Imagine CEO’s “We own the schools” email makes national papers

by David Safier

A little over a month ago, I made public an email sent by Dennis Bakke, the national CEO of Imagine Schools, to the principals, directors and developers of his schools around the country, 18 of them here in Arizona. Bakke's basic message: We own the schools. The school boards either should do what we say or resign.

Now there's a big story about the email in the Sunday edition of the St. Louis Post-Dispatch along with an unedited version of the email. The story was also picked up by the AP. So far, it's appeared in New York and Washington, D.C. As of yet, Arizona papers have remained quiet about our Imagine charter schools or their parent company, though local stories have been carried in 10 other states.

Here are some excerpts from the Dispatch article.

In the year-old e-mail, CEO Dennis Bakke tells his employees they should control who stays on the board, select those who will "go along with Imagine," and ask board members to submit undated letters of resignation "that can be acted on by us at any time."

Such philosophies break a primary tenet of the charter school movement — that schools should be independently governed by local leaders — and conflict with both nonprofit law and state charter school statutes.

"That is appalling. I am appalled," Jocelyn Strand, Missouri's state director of charter schools, said after reading the memo. 

[snip]

. . . regulators said the letter reinforced what they had long believed. Several said they would now look at applications involving Imagine with greater scrutiny.

"That is so far afield from best practices," said Dean Titterington, vice chairman of the Colorado Charter School Institute, the agency that authorizes charter schools in Colorado and that turned down an Imagine-run school application last year. "If we're going to have genuine oversight of tax dollars, we have to have functioning boards. And they can't be shills for the management company."

[snip]

In exchange for six- or seven-figure yearly fees, [Imagine] will do everything for a school, from hiring teachers to recruiting students to leasing desks, file cabinets and trash cans.

But Imagine has lost some contracts, often when board members get assertive about their independence.

By Sept. 4, 2008, the day Bakke sent the e-mail, Imagine was struggling with governance issues in Nevada, Colorado, Florida and Missouri.

Here [in Missouri], a charter school downtown, Ethel Hedgeman Lyle Academy, was wrapped in a bitter divorce with Imagine, one that had descended into a melee of accusations, money squabbles and lawsuits. "We feel like they're trying to take our school away," former Lyle school board leader Karen Douglas Bell said at the time.

Soon thereafter, Bakke sent his memo.

[snip]

Now the letter, confirmed by former and current Imagine staffers, sends up red flags among nonprofit attorneys and experts.

The Internal Revenue Service prohibits nonprofit companies from being "self-dealing," established simply to benefit a for-profit company.

"Nonprofit boards have many functions, but they can't be puppets of some for-profit corporation," said Bruce Hopkins, a national nonprofit law expert and senior partner at Kansas City's Polsinelli Shughart law firm.

The IRS comes up frequently in these questions about whether a non profit school or educational organization is crossing the line. We're hearing it in the tuition tax credit concerns, and the subject comes up with charters as well, especially those being dubbed "corporate schools," across the nation.

Privatization is moving into public education at an ever increasing rate, for better and/or for worse. The IRS needs to exercise due diligence and oversight. It must investigate some of the more egregious situations and create firm guidelines concerning non profit and for profit education organizations being paid for with tax dollars.