A South Florida charter school network now runs a small district 500 miles away. Legislators with close financial ties to charters helped make that happen.

By Jessica Bakeman

South Florida legislators who earn six-figure salaries in the charter school industry played a key role in the unprecedented private takeover of a long-struggling public school district, flaunting apparent conflicts of interest.

The tiny school district in rural North Florida’s Jefferson County had suffered a decade-long academic and financial decline at the hands of local elected officials. So the Legislature helped bankroll a takeover by a charter school operator based nearly 500 miles away in South Florida.

Millions of taxpayer dollars flow through the charter-school network, Somerset Academy, Inc., to its for-profit contractor Academica. The Miami company provides administrative services like recruiting staff, developing curriculum and handling legal matters. It’s a growing business, as Somerset operates 62 charter schools in Florida and is rapidly expanding into other states and countries. Other prevalent charter school chains in South Florida are also under the “Academica umbrella,” as leaders have described it. Those include the Mater, Pinecrest and Doral academy networks.

Florida’s first all-charter school district in Jefferson County is a prime example of the fruits of the special relationship between Academica and the Legislature. Academica has close links to current and past state lawmakers who have written laws and budgets benefiting dozens of charter schools that the company helps run, mostly in Miami-Dade, Broward and Palm Beach counties.

In particular, Senate education committee chair Manny Diaz, Jr., a Hialeah Republican, helped secure legislation and funding in 2017 that aided Somerset’s efforts in Jefferson County. Then a committee chairman in the state House of Representatives, Diaz was instrumental in making the district’s transition to charter schools possible.

Diaz is a top administrator at a private college also affiliated with Academica. Doral College was created in 2010 to offer advanced courses at charter schools, including Somerset Academy schools. Somerset alone pays Doral College more than $100,000 a year in public money for delivering college-level courses at the network’s schools, including in Jefferson County. And Diaz’s boss — the president of Doral College — has led the transition to charter schools in Jefferson as a consultant for Somerset.

Diaz rejects the notion that his role in facilitating the charter school takeover constitutes a conflict of interest.

“I don't see what a conflict would be there,” Diaz said.

Opponents of charter schools don’t see it that way.

“Manny Diaz is receiving money from the charters. He’s getting a six-figure salary. And he's the current Senate Education Chair,” said Patricia Brigham, executive director of The League of Women Voters, a nonpartisan advocacy group that promotes government transparency and has often opposed the Legislature’s agenda to establish private alternatives to public education. “I don't understand how that is not a conflict of interest.

“The future of the public education system in Florida is in grave danger,” Brigham said. “And the fact that we have legislators who are essentially in bed with these charter companies is disgraceful.”

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A major priority for then-House speaker Richard Corcoran in 2017 was passing a package of financial and regulatory incentives for charter schools called "schools of hope." Somerset Academy Jefferson County was the first beneficiary of the program.
© AP

A plan to multiply charter schools, with industry leader as ‘shepherd’

Months before Jefferson County’s new charter schools opened their doors, legislators seized on the school district of fewer than 800 students as a poster child for public school failure ripe for private intervention.

During the 2017 legislative session, Republican lawmakers frequently referenced Jefferson in anecdotal arguments for then-House Speaker Richard Corcoran’s major priority: “schools of hope.”

A multi-million dollar package of financial and regulatory incentives, his bill was designed to attract charter schools into neighborhoods where traditional public schools had racked up Ds and Fs under Florida’s high-stakes school grading system.

Jefferson County was easy to make an example of. Located only 25 miles from the state capital but isolated from Florida’s power centers, the district had been among the worst in Florida for about a decade.

As the 2017 legislative session was ramping up, the state Board of Education had just forced Jefferson County school board members to accept a charter school takeover — the state’s answer to the district’s ongoing academic and financial crises. Academica-affiliated Somerset Academy, Inc., was the only applicant.

See the connections among the characters and institutions that made the Jefferson County charter district happen. »

Corcoran pointed to Jefferson County while pushing “schools of hope” during an interview with public television’s The Florida Channel in April 2017.

“Jefferson County: a failure factory,” he said. “Basically, the school board threw up their hands and said, ‘We give. We cannot turn around this school. We’re persistently, you know, a D or an F. It’s a disaster.’ They put out to bid and [said], ‘Hey, will one of these types of high performing charters, public charters, come in, take over the Jefferson County school system, and turn it around?’”

