Judge: White Hat must open books

By Catherine Candisky

Columbus Dispatch

COLUMBUS

A Franklin County judge has ordered charter-school operator David L. Brennan to turn over a detailed accounting of how his for-profit management company spends the millions of tax dollars it receives each year.

Judge John F. Bender of common pleas court here ruled that White Hat Management Company is required to disclose the financial information under Ohio law.

State law “clearly and unambiguously requires operators of community schools to provide their governing authorities with a detailed accounting of how public funds are spent,” Judge Bender wrote in a 12-page decision on a request by several charter schools in their ongoing lawsuit against White Hat.

For years, the company has refused to open its books, claiming such information was secret.

The decision is good news for the nine schools suing White Hat and others who for years have tried unsuccessfully to learn what portion of the tax dollars the company receives are spent on teacher salaries, school supplies and other expenses, and how much it pocketed.

“We are pleased that the court has ruled that the accounting information we seek is both relevant and discoverable,” said Karen S. Hockstad, attorney for the charter schools that filed the lawsuit.

“For charter school governing authorities, having knowledge and input on how taxpayer dollars are spent to educate Ohio’s children is critical to the success of the schools,” she added.

Brennan’s attorney, Charles R. Saxbe, was out of town and could not be reached to comment.

One of the nation’s largest charter-school operators, White Hat runs more than 30 charter schools across Ohio, including Southside Academy on Market Street in the former South High School building in Youngstown, LifeSkills Centers of Youngstown and LifeSkills Center of Trumbull County in Warren.

The schools are funded by the state like traditional public schools but are privately operated.

Last year, several schools in the Akron and Cleveland areas sued to terminate or renegotiate their contracts with White Hat.

The schools complained that their input was being ignored and that White Hat ran the schools “as they deem fit regardless of many legitimate objections, questions and challenges that the [community schools] have raised.”

Under contracts with the schools, White Hat receives 96 percent of the state aid they receive.

Judge Bender’s decision means White Hat must turn over a broad range of financial data including: how much they spent on teacher salaries, computers, textbooks and other classroom equipment, an inventory of personal property for each school; how much is spent on lobbying state lawmakers or making political contributions; and funds paid for security.

The judge said the accounting is limited to amounts paid from public funds and does not apply to any personal expenditures made by Brennan or his employees.