RACHEL MARTIN, HOST:
When California started authorizing charter schools in the 1990s, it created some rules around the system. But they were purposely limited.
ANNA PHILLIPS: The regulations and the oversight that was put in place was relatively minimal because this was going to be such a small endeavor. It was going to be a small-scale experiment for 100 schools. Well, guess what? We have 1,300 charter schools today. And we have a law that doesn't actually account for the scale of that.
MARTIN: That's LA Times reporter Anna Phillips. She's been investigating loopholes in California's charter school system. What she discovered is a fragmented and decentralized regulating system. In Los Angeles, Phillips encountered a case in which a wealthy Beverly Hills couple made millions of dollars by simply turning to a different school district whenever their charter schools came under scrutiny.
PHILLIPS: These charter schools had been set up as nonprofits that were publicly funded. But if you looked right kind of on the outskirts of them, the couple that had started them had essentially created a series of businesses or nonprofits that were doing business with their own schools. So for instance, this couple rented a lot of their own properties they owned. They were their own landlords.
MARTIN: They owned buildings that then they rented to the schools, so they were getting that income.
PHILLIPS: Exactly. And there were other ways they were getting income. The woman who ran these schools, her husband was hired on as a project manager for about $500,000 to oversee the construction of a new campus. When they wanted to bring in cafeteria meals for their students, they hired one of their own organizations. So this was public money that was coming into these schools, but the couple that ran them was financially benefiting from it.
MARTIN: Their names?
PHILLIPS: They are Clark and Jeanette Parker.
MARTIN: I mean, if this is true, there were clearly ethical violations. But is any of this illegal?
PHILLIPS: When the Los Angeles Unified School District looked at this back in 2015, they found that the Parkers had likely violated California's conflicts-of-interest law. Since then, their operations are a little bit more difficult to understand because they're being overseen by school districts that are not really digging into what they're doing. Are they breaking a law today? It's hard to say.
MARTIN: And that's part of the problem, is that to evade accountability, according to your reporting, they sort of shopped around. If they got in trouble in one place, then they just bailed and looked for another district to set up shop.
PHILLIPS: Which you can do very easily in California. We have more than 300 different entities that authorize charter schools. They're empowered to approve or deny these schools all over the state. So if you don't like what you're hearing from one school district, you can go to the county. You can go to the State Board of Education, or you can go to any one of hundreds of school districts and see if they'll approve your application.
MARTIN: But your reporting shows that just because California has so many doesn't mean they're effective.
PHILLIPS: I'd say it's exactly the opposite. Because we have so many, there is this massive marketplace. And so if you're a charter school, or you're seeking to open a charter school, you have a lot of options.
MARTIN: The governor of California, Gavin Newsom, has recently passed measures to improve transparency in holding charter schools accountable. Is that right?
PHILLIPS: That's correct. This is a new law. It takes effect next year. What it's going to do is require charter schools to comply with the same public records, open meetings, different transparency measures that district schools have to follow.
MARTIN: And why were charter schools exempted from those stipulations in the first place?
PHILLIPS: It was never in the original law. You got to remember, this law was written in 1992. We were only the second in the country to have one. And there was a lot that was not anticipated. This is before online schools, virtual schools...
PHILLIPS: ...Existed. It's before remote schools existed. There's just a lot it didn't consider.
MARTIN: Anna Phillips with the Los Angeles Times, thank you so much for talking with us.
PHILLIPS: Thanks for having me. Transcript provided by NPR, Copyright NPR.