Corcoran said two Miami-Dade Republicans — then-Reps. Manny Diaz, Jr., and Michael Bileca — had been recruiting charter networks to open more schools in Florida and had assured them more money was on the way through the “schools of hope” program, although the legislation had not yet been approved.

Corcoran was clear some of the funding was intended for Somerset in Jefferson County: “One of the high-performing charters [Somerset] came in [to Jefferson County], made the bid, knowing that we’re working towards this ‘school of hope’ program, knowing that there’s going to be an opportunity to draw down additional funds so that they can succeed, they can bring in the best and brightest teachers. And those things cost more.

“So … [Somerset] came in, they took the bid. Jefferson County awarded it to them,” he said. “And I promise you, … Jefferson County will turn around with this program.”

Learn more about the extra state funding awarded to Somerset. »

Diaz, who chaired the House PreK-12 appropriations subcommittee at the time, played a leading role in enacting the “schools of hope” law, known as House Bill 7069. He sponsored the original draft of the bill, introduced the final version that included the “schools of hope” program, and then he answered questions about it and defended it during debate on the House floor. He also worked extensively behind the scenes to whip votes in the House, as shown in text messages he and his staff sent while it was under consideration.

Oddly, though, Diaz voted against the bill. He changed his vote only minutes later, but it was too late to affect the final tally. The Miami Herald reported it was an accident.

In addition to the “schools of hope” program, the nearly 300-page omnibus bill also included a little-noticed provision that applied only to Jefferson County. It allowed the school district, for just one year, to use money typically earmarked for construction projects to pay for personnel costs instead. The district needed the money — about $552,000 — to pay sick and vacation time it owed to teachers and staff who were being fired because Somerset, the charter school company, decided not to keep them. Without this funding, the charter school takeover could have bankrupted the district, which was already in a state of financial emergency.

Diaz acknowledged how crucial that money was for Jefferson County in text messages he exchanged with staff as then-Gov. Rick Scott was weighing whether to sign the bill.

“All the Jefferson county safeguards are in that [bill],” Joanna Hassell, a House education committee staff director, texted Diaz in May 2017. “The [Department of Education] will be hard-pressed to make Jefferson county work” if Scott vetoed the bill.

“Yes,” Diaz responded, “that’s a hard one for them to miss.”

Joanna Hassell and Manny Diaz Jr texting

At a June 2017 event when Scott signed the bill into law, Corcoran named Diaz as one of two lawmakers who "helped shepherd” it through the legislative process.

There was also extra help for Somerset in the 2017-18 state budget, which Diaz helped write as chair of the House PreK-12 appropriations subcommittee. He later supported the budget with his vote.

The spending plan passed by lawmakers included $2.2 million for a nonprofit that provides social services like mental health care in schools with needy students. A line in the budget specified at least $300,000 should fund the services at Jefferson County’s schools. Lawmakers approved the budget almost two months after the Jefferson County school board voted to let Somerset take over their schools the next academic year. Jefferson was the only district that got singled out.

That money never ended up getting to Jefferson County, though, because Scott vetoed the line item for that bill.

Somerset did receive the “schools of hope” funding, though, as Corcoran had predicted. Somerset Jefferson was the first “schools of hope” recipient, getting a $2.25 million award in the 2018-19 school year that accounted for almost 20 percent of the charter-district’s roughly $12 million overall budget.

Government watchdogs argue Diaz's help on House Bill 7069 and the budget item was a conflict of interest.

In addition to being an influential legislator, Diaz works as chief operating officer of Doral College, which is affiliated with the for-profit charter school service provider Academica. Diaz makes more than $122,000 from Doral College and another $30,000 from the Legislature, according to his most recent financial disclosure form.

Florida has a part-time Legislature where members have other jobs, and it’s not unusual for legislators to make policy that relates to their outside work. Still, throughout his time in the Legislature, Diaz has faced scrutiny for his ambitious leadership on behalf of charter schools.

State ethics laws say lawmakers can usually vote on legislation that affects their entire industry, as long as a bill doesn’t help only the company they work for. Lawmakers aren’t allowed to put state money in their own pockets or directly aid their employers.

