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9486 in the collection
In One School Deal, Chairman Played Three Roles
By James V. Grimaldi and Theola Labbé-
DeBose
Thomas A. Nida often has played two roles when
District charter schools enter into real estate
deals. As a banker, he has arranged loans to
the schools or their landlords. And as chairman
of the public board that oversees charters, he
has approved the schools' borrowing and
spending.
But in one episode, Nida ended up wearing three
hats.
The deal centered on the old Kingsman public
school, a Northeast landmark that closed in
1993 because of declining enrollment. Kingsman
became an eyesore and a haven for drug dealers,
with punched-out windows and peeling paint
cascading onto the floors. In 2003, a charity
bought the dilapidated edifice from the city
for about $300,000 and began to renovate it for
charter schools.
Nida was the bank officer who handled the
initial $2.45 million construction loan to the
tax-exempt organization, Charter School
Development Corp., known as CSDC. Soon after,
Nida was appointed to the Public Charter School
Board and began taking official actions that
affected CSDC and its tenants. Then, as a
banker, he refinanced the loan. After that, he
joined the nonprofit group's board of
directors, where he further helped expand its
financing to obtain city revenue bonds.
Finally, in July 2006, Nida made a move that
led to a financial windfall for CSDC. He led
the effort and cast the deciding vote that shut
down one of the two charter schools renting
space in Kingsman, clearing the way for the
other tenant to purchase the 54,810-square-foot
building.
CSDC made almost $1 million from the sale. "We
made a nice gain on it," said Frank Riggs, the
former California congressman who is the
group's chief executive, "which we need, to be
candid with you, to offset the risk for
properties we own in northwest Indiana."
Nida did not disclose his multiple roles in the
Kingsman deal at a public hearing, according to
a transcript, or before the vote, according to
two charter board members who voted against the
closure. Nida also has not listed his CSDC
board membership on the financial disclosure
forms he filed with the city. Nida said
yesterday that he did not think he needed to
disclose the position because it was unpaid.
In an earlier interview, Nida acknowledged his
multiple roles but said he kept each of them
separate. He said his official acts on the
public charter board are always based on the
needs of schoolchildren and are not influenced
by his banking job or his unpaid position at
CSDC.
"Any consideration that would have involved
CSDC for better or worse was not a
consideration in my decision," Nida said. "That
hat that I wear on a charter board is what is
best for the students, as far as I'm concerned.
And if there is a financial consideration, good
or bad, that is a distant second issue."
The board's 2006 decision to close Sasha Bruce
charter school, with more than 260 students in
grades seven through 11, left Options Public
Charter School, which at the time had 240
middle schoolers, as the sole occupant of the
Kingsman building. Options itself had almost
been shut down by the city three years earlier,
after management turmoil and news reports that
its principal had an undisclosed criminal
record. In the interview, Nida said the
decision to close Sasha Bruce was based on its
"lousy academic performance" as a result of
management problems. "They were going down the
toilet academically and financially," he said.
Board minutes reviewed by The Washington Post
show that Nida had recused himself from one
vote in 2004 related to Sasha Bruce's
enrollment, although he said he could not
recall why. But there is no public record that
he ever recused himself from the discussions
about closure. At a public hearing requested by
Sasha Bruce to challenge the board's plan to
revoke its charter, Nida led the questioning,
suggesting there was financial mismanagement.
Officials from Sasha Bruce vehemently contested
Nida's characterization. "There was nothing
wrong with our financials," said Deborah Shore,
executive director of Sasha Bruce Youthworks
Inc., a related nonprofit that has a board of
directors separate from the school and remains
active in its 34th year serving runaway and
homeless children.
Shore and other school officials told the
charter board that although Sasha Bruce had run
budget deficits in three of its first four
years, it had a net of $118,000 because of a
surplus in one year.
About a week after the hearing, the charter
board voted at a special meeting outside of its
monthly sessions. Board spokeswoman Nona
Richardson issued a news release reporting that
the vote was 3 to 2 (there were two vacancies
on the seven-member board) to revoke the
charter, but there were no meeting minutes
taken. Richardson said recently that no
breakdown of the vote was recorded.
It was only the third time that the board has
revoked a school's charter. The decision, weeks
before the start of the school year, sent the
students and their parents scrambling to find
another school.
Anthony J. Colón, one of the two charter board
members who said they voted against revocation,
said Sasha Bruce deserved another year to show
improvement. The other opposing board member,
Will Marshall, said he believed that voting to
shut down the school for academic performance
before it had started its fifth year was
prohibited by the charter law.
Informed recently of Nida's varied connections
in the matter, Colón said: "In general, when
there's some perceived conflict of interest, we
recuse ourselves from those conversations."
D.C. Council member Tommy Wells (D-Ward 6), who
has criticized the charter board for lacking
transparency, said the attorney general should
investigate whether Nida violated conflict of
interest laws. "Public officials in any close
case need to err on the side of recusal," Wells
said.
City officials and appointees who serve on
nonprofit boards should treat any financial
interest of the nonprofit as if it were their
own, according to the D.C. attorney general's
office. They "may not act on a government
matter that would affect that organization,"
the office said in guidance on its Web site.
Harvey Schweitzer, who was the attorney for
Sasha Bruce, said he considers Nida's
previously undisclosed connections
"cataclysmic."
The bad news for Sasha Bruce was good news for
Options, which had long-standing ties to CSDC
and had been invited into Kingsman by CSDC's
founder, who also was an Options board member.
The day after the Sasha Bruce vote, Charles
Vincent, chief operating officer of Options,
said he called CSDC to say his school wanted to
move into Sasha Bruce's space and take steps
toward buying the building. Vincent said the
reaction from his landlord was, "I thought I'd
hear from you."
At the time, Options was regulated by the D.C.
Board of Education rather than the charter
board. In 2007, Mayor Adrian M. Fenty's school
reform plan shifted 18 charters, including
Options, to Nida's board. Still, Nida said in
an interview, he "didn't think it was
necessary" to recuse himself from official
action about Options, which was paying $75,000
a month in rent to CSDC at the time. He voted
later that year in favor of a large expansion
of the school's enrollment.
When the CSDC board voted in April 2008 to sell
the building to Options, Nida recused himself,
he said. Minutes released by CSDC do not
mention a recusal, though they do note that
Nida was absent.
As required by the charter board rules, Options
submitted its $8.25 million Kingsman purchase
contract for approval. But the board never
voted on it. Instead, it was automatically
accepted 10 days later under the board's
"passive approval" policy. The sale was
accomplished by emptying the school's savings
to pay CSDC almost $1 million in cash --
essentially a down payment -- and then taking
over CSDC's existing debt in D.C. revenue
bonds.
As charter board chairman, Nida wrote a letter
certifying that Options was "in good standing,"
which was submitted to the city bond office.
Two weeks after the sale closed April 30, the
board reversed course, issuing Options a
warning. It designated the school as "high
risk" because of poor academic performance,
having failed to meet No Child Left Behind
status for more than five years. The board
shelved the school's plan for a vocational
center and imposed a moratorium on its high
school expansion.
Nida said the board did not deliberately delay
the "high risk" notice until after the building
sale. It "was not a timing" issue "where I was
connecting the finances or the interest of the
CSDC to the school's performance," Nida said.
"We were dealing with what the school was doing
academically."
Last month, Nida voted "aye" on giving Options
time to get its academic house in order. He
said he saw no reason to recuse himself.
"If I believe it is appropriate for me to give
my vote, I will," he said.
Staff writers David S. Fallis, Joe Stephens,
April Witt and researcher Meg Smith contributed
to this report.
— James V. Grimaldi and Theola Labbé-DeBose
Washington Post
2008-12-14
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/13/AR2008121301779_pf.html
INDEX OF OUTRAGES
Pages: 380
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