Reply to Kent Amos Paid Himself over $1 Million a Year

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Reply to "Kent Amos Paid Himself over $1 Million a Year"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Why should he go to jail...?  He did not steal the funds, he is not embezzling the funds, he sort a salary and it was approved.  Get a life.  The public education is free not the work.[/quote]

The fact that Amos has hired Frederick Cooke, longtime consigliere to Marion Barry says volumes about the corrupt DC crowd he runs with and the seriousness of the trouble he is on.  It's pretty likely that the Feds will be all over his tax filings as well. [b] Yes, this crony bro is likely to do time.[/quote][/b]

I doubt it.  Unfortunately, what he has done is not illegal.  It may be unethical, but not illegal.  They need to change the law and have restrictions.  I would be happy for them to fix this loophole and make it difficult for the for-profit charters to do abuse the system they way they have been doing it for years.  [/quote]

However, every charter school in DC is required to be organized as a non-profit corporation.  That's a requirement of the school reform act.  Non-profit corporations are required to retain their profits, rather than distribute them to their owners.

So, the more subtle question is whether it is legal for the owner of a non-profit corporation in DC to subvert this provision of the law by paying out the profits to himself in the form of salary, rather than distributing the profits to himself in the form of dividends.

I suspect that subverting this provision of the law is not so easy.  This is probably a civil violation, and the DC attorney general undoubtedly has the power to force Amos to pay back that portion of his salary that was in excess of a "reasonable" amount -- however that would be calculated. It might also be a criminal violation.

Any lawyers care to chime in?[/quote]

The payments were made under a contract to a for-profit corporation that contracted with the school to provide services.  This is a provision in the law that was set up for a good reason- to allow schools which needed back-office and operational support to contract with experienced "CMOs"- charter management organizations.  But some people realized that they could contract out EVERYTHING and just siphon off the excess profits through the contract.  It's the same thing the Options folks did.  The PCSB is trying to combat this by requiring disclosure of the salaries of the CMOs, but are having a tougher time because they are private companies.  This all works generally well if there is no connection between the school and CMO, so the school is able to perform proper due diligence and control over the CMO.  But in both the CAPCS and Options cases, the CMOs were owned by the same people who were running the school, and that lack of control over conflicts of interest and dealing on both sides is very much in violation of DC's non-profit laws.

This is a pretty good summary of the alleged violations- http://www.washingtonpost.com/local/education/dc-officials-allege-improper-diversion-of-charter-funds/2014/06/02/a22ffcc2-ea94-11e3-b98c-72cef4a00499_story.html[/quote]

Well the PCSB didn't do a good job of that initially as the financial officer Jeremy L. Williams as the one getting the kick-back.

http://www.washingtonpost.com/local/education/former-dc-charter-board-cfo-promoted-private-companies-that-allegedly-paid-him/2014/08/16/54469012-1e6e-11e4-ab7b-696c295ddfd1_story.html

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