09/18/2015

Did charter operators win battle but lose transparency war?

Also: Notes on a major libel case and a bill to improve info on campaign spending

By Dennis Hetzel, Executive Director

No Ohio Supreme Court decision in recent years has been awaited much more than a ruling this week on a lawsuit involving charter-school sponsors who sued the operators of those schools over who had to pay for supplies bought with public money.

So, why should you care about a contract dispute? The case also has important implications for the ability of journalists – and everyone else – to get access to details on how charter schools are spending nearly $1 billion in taxpayer dollars that now come their way annually. My read of the decision suggests that the charter operators – for-profit companies in many cases that have made thousands of dollars in campaign contributions – might have won the battle but lost the war.

Well, maybe.

Here’s a call to action: Ohio journalists should test this new decision. Make fresh records requests to charter school operators for detailed records on how they spend public dollars – requests that would have been denied in the past. Education reporters across the state have been frustrated for years about the lack of accountability – regardless of how you feel about charters as public policy.

The “battle” in the case was whether the contract between charter-school sponsors and White Hat Management, an Akron-based, for-profit operator, was valid. White Hat reportedly bought textbooks, computers and furniture bought with some of the $90 million that went to seven Hope Academies and Life Skills Centers in the Cleveland and Akron areas. The items were titled in the schools’ names. The contract required the schools to pay White Hat the current value of the items from an accounting standpoint if they wanted them back.

In a sharp dissent, Justice Paul Pfeifer called the contract “unconscionable and one-sided.” (What could be more ironic than buying school supplies with taxpayer dollars and then having to use more taxpayer dollars if you want them back?) The court majority said maybe so, but the contract was valid under the law. The court also took a swipe at the law, noting there’s little accountability for school operators. The Legislature has work to do. We think they dropped the ball this spring by not finishing a charter-school reform bill that would have meant greater accountability.

The “war” is a broader conflict – the ability to track public money in the hands of private entities. In the case of charter schools, only lump sums in broad categories get revealed. Contrast this to the checkbook-level scrutiny that public school districts must provide upon request.

In the ruling in the White Hat case, some of the justices also noted that providing an education is a core government function, and that the school operators have a fiduciary responsibility to their sponsors. Translation: This means accountability.   In the Columbus Dispatch story about the case, Karen Hockstad, a Columbus lawyer who represented the charter schools, said that’s how she reads it – the public should be able to get financial records now from charter-management companies.

ONA Counsel Lou Colombo cautions that there are gray areas in the decision issued by the sharply divided court but agrees the court has provided reason for optimism on greater access to information about public dollars being spent by private entities – at least when it comes to education.

So, go for it. Ask for the records. Let us know how it goes. Call our legal hotline if you need help.

Bill improves access to local campaign finance reports

Political reporters and editorial writers may want to take note of Senate Bill 206, introduced recently by Sen. Frank LaRose, R-Copley.

It’s a common-sense bill that requires campaign finance reports to be filed electronically with county election boards and made available to the public online. It updates existing law and, according to LaRose, works in a similar way to what the Ohio secretary of state does with filings in state races.

Supreme Court won’t reconsider libel ruling in Chagrin Falls case

It’s rare for the Ohio Supreme Court to reconsider a case. So, it was no surprise but good news just the same when they declined this week to reconsider their decision in a particularly important libel case involving Murray Energy and Bob Murray, a major political donor who has gained a reputation as a frequent litigator when he feels wronged.

Murray contested a ruling that he was not defamed by the Chagrin Valley Times when it published a story, column and editorial cartoon that he found unflattering and considered false.

In a written decision that the Supreme Court has now upheld twice by declining to take the case, the appellate court also took an extraordinary step. The court urged the Ohio Legislature to pass an anti-SLAPP law, citing the Murray case as a prime example of the need. SLAPP stands for “strategic lawsuits against public participation.” Anti-SLAPP laws create expedited processes for cases in which the person being sued argues that the case only is being filed to chill their First Amendment rights. Ohio indeed needs such a law.

Meanwhile, we’ll see if Murray attempts an appeal to the U.S. Supreme Court.

You will find more detail at the end of a previous column I wrote about the case.