GOP?????s Biggest Charter School Experiment Just Imploded

[_Kevin Graham]

GOP’s Biggest Charter School Experiment Just Imploded

The west side of Columbus, Ohio, is a flat expanse of one-story houses, grimy convenience stores, and dark barrooms, and William Lager, in his business wear, cut an unusual figure at the Waffle House on Wilson Road. Every day, almost without fail, he took a seat in a booth, ordered his bottomless coffee, and set to work. Some days he sat for hours, so long that he’d outlast waitress Chandra Filichia’s seven-hour shift and stay on long into the night, making plans and scribbling them down on napkins.

The dreams on the napkins seemed impossibly grandiose: He wanted to create a school unlike anything that existed, a K-12 charter school where the learning and teaching would be done online, and which would give tens of thousands of students an alternative to traditional public schools across the state. It would offer them unheard of flexibility—a teen mom could stay with her child and study, while a kid worried about being bullied could complete lessons at home. And it would be radically cheaper than a traditional classroom, since there would be no buildings to maintain, no teachers’ unions to bargain with. At the time—the late 1990s—it was a revolutionary idea. Lager called it, in the heady days when the internet seemed to promise a solution to every problem, the Electronic Classroom of Tomorrow.

But back then—before Lager had his mansion and lake house, before he rose to become a hero of the school choice movement, before Jeb Bush flew in to give ECOT’s commencement speech and Betsy DeVos helped him and his cohort transform Ohio’s educational landscape—Filichia, the Waffle House waitress, could tell Lager seemed broke. Balding, round-faced, and concentrating intently as he scribbled, she even once caught him trying to pass off photocopies of discount coffee coupons. But he didn’t plan on using a Waffle House as his office forever. “One of these days I’m going to have a real big business,” she remembers him telling her, “and you can come work with me, and you won’t ever have to work anywhere else.”

Lager kept his promise, sort of. His back-of-the-napkin vision soon became an improbable reality, and though she’d never gone to college, in 2000 Lager hired Filichia, and eventually, she says, she became one of ECOT’s registrars. In that role, the 24-year-old had a front-row seat to watch the company’s growth. As it expanded from an upstart to a juggernaut—this year it educated some 12,000 students across Ohio, and two years prior its student body was the largest in America—she began to turn on Lager, angered that the school seemed to provide some students with a sham education, functioned more like a profit center than an educational institution, and ignored its own attendance policies, a fact later corroborated by court documents. “I am a single mom, so obviously I needed money and stayed there,” Filichia told me. “But after so long, when I saw how bad these poor kids were doing, I couldn’t do it anymore.”

Yesterday, after 17 years of operation, the school came to a spectacular end, and many of Filichia’s concerns suddenly seemed prophetic. (Lager and ECOT officials did not reply to repeated requests for comment.) Despite years of critics raising similar concerns, the school’s demise happened quickly, after two Ohio Department of Education reviews from 2016 and 2017 found that ECOT had overbilled taxpayers by $80 million for thousands of students it couldn’t show were meeting the department’s enrollment standards. As a result, last summer the state ordered the school to begin paying back almost $4 million per month in school funds, which ECOT claimed it was was unable to do. Then, last week, the school’s charter sponsor, the Educational Service Center of Lake Erie West, claiming concern that ECOT wouldn’t have the funds to last out the year, suddenly announced plans to drop the school. Many of ECOT’s 12,000 current students learned on the nightly news or read in newspapers that unless an emergency deal could be worked out, the institution was in imminent danger of folding up before the start of next semester, set to begin on January 22, leaving many parents confused and panicking, with only days to choose a new school and get their child enrolled.

The drama reached its climax yesterday. The board members of Lake Erie West held a public meeting in Toledo to vote on how they would respond to ECOT’s plea that they remain the school’s sponsor, at least temporarily. About 40 students, parents, and teachers, some of them breaking down in tears, reportedly showed up. “If this is really about our children,” one parent, Lisa Burford, pleaded, “I hope that you consider our children.” Burford explained that her daughter, who was deaf, had struggled with Toledo’s traditional schools and had been better off in ECOT’s online program, where she was scheduled to graduate in May. ECOT had been deeply troubled long before this year—it had a graduation rate of just 40 percent and produced more dropouts than any other school in the nation, according to an investigation by the New York Times. But for some, it was a school of last resort, and now that last resort was about to vanish. All three board members of Educational Service Center of Lake Erie West voted to withdraw their sponsorship of ECOT, effectively shuttering the school immediately. The decision cast doubt over whether or not Burford’s daughter, and thousands like her, would be able to graduate this year. But it also cast a doubt over why Lager’s troubled school had been allowed to operate so long, and why it had been given almost $1 billion in taxpayer money that would otherwise have gone to local school districts. “A lot of these students,” Burford said, “don’t have any other choices.”

Now, with ECOT imploding, some state politicians have floated the idea that Lager, who has made millions in profits off the school and come a long way from the Waffle House, should be personally held responsible for paying back some of the $80 million owed to the state. But while the coming days will reveal if the political will or mechanisms exist to make this happen, it’s unclear how he might ever be held accountable—because the real scandal is that ECOT grew up legally, with the support of state politicians and national GOP power brokers, and that in many ways it has served as a model for schools like it across the country. Now, the same districts ECOT pulled its funds from are scrambling to find a way to take in its former students, and Ohio is facing a reckoning, after nearly two decades when the state became one of the country’s freest laboratories for pro-charter policies. “Why did it take a generation and a half of kids to go through this crappy system for us to do something about it,” Stephen Dyer, a former Ohio state representative asked me in exasperation in December. “The reason is because a lot of money came in.”