Diaz, who is now a state senator and chair of the upper chamber’s education committee, argued there was nothing wrong with him sponsoring and voting for the provisions of law that helped Somerset.

During an interview in his office at the Capitol earlier this year, Diaz told WLRN he did not personally communicate with Somerset leaders about “schools of hope” — the program that entices charter schools to open in neighborhoods where traditional public schools have failed. And he said he was not aware while negotiating the bill that Somerset Jefferson would ultimately receive millions of dollars because of it.

As for the provision that allowed the Jefferson County district to use construction funding to pay the teachers who were being fired, Diaz stressed the money was provided directly to the school district, not to Somerset, the charter school network tied to his employer.

“The county [school district] received those monies, to be clear, in order to fulfill their obligations to those teachers,” Diaz said. “It went to the county. So there was no Somerset money there.”

Diaz’s interest in Somerset Academy Jefferson County didn’t end with legislation.

He also chaired and participated in several legislative committee meetings in 2017 examining the charter school takeover, during which he shielded Somerset leaders from tough questions.

One meeting in November 2017 took place just days after a major fight broke out on campus at Somerset Jefferson, leading to the arrests of 15 students. Committee members had heard about the fight and wanted to find out more.

”I don't like rumors, so I always like to go to the source. But I heard that there were 15 arrests. Can you elaborate on what happened?” begun Rep. Larry Lee, a Democrat from Port St. Lucie.

Diaz interrupted, stopping the Somerset leaders from answering Lee’s questions. “We would hold off on that,” he said, stressing that he asked the charter school administrators there to talk about financial issues.

“I would ask that we do that at another time,” Diaz said.

Another committee member, Rep. Wengay Newton, a Democrat from St. Petersburg, asked whether the demographics of the staff at Somerset Jefferson reflected the majority-black student population. He asked what percentage “are African American, look like me.”

Again, Diaz jumped in. “Members, I would ask that we — we’re trying to have a conversation here on the financials.”

Diaz said he invited the Somerset Jefferson administrators because committee members had indicated during previous meetings they had financial questions about the charter takeover.

Their appearance was not on the published agenda, though. So the Democrats argued they hadn’t been offered the opportunity to prepare the specific financial questions they had hoped to ask. Newton called it “unfair.”

Diaz responded, “It's my prerogative” to ask people to speak during the public-comment portion of the committee meeting, whether they’re listed on the agenda or not. He said the Somerset leaders could answer questions submitted in writing.

“It is your prerogative, but they’re standing right here, sir,” Newton replied, stressing the legislators should be allowed to ask anything they wanted.

“That’s correct. They are,” Diaz snapped back in the tense exchange.

Learn more about the fight in Nov. 2017 at Somerset Jefferson. »
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Doug Rodriguez is president of Doral College and a consultant for Somerset.
© Katie Lepri/WLRN

Lead ‘point person’ on charter school takeover is also top lawmaker’s boss

There’s another link between Manny Diaz, Jr., and Somerset Academy Jefferson County: Doral College President Doug Rodriguez. Rodriguez — who is Diaz’s boss at Doral College — was tapped to lead the transition to an all-charter school district in Jefferson.

"He has been the point person from day one,” Jefferson superintendent Marianne Arbulu said of Rodriguez. “He is the guy who solves the problems, pushes the agenda.”

Doral College — an unusual private college founded to partner with charter schools — gets about $112,000 a year for dual-enrollment courses offered at Somerset schools, including in Jefferson County, according to Rodriguez.

Rodriguez was a part of the state Department of Education’s “transition team” that planned the charter school takeover in Jefferson County. He appeared on behalf of Somerset at legislative, state Board of Education and Jefferson County school board meetings. Rodriguez acted as a liaison between Somerset and the school district, and he asked the state to intervene at times when he believed the district was treating the charter schools unfairly.

Details about Rodriguez’s role with Somerset Jefferson are revealed in more than 800 pages of emails WLRN obtained from Somerset and the state Department of Education through separate public records requests.

When WLRN first requested records from the state Department of Education, in June 2018, officials estimated it would cost tens of thousands of dollars to fulfill.

After months of negotiations scaling down the scope of the request, department officials quoted $541.40 to provide more than 2,100 emails they said were exchanged over a period of nearly three years by the state’s top education administrators and three people tied to Academica: the principal of Somerset Jefferson, a lobbyist and a spokeswoman. WLRN paid for the request and, two and a half months later, received the response: only 97 emails.

