Pastors, Savvy Connections and Chicago Schools: How One Private Company Raked In $50 Million
This is a story about how a savvy company came to Chicago and raked in more than $50 million in contracts from the school system in just four years, becoming one of the district’s biggest vendors.
Camelot Education runs six small schools that re-enroll high school dropouts or students who have been expelled. It’s a service the city needs, the school district insists, and by most accounts Camelot runs solid programs that are making a difference for some troubled teens.
But Camelot is also a for-profit company willing to play ball to get contracts, school buildings and students. The Austin, Texas-based company’s growth in Chicago is a textbook example of how private companies are working the system in Chicago — using and being used by city and community leaders for political and financial gain. Call it the new Chicago Way.
Chicago Public Schools is increasingly privatizing services, hiring companies and organizations who often promise cheaper and better services. But it can have troubling consequences. Private companies like Camelot are not subject to stringent reporting requirements, and most of the work is done outside public view. This makes it harder for the public to see how its schools are run and to ferret out conflicts of interest and shady deals.
A WBEZ investigation into Camelot’s rise in Chicago reveals the depths of those potential conflicts.
This story is the second in a WBEZ Education series looking at the costs of Chicago’s newest alternative schools. Read the first story in the series: “CPS Paying for Re-Enrolled Dropouts, Even If They Cut Class”
Camelot was connected to former CPS contractor Gary Solomon, who was later convicted of bribing CPS CEO Barbara Byrd-Bennett. She and Solomon pled guilty to a kickback scheme in which Solomon promised Byrd-Bennett a cut of CPS contracts worth more than $20 million.
Among other things, Camelot agreed to host a Solomon-run principal training program called Supes Academy -- the very program at the heart of the bribery scheme. This agreement is cited in Bryd-Bennett’s federal indictment, with sources confirming that Camelot is “Vendor A.” Camelot is not accused of any wrongdoing.
Camelot was a favorite of Byrd-Bennett, who pushed hard for its expansