UPDATE at the end
A top financial backer of Jeb Bush’s Foundation for Excellence in Education, K12 Inc got into hot water with investors for inflating their claims about student success. Earlier this month, the corporation settled with share-holders. From Sean Cavanagh in Education Week:
The for-profit education provider K12 Inc. has reached a tentative settlement in a class-action securities lawsuit brought by investors who said they were misled by the company’s business practices and academic performance.
The online schools provider has agreed to pay $6.75 million to plaintiffs who have brought the suit, while company officials said they also continue to deny any claims of wrongdoing.
The agreement will settle allegations related to K12’s disclosure of student retention and enrollment information, while other claims, focused on academic performance and school quality, will be voluntarily dismissed, according to a statement by the company. The agreement between the two sides still must be approved by a judge overseeing the case, which is being heard in a federal court in Alexandria, Va.
Nate Davis, the executive chairman of the Herndon, Va.-based company, said K12 was pleased with the outcome, calling it a “pragmatic resolution” for the organization.
“The plaintiff is representing before a court of law what K12 has always maintained,” Davis said in a statement, “that the claims in this lawsuit regarding our academic standards, student-teacher ratios, grading and attendance policies—allegations unfairly echoed in the media and other forums—could not be supported on the merits.”
While being investigated for securities fraud, K12 Inc was hit with the class-action suit early in 2012. A study released in July last summer called into question K12 Inc’s effectiveness – just two months before it was revealed that K12 Inc was under investigation by the Florida Department of Education “over allegations the company uses uncertified teachers and has asked employees to help cover up the practice.” This was almost seven months ago in September 2012.
As commissioner of education for Indiana, Tony Bennett received campaign contributions from K12 Inc. Scathing Purple Musings wondered what would happen to the FLDOE investigation of K12 Inc after Bennett became Florida’s commissioner. That was almost four months ago, three months after the FLDOE investigation became public.
With the Bush foundation and Bennett so close to K12 Inc’s money, Floridians have a right to question the delay. As of last summer, K12 Inc had contracts with 39 Florida districts with them looking to expand Virtual Charter Academies throughout the state. As local school boards no longer have final say in denial of their applications – it’s in the hands of Bennett and state board members loyal to Bush – a quick, transparent resolution to the investigation is in order. Otherwise, justifiably skeptical voters can conclude some sort of cover-up is underway.
UPDATE: Chris Guerrieri writes about K12 Inc’s contributions to republican legislators