By T. Ultican 5/4/2019
Epic is the business name for Oklahoma’s indigenous and fastest growing virtual charter school chain. In 2015, they moved beyond Oklahoma opening a business in Orange County, California and are currently in contract talks with Pulaski County, Arkansas to provide online education. EPIC’s fast growth has been accompanied by continuous legal problems, charges of political improprieties and claims of unethical aggressive marketing.
The Founders
Ben Harris and David Chaney, two long time friends from Oklahoma City, founded Epic.
The Founders of EPIC Virtual Charter Schools
In 1999, One year after Harris was awarded a Master of Public Administration from Syracuse University, he and Chaney founded Advanced Academics Inc. Today Pearson Corporation the large British testing and publishing company owns Advanced Academics which sells credit recovery courses and software for virtual classes.
Both Harris and Chaney went to work for Jeb Bush in 2003 at the Florida Department of Children and Families. Harris was soon made the Deputy Secretary in charge of technology. He worked under Secretary Jerry Regier who had previously run health and human services in Oklahoma. It was here that Harris made a name for himself by privatizing the child welfare system. However, all was not well.
Megan Rolland of the Tulsa World reported,
“In July 2004, a whistle-blower investigation revealed that Harris had accepted trips, dinners and other favors from companies looking to contract with the social services agency.
“Harris resigned and a full criminal investigation conducted by the Florida Department of Law Enforcement began. No charges were filed.
“The investigation did find that both Harris and Chaney were involved in a number of questionable contracts awarded to vendors that appeared to circumvent the state’s bidding process.
“One of those questionable contracts was awarded to Florida State University’s Institute of Health and Human Services, where Elizabeth VanAcker worked.”
“VanAcker also sits on the board of a nonprofit in Florida that has submitted seven charter school applications for virtual schools that propose contracting exclusively with Advanced Academics.”
“VanAcker’s company — formerly named Edmetrics — created the Epic 1 on 1 Charter School website for Community Strategies Inc.”
Rolland’s Report also shared some founding details about the business originally called Epic 1 on 1 charter schools,
“Harris is listed as a registered agent for Community Strategies Inc., the nonprofit that is opening Epic 1 on 1 Charter School. He uses his home address on the corporate papers, and he worked behind the scenes to get the school approved by the University of Central Oklahoma.”
In 2009 – just prior to founding Epic – Harris was Chief Financial Officer of Velocity Sports Performance in Irvine, California. The CEO of Velocity Sports Performance when Harris arrived there was Troy Medley, who is now Chairman of the Board for Epic in California.
Epic Found a Way into Orange County, California
Epic is an acronym for excellence, performance, innovation and citizenship. In California the non-profit business name is Next Generation Education. In Oklahoma the non-profit business name is Community Strategies Inc. Neither Epic founder, David Chaney nor Ben Harris, sits on the board of either Next Generation Education in California or Community Strategies Inc. in Oklahoma.
Rather, David Chaney serves as both superintendent of the nonprofit Epic Charter Schools and CEO of Epic Youth Services, a for-profit company that manages the school for a fee. Chaney owns the for-profit corporation, which originally had Harris’s home address listed on the incorporating papers.
A report in the Oklahoma Watch described the Epic business structure:
“The nonprofit contracts with Epic Youth Services, a for-profit company that manages the school for a fee of 10 percent of Epic’s gross revenue. Epic Youth Services, in turn, contracts with Advanced Academics, a division of Connections Education, a Pearson company. Calvert Partners and Beasley Technology also have contracts with Epic Youth Services.”
It appears that the structure is the same in California. In the Next Generation Education board meeting notes, Ben Harris is referenced as providing updates from the charter management organization (CMO) which is Epic Youth Services.
This Byzantine structure hides the fact that Epic is a for profit business cloaked in a non-profit’s suit, thus skirting California’s prohibition against for profit charters. It also means that in their tax forms, the non-profit only reports costs and no salaries. For example, in the fiscal year ending June 30, 2017 Community Strategies Inc. the Oklahoma non-profit reported revenues of $41,487,230 and expenditures of $40,105,203. However, the non-profit reported no salaries because the for-profit does payroll. There is no way for taxpayers to see how many public dollars are going into private hands.
