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Ohio auditor candidate misleads about his role in online school ECOT shutting down
Investigations into the now-shuttered Electronic Classroom of Tomorrow, called ECOT, have roiled statewide elections in Ohio.
The Columbus public online school launched in 2000, founded by software executive William Lager. By the end, nearly two decades later, the school received $1 billion from the state, and Lager, who once had financial problems, became a millionaire.
Now politicians on both sides are spinning answers to key questions: Who is to blame for the online school bilking state taxpayers? Who gets credit for the school’s demise?
The Ohio Department of Education is seeking to recoup $80 million from the school, while State Auditor Dave Yost referred his findings to state and federal prosecutors for potential criminal prosecution.
State Rep. Keith Faber, the Republican candidate for state auditor, took some credit for the school shutting down.
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"Thanks to the strong charter school reforms put in place while I was Senate President and the diligent work of Auditor Yost and his staff, ECOT was caught and is out of business," he said in a May 11 statement to the press.
Democrats pounced on Faber for taking credit.
Faber’s Democratic opponent Zack Space tweeted: "Keith Faber’s complicity in this — perhaps the largest political scandal in Ohio history — should disqualify him from serving as Auditor, the top taxpayer watchdog in the State."
Time for PolitiFact to weigh in: Is Faber accurate in claiming credit for ECOT shutting down?
We found that when Faber was Senate president, the Legislature voted for a bill that included attendance rules for online schools in 2015. But the main reason the school shut down was a change in the type of student participation data that the state education department sought. And the department began seeking the data before the 2015 legislation passed.
Faber’s spokeswoman Allison Dumski pointed to his role as Senate president in passing HB 2, a charter schools bill. The final version passed the Senate unanimously and the House overwhelmingly in October 2015.
A provision added in the Senate required online schools to keep "an accurate record of each individual student's participation in learning opportunities each day." The bill said that the records must be kept in a manner that could easily be submitted to state officials.
"ECOT was unable to provide these attendance records or comply with Ohio Department of Education's student count, requiring them to repay the state, which ultimately put them in financial distress and caused them to close," Dumski said.
The passage of the bill drew praise from newspaper editorial boards and education advocates.
But the bill essentially codified what the education department had already started. The wheels were already in motion for the state to seek millions from the school.
For years, news reports showed the online charter school had problems with poor record keeping, high student turnover, suspicious attendance reports, poor performance outcomes and graduation rates, and inflated enrollment. State audits showed problems as early as 2001.
While the school racked up troubling headlines, Lager (the school's founder) gave campaign donations, largely to Republicans. The Columbus Dispatch reported that Lager and other executives made $2.1 million in donations. The FBI is examining whether the company reimbursed employees for donations, the Dispatch found. (Faber announced in May that he would donate the approximately $36,000 he received to other schools.)
By 2015, the state began to suspect that some schools were inflating their participation numbers. So it began to request actual log-in data for students.
For ECOT, that meant trouble.
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The department found that for the 2015-16 school year, the online school could only account for 6,300 of its 15,300 claimed students. That eventually led the state to demand that the school repay $60 million, and later an additional $20 million for the next school year.
The school argued that the department illegally changed its rules for counting students. But the courts have sided with the state. The school continues to appeal.
In 2017, the state started withholding $2.5 million per month from the school.
In January, the school’s sponsor, The Educational Service Center of Lake Erie West, cut off ties. Charter schools must have a sponsor to operate. About 12,000 students had to find new schools.
Faber said, "Thanks to the strong charter school reforms put in place while I was Senate President" the online charter school ECOT "was caught and is out of business."
Faber was referring to House Bill 2, which passed in 2015 and required online schools to keep accurate and accessible attendance records.
But Faber is overstating credit by hanging the demise of the school on that bill. The key change that led to the school shutting down was when the education department decided to require e-schools to provide student log-in data. This showed that that the school couldn’t account for many of its supposed students, leading the state to conclude the school owed $80 million. Faber doesn’t get credit for that.
The only kernel of truth here is that the bill that passed under his leadership was another affirmation by the state that e-schools had to provide attendance data.
We rate this claim Mostly False.