WLRN questioned whether more records were owed or if the estimate had been inflated. In response, the department refunded WLRN $406.05 — three-quarters of the cost estimate. The department explained, “The actual cost incurred was much lower than originally estimated,” hence the refund.

The emails showed that, in June 2017, Rodriguez alerted the department’s transition team that he and the president of Somerset Academy would be traveling to the Canary Islands, where they were opening a new Somerset school, but would be available by phone and email. The team included the Jefferson County superintendent, the Somerset Jefferson principal, charter school specialists at the Department of Education and others.

“I will return to Jefferson on Monday the 26th of June, and remain there the entire week,” Rodriguez wrote.

In an October 2017 email, Rodriguez told the Somerset Jefferson principal, Cory Oliver, to make additional hires: “Cory let's hire two people to deal with discipline. Your team is dealing with so much. And discipline is time-consuming.”

When Somerset Jefferson leaders were frustrated about their interactions with the county’s elected superintendent, Rodriguez volunteered to seek the Department of Education’s help. He wrote to the Somerset Jefferson administrators in November 2017 asking them to document their complaints about Marianne Arbulu, the superintendent.

“I have asked [state education commissioner Pam Stewart] to intervene and she wants everything. Please make this a priority,” Rodriguez wrote. “You name it and I want it.”

Rodriguez said all of his work for Somerset has been “pro bono” and he has received no compensation from the charter school network except for reimbursement for travel expenses. He said he was asked to get involved because of his experience leading a turnaround effort at Miami Central Senior High School, a traditional public school that was at risk of closure in 2009 after five years of Fs. It is now a C school.

Rodriguez was a celebrated principal in Miami-Dade County Public Schools before leaving to work in charter schools. Diaz also spent much of his career as a traditional public school teacher and administrator in Miami.

Doral College President Doug Rodriguez’s involvement with Somerset Jefferson wasn’t just behind the scenes. He represented the schools at legislative meetings — including one where he was questioned by then-Rep. Manny Diaz, Jr.

Diaz said he doesn’t believe interviewing his boss, Rodriguez, during a legislative meeting was improper.

“What President Rodriguez does on his separate time, not involving the college, is something that he does as a consultant,” Diaz said, arguing that Rodriguez’s position with Somerset was unrelated to their shared work at Doral College.

Rodriguez defended Diaz, arguing critics’ focus on the lawmaker’s advocacy for charter schools while working for a charter school college is misplaced.

“Manny's heart is in the right place. … The criticism that he is doing this for some reason other than the right reason, for children, is unfair to him,” Rodriguez said.

A legislator who 'makes it rain' for Academica schools

The law that helped bankroll the state’s first all-charter school district sailed through the conservative Florida House of Representatives. The Senate was different.

In the more moderate chamber, House Bill 7069 passed 20-to-18. If one more senator had voted no, it would have failed on a tie. One of the lawmakers who got the bill over the finish line: Miami Republican Sen. Anitere Flores.

Like Diaz, Flores has been criticized for her ties to the charter industry and her history of promoting the privately run schools while in the Legislature.

Flores was the founding president of the Academica-affiliated Doral College and presided over the school until 2015. During her tenure as president, the school was unaccredited. It has since earned accreditation from a national group that evaluates online schools.

In early 2015, Doral College was facing public scrutiny for using taxpayer funds to offer courses while being unaccredited, which meant any credits students earned would generally not transfer to other schools.

Flores left her position as the college’s president around that time to work instead for the ACE Foundation, which raises money for charter schools, mostly those run by Academica. Her salary of $150,000 remained the same. According to her financial disclosure forms, she earned $75,000 each from Doral College and the ACE Foundation in 2015.

Flores’ $150,000 salary makes her the ACE Foundation’s highest-paid employee, according to federal tax forms. Her title is director of development. She also earns $29,300 from the Legislature.

While it appeared as if the move to the ACE Foundation put distance between Flores and Academica, in fact, the two entities are inextricably linked, according to interviews and a WLRN review of tax, corporate and property records.