In 2015, EPIC petitioned the Anaheim City School District (an elementary school district) for its first charter outside of Oklahoma. The districts staff investigated the petition, came back with a long list of deficiencies and made a strong denial recommendation. After reviewing the report the district board voted 5 – 0 to deny.
The following three deficiencies are among the more than 20 deficiencies cited:
(1) California charter law requires new charter petitioners to gather signatures showing a demand for the school. When Anaheim City School District started checking the signatures, the majority response they heard was “I don’t know what you are talking about.” They checked 109 of the 526 signatures and these are some of the responses,
“I’ve never heard of EPIC.”
“No, but if you ever need someone to sign a petition to help you with your funding just let me know.”
“I don’t remember signing any petition.”
“I like the school my kids go to, I thought I was just signing a petition saying I am in favor of charter schools.”
“No, I don’t know what you’re talking about, I’m in China.”
(2) The plan for special education was almost non-existent.
(3) There was no workable plan for English language learners (EL’s).
A widely held belief says charter schools find ways not to enroll more expensive students to educate such as EL’s. The enrollment data for school year 2017-2018 indicates that Epic still has no viable support for EL’s. That appears to be a feature not a flaw.
At Epic’s 2015 appeal to the Orange County School Board, Leslie Coghlan speaking for the Anaheim City School District explained their petition denial and concluded with,
“We would also like to note that at our public hearings in the Anaheim City School District there were not any members of our community that came out to support the charter school at the public hearings. And one of our final concerns is that the Epic’s Oklahoma program is involved in litigation with the Oklahoma Department of Education and currently the subject of a fraud investigation by the Oklahoma State Bureau of Investigation concerning falsification of records to fraudulently receive payments from the Department of Education.”
At that same 2015 hearing, Ben Harris defended Epic against the fraud investigation charge. He said, “This is based off a single news article several years ago that is proven to be false as no findings or issues have been raised.”
In a 2016 article, KOSU radio of Tulsa and Oklahoma City reported on Epic’s California problems:
“In 2014, Oklahoma Governor Mary Fallin requested an investigation in to allegations of fraud at the school. … No charges have been filed, and no information has been released.”
“More recently, controversy over EPIC’s business practices came to light last month in an audit prepared by the Fiscal Crisis & Management Assistance Team (FCMAT), which provides California school districts with financial and management support.
“The FCMAT audit alleges that Sue Roche, the founder of Oxford Preparatory Academy, which has two charter campuses in Orange County, formed an education management company called Edlighten Learning Solutions to launder school funds for personal profit.
“The audit lays out substantial financial ties between Edlighten and Ben Harris and David Chaney’s company, EPIC Youth Services. The audit says EPIC Youth Services received $5,000 a month from Edlighten for consulting services. The report contains emails between Roche and Harris, EPIC’s co-founder, in which they discuss moving personnel between Oxford Preparatory and their management companies to skirt legal issues.”
This February, the Oklahoma State Bureau of Investigation announced that Epic is once again the target of both state and federal investigators. No additional information was released.
At Epic, a yearly $1500 payment is made into each student’s personal “learning fund” to buy school supplies or use for academically compatible activities. The Orange County Register noted, “Though money doesn’t wind up in the hands of parents or students, the learning fund can, for example, pay for horseback riding, music or dance lessons.” Anaheim Union High School District Superintendent Mike Matsuda called the practice, “predatory marketing.”
Virtual schools like Epic have a history of poor student outcomes. Even the National Alliance for Public Charter Schools released a report sharply critical of virtual charter schools. And the Stanford study of online schools in 17 states and the District of Columbia found that during a 180-day school year, virtual students lost an average of 72 days of learning in reading and 180 days, or an entire school year, of learning in math.
“Why Would Anyone Support These Horrible Schools?”
A friend asked this question about Epic.
To get their foot in the door, Epic’s Ben Harris was able to use his personal connection with his former boss Troy Medley. Medley is currently President of Prima Health Credit of New Port Beach and he serves as Chairman of the Board for the charity Mortgage Miracles for the Kids. The President of Miracles, Autumn Strier – who previously worked for the Giuliani administration – joined Medley on the Next Generation Education (Epic) board as did another associated from Miracles, Chris Relth – a corporate head hunter.
