Business

For-Profit Charter Operator In Jeb Bush Video Has A Checkered Past

Academica’s classrooms star in a new Bush campaign video. The Miami Herald called the company “Florida’s Richest Charter School Management Firm.”

In Jeb Bush’s first set of campaign videos, including one released yesterday, there is no place more prominently featured than the classroom. Oft-repeated reels of footage show Bush, known as Florida’s “education governor,” speaking to rooms full of hand-waving elementary students, leaning over a girl’s shoulder as she works on the computer, and sitting down for a discussion with smiling boys in ties.

Many of those students wear the uniforms of Mater Academy of International Studies; others are students at Somerset Academy South Miami, where Jeb Bush’s campaign was seen filming earlier this month, according to Politico. Almost all of the classrooms have something in common: they are at schools operated by Academica, the state’s largest for-profit charter school management company.

Academica, which has almost 100 schools in Florida and well over $150 million in annual revenue, has a checkered past. Along with an ongoing federal probe into its real estate dealings, past investigations have looked at allegedly corrupt connections with lawmakers. Last year, controversy erupted over its opening of an unaccredited college funded by one of its charter schools.

Of his time as governor of Florida, Bush told Fox News in the wake of his presidential campaign announcement that “what I’m most proud of is reforming our education system.”

As suggested by Bush’s latest ads, Academica and its high-performing charter schools, which consistently receive high grades from the state, are perhaps the best examples of that legacy at work. The company owes much of its growth in Florida to Bush’s policies during his governorship. Bush spurred charter schools to flourish in the state, including those operated by for-profit companies, which found a way to circumvent a 1996 law that forbids the practice. To get around the law, companies set up nonprofit boards to run the schools, which then contract out virtually all of the work to for-profit operators. Bush has been a supporter of for-profit operators. In emails, he suggested that his successor, Rick Scott, sell the massive state-run Florida Virtual School to a for-profit operator, where it could make “more [money]in the private sector.”

As governor, Bush visited Academica schools several times, his emails show, including a trip to a campus of a Mater Academy school in 2006. His son, Jeb Bush Jr., was elected to serve as the chair of the nonprofit board another Academica school group, Somerset Academy, though he later withdrew his name.

A spokeswoman for Bush said the former governor “is a longtime advocate for providing more choices for parents and students … Thanks in part to the strongest choice programs in the nation, Florida is one of the only states closing the achievement gap in America today.”

A Miami Herald investigation in 2011 found Academica was embroiled in a complex and controversial real estate scheme. Its founder and president, Fernando Zulueta, owns a wide swath of real estate companies — firms that also lease tax-exempt space to many of Academica’s schools, acting as their landlords. Academica schools pay tens of thousands of dollars in rent, sometimes over 20% of their revenue, well above the area average, to Zulueta-connected real estate holdings, the Herald found, deals that are meted out by nonprofit governing boards with close ties to Academica.

In 2003, for example, Mater Academy, whose logos dot the polo shirts of students in Bush’s campaign ad, signed a $5.8 million construction contract to a company whose contractor also served on the school’s board. And Mater Academy High leased its land from a company owned in part by Zulueta’s brother, the Herald reported.

Similar real estate setups have landed other charter companies in serious federal trouble. One other major operator, Imagine Schools, was ordered to pay $1 million in January for a “self-dealing” real estate scheme.

Mater Academy was the focus of a federal investigation last year, the Herald reported. Academica’s founder and his family, a preliminary report found, had ties that constituted “a potential conflict of interest” to the companies that Mater Academy leased its space from, and to an architect that designed their buildings.

A new controversy arose last year, when the company opened Doral Academy, a junior college within one of its schools in suburban Miami. The school is funded with taxpayer dollars intended for the state’s K-12 system. The school is entirely unaccredited, meaning its credits do not transfer to any other schools, which prompted skepticism from officials and outside observers. The college is helmed by Anitere Flores, a state senator and former education adviser to Bush.

Flores has also been involved in education-related legislative efforts in Florida — and was the sponsor of a bill to create virtual charter schools in the state, The Herald reported; when it passed, Academica applied to open 19 such schools.

Other Florida legislators with close ties to Academica, and to Bush, have also been behind legislation that works in favor of the company. State representative Erik Fresen, who is married to an Academica executive who also happens to be the CEO’s sister, relaxed zoning restrictions that stood in the way of Academica’s expansion.

Working with the company can be lucrative. Miami-Dade prosecutors investigated another former representative, Ralph Arza, after he backed a slew of pro-charter bills while serving as a consultant on the payroll of Academica. He was paid $230,000 for his services, via a company set up in his wife’s name. He was later cleared. The Tampa Bay Times said Arza, a Republican, “worked with Bush on many of his education initiatives.”

The Jeb Bush campaign and Academica did not immediately respond to requests for comment.




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Molly Hensley-Clancy is a business reporter for BuzzFeed News and is based in New York. She covers the intersection of business and education.
Contact Molly Hensley-Clancy at molly.hensley-clancy@buzzfeed.com.
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