CHAR­TERS CASHED IN ON FED­ERAL PPP LOANS

The pri­vately run schools re­ceived mil­lions in pan­demic stim­u­lus money even though they also got their full fund­ing from CPS, which is ask­ing for an in­ves­ti­ga­tion

Chicago Sun-Times - - FRONT PAGE - BY LAU­REN FITZ­PATRICK AND NADER ISSA Staff Re­porters

Hun­dreds of pub­licly funded char­ter schools in Chicago and else­where in Illi­nois re­ceived a to­tal of be­tween $31 mil­lion and $76 mil­lion in fed­eral loans in­tended to bol­ster small busi­nesses and non-prof­its dur­ing the coro­n­avirus pan­demic, a Chicago Sun-Times anal­y­sis has found.

They got the money even though the schools, un­like many other em­ploy­ers that sought Pay­check Pro­tec­tion Pro­gram loans, hadn’t lost any of their nor­mal fund­ing, which comes from Illi­nois tax­pay­ers.

That prompted Chicago Pub­lic Schools of­fi­cials to call Wed­nes­day for an in­ves­ti­ga­tion of why the pri­vately man­aged char­ter schools got the fed­eral money.

“We have asked our in­spec­tor gen­eral to review the le­git­i­macy of ap­pli­ca­tions submitted by char­ter op­er­a­tors,” CPS spokes­woman Emily Bolton said. “CPS did not en­dorse the Pay­check Pro­tec­tion Plan loan ap­pli­ca­tions submitted by char­ter school op­er­a­tors.”

Ac­cord­ing to Bolton, CPS has con­tin­ued through­out the 2019-20 school year, un­in­ter­rupted, to dis­trib­ute the full pub­lic fund­ing that the pri­vately run char­ter schools re­ceive un­der state law meant to of­fer fam­i­lies broader school choice.

CPS ap­pears to be the first pub­lic school sys­tem to try to thwart char­ter schools from tak­ing a share of the money that Congress al­lo­cated for small busi­nesses to help keep their em­ploy­ees on the pay­roll amid plum­met­ing business be­cause of pan­demic-re­lated stay-at-home or­ders.

CPS’ protest comes days af­ter the U.S. Trea­sury de­part­ment fi­nally re­leased the list of who got the for­giv­able loans doled out un­der the hastily as­sem­bled $660 bil­lion pro­gram.

Some na­tional business chains and pub­licly funded com­pa­nies that re­ceived much of the ini­tial pot of money ended up re­turn­ing the money af­ter their loans were made pub­lic.

The Trea­sury De­part­ment data that the Sun-Times anal­y­sis was based on didn’t dis­close ex­act loan amounts, which were given only in ranges. And the in­for­ma­tion was lim­ited to busi­nesses that got loans of be­tween $150,000 and

$10 mil­lion, among them the Sun-Times’ par­ent com­pany.

Be­tween $133 mil­lion and $321.5 mil­lion went to K-12 schools in Illi­nois.

The pro­gram, de­signed mainly to give a boost to com­pa­nies with fewer than 500 work­ers based on the num­ber of em­ploy­ees they have, also al­lowed re­li­giously af­fil­i­ated or­ga­ni­za­tions to ap­ply.

Ac­cord­ing to the pro­gram’s rules: “Be­fore sub­mit­ting a PPP ap­pli­ca­tion, all bor­row­ers should review care­fully the re­quired cer­ti­fi­ca­tion that cur­rent eco­nomic un­cer­tainty makes this loan re­quest nec­es­sary to sup­port the on­go­ing op­er­a­tions of the ap­pli­cant.”

In Illi­nois, Catholic schools cu­mu­la­tively got 119 PPP loans to­tal­ing be­tween $51.4 mil­lion and $123.8 mil­lion — more than any other cat­e­gory of schools.

More broadly, churches and other faith-based or­ga­ni­za­tions in Illi­nois col­lected at least an­other $140 mil­lion.

One Chicago-area Catholic school, St. Joseph, got be­tween $150,000 and $350,000 from the fed­eral pro­gram in­tended to stave off lay­offs. That was even though the Arch­dio­cese of Chicago had an­nounced months ear­lier that the el­e­men­tary school would per­ma­nently close June 30.

The arch­dio­cese, which em­ploys about 15,000, said it showed its parishes and schools how to ap­ply, cit­ing a “drop in of­fer­tory col­lec­tions which sup­port our parishes and schools” com­bined with an av­er­age 15% drop in tuition pay­ments and the in­abil­ity to host fundrais­ing events.

“Even in the best of times, tuition of­ten pays only a por­tion of the cost of ed­u­cat­ing a stu­dent,” Arch­dio­cese spokes­woman Yas­min Quiroz said. “Many parishes sup­port their school fi­nan­cially.”

Quiroz said the St. Joseph loan was shared be­tween the school and the church.

Sec­u­lar pri­vate schools in Illi­nois — some with tuition as high as $61,000 a year — got $19 mil­lion to $48 mil­lion from the pro­gram.

Pub­lic schools have ac­cess to a sep­a­rate, $13.5 bil­lion pool un­der the Coro­n­avirus Aid, Re­lief, and Eco­nomic Se­cu­rity Act, known as the CARES Act, which Congress passed in late March. CPS’ al­lot­ment is $205 mil­lion of the $569.5 mil­lion ear­marked for Illi­nois, some of that for char­ters.

U.S. Education Sec­re­tary Betsy DeVos has de­manded that pub­lic school dis­tricts share that fund­ing with pri­vate schools. Sev­eral states sued DeVos this week, ac­cus­ing her of us­ing the CARES Act to di­vert pub­lic funds to pri­vate schools.

An­drew Broy, pres­i­dent of the Illi­nois Net­work of Char­ter Schools ad­vo­cacy or­ga­ni­za­tion, said char­ter op­er­a­tors faced bud­get crunches as a re­sult of added spend­ing on com­puter and in­ter­net needs for re­mote learn­ing.

The char­ter or­ga­ni­za­tion got its own loan of $150,000 to $350,000. It has 14 em­ploy­ees and, ac­cord­ing to its lat­est pub­lic fil­ing, in De­cem­ber 2017, was pay­ing Broy $350,000 a year.

The LEARN char­ter chain, which op­er­ates seven schools in Chicago and two more else­where in Illi­nois, got one of the big­gest loans, be­tween $5 mil­lion and $10 mil­lion. It has 485 em­ploy­ees.

Per­spec­tives Char­ter Schools, op­er­a­tor of five schools in Chicago, got at least $2 mil­lion, as did KIPP Chicago Schools, which has eight schools in the city.

TYLER LARIVIERE/SUN-TIMES

The LEARN char­ter chain, which op­er­ates seven schools in Chicago and two else­where in Illi­nois, got be­tween $5 mil­lion and $10 mil­lion in PPP money.

TYLER LARIVIERE/SUN-TIMES

Per­spec­tives Char­ter Schools, op­er­a­tor of five schools in Chicago, got at least $2 mil­lion in fed­eral loans un­der the Pay­check Pro­tec­tion Pro­gram.

An­drew Broy, pres­i­dent of the Illi­nois Net­work of Char­ter Schools.

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