Completing the five member Next Generation Education (Epic) board are Kenny Dodd, senior pastor at Claremont Emanuel Baptist Church in San Diego, and Alex Arcila of the Orange County Hispanic community. Medley is the board President.
Once Epic established an apparently reputable presence in Orange County, they were aided by the fact that this county is the most pro-business and privatization friendly place in California. For example, in the 2018 election for Superintendent of Public Instruction, Tony Thurmond defeated former Charter School executive Marshall Tuck, but he didn’t come close to matching Tuck’s support in Orange County.
Orange County 2018 Election Tallies
During the appeal hearing at the Orange County School Board, the board staff concurred with the Anaheim City School District and recommended the appeal be denied. After the staff submitted their recommendations, representatives of the district made a presentation and Epic co-founder Ben Harris made a presentation. Public comment followed the presentations. There were just seven speakers all from Epic; Epic co-founder David Chaney, Epic’s attorney Michelle Lopez and the five Epic board members.
When the board voted on the Epic appeal, Orange County School Board Trustees Robert Hammond, David Boyd, Linda Lindholm and Ken Williams voted to grant Epic a charter.
This vote also reflected the power of billionaire spending on school privatization.
Billionaire Money is Distorting Democratic Processes in Local Elections
All but one board member who voted to give Epic a charter received large campaign support from billionaires through three independent expenditure committees; California Charter Schools Association Advocates (CCSAA), Orange County Charter Advocates for Great Schools (which is sponsored by CCSAA) and the Lincoln Club of Orange County. David Boyd, Chancellor of The Taft University System, did not receive documented largess from the billionaires but his campaign did have odd financial support. He loaned his own campaign $72,000, got a $50,000 loan from Taft University and a $25,000 loan from Elizabeth Dorn’s campaign. More than $30,000 in loan debt was later forgiven.
In 2016, the Beverly Hills Billionaire, Howard Ahmanson Jr. (state major donor ID 479163) gave the OC Charter PAC $10,000 and the Local Liberty PAC (State ID 1291528) that Ahmanson finances provided them another $18,171.83.
Howard Ahmanson’s name sake father established the Ahmanson Family Foundation in 1952. Today, that foundation has slightly more than a billion dollars in assets. They give extensively to the arts and LA basin charter schools. In 2016, they gave $500,000 to the billionaire funded pro-school privatization youth group Teach For America. Howard runs the Fieldstad and Company arm of the Ahmanson foundation.
Roberta Ahmanson, Howard’s wife, is a serious Christian thinker and writer. She gave a speech titled “What Fundamentalism Gave Me” at the 2018 commencement for Cornerstone University in Grand Rapids, Michigan. Like Betsy DeVos, she is part of The Gathering. Roberta and her husband see Epic as a tool that benefits the Christian home schooling movement.
Some Observations
The Epic contract with Epic Youth Services calls for an annual $125,000 fee for “development services” plus 10% of net revenue be paid to the for profit managers of the CMO, Harris and Chaney. This means that in 2016 Epic Oklahoma paid Epic Youth Services more than $540,000 for their services; this doesn’t include the California revenue. Ben Harris and David Chaney are becoming wealthy men. Because of aggressive marketing which even led to taking over an entire rural school district in Oklahoma and expansion in California, the 2016 $42 million in revenue probably isn’t a forth of the 2019 projected revenue.
In December, Oklahoma Watch reported, “Epic’s two leaders also outspent the political action committee for the largest teachers union, the Oklahoma Education Association, which has 35,000 members across the state.” This looks very much like a replay of Bill Lager’s Electronic Classroom of Tomorrow and his large political contributions leading to the continued fleecing of taxpayers in Ohio.
It is not in society’s interest to have children educated in isolation. Socialization is an important part of education. As Americans, we should have freedom of choice but we should not expect taxpayers to pay for those choices. If people want to home-school or put their children in private schools, that is their choice. It is more than sufficient for taxpayers to provide a world class professionally run public education system. Public money should not be transferred into private profiteering pockets.
Twitter: @tultican
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