charter FS Corporation, allowing the school to operate during its so-called "Tyvek" years.

Kaye Mentley, a founder of the school and former principal, launched the school on a foundation of Choice Theory, based on her previous work at another Glasser Quality School in Wyoming, Michigan.
 
The criteria for a Glasser Quality School include a school-wide atmosphere of trust and respect, elimination of discipline problems, schooling replaced by useful education with students achieving beyond competence and students and staff using and applying Choice Theory at home and in school. Other components of the designation include parents studying Choice Theory, students excelling at standardized tests and a general joyful environment at the school.

In 2005, the Academy was named a Glasser Quality School, one of 18 schools honored that year. Dr. William Glasser of the Glasser Institute visited the Academy, sharing how his Choice Theory principles have been applied at all levels of the school. 

Ingersoll’s intellectual contribution to the Academy was Integrated Visual Learning (IVL), an optometric-based process he developed.  Although unsupported by peer-reviewed research, Ingersoll claims that IVL helps identify, assess and correct students’ vision.

The IVL process combines vision procedure with cognitive processing drills and mental and motor skills.

While the “intellectual contributions” of Mentley and Ingersoll are more easily confirmed, it’s much more difficult to confirm Habermehl’s assertion that Smart Schools actually did “rebate its earnings” in the Academy’s early years.

FINANCIAL VIABILITY AND SMART SCHOOLS

Over the years GTA needed substantial financial support and Smart Schools always supplied what the Academy needed.

In the Academy’s April 6, 2004 Lake Superior State University charter contract renewal, then-Principal Kaye Mentley referred to the Grand Traverse Academy’s finances as “solvent and stable”. Mentley backs up her claim, revealing that the “school has ended each year with a surplus”.

Mentley states that the Grand Traverse Academy has “entered into a long term agreement with Smart Schools Inc. to provide building, equipment, financing and educational management.”

Mentley goes on to add that Smart Schools also “owns and operates Excel Institutes, which are community based learning centers that provide drug free treatments for Learning Disabilities, Dyslexia and Attention Deficits.”

Referring to the 2002 Series bond issue, Mentley states that the “financial success has allowed Grand Traverse Academy to purchase and complete renovations on its building in December of 2002.”

The very first Academy audit—June 30, 2001—is unavailable for review. The Board’s response to my Freedom of Information Act request resulted in a digital file that could not be opened, and further inquiry revealed that no hard copy existed.

In addition, while the June 2002 fiscal audit had a recap of the previous year’s Combined Statements of Revenues and Expenditures, it did not break out detailed budget line item information.

However, the Series 2002 bond issue document included information about the Academy’s renewed management contract with Smart Schools, running through 2007.

The contract called for the Academy to pay Smart Schools an annual fixed base fee of $361,800 for the first year of the term (beginning June 2002). The contract stated that the base fee “shall be increased in subsequent years to reflect increases in the total aid received by the Academy from the State of Michigan pursuant to the State School Aid Act of 1979, as amended, for the particular number of students enrolled in the Academy.”

That agreement capped Smart Schools’ management fee at $650,000.

A review of the Academy’s 2002-2007 fiscal audits show the following management fee payments to Smart Schools:

2002: $279,201
2003: $317,073
2004: $432,701
2005: $561,472
2006: $650,000
2007: $240,000

If the theory for Habermehl’s claim is by accepting less than its contractually-mandated maximum of $650,000, Smart Schools was “rebating” its earnings, I believe that contention has stretched the truth.

However, financial fact-checkers may have a future opportunity to dispute that shaky assumption. 

FINANCIAL SUPPORT: TAXPAYERS SUPPLIED THE BACON...SMART SCHOOLS JUST THE SQUEAL

According to the terms mandated in its contract with the Grand Traverse Academy, Smart Schools did deliver financial support. In addition to the two bond issues, Smart Schools arranged financing from Charter FS Corporation that allowed the Academy to equip its classrooms. 

But while Smart Schools did its part, its contributions were far outweighed by the taxpayers of Michigan and the United States government, as you can see in the chart above.

From the Academy’s inaugural year through June 2013, Michigan has provided the Academy with nearly $72.0 million dollars in taxpayer funds.

In addition, various grants and federal funding (including over $800,000 from the American Recovery and Reinvestment Act of 2009, popularly known as “the Stimulus”) added roughly $8.5 million in financial support.
 
It looks like taxpayers “brought home the bacon”...and paid for the pan that fried it up.

SMART SCHOOLS “GAVE” THE GTA $3.3 MILLION DOLLARS?

Analysis of GTA’s audited financial statements and board minutes from June, 2004 through March, 2014 shows that Smart Schools gave GTA $3.3 million from its budgeted and contractually authorized earnings. Additionally, Smart Schools planned to rebate another $1.6 million from its future earnings which is classified on GTA’s books as a non-spendable asset.

"Gave" is a peculiar term to use. It generally means to "present voluntarily and without expecting compensation", so it can give the perception that no "strings" were attached.


I reviewed the Academy’s audited financial statements (from June 2002-June 2013) and could not substantiate the claim that Smart Schools “gave (emphasis added) GTA $3.3 million from its budgeted and contractually authorized earnings.”

Aside from a reference in the Academy’s June 2004 fiscal audit referring to a “$41,414 in decreases allocated to support services in the General Fund donated by Smart Schools Management”, I was unable to locate any additional "donations".

However, in the June 2013 audit under “Related Party Activities”, there was this statement: “Total payments to Smart Schools Management, Inc. during the year totaled $6,946,462 and refunds received total $1,897,805. As of June 30, 2013, the Academy carried a prepaid expense/expenditure balance of $2,338,980 for payments made to Smart Schools Management, Inc.”

