by David Safier
This morning I posted about the $8 million tax credit donation GEICO made to Arizona Leadership Foundation a Student Tuition Organization (STO) that gives out vouchers for private school tuition. I also noted that GEICO will get the entire $8 million taken off its tax bill, leaving the taxpayers stuck with $8 million tab for the vouchers. And that lucky STO stands to reap 10% of the money for overhead — $800,000. I suggested there might be a link between GEICO and someone in the STO, but I haven't found any connection. However, I found some other very interesting stuff when I went over Arizona Leadership Foundation's 990 tax form for 2011, the first year it showed any revenue.
The Executive Director, Richard Kirsch, made $22,527 in 2011, certainly not a large salary. But I noticed that the STO spent $57,160 on Professional fundraising services. $48,760 went to Muth Strategy Group, LLC, which is owned by Aaron Muth who, according to some articles about the GEICO donation, is the president of Arizona Leadership Foundation. He's also the son-in-law of Executive Director Richard Kirsch. Muth Strategy Group was started somewhere between 2010 and 2011, about the time the Arizona Leadership Foundation came into existence. It looks like the STO is a two man show, with Executive Director father-in-law pulling in a minimal salary and President son-in-law making $48,760 for that nebulous service, fundraising.
This kind of nepotism is standard operating procedure in the education privatization world. Charter schools are often family businesses, with the parents running the show and the kids teaching, doing the books, and so on. Arizona Leadership Foundation looks like a classic example. The question is, why would GEICO choose such a shaky STO for its $8 million, 100%-refunded-by-the-state donation? I have a feeling there's an answer in there somewhere. I just don't know what it is.