“Chartergate” Scandal Prompts FBI Investigation

Ohio Republicans are rushing to give away tainted campaign cash. Here’s why.

Ohio Democratic Party
6 min readMay 16, 2018
GOP candidate for attorney general Dave Yost gave the Electronic Classroom of Tomorrow the “Ohio Auditor of State Award of Distinction” for “record keeping,” while taking at least $29,000 from ECOT-affiliated people or entities.

The Chartergate scandal is roiling Columbus. Here’s what you need to know: Millions in tax dollars were wasted, Ohio kids were hurt and now there’s a criminal investigation into just how deep it goes. And all of this happened on the Ohio GOP’s watch.

Just hours before the Columbus Dispatch reported the FBI was looking into potentially illegal donations connected to Bill Lager (founder of the now-defunct “ECOT,” or Electronic Classroom of Tomorrow), Ohio Republicans on the 2018 ticket scrambled to offload hundreds of thousands of dollars in campaign cash they took from donors linked to ECOT.

On the heels of the Cliff Rosenberger payday lending debacle, this is now the second Ohio Republican scandal that the FBI is investigating, and the Republican politicians who enabled this scam are now desperately trying to cover their tracks.

How did we get here?

The History of “Chartergate” — A Culture of Corruption

Nearly 20 years ago, a man named Bill Lager (now a multi-millionaire) founded ECOT. He worked up quite a scheme — a fully online school that would siphon $1 billion from our public schools based on one determining factor: how many kids he could enroll.

Columbus Dispatch: 7/30/17 — “How ECOT founder William Lager cooked up a lucrative charter school” — https://bit.ly/2v8MJwO

The catch? ECOT claimed they didn’t have to track how often their students were logged on, whether they were completing their lessons or whether they were learning anything (while still collecting fat checks from Ohio taxpayers).

Over the course of 15 years, ECOT took in more than $1 billion from Ohio taxpayers while showering Ohio Republican leaders with more than $2 million in political contributions.

Bottom line: it looks like they cooked the books — and wrote big campaign checks to the Ohio Republicans that were supposed to oversee them. Over the course of 15 years, ECOT took in more than $1 billion from Ohio taxpayers while showering Ohio Republican candidates and organizations with more than $2 million in political contributions.

Your tax dollars at work: ECOT Founder William Lager’s Key West home.

Republican politicians like Dave Yost, Keith Faber and Frank LaRose accepted tons of political contributions from ECOT-linked donors, while failing to hold the corrupt e-charter accountable, instead treating the taxpayer-funded program like an ATM for the Ohio Republican Party.

The Ohio Democratic Party has long been concerned about Republican oversight (or lack thereof) of the for-profit charter school system in Ohio. We first called for an independent investigation into how Gov. John Kasich’s charter-school czar allegedly rigged evaluations for e-charters like ECOT all the way back in 2015.

It hasn’t gotten any better in the intervening years. ECOT finally had to close down earlier this year, after the state found the e-charter owed at least $80 million for students it claimed were enrolled, but couldn’t be verified. Now they’re auctioning off the school’s office building and its contents.

Luxury furniture and posh offices auctioned off for pennies on the dollar. None of it will come close to paying back the millions of dollars that ECOT owes the state of Ohio.

It keeps getting worse. Last month the Associated Press revealed a whistleblower’s allegations of data-rigging at ECOT. Then accusations emerged that the whistleblower was offered “hush money” to stay silent about what he saw while working at ECOT.

These revelations made the ECOT scandal — “Chartergate” — potentially criminal. And it’s making headlines across Ohio:

The Cincinnati Enquirer: https://cin.ci/2IDFXGP
The Cleveland Plain Dealer: https://bit.ly/2KtaByY
Akron Beacon Journal: https://bit.ly/2Ilw5S3
Youngstown Vindicator: https://bit.ly/2L6OVd4
The Toledo Blade: https://bit.ly/2ILlWgS

This issue is far from over for Ohio Republicans. Ohioans remember the Coingate scandal. Well, the Chartergate scandal is Coingate on steroids.