If it weren’t for his good grades, Lager may have been an ideal candidate for ECOT as a teen in Ohio in the ’60s. He grew up poor, in an area of Columbus’ west side called the Bottoms—so-called “partially because it was in a flood plane (sic),” he would later write in a self-published book about the founding of ECOT, “and partially because the name fit.” His blue-collar parents had met in a factory when the state was still an industrial powerhouse and sent their kids to Catholic schools, where Lager excelled. He was elected class president all four years of high school before going on to Ohio State University.

He dropped out of college to join the Coast Guard Reserve during the Vietnam War and later returned to Ohio, hoping to run for office. But after family tragedy struck, he ditched politics and, in his early 20s, started an office-supply company that by his account had a few good years before eventually falling into debt. He filed for corporate bankruptcy and bounced around through a series of jobs as a lobbyist, an executive director of a nonprofit, and a salesman offering office supplies to state agencies. He went through a divorce and custody battle and eventually arrived at his lonely perch in the booth of the Waffle House on Wilson Road.

Lager, now about 50, may have been broke, but he had made a few good connections over the years. And he had a model: David Brennan, the first of Ohio’s charter school barons. Brennan, an Akron-based entrepreneur and a prominent GOP donor, earned millions of dollars “buying and selling manufacturing companies, slashing operating costs, and turning profits,” according to a 1999 article in the Akron Beacon Journal. He wore a white cowboy hat, a symbol of his noble intentions.

At the time, during the George H.W. Bush administration, the idea of a decentralized, privately run but publicly funded system of schools was just taking hold in national Republican circles. When Brennan threw a GOP fundraiser, attended by President Bush, it sparked an alliance with George Voinovich, a former Cleveland mayor running for Ohio governor whom Brennan bonded with over a shared vision of making Ohio a national experiment in privatizing education. In 1994, Brennan raised almost $1 million to help Republicans gain control of the state Legislature, and Voinovich won the governor’s race.

Three years later, the state passed a bill that created a pilot program allowing a school district to issue “charters”—documents that would come to be defined as legal authorizations allowing private companies to manage public schools. The program spread quickly, and Brennan’s company, which he called White Hat Management, seized the moment. Operating with little state oversight, White Hat advertised for teachers without college degrees, drew thousands of dollars per student from local districts for its schools, and billed schools hefty “management fees”—as much as 20 percent of their operating budgets.

Brennan’s school’s spread across the country, eventually opening more than 30 facilities. But Ohio was an innovator, and Brennan set the course for a massive expansion of the state’s charter system, leading some people to call it the “wild, Wild West” of charters.


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Lager observed the proliferation of charters nationwide, but his innovation was to do it one better—by getting rid of the need for brick-and-mortar facilities almost entirely. Still using the Waffle House as his home base, he began attending seminars offered by the Ohio Department of Education to help entrepreneurs through the process of applying for a charter. The Department of Education was initially skeptical of Lager’s idea, but he convinced the head of a Toledo-area agency that provided educational materials to public schools, the Lucas County Educational Service Center, to sponsor him. In Ohio, charters need an agency sponsor, which can be a wide range of nonprofits, school districts, or universities, and which will take responsibility for monitoring the schools’ performance—while also sustaining itself at least in part on fees paid by the charters. The Lucas County Educational Service Center (since renamed Educational Service Center of Lake Erie West) would eventually come to receive $1.5 million a year in fees from ECOT, according to the Plain Dealer. “At that time, they were so broke,” Filichia remembered, that Lager “borrowed my grandmother’s car to even go up to Toledo” to deliver the application.

Lager’s grand plan was to provide every student who enrolled at ECOT with a computer, and in order to do this—as well as design and deliver an online curriculum and provide internet service to the students who would use the computers—he needed money. He knew an executive at Xerox from a brief stint working there, and he pitched the company for $2 million in trade credit to get the business going. “They saw the power of the model immediately,” Lager wrote. He sold them on the idea that tech companies were in a position to lead a revolution in American education “and knew that if they didn’t come on board someone else would.” Lager called it “a paradigm shift no less extraordinary than the advent of the automobile or electricity,” a tech-fueled shift in schooling that would push education even further into a “market-driven role.”

With backing from Xerox secured, Lager set up headquarters in a strip mall on a seedy stretch of South High Street in Columbus, located server space in Cincinnati, began to hire teachers, and designed a system ECOT used for the next decade and a half: ECOT provided computers and internet service, and teachers would communicate with students via email and in chat rooms, with learning augmented by periodic in-person field trips. ECOT itself was technically a public entity subject to state oversight, but Lager, inspired by a structure pioneered by Brennan and allowed by Ohio law, founded a for-profit management company called Altair that billed ECOT millions in fees for services like “strategic planning.”

To round out his administrative staff, Filichia says Lager tapped her and her family, most of whom hadn’t gone to college, and several of whom had also worked at Waffle House—her mom, sister, two brothers, and former mother-in-law, four of her cousins, and two of her aunts. “Pretty much just like our whole family,” she says.

Lager paid Filichia and her family $5 for every student they could sign up, she says. The school would come to draw many children and teens whose families had been homeless, who’d been in trouble with the law, or who’d fallen hopelessly behind in their traditional schools. A teenage newlywed and dropout with a son at home called the school after her father learned about the launch on the radio. A boy named Richard who’d dropped out in 11th grade, failed the GED exam, and was working as a groundskeeper, heard about the school on the news. “We just basically told them about the program, and they just enrolled,” Filichia remembered. “The districts here are bad anyway,” she says....

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