Charter Success Marred in Some Locations by Abuses.

SINCE Minnesota passed the first law enabling charter schools in 1991, more than 2,200 charter schools have been formed across the country.

And while many charter schools appear to be meeting expectations, major problems have arisen at schools in some states, most notably Texas and Minnesota, where educators and legislators have begun calling for massive overhauls of charter school systems.

Citing a series of recent charter school failures and reports showing that only 59 percent of charter school students in Texas passed the statewide graduation test -- compared to 78 percent of students in traditional public schools -- lawmakers there are calling for a moratorium on new charters and for additional regulations on existing ones.

"We have everything from well-intentioned people who don't know how to run a school to people who are paying themselves a quarter million dollars a year to run some very small schools," said State Rep. Jim Dunnam, D-Waco, who recently released a report blasting the Texas charter school system for lack of financial oversight and basic taxpayer accountability.

"Some of the cases are appalling. Classes are being conducted in the sanctuaries of old churches without occupancy permits, kids are sleeping in the pews, high school dropouts are teaching courses and condoms are being thrown around classrooms -- it's a total disaster," he said.

But Dunnam and other state legislators said these kinds of problems are not isolated.

"We (members of the Texas House Committee on Public Education) reviewed 50 charter schools last fall and found that more than 20 of them have significant problems, ranging from financial and educational mismanagement to fraud," he said. "At one school we have a guy who is paying himself $210,000 a year to run the school and is paying his wife $50,000 to be his secretary, and at another school there is a guy who is accused of mixing the school money with bingo prize money. We're taking that one to the grand jury."

Mismanagement in Minnesota

The situation is equally bleak at some charter schools in Minnesota, where the founders of at least two charter schools are currently under investigation for alleged fraud and other criminal acts.

"The criminal activity ranges from forging signatures on leases for charter school buildings, to obstruction of justice and misappropriation of state funds," said state Rep. Matt Entenza, D-St. Paul, who introduced legislation on March 29 calling for tighter financial and educational supervision of all charter schools in the state.

Entenza, who was a prosecutor before becoming a state legislator, said he was alerted to the charter school problem last year after receiving results of an audit which alleged that the head of one school's management company had diverted more than $1 million in state funds to pay for weddings, monthly rent payments for acquaintances and other personal expenses.

"When looking at the audit, it became apparent to me right away that there was criminal activity involved. After reviewing the audit, I asked my staff to do a more thorough statewide review. We looked at 50 audits and found a fairly wide range of problems, mostly due to inexperience or lack of business backgrounds, but in a few cases, we saw things that clearly appeared to be criminal," he said.

While state and local governments have lost millions of dollars due to the failure of some charter schools, Entenza said the saddest part of the problem is that hundreds of children, many of whom are at-risk or have special needs, are not being educated.

Parents are also upset. There are about 50 students from one of the troubled Minnesota charter schools -- the Peaks School of Faribault, which closed following allegations of misappropriation of state funds and forgery -- in which half of the children have special needs. That school shut down last month, and the students have been forced to find places in the already overcrowded local public school district.

"That's why the Peaks school was created in the first place -- because most special students don't fit into the normal classroom setting. But I suppose that's where they're going to have to go now," said Sheila Hegna, the aunt of a former Peaks student.

Hegna, whose nephew has been on the public school waiting list for nearly nine months, hopes the owners of the Peaks school are indicted.

"Hopefully they will have to face their victims someday and explain what they were doing with all this money and with all these kids' lives at stake," she said. "I truly hope an indictment comes out of this because, what does it say to the kids if they aren't criminally punished?"

Despite the failure of the Peaks school, Hegna still believes charter schools can work.

"Charter schools are a good thing, but left with no parental or community or professional involvement, it's a recipe for ripoff artists and children not receiving a proper education. A lot of people in this community were hoodwinked because we were too trusting," she said.

Success stories

While some charter schools are clearly in crisis, many educators claim that for every shocking tale of failure there is an equally compelling success story. One example is the Perspectives Charter School in Chicago, where all of the school's 150-plus students must conform to a rigorous moral code of behavior which, among other things, teaches students how to resolve conflicts peacefully rather than resort to violence.

All students are also required to apply to five colleges and can't graduate unless they are accepted at a college, a trade school, the military or have a job.

Expectations are admittedly high, hut school officials said the rigorous standards are paying off. Since the school opened in 1997, math scores have tripled, reading scores have doubled, and 19 of last year's 21 graduates are currently attending college.

                             Texas Performance
                    Portion of charter students passing
                  standardized tests lags state average.
                Charter  State
Test            Schools Average
All tests taken  59.1%   78.4%
Reading          76.1    86.6
Writing          71.3    88.2
Mathematics      67.2    85.7
Source: Univ. of Texas