Epic board leader sounds off on co-founders
Campbell says they carried out ‘nothing but a grift and a con job’
For years, the co-founders of Epic Charter Schools carried out “nothing but a grift and a con job” while running the virtual charter school system, Epic’s new school board chairperson said.
Paul Campbell, who has led Epic’s school board since May, gave a scorched-earth address to the House Common Education Committee on Monday about Epic’s termination of its co-founders, Ben Harris and David Chaney.
Harris and Chaney, who have long been under a
microscope of audits and criminal investigations, founded Epic in 2011 and established a management company, Epic Youth Services, that operated the school system and earned 10% of the school’s annual funds for 10 years.
Campbell and Epic’s restructured school board cut all ties with Harris, Chaney and their business on May 26.
“We’ve got to have a divide between the school and those guys,” Campbell said in his presentation. “They are not the school, and they are bad actors, period.”
Neither the co-founders nor their company’s chief financial officer, Josh Brock, have been charged with any crimes.
“The opinions of Paul Campbell are in direct conflict with the truth,” said Libby Scott, Harris and Chaney’s attorney. “We will not engage in the same type of name calling that Mr. Campbell did today for purposes of political grandstanding.”
The Oklahoma State Bureau of Investigation accused the co-founders of embezzling millions of taxpayer funds through the school – allegations Harris and Chaney have denied.
Oklahoma State Auditor and Inspector Cindy Byrd said it would “take hours” to explain all the violations her office found while investigating Epic’s finances last year, findings that included a lack of separation between school officials and the managing company.
State auditors noted Brock was the CFO for both the company and the school. Multiple school board members who were meant to hold Epic Youth Services accountable had been “handpicked” by Harris and Chaney, auditors reported.
“I have seen a lot of fraud in my 23 years and this situation is deeply concerning,” Byrd said when releasing the audit Oct. 1, 2020.
Epic, with Harris and Chaney still at the helm, called the audit “political theatrics” and said the auditors’ calculations were deeply flawed.
Among the key audit findings was Epic overspending on administrative costs, including the annual 10% management fee paid to Epic Youth Services, according to the audit report.
Under state law, no public school with more than 1,500 students can spend above 5% of its funds on administration.
Epic Youth Services earned $45.9 million from the 10% fee between 2015 and 2020 alone, auditors reported.
The company also controlled Epic’s Learning Fund, which paid for student technology, lesson plans and extracurricular activities. A state audit of the Learning Fund, which collected $79.3 million from 2015 to 2020, is ongoing.
Firing the company saved Epic millions of dollars by nixing the 10% management fee.
The school system has used the extra funds to hire more teachers and lower class sizes, Campbell said.
Although Epic and its co-founders have parted ways, Harris and Chaney had “full authority over the school” for a decade, until the school board terminated their contract this year, Campbell said.
Epic Youth Services oversaw all hiring and firing of staff and restricted access to school bank accounts, the new board president said. Even Epic’s superintendent, Bart Banfield, was blocked from reviewing the school accounts, Campbell said.
When Epic cut ties with its co-founders, administrators said the school system had enough qualified personnel and technology infrastructure to run the school without an educational management organization.
“Over the past 10 years, these guys have been charging millions,” Campbell said. “Millions of dollars within the management fee for work the school’s doing themselves anyways. It just doesn’t make any sense.
“In my opinion, this is nothing but a grift and a con job.”
Epic has not hired another management company in place of Epic Youth Services. Instead it leans on its superintendent and school board to operate the school. Technology Epic Youth Services provided has been replaced at a fraction of the cost.
The House Common Education Committee hosted an interim study Monday on educational management organizations, specifically on the contracts public virtual charter schools enter into with these businesses.
Rep. Rhonda Baker, the head of the committee, said lawmakers appreciated Campbell’s candor “because he did not have to be as forthright as he was.”
“I felt like he is trying to clear up a lot of the concerns that we have had in this building, and to let us know that they’re going to move that school in a direction that is transparent,” Baker, RYukon, said. “They’re willing to actually talk to us and answer our questions and give us information.”
Harris and Chaney have misled lawmakers themselves, Campbell said.
“They have gas lit a lot of people in the Capitol, and it’s time it stops,” he said.
Charter schools and virtual charter schools commonly hire management companies to help establish and operate their school. Other virtual charter schools in Oklahoma told lawmakers on Monday they pay between 3% and 12% of their funds for management services.
These businesses tend to become less necessary the longer a charter school exists, Byrd said during the interim study Monday.
“As a charter school grows, it’s likely that they’re going to hire their own people and phase out this educational management organization,” Byrd said during the interim study on Monday. “They’ll be standing on their own feet.”
But, some educational management organizations are so ingrained that it becomes difficult to separate the company from the school, Byrd said. That becomes even harder to do when the founders of the charter school also own the management company, like Harris and Chaney did at Epic.
State agencies and local governments go through a competitive bidding process for large-scale contracts and high-dollar purchases, but the boards running the state’s virtual charter schools aren’t subject to the same standard when hiring education management organizations, Byrd said.
“Someone needs to be responsible for vetting these contracts to make sure that the people who are being put in charge of large amounts of our public education dollars are going to be good stewards of these dollars,” Byrd said.
Reporter Nuria Martinez-Keel covers K-12 and higher education throughout the state of Oklahoma. Have a story idea for Nuria? She can be reached at nmartinez-keel@oklahoman.com or on Twitter at @NuriaMKeel. Support Nuria’s work and that of other Oklahoman journalists by purchasing a digital subscription today at subscribe.oklahoman.com.
“Over the past 10 years, these guys have been charging millions. Millions of dollars within the management fee for work the school’s doing themselves anyways. It just doesn’t make any sense.” Paul Campbell, Epic school board leader