A charter school executive charged this week for stealing $218,000 from his network of nonprofits running charter schools has a connection to Texas—the takeover of a San Antonio public school by Democracy Prep.
Seth Andrew—a Democracy Prep founder—faces charges of wire fraud, money laundering, and making a false statement to a bank when he allegedly used the charter school network’s money to leverage a lower interest loan on a $2.4 million Manhattan apartment. He was released on a $500,000 bond.
“The tangled financial web woven by these charter chains creates an atmosphere ripe for corruption,” said Texas AFT President Zeph Capo. “Who knows how many other charter operators are gaming the system for personal profit, or worse: actually stealing large sums of money.”
Democracy Prep was at the center of the controversial takeover of Stewart Elementary in San Antonio ISD. The school faced possible closure (or a TEA takeover of the entire district) for accountability-rating sanctions. District officials decided to use provisions of a then-recent state law, SB 1882, which allows districts to “partner” with charter operators to avoid the sanctions. The law also offered tempting financial incentives for SB 1882 partnerships, since districts received a charter school per-pupil funding advantage, up to $1,900 more per student, for the students on the campus.
Our local union, the San Antonio Alliance, fought the move because it gave significant financial control and decisions on staff hiring and firing to Democracy Prep, which is based in New York. Texas AFT filed a successful lawsuit against the partnership because officials ignored state rules on teacher input in contracts with the charter school. However, the lengthy court battle made any changes to Stewart Elementary impossible.
Charges against Andrew come in the middle of a hard fought school board race in San Antonio, which has centered on issues of for-profit charters and privatization and after the resolution of another charter scandal this month—the five-year prison sentence handed Richard Garza, former superintendent of the Gateway Academy in Houston, for embezzling more than $164,000 from the school.