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Our Sources
Interview, Dan H. Minnich, Ohio Department of Education spokesman, May 15, 2018
Interview, Allison Dumski, spokeswoman for state Rep. Keith Faber, candidate for state auditor, May 15, 2018
Interview, Steve Dyer, Innovation Ohio education policy fellow, May 15, 2018
Interview, Rachel Coyle, spokeswoman for state Sen. Joe Schiavoni, candidate for Democratic primary for governor, May 15, 2018
Interview, Nathan Cotton, spokesman for Zack Space auditor campaign, May 15, 2018
Interview, Beth A. Gianforcaro, State Auditor Dave Yost spokeswoman, May 16, 2018
Keith Faber campaign for state auditor, Faber statement on ECOT findings, May 11, 2018
Ohio Codes, 3314.08 Annual enrollment reports; payments from department, Accessed May 16, 2018
Ohio Supreme Court, 2017-0913: Electronic Classroom of Tomorrow, Jeremy Aker, et al. v. Ohio Department of Education and Ohio Department of Appellee’s legal brief, Nov. 6, 2017
Columbus Dispatch, "ECOT co-founder had money woes," (Accessed in Nexis) Dec. 30, 2000
Columbus Dispatch, "School’s problems multiply," (Accessed in Nexis) April 17, 2001
Columbus Dispatch, "Online classroom; school overpaid, auditor says," (Accessed in Nexis) Nov. 14, 2001
Columbus Dispatch, "E-schoolers play hooky," (Accessed in Nexis) Aug. 20, 2002
Columbus Dispatch, "Online charter school; ECOT owes Ohio money because some students weren’t eligible," (Accessed in Nexis) Sept. 3, 2003
Columbus Dispatch, "Our schools; Popular ECOT poor performer," Jan. 4, 2015
Columbus Dispatch, "Ohio schools; Turnover common at e-schools," March 1, 2015
Columbus Dispatch editorial board, "Charter-school bill deserves action," April 19, 2016
Columbus Dispatch, "CHARTER SCHOOLS; State official: Kasich sought ECOT audit," Sept. 5, 2016
Columbus Dispatch, "ECOT, state dispute log-in data rules," (Accessed in Nexis) Sept. 14, 2016
Columbus Dispatch, "Your schools; ECOT's enrollment inflated, state finds," (Accessed in Nexis) Sept. 27 2016
Columbus Dispatch, "Ruling calls for ECOT to repay $60 million," (Accessed in Nexis) June 13, 2017
Columbus Dispatch editorial, "Rules improving charter schools," Jan. 19, 2017
Columbus Dispatch, "ONLINE SCHOOLS; State agency takes fall for mystery amendment," (Accessed in Nexis) May 5, 2017
Columbus Dispatch, "How ECOT founder William Lager cooked up a lucrative charter school," July 30, 2017
Columbus Dispatch, "OHIO POLITICS; Dems hope to pin ECOT on GOP," (Accessed in Nexis) Feb. 5, 2018
Columbus Dispatch, "ECOT may face fraud charges," May 11, 2018
Dayton Daily News, "Charter school reform bill will wait for House action," (Accessed in Nexis) July 3, 2015
Dayton Daily News, "Ohio e-schools face scrutiny with greater focus on rules," (Accessed in Nexis) Aug. 27, 2017
Cleveland Plain Dealer op ed, "In the end, charter bill is better than expected," (Accessed in Nexis) Oct. 9, 2015
Cleveland Plain Dealer, "ECOT attendance inflated by 9,000 students, audit finds; $60 million in state funding in jeopardy," Sept. 26, 2016
Cleveland Plain Dealer, "Campaign money at root of Ohio's ECOT charter oversight failures," Jan. 26, 2018
Cleveland Plain Dealer, "ECOT squabble heading to court education," (Accessed in Nexis) Feb. 11, 2018
Cleveland Plain Dealer, "ECOT officials could face fraud charges for hiding data from state, Ohio Auditor Dave Yost says," May 10, 2018
Cleveland Plain Dealer, "Democrats again push ECOT as a central campaign issue," May 10, 2018
New York Times, "Online School Enriches Affiliated Companies if Not Its Students," May 18, 2016
Ohio Auditor Dave Yost, "ECOT Inflated Time Claimed for Students, Failed to Document Time Spent Learning, Audit Finds," May 10, 2018
Ohio Auditor Dave Yost, The Auditor of State's office and ECOT, Accessed May 16, 2018
Thomas B. Fordham Institute, House Bill 2, Oct. 7, 2015
Innovation Ohio, "Ohio’s e-schools: funding failure, coddling contributors," 2011
State Sen. Joe Schiavoni, Tweet, May 11, 2018
Zack Space, Democratic candidate for state auditor, Tweet, May 12, 2018
ECOT, Website, Accessed May 15, 2018
Ohio Legislature, House Bill 2, 2015
Ohio Legislature, Senate Bill 298, 2016
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Ohio auditor candidate misleads about his role in online school ECOT shutting down
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