On Saturday the Washington Post’s Michael Alison Chandler revealed that a civil lawsuit by the D.C. Attorney General against the leaders of Options PCS has been settled.  As a reminder, towards the end of 2013, the U.S. Attorney accused Donna Montgomery, David Cranford and Paul Dalton, managers of Options, of stealing $3 million dollars in public funds belonging to the charter through a private company that they had established to provide school services. Others caught up in this mess included long time WUSA Channel 9 newscaster J.C. Hayward, who was Options board chair when a contractual arrangement was struck between the school and the former managers, and who was allegedly paid to attend board meetings, and Jeremy Williams, a hero to those of us involved in D.C.’s charter movement until it was discovered that he was hiding the Options financial scheme through his position as the chief financial officer of the DC Public Charter School Board.  When this news broke Ms. Hayward was placed on leave by the station and she eventually retired.

Options was established to teach severely emotionally and physically disabled students that no other schools were equipped to serve.

Last summer the U.S. Attorney ended a criminal investigation against the same individuals.  Ms. Hayward had been dismissed from the case earlier.  The civil action had been on hold while the criminal complaint was progressing.

Under the civil settlement, Ms. Chander indicates, Ms. Montgomery, Mr. Cranford, and Mr. Dalton will together have to pay $575,000 to Kingsman Academy PCS, the charter that replaced Options in August 2015.  Mr. Williams is being charged $84,237 in an agreement reached the week before.  The Post reporter also states that “the defendants agreed that they would not serve in a leadership role of any nonprofit corporation in the District until October 2020.”

The article includes the additional information that Kent Amos, the founder of Dorothy I. Height Community Academy PCS, also settled a civil lawsuit with the city in 2015 after it was found that he was skimming over a million dollars a year from his institution for himself and family members. The charter was shuttered the same year by the PCSB.

There was some good that came out of the Options disaster.  My friend Shannon Dodge took over Kingsman Academy PCS and she and her team are doing thoroughly impressive work.  I interviewed Ms. Dodge last May.  In addition, Josh Kern, through his role at Ten Square Consulting, demonstrated for all to see as the court-appointed Options Receiver how to superiorly manage a school turnaround.

Last evening during the monthly meeting of the DC Public Charter School Board Rashida Young, the organization’s equity and fidelity senior manager, provided an excellent overview of the 2016 Equity Reports that I recently wrote about here.  When it came to the portion of the study that covered student suspension rates, Scott Pearson, the PCSB executive director, asked Ms. Young to talk about Kingsman Academy PCS.  It was at this point that the staffer dropped a bombshell.  Ms. Young revealed that this year the charter school has eliminated student suspensions.

For those of you who may not remember, Kingsman PCS is the reincarnated Options PCS that was slated for closure by the PCSB after it was revealed in 2013 that former managers of the school had siphoned millions of dollars to themselves through unethical and almost certainly illegal contracts struck with the charter.  It was a particularly sad case in that caught up in the mess were two local heroes.  Long-term Channel 9 newscaster J.C. Hayward was the Options board chair when all the shenanigans around money was going on.  She eventually retired from the network and was removed from the legal case.  Also involved was Jeremy Williams, the former PCSB chief financial officer who was loved by the many charter school leaders who he helped.  It turned out that he was paid to hide the contracting situation from his bosses.  The criminal complaint against him has also been closed.

The entire matter was especially tragic because Options took care of kids that no one else wanted to teach.  These were about 400 severely emotionally and physically disabled middle and high school special education students.  After all of the news broke about this school, the plan was to shutter its doors.

But then something amazing happened.  Josh Kern, through his Ten Square consulting group, was made the Court-ordered Receiver of Options PCS.  In something that can only be described as miraculous, he and his team did a complete management restructuring of the school, refining every detail of its operation.  I appreciated from behind the scenes what Mr. Kern was doing and I began arguing on my blog to keep Options going citing these efforts.  During the darkest periods of this mess, when it looked like the end of the school was a forgone conclusion, I met with Mr. Kern and then communicated through other means to see how I could best support his work.

In the end, the charter board decided to to offer a new charter to a group that would take over the Options facility.  The fine team that Mr. Kern assembled to run the school won the bid which leaves us where we are today:  a charter teaching the most challenging young scholars that has come to the conclusion that it can accomplish its goals by eliminating the need to suspend its students for even one hour.

It is a fantastic story perfectly suited for this holiday season.