This is “Coingate on steroids” — at least $80 million was pilfered from Ohio taxpayers.

First of all, we’re talking about at least $80 million pilfered from Ohio taxpayers. That’s just from looking at two years of ECOT’s books; it could potentially be hundreds of millions more. Keep in mind that Ohio spends $1 billion every year on charter schools.

Secondly, this scandal touches every Ohio Republican who is running for statewide office in 2018. Their attempts to get out from under the scandal by “donating” their ECOT-linked contributions are even more suspicious, given the latest news.

The GOP candidate for attorney general, Auditor Dave Yost, gave ECOT the “Ohio Auditor of State Award of Distinction” for record keeping.

Not once, not twice, but three times, while taking at least $29,000 in donations from ECOT-affiliated entities.

Despite Yost’s claims of “holding ECOT accountable,” his office failed to crack down on ECOT after a whistleblower “made allegations that ECOT was cooking its attendance books,” and he failed to notify prosecutors immediately when the most recent ECOT whistleblower talked with his office about potential fraud. Instead Yost waited more than a year to release his “audit” and referred the matter for possible criminal charges only after Democratic candidates and officials called him out.

According to WKSU: “The whistleblower — who worked for the Electronic Classroom of Tomorrow — told the Associated Press he had notified Yost last year that the school had used software to report phony attendance numbers.”

“It is a massive fraud case, and it should immediately have been taken out of the audit queue and sent over to criminal investigators who can handle it. And I am worried that evidence, witnesses and money has dissipated and disappeared in this time.” — Steve Dettelbach, candidate for Attorney General

As state auditor, Yost was the one person in Ohio responsible for looking at ECOT’s books every year and protecting our kids and the taxpayers from fraud. Instead of calling out ECOT’s scam, Yost ignored warning signs and collected almost $30,000 in campaign checks from the school’s founder and executives.

State Rep. Keith Faber — who is running for auditor — took more than $36,000 from ECOT affiliates.

As senate president, Faber and his caucus took more than $200,000 from for-profit charter school operators. Even though Faber claimed “Bill Lager hasn’t been happy with me for a long time,” Innovation Ohio’s Stephen Dyer noted that Faber added a “mystery pro-ECOT amendment” to the latest state budget just last year. In 2016, Faber used his position as senate president to block attempts at oversight of ECOT’s attendance records.

Democratic candidate for Ohio auditor Zack Space says ECOT is a “prime example of money corrupting Ohio politics.”

State Sen. Frank LaRose, the Republican candidate for secretary of state, took nearly $10,000.

While the charter school scam looked to be a boondoggle with many red flags from the beginning, LaRose regularly supported bills designed to benefit charter schools and didn’t take any action toward accountability until after the ECOT scandal had been exposed to the public.

State Rep. Robert Sprague, the Republican candidate for treasurer, has taken at least $1,350 from ECOT lobbyists.

Sprague has taken at least $1,350 from ECOT lobbyists, as well as multiple donations from the Ohio Republican Party and the Ohio House Republican Organizational Committee, which were the top two beneficiaries of ECOT’s largesse. At a news conference in January, Sprague provided flimsy excuses for the ECOT disaster.

Mike DeWine and Jon Husted took more than $40,000 from ECOT-connected donors.

Attorney General DeWine is supposed to be Ohio’s “top cop,” but he’s done nothing to investigate ECOT.

Finally — this scandal isn’t about rare coins and bad investments. This scandal is about failing our kids.

Chartergate is just one more example of the GOP culture of corruption in Columbus. By ignoring Chartergate, the Ohio GOP has sold out Ohio’s kids.

If Columbus Republicans are willing to sell out our state’s kids to the highest bidder, what aren’t they willing to sell?

It’s time to fix Columbus.

Ohio families can’t afford another minute of Republican mismanagement, fraud or corrupt Republican leadership. Scandal-ridden Republicans have already cost us millions in wasted tax dollars.

Find out just how much at www.GOPScandalsCostU.com.

Then take action. Add your name. Demand a full investigation into ECOT and the GOP politicians who enabled them.



Ohio Democratic Party

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