OFT’s IRS Letter About White Hat Garners Press, Bloggers’ Attention

The CEA Blog wrote a post about the Ohio Federation of Teachers (OFT) who wrote a letter to the IRS, asking for an investigation of Akron-based White Hat Management’s 503 (c) tax-exempt status. The management firm operates numerous “Life Skills Centers” and “Hope Academies” in three states, pulling in an estimated $85 million annually in tax dollar revenue in Ohio alone.

News outlets and bloggers have begun to write as well discuss recent developments. Highlights are below, after the jump.

Bloggers

Kathie Bracy looks at White Hat’s Founder and President David Brennan’s influence over the political landscape in Ohio that gave birth to charters and school choice in Ohio.

Jill Miller Zimon recounts an off-air exchange regarding White Hat’s finances.

Plunderbund’s Joseph asks a few questions, too.

Illinois’ PREA Prez has a few things to say.

“Traditional Media”

The Akron Beacon-Journal writes:

“…there is sufficient evidence that White Hat was created first, pointing out the schools are promoted as a chain, all trademarks for Hope Academies and Life Skills Centers cannot be used if the charter school terminates a contract with the management firm, and the schools would have to change their names if White Hat would no longer operate them.”

The Columbus Dispatch writes:

“(OFT President) Taylor said that school boards in White Hat-operated charters lack power — White Hat uses a similar contract for each of its schools, and boards don’t have flexibility to negotiate their own — and that the same members serve on as many as 19 boards.

The union says each of those practices violates IRS rules that say that nonprofit charter schools must operate independently of a for-profit management company and that a for-profit group can’t benefit from the tax-free public schools it runs.”

The Cincinnati Enquirer writes:

“When the charter school laws in Ohio were first written and enacted, the promise White Hat made was to better educate our at-risk students than public schools,” (OFT President) Taylor said. “They made a promise they could do so with less money. They’re the largest. We believe there’s empirical evidence that proves they have not fulfilled the promise they made and they’re abusing the tax system set up by the IRS.”

Off the AP Wire:

“The union alleges that at least 25 Life Skills Centers and Hope Academies operated by Akron-based White Hat don’t qualify for tax-exempt status because many of them share board members, trademarks and boilerplate contracts that aren’t tailored to their individual communities and students.

To keep a tax exemption under IRS rules, board members need to be unaffiliated with their for-profit management company and have primary authority over their own budgets, curriculum and staff. Federal guidelines also prohibit a for-profit management company from deriving private benefit from the publicly funded schools it runs.”