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LESSONS FROM UNO SCHOOLS SCANDAL

UNO CEO Juan Rangel

UNO CEO Juan Rangel

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Updated: November 21, 2013 6:40AM



The latest chapter in the unfolding scandal surrounding the United Neighborhood Organization’s network of charter schools in Chicago has only just begun.

But long before it ends, two take-home lessons already are abundantly clear.

◆ The lack of transparency at UNO — a screen that allowed it to make hiring and contracting decisions rife with conflicts of interest — needs to be lifted for that organization and all charter operators. UNO’s alleged misdeeds came to light only because of dogged reporting by the Sun-Times’ Dan Mihalopoulos. The finances of public charter schools aren’t subjected to the same level of public scrutiny as other public entities, such as traditional public schools. They should be.

◆ UNO’s sins, so far as we know, are UNO’s alone. Its actions shouldn’t cast an unfair shadow over an already beleaguered charter school landscape in Chicago, particularly charter efforts to find or build affordable facilities.

More on those two points to come, but first the background:

Last week, the state of Illinois disclosed that it had frozen the final $15 million of a $98 million state school-construction grant that the Illinois Legislature promised UNO in 2009 to help build more charter campuses and Gov. Pat Quinn vowed not to give any more construction dollars to UNO, decisions we strongly support. Quinn made those calls after the Sun-Times reported that the federal Securities and Exchange Commission is investigating UNO for possible securities fraud related to state-backed bonds used to finance school construction projects. This is the second time this year that Quinn has suspended UNO’s funding.

The disclosure comes after a series of Sun-Times stories that detailed how $8.5 million of the state funding went to companies owned by two brothers of a top UNO executive. Mihalopoulos also reported that UNO failed to notify the state of any conflict of interest or the appearance of one, despite a requirement to do so, and how UNO opted against sealed bids when choosing contractors, a practice that makes it harder to steer contracts.

Quinn initially restored UNO’s funding after UNO promised reforms, but since then the newly appointed chairman has resigned and, now, the SEC investigation.

We see the damage this story has done to all charters — and what charters must do to fix it.

◆ Chicago charter schools get only modest help from the Chicago Public Schools to lease or build facilities, forcing them to spend instructional dollars or turn to private donations. This is why UNO in 2009 asked the state for the $98 million construction grant. UNO abused its privilege, no doubt, but that shouldn’t impugn other charters, which is what anti-charter opponents would like to do, nor do UNO’s mistakes erase the very real problem charters face in finding suitable facilities. Love them or hate them, charters are public schools and they shouldn’t be left to fend for themselves to find facilities. Choosing where to locate them so they don’t undermine neighborhood schools is essential, but charters have a role to play in Chicago.

◆ Mihalopoulos’ experience trying to unwind UNO’s finances makes clear that charters are not held to the same standards of public accountability and transparency as other public bodies. Though some public reporting of charter financial information is required, much of it is vague and hard to decipher. Significantly more could be required — and it doesn’t have to overburden charter organizations. For example, charters do not routinely post all their contracts, as most agencies do, turning what should be a quick check of a website into a weeks- or months-long investigative journey.



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