New rules on ethics at charter advocate

Exec used inside info to benefit his own business

The Arizona Charter Schools Association has adopted a new conflict-ofinterest and ethics policy after The Arizona Republic revealed its chief operating officer had used inside information to benefit a student-recruitment business he co-owned with his wife.

Charter association Chief Operating Officer Robert Di Bacco and his wife, Paola Leyton Salas, own Enrollment Experts. Last month, Di Bacco used student-directory information given to the association to help 32 students find new campuses after the central Phoenix charter school they had attended, SySTEM, closed its doors.

Self Development Academy had agreed to pay the recruitment company a $550-per-student fee for steering six of the displaced students to the charter school. But after The Republic

reported Di Bacco’s ownership interest in Enrollment Experts, the association forced him to refund $3,300 to the school.

Self Development, 1515 E. Indian School Road, had since 2015 paid $171,360 plus expenses to Enrollment Experts for the recruitment of 348 students, according to public records recently obtained by The Republic.

Di Bacco co-owned the company for more than a year while he also worked at the charter association. During that time, the company was paid at least $37,350 by Self Development.

Di Bacco said when students were displaced by the closure of SySTEM, it was “all hands on deck” at the association to help them find new schools. In the rush to assist students, a mistake was made in referring business to a company co-owned with his wife, and it was the first — and last — time it occurred, he said.

“The last thing on my mind was personal gain,” Di Bacco said. “We were acting in the best interest of the students.”

Di Bacco also disputes that he used inside information, even though only the association was initially provided with a SySTEM student directory that helped his wife place students. Leyton Salas could not be reached for comment.

“It was a very unusual situation, and we have learned a lesson,” he said.

The association, a non-profit membership organization that advocates on behalf of the state’s 500-plus charter schools, declined to say whether Di Bacco faced discipline beyond returning the $3,300 in fees to Self Development.

The association did, however, adopt a new policy prohibiting actual or potential conflicts of interest. It prohibits employees from:

❚ Using information obtained as the result of their employment by the association for potential gain for that employee or for a relative.

❚ Using a position at the association to influence or make a business decision that may benefit themselves or their relative.

❚ Causing a relative to receive any kickback, bribe, substantial gift or special consideration as a result of any transaction or business dealings involving the association.

Matt Benson, an association spokesman, said Thursday that the new policy was adopted in the wake of The Republic’s

reporting.

A previous policy had barred association employees from having outside employment or sitting on a charter school’s board. Provisions concerning an actual or perceived conflict of interest are new, Benson said.

Benson said co-owning a company with a spouse, even if the business is related to charter schools, did not violate the previous policy.

Arizona Corporation Commission records show Di Bacco became a coowner of Enrollment Experts on March 2, 2017, when the earlier policy was in place.

Di Bacco said the only reason he became a co-owner of Enrollment Experts was for estate-planning purposes, and that he’s not involved in the business.

His wife is a one-person consulting firm, he said, and the business has only one other client, which he declined to name.

The charter association initially defended Di Bacco’s business dealings, but following The Republic’s reporting, it changed course, calling the transaction a “serious error.”

It is unknown how many charterschool recruiters are operating in Arizona. The association does not require them to register, nor does it otherwise regulate them.

Eileen Sigmund, the association’s chief executive, said some schools pay recruiters because “recruiting students to new schools makes or breaks whether a school may stay open.”

Di Bacco said it’s common for all public schools to recruit kids.

The state funds public schools on a per-child basis, meaning each student that Enrollment Experts brought to Self Development resulted in additional tax dollars. Further, charter schools get up to $2,000 more in additional state dollars per student than district schools because they don’t have access to local property taxes.

Anabel Maldonado of the American Civil Liberties Union of Arizona has criticized the Charter Association over enrollment issues for special-needs students. She is lead organizer of #Demand2Learn, a campaign designed to end practices that push some students out of charter schools.

Maldonado said recruiting students for profit is unseemly, and perpetuates a system in which charter schools recruit students without special needs and who are less expensive to educate.