State Rep. Roebuck calls for accountability in charter schools’ real estate deals

The bill is part of a larger package aimed at reforming Pennsylvania's charter school system.

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

State Rep. James Roebuck renewed his push this week for legislation that would bar charter school companies from leasing buildings that they already own back to themselves, collecting state dollars in the process. This comes shortly after Franklin Towne Charter School faced criticism from the School Reform Commission over conflicts of interest in similar real estate arrangements and the state’s audit of Aspira charter schools found the practice there as well.

The legislation was first introduced last year. Roebuck (D-Phila.) said the audit proved his long-standing assertion that Pennsylvania’s charter school law needs to be reformed.

“The findings by Auditor General Eugene DePasquale mirror what I’ve been saying all along, that charter schools lack financial accountability,” said Roebuck, the Democratic chairman of the House Education Committee. “The legislation I introduced last year would specifically address the core problems found in this report while protecting taxpayer dollars.”

Roebuck’s bill, HB 1199, would eliminate conflicts of interest in tax-funded payments for charter school leases through the state’s program, which is meant to help charter schools who rent the school building, but is often used by charters who already own the building.

In the case of Franklin Towne, the CEO, Joseph Venditti, took the building bought by Franklin Town High School using bonds and leased it to a company called Franklin Towne Holdings that was created by Venditti, who made himself CEO of that company. Venditti then used the holding company to sub-lease the building back to the high school, which paid the holding company rent while collecting state reimbursements for part of those rent payments.

Franklin Towne was first found to be engaging in this practice in a 2010 report from the city controller, which found that 10 of the 13 charter schools it examined in Philly used similar practices between the school and landlord.

That’s a rate of 77 percent, though the sample size is quite small.

In 2015, the state’s auditor general found these practices at 10 charter schools around the state, which collected a total of $2.5 million in state tax dollars as a result.

Roebuck’s bill is part of a bigger charter reform legislative package from many House Democrats aimed at creating a system of equal treatment for all Pennsylvania public schools both traditional and charter and their students.

Roebuck has also introduced legislation, HB 578, that would initiate a comprehensive study to evaluate the successes and failures of charter schools throughout the state over the last 20 years, since the charter law was created.

“We need to see what’s working and what’s not, because at the end of the day, it’s the children and taxpayers who are being reprimanded for these avoidable mistakes,” Roebuck said. “It is abundantly clear in the auditor general’s audit that charter school management groups like Aspira are not working. It’s past time for a comprehensive overhaul of Pennsylvania’s nearly 21-year-old law.”