The ACE Foundation lists Academica’s phone number on its federal tax forms. The address listed for the foundation is not even 500 feet away from Academica’s headquarters. The two offices are owned by separate limited liability companies that are managed by the same person: Rosanne Wright, a former Academica officer and the current registered agent for more than a dozen LLCs established by Academica founding partner Ignacio Zulueta.

All five ACE Foundation board members hold leadership positions at Academica or its affiliated charter schools: One is the chief operating officer of Academica Nevada. Three are principals and another is the governing board chair of South Florida charter schools that contract with Academica.

The ACE Foundation’s executive director, Daniel Diaz, is a former governing board member for both Somerset and Pinecrest academies — charter school chains affiliated with Academica.

Daniel Diaz doesn’t take a salary for his work at the ACE Foundation. That’s because Academica pays him directly. His official title is Academica’s director of community relations, and he’s “on loan” from the charter-school company to lead the foundation, he said.

“I work for Academica as my day job, and this is my other day job, I guess,” Daniel Diaz explained. “I work for the ACE Foundation because I believe in its mission. And Academica allows me to allot time to the ACE Foundation.”

Daniel Diaz explains all of the connections between the ACE Foundation and Academica as simply a reflection of the fact that Academica is the charity’s main sponsor. The office space, for example, is an in-kind donation, he said.

The foundation was created because leaders of Academica-affiliated schools wanted to raise funds for monetary needs that were hard to predict, Diaz explained. For example, he said, the foundation helped some students visit New York City to attend an award ceremony where they were being honored. The foundation has also paid for summer camps, including in Jefferson County, so students can continue learning when school is not in session.

Daniel Diaz said he hired Flores because she has been passionate about children and committed to educational causes throughout her career. Her primary role with the ACE Foundation is fundraising.

“She's the person that makes it rain for us,” Daniel Diaz said.

He said the fact that she’s a state senator had nothing to do with why he hired her. “The ACE Foundation doesn’t benefit at all” from Flores’ position as a legislator, he said.

Some of the foundation’s sponsors, listed on its website, lobby the Legislature, including Uber, Lyft and the Florida Health Care Association. Southern Strategy Group, a lobbying firm that wields considerable power in Tallahassee, is another sponsor. Flores is the Senate’s deputy majority leader, and she sits on the appropriations subcommittees for education and health care.

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Miami Sen. Anitere Flores works for a foundation that supports Academica charter schools.
© AP

Flores sees herself as a representative of Academica, according to emails obtained by WLRN through a public records request. In early 2016, Flores got an invitation to attend a fundraiser for programs serving people with autism. She responded to a staff member that she already planned to go.

"I am participating as part of the ACE Foundation and Academica schools also :),” Flores wrote. Her legislative aide, Tiffany Lorente, then wrote to the foundation, sending along her boss’ message: “Senator Flores wanted me to let you know that she is also attending on behalf of Academica and the ACE Foundation."

After the Legislature passed House Bill 7069, administrators of Academica-affiliated charter schools were worried that then-Gov. Rick Scott might veto it. The bill was important not just for the Somerset schools in Jefferson County but for all charter schools in Florida, as the legislation allowed charters, for the first time, to share in billions of dollars of local property taxes used for building and maintaining school facilities.

Some Academica client schools sent electronic “alerts” to parents offering them volunteer hours if they wrote letters to Scott asking him to sign the bill, the Miami Herald reported at the time. The alerts included links to a petition posted by Flores’ ACE Foundation — although she told the newspaper she didn’t know about it.

Flores would not agree to an interview with WLRN, after multiple requests through her office and a spokeswoman. She did not reply to an emailed list of questions or a text message asking for a response.

A nonpartisan nonprofit government watchdog group called Integrity Florida named both Sens. Flores and Manny Diaz, Jr., in a 2018 report as examples of current and former lawmakers who have helped charter school companies profit off of taxpayers.

The group’s research associate, Ben Wilcox, said there’s a high bar for what constitutes a conflict of interest in Florida state government. It’s hard to prove that lawmakers or their outside employers profited as a direct result of legislative action. So, in Wilcox’s opinion, it’s “questionable” whether Diaz and Flores’ actions in the case of Jefferson County’s charter school takeover would get them in trouble under state laws or the Legislature’s rules.

Still, he said, “to the public, it does not look good,” he said. “To anybody looking at the situation, it's a conflict of interest.”