Today, the Washington Post’s Emma Brown reports that United States Attorney Channing Phillips has closed the criminal case against the past managers of Options Public Charter School without bringing charges.  These are the individuals who were accused of diverting over $3 million in public funds for their own benefit from the school serving severely emotionally and physically disabled children.

The case started in 2013 when it was revealed that Donna Montgomery, along with David Cranford and Paul Dalton, established two companies, Exceptional Education Management Corp. (EEMC) and Exceptional Education Services (EES) that then struck highly lucrative contracts with the charter.  For example, according to Ms. Brown, EES charged $981,250 for transportation services that previously cost the school $70,000 from another vendor.  At the time Ms. Montgomery’s salary and bonuses to run the two for-profit firms was about $425,000.  There was also a $2.8 million management agreement between EEMC and EES to run Options PCS.

The situation engulfed others in our community.  Former Channel 9 newscaster J.C. Hayward was chair of the Options board of directors when the contracts with the private companies were signed.  It was alleged that Ms. Hayward was paid $8,500 every time she attended a board meeting of the school.  The criminal complaint also said that she helped incorporate one of the involved organizations and held stock in it.  Ms. Hayward was placed on leave when the news about Options broke, and retired at the start of 2015 after 43 years on the air.  She was removed from the court case last year.

Also involved was Jeremy Williams, the highly respected member of the staff of the DC Public Charter School Board.  He was believed to have been paid $150,000 when he was the chief financial officer to hide the agreements between Options and the two companies from PCSB oversight.

Josh Kern, the co-founder of Thurgood Marshall Academy PCS, became the Court’s Receiver for Options once the legal matter started.  In his role at the Ten Square Group he expertly guided the charter to its eventual strong resurgence as Kingsman Academy PCS.  Joe Bruno, the president of Building Hope, became the Court-appointed Receiver for EEMC and EES.

The mess at Options and at the Dorothy I. Height Community Academy PCS resulted in legislation being passed this year by the D.C. Council giving the PCSB power in certain circumstances to look at the financial records of charter school management organizations.

It is horrible that after all of this time and effort by so many good people to fix the problems around Options, and to properly serve those kids that few want to serve, that Ms. Montgomery and the others would get off so easily.  It practically broadcasts a message that what they did with public dollars was perfectly fine.  Let’s sincerely hope that this decision by U.S. Attorney Phillips does not establish precedent for others to emulate.

Ms. Brown indicates that the city is still pursuing a civil case against Options.

The Washington Post’s Allison Michael Chandler revealed yesterday that former prominent WUSA Channel 9 newscaster J.C. Hayward has been removed from the legal case over the millions of dollars in public funds two private companies diverted from the severely disadvantaged and disabled children attending Options PCS in return for a payment from her of $8,500 to the charter.

At the time the story broke in late 2013 about financial regularities at Options it was revealed that Ms. Hayward was the board chair of the school during the period that contracts were signed between the school and two companies, Exceptional Education Services (EES) and Exceptional Education Management Corporation (EEMC), for exorbitant fees charged to the school for services.  From my article published in early January of the following year about the case:

“Extremely unfortunately, we begin 2014 exactly the way we ended last year: with another news story revealing more sordid information about the financial irregularities regarding public funds and Options PCS. This time the Washington Post’s Emma Brown tells us, among other things, that while Jeremy Williams was the D.C. Public Charter School Board’s chief financial officer it is alleged he was paid $150,000 to hide the shenanigans that resulted in the school’s executives diverting three million dollars to their own pockets. New court papers claim that television anchor J.C. Hayward owned shares in one of the for-profit companies established by the school’s senior team as a tool to transfer money to them from the charter, and was paid $8,500 a shot to attend the firm’s board meetings. The Post reporter adds this finding about the team members:

‘In all, EES received $974,850 from Options for bus transportation, according to court documents. The company paid Deadwyler [Transportation]  $309,200 to run the buses, and it paid [Donna] Montgomery, [Paul] Dalton and [David] Cranford hundreds of thousands of dollars on top of the full-time salaries and bonuses they were already receiving for working at the charter school.'”

It is alleged that approximately $3 million dollars were diverted from Options to the private firms led by school management.

Ms.Hayward’s attorney Jeffrey Jacobovitz is quoted in today’s Post story as commenting about yesterday’s development that “Ms. Hayward is delighted that she will be able to leave a lasting legacy.”  Only time will tell.