Under the Dome: CSBA-sponsored bill addresses charter conflicts of interest 

Assembly Bill 572 Charter Schools

Brownley, D-Santa Monica

Existing law is ambiguous with regard to restrictions on conflict of interest in charter schools. CSBA believes charter schools are public schools and, as such, are subject to the same conflict-of-interest restrictions applicable to traditional public schools. CSBA is sponsoring AB 572 to clarify that charter school board members cannot hold a financial interest in any transaction with their charter school, as specified in Government Code Section 1090. AB 572 would also clarify that the Brown Act, the Political Reform Act and the Public Records Act apply to charter schools. This bill is needed to prevent the abuse of taxpayer dollars and to rebuild the public trust.

There have been instances in which some charter school operators directed millions of dollars to their own companies, themselves and their family members. In these cases, school boards have been forced to spend time and money to investigate abuses and close the charter school. AB 572 would prevent abuses before they can occur and allow for intermediate steps in the event of mismanagement. The Fair Political Practices Commission would be able to investigate possible abuses and assess fines and penalties. This would give charter schools an opportunity to remedy questionable business practices and save school districts the time and money required for an investigation.

Despite support for AB 572 from nearly every statewide educational organization, Republicans have consistently voted against the bill. (Sen. Abel Maldonado, R-Santa Maria, is the only Republican who has voted for it.) The California Charter Schools Association opposes AB 572, arguing that most charter schools are run by nonprofit organizations that must abide by the Corporations Code for the purposes of conflict of interest. Raising red flags of concern, the Corporations Code permits up to 49 percent of those serving on the charter board to have financial interests in contracts.

This year, CSBA launched two action alerts to urge members of the Legislature to support AB 572. With active support from our members and other education leaders, this bill passed out of the Senate Education Committee and the Senate Judiciary Committee on 6-1 and 3-2 votes, respectively. While support for this bill is strong, CSBA will face a major hurdle in persuading Gov. Arnold Schwarzenegger to sign it. In the last legislative session, the governor vetoed a similar bill that CSBA had sponsored. He explained that “not only would this bill create state-mandated costs for charter schools to comply with its provisions, the measure runs counter to the intent of charter schools, which were created to be free from many of the laws governing school districts.”

CSBA will continue to keep members abreast of new developments regarding this bill and other sponsored or co-sponsored legislation.

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