Trial of charter school founder costs taxpayers a bundle

As Dorothy June Brown undergoes a mental exam to determine whether she is competent for retrial on charges that she defrauded the schools she founded of $6.3 million, the charters' legal bills from the first trial have been tallied.

Records that The Inquirer obtained under the state Right-to-Know Law show Brown's three Philadelphia charters spent more than $925,000 in taxpayer money on the case.

Annual revenues for each of those schools range from $4 million to $4.5 million, according to the most recent published figures.

The payments for lawyers and expenses cover from July 2012, when a federal grand jury indicted Brown and four others, through June 30.

The money was used to represent the schools and defend two employees who were acquitted. The total also includes $170,000 in legal fees for an administrator who changed her plea to guilty before jury selection.

Several parents had criticized the charter boards' decisions to pay the indicted educators' legal expenses. The money came from school budgets and tapped funds available for books, supplies, and other educational needs.

For Laboratory Charter School, which has 450 K-8 students, the bills totaled $480,615.

"It staggers the mind what it could have been used for," said Richard Weiss, whose son graduated from the school's eighth grade in June. "Everything from physical plant repairs that were put off to new textbooks that teachers were told they couldn't afford."

Lawyers who represent the charters said the schools did not pay any of Brown's legal bills after she was indicted.

Brown's retrial was set after jurors acquitted her in January on six counts and deadlocked on dozens of others. The judge postponed her scheduled Sept. 8 retrial after Brown's attorneys requested a competency hearing for the 77-year-old educator.

In addition to Laboratory, which has campuses in Northern Liberties, Overbrook, and Wynnefield, Brown founded two other elementary charters - Ad Prima, with campuses in Overbrook and Frankford, and Planet Abacus, in Tacony.

She also established Agora Cyber Charter in 2005 but cut her ties to it in 2009 as part of a settlement of several civil suits. Brown retired as the chief executive of Laboratory and Ad Prima in 2008.

In a 67-count indictment, the grand jury charged that she had schemed with four charter administrators to defraud the schools and conspired to cover up the alleged crimes.

Charged with Brown were Michael A. Slade Jr., the CEO at Laboratory; Courteney L. Knight, a Laboratory teacher and former Ad Prima CEO; Joan Woods Chalker, the CEO of Planet Abacus; and Anthony Smoot, the former business manager of Brown's charter network.

Smoot, who pleaded guilty to obstructing justice and testified against Brown in the first trial, was represented by an assistant federal defender.

After the indictments were announced, the charter boards suspended Slade and Chalker with pay. Knight was permitted to continue working because he had no administrative duties.

Citing the state nonprofit law, the boards also voted to cover the defense costs of the three educators but capped the amounts.

Ad Prima and Laboratory each approved $125,000 for Knight. Laboratory set a limit of $250,000 for Slade; Abacus authorized $300,000 for Chalker.

Under the agreements the three signed, the educators could be required to repay the money if the boards determined they had not acted in the schools' best interests, attorneys said.

Checks obtained by The Inquirer show that Laboratory paid more than the maximum for Slade - $270,670.

But Scot Withers, a lawyer with Lamb McErlane, the firm that represented Brown's schools and negotiated the agreements for the boards, said Slade's total included bills from the federal investigation before he was indicted and agreed to the cap.

Withers said Laboratory had received invoices totaling $435,593 for Slade's defense after he was indicted but paid only the $250,000 in his agreement.

Both Slade and Knight were acquitted of all charges.

Abacus spent nearly $170,000 to represent Chalker before she pleaded guilty. The board stopped payments when she changed her plea.

As is required by nonprofit law, the Abacus board has to investigate whether Chalker was entitled to the funds before it can require her to repay them. Board minutes show an investigation has been launched.

In the trial's aftermath, the charters moved to distance themselves from Brown. As part of the charter-renewal process, the School Reform Commission required Laboratory and Abacus to cut ties with her and move their business operations from her headquarters in Bala Cynwyd to the schools.

The SRC will take up Ad Prima's renewal this year.

Abacus also changed its name to Keystone Academy and hired a new law firm.

"Our intention was to make sure we started anew, and that we stood independent, so we had to make some changes," said Claudia Lyles, Keystone's CEO.

Lyles said she did not want to dwell on the $237,663 her school spent on the trial costs. "I don't want to speculate about what could have been," she said.

"Historically, this has been a high-achieving school, and we are still a very high-achieving school," Lyles said. "We have 595 children and a long waiting list. We have many families seeking to have their children come here."

At Laboratory, Slade, who is Brown's grandnephew, never returned as CEO. An investigator from the school district's Inspector General's Office testified at the trial that Slade had falsified his criminal background check to conceal a prior conviction. The board terminated Slade in May.

Last month, Laboratory's board appointed Knight as CEO.

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