As there is no explanation of the “refunds received” in the Academy’s 2013 fiscal audit, I am unable to determine if the “refund” was merely transfer by Smart Schools back to the Academy’s bank account based on an inflated budget projection or an actual “donation”.

But here’s where Habermehl’s logic goes totally off the rails, and becomes a caboose on the crazy train: his claim that “Smart Schools planned to rebate another $1.6 million from its future earnings, which is classified on GTA’s books as a non-spendable asset.”

This whopper deserves its own section!

ANOTHER $1.6 MILLION FROM ITS FUTURE EARNINGS? WHAT EARNINGS?

Smart Schools planned to rebate another $1.6 million from its future earnings which is classified on GTA’s books as a non-spendable asset.

What happens when you make a business deal with someone, and they take your money but don’t deliver?

You sue him, right?

Well, only if you have something in writing!

It’s an old legal joke: a verbal agreement is not worth the paper it’s written on.

When Habermehl stood up at the July 18th board meeting and read the Board's statement in support of Steve Ingersoll, he certainly knew that no agreement existed that could compel Ingersoll’s Smart Schools to repay the outstanding $1.6 million dollars.

In addition, once the Academy parted ways with Ingersoll’s Smart Schools in March, it didn’t matter what Ingersoll had “planned” to do months before.

I mean, I’d planned on having shiny hair like Daryl Hall and marrying a news anchorman—and just look how that turned out!

You lost me here, Brad, along with any shred of credibility left clinging to your “statement”.

I mean, how can the Academy keep the missing $1.6 million dollars on the Academy’s books as a “non-spendable asset”?

That phrase belongs in the Euphemism Hall of Fame!

DEMONSTRABLY MISLEADING ELEMENTS…FROM EMPTY RHETORIC TO OUTRIGHT DISTORTION

Smart Schools founded and funded GTA from its origin. GTA flourished in large part because Smart Schools was willing to rebate its contract and budget authorized earnings during GTA’s lean years of infancy, expansion and State funding reductions. 

I suppose the Academy’s September 12th Board meeting will likely be as awkward as a preschool Christmas pageant—with parents flocking like baby penguins angling for regurgitated fish.

Remember, brutal consistency is the key to credibility—to call them “white lies” just insults all the white liars in the world.

Vipers are measured by the pitful for a reason!

NOTE: If the Academy Board would like to comment on this article or provide a rebuttal, I'll be happy to post the response. That is, if the three Board members left can find the time!

NO REPAYMENT PLAN CONTRACT BETWEEN SMART SCHOOLS MANAGEMENT AND GRAND TRAVERSE ACADEMY: Effort To Retrieve Remaining $1.6 Million Dollars In Jeopardy?

Miss Fortune has discovered that the Grand Traverse Academy has no contract confirming the repayment plan agreed to by Smart Schools Management, Inc. as outlined in the Academy's 2013 fiscal audit.



Academy Board president, Brad Habermehl, responding in an email this morning to my Freedom of Information Act request seeking a copy of any agreement/contract confirming the details (and contingency plan) of Smart Schools' repayment of a $2.38 million amount classified in the Academy's 2013 fiscal audit as a "prepaid balance", confirmed that "no documents that exist beyond the 2013 audit, which can be found on the Academy's website, pertaining to your request."

In other words, it appears that the Academy board did not amend its management agreement with Smart Schools to incorporate the plan that called for Smart Schools to work off the $2.3 million dollar "prepayment" by "partially reducing cash transfers for future management fees through June 2016", leaving the recovery of the remaining $1.6 million in jeopardy.

Yes, there's nothing in writing!

Holy s**t!

THE $2.38 MILLION DOLLAR PREPAID EXPENSE

The official 2013 Grand Traverse Academy audit report stated that in addition to receiving “prepaid management fees”, Smart Schools Management also had the ability to “transfer funds between the Academy’s and Smart Schools Management, Inc.’s bank accounts” without prior approval.

The audit report revealed that on behalf of Smart Schools Management, Ingersoll "took cash advances" for the management fee each year in the beginning of the school year based on the budgeted figure and "without further Board action".

The audit report revealed that Smart Schools Management agreed that it "owed Grand Traverse Academy an amount classified as a prepaid balance" ($2,338,980), and worked out a repayment plan with the Academy. The plan called for Smart Schools to work off the prepayment by "partially reducing cash transfers for future management fees through June 2016".

In plain language, the Academy would simply deduct the $2.3 million overcharge--in three installments--from 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 now clear from court documents recently 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 negotiating a plea bargain. 

It remains unclear, however, how much the Academy board knew...and when they knew it.

THE CORPORATE VEIL...OR THE HOBOKEN SHUFFLE?

I thought I was jaded because I'd spent nearly ten years living in New York City, but it's all starting to make sense! 

This is pure gangsta—almost as badass as Fred Williamson in "Black Caesar"!  

I'm diving down deep into the skeptic tank, because this new revelation calls into question the remarks made recently by the Academy's attorney, Kerry Morgan.

Quoted in a Traverse City Record-Eagle article, Morgan stated that “he’s been looking into how and whether it’s even possible the school can retrieve the $1.6 million from Smart Schools.”  Morgan went on to ponder whether there’s even a “legally enforceable obligation for that money to be paid.”

Miss Fortune has reached out to Morgan for a comment, and will provide an update as soon as possible.

Just hope it's not more smoke-and-mirrors bloviating about "piercing the corporate veil"!