Universal Companies, a nonprofit that for decades has reshaped Philadelphia schools and neighborhoods, suspended its president and CEO after federal agents raided his home and office and notified him he’s the target of an investigation.
In a statement late Monday, Universal officials said it had placed CEO Rahim Islam on leave after the search warrants were executed late last week. The statement did not specify the nature of the investigation, or which agency was running it, but said the probe’s target was Islam, not the nonprofit launched a quarter-century ago by famed music producer Kenny Gamble.
“It definitely has nothing to do with Universal,” said Devon Allen, a spokesman for Universal. “It’s a personal legal matter.”
Islam and an attorney said to be representing him did not respond to requests for comment Tuesday.
The nonprofit made news in April after it laid off school staff and office workers before the end of the school year to “ensure the stability of company operations.” And last year, City Controller Alan Butkovitz raised concerns about its financial management and charter-school payments to related companies.
Islam was one of the founding members of the nonprofit, along with Gamble, back in 1993. Gamble, with partner Leon Huff, gained fame in writing and producing music said to capture the “Sound of Philadelphia.”
Islam’s profile page on the nonprofit’s website says: “Under his direct leadership, Universal has been the conduit for over $1.5 billion of real estate development and investment and currently educated over 5,000 students in 12 schools (K-12.) The company is also one of the largest African American led businesses in Philadelphia, employing nearly 650 professionals across disciplines such as education, real estate, community development, social work, technology, finance, and preventative health.”
In 2013, he also helped found the Philadelphia Community of Leaders, a group of African Americans seeking to influence the political agenda in the city.
Universal, in its statement, said it called an emergency meeting of the board of directors Friday evening, after the search warrants had been executed, and that Islam agreed to take an administrative leave.
“The purpose of the board’s decision was to allow Mr. Islam time to focus on his legal affairs,” the statement said.
Universal Companies now operates seven charter schools in Philadelphia: Universal Institute, a traditional charter school in Southwest Center City, and six former low-performing district schools that the School Reform Commission contracted with Universal to convert to charters as part of their academic turnarounds.
Two of those “Renaissance charters,” Vare Promise Neighborhood Partnership School in South Philadelphia and Audenried Promise Neighborhood Partnership Charter, a high school in Grays Ferry, have been in legal limbo for several years.
The district’s charter school office recommended that the SRC not renew the operating agreements for the schools for academic shortcomings and shaky finances. The SRC has postponed taking action several times and has not voted on the status of the two school’s charters.
Two more Universal charters are up for renewal this academic year.
One of the attorneys representing Universal is Robert L. Archie Jr., a former School Reform Commission chair. Under Archie’s leadership, the SRC in 2011-12 allowed Universal to use Audenried High School, at the time a three-year-old building, for free. It also paid for the building’s custodial staff and upkeep, a deal worth $1.8 million in total.
Archie did not respond to requests for comment Monday and Tuesday.
Staff writers Kristen A. Graham and Martha Woodall contributed to this article.