Are charter schools subject to state laws designed to prevent public officials from personally benefiting from taxpayer dollars they spend?
That question has divided California lawmakers for years, and it’s taken new salience following the latest twist in the saga of Los Angeles Unified school board member Ref Rodriguez.
First, quick reminder of the twist: news broke this week that Rodriguez, while still a top employee in the charter school network known as Partnerships to Uplift Communities, or “PUC,” signed $285,000-worth of checks to two outside firms to which he also had personal ties.
The charter network documented these transactions in a conflict-of-interest complaint against Rodriguez filed recently with the California Fair Political Practices Commission.
So do the state’s conflict-of-interest laws govern such a transaction with a charter school? After all, charters are government-funded schools. But most charter schools are also run by non-profit organizations, not school districts.
In L.A. Unified, there's no ambiguity. For years, district officials have required the charter schools they oversee to promise to follow both the California Political Reform Act and Government Code 1090, a law prohibiting public officials from having a "financial interest" in contracts they make in an official capacity. Schools in L.A. Unified must write these promises into their charters.
But outside of L.A. Unified, the legal picture is far more ambiguous.
Leaders of the California Charter Schools Association don't believe Government Code 1090 applies to charter schools; the statute doesn't mention "charter schools" after all.
The state's Office of the Legislative Counsel disagrees, advising in 2015 that the law does apply to charter schools.
"I’m stunned that a state like ours would allow such a loophole," said Frank Zerunyan, a professor of practice at the USC Price School of Public Policy. "You should not, in public office, spend public money to directly benefit you or your organization," he added later.
But the charter association has resisted attempts to clarify that Government Code 1090 does apply to charter schools, for fear the statute's broad "self-dealing" provisions would prevent transactions they say can be harmless — like a donation of land by a charter school board member. The organization instead favors applying different conflict-of-interest laws to charter schools.
In 2010, state lawmakers passed a bill aimed at clarifying that charter schools should be subject to these and other open government laws. But then-Gov. Arnold Schwarzenegger vetoed the bill, writing in his veto message that the measure would "stifle efforts to aid the expansion of charter schools."
The nature of charter schools' legal relationship to the Political Reform Act is similarly murky.
California Charter Schools Association officials have urged schools to file the conflict-of-interest policies required under this Watergate-era law, even though they argue there is "no statute or case law definitively holding that charter schools must" do so.
Here's how one training from the charter association answers the question of whether the Political Reform Act applies to charter schools: "Maybe? Probably? For now, yes."
The question of whether these laws apply to charter schools is not merely academic — it has been an active issue in Sacramento.
Earlier this year, the Assembly Education Committee passed AB 1478, a measure similar to the failed 2010 legislation. The bill would definitively bind charter schools to Government Code 1090.
But like many education issues in Sacramento, this one has gotten tied up in the political clash between pro-charter school groups and teachers unions; both sides would prefer to resolve the ambiguity in different ways.
The California Charter Schools Association's preferred solution is SB 806. That bill, introduced earlier this year, is similar to its Assembly counterpart in a number of ways. But instead of Government Code 1090, SB 806 would impose the conflict-of-interest provisions of the state's Non-Profit Corporations Code on charter schools.
While most charter schools in California are, in fact, run by non-profit organizations, SB 806 would also ban the relatively small number of charter schools that are run as for-profit operations.
For all their differences, both AB 1478 and SB 806 essentially clarify that charter schools are subject to the Political Reform Act as well as to laws requiring open public records and open government meetings.
AB 1478 has yet to come up for a vote on the Assembly floor. SB 806 is still in the committee process.
This post was updated at 12:30 p.m. Pacific to include more information on AB 1478 and SB 806.