A cover story in yesterday's NY Times sure makes Imagine Schools, one of the largest operators of charter schools in the country, look bad.  I'm not familiar with Imagine, so I'll do some digging and share further thoughts in subsequent emails, but one thing in the article leaped out at me: their model is centralized command and control, which might well be the right way to go, but it's incompatible with most (all?) states' charter laws, which require that the local board has ultimate authority.

The Bakkes became part of the nation's new crop of education entrepreneurs, founding a commercial charter school company called Imagine Schools. Beginning with one failed charter school company they acquired in 2004, they have built an organization that has contracts with 71 schools in 11 states and the District of Columbia. Imagine is now the largest commercial manager of charter schools in the country.

But as Imagine continues to expand, it is coming under growing scrutiny from school boards and state regulators questioning how public money is spent and whether the company exerts too much control over the schools.

The concerns are being raised as charters, designed by education reformers to create alternatives to hidebound and failing public schools, are becoming an indelible part of the nation's education landscape. Such schools are among the biggest beneficiaries of the billions of dollars the Obama administration plans to spend to improve public education.

Because public money is used, most states grant charters to run such schools only to nonprofit groups with the expectation that they will exercise the same independent oversight that public school boards do. Some are run locally. Some bring in nonprofit management chains. And a number use commercial management companies like Imagine.

But regulators in some states have found that Imagine has elbowed the charter holders out of virtually all school decision making — hiring and firing principals and staff members, controlling and profiting from school real estate, and retaining fees under contracts that often guarantee Imagine's management in perpetuity.

The arrangements, they say, allow Imagine to use public money with little oversight. "Under either charter law or traditional nonprofit law, there really is no way an entity should end up on both sides of business transactions," said Marc Dean Millot, publisher of the report K-12 Leads and a former president of the National Charter Schools Alliance, a trade association, now defunct, for the charter school movement.

"Imagine works to dominate the board of the charter holder, and then it does a deal with the board it dominates — and that cannot be an arm's length transaction," he said.

Such concerns have thwarted efforts by Imagine to open a school in Florida, threaten to stall its push into Texas, and have ended its business with a school in Georgia and another in New York, as well as other states.

Imagine is not shy about the way it wields its power, which it calls essential to its governing philosophy.

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For Charter School Company, Issues of Money and Control

By STEPHANIE STROM

Published: April 23, 2010

www.nytimes.com/2010/04/24/education/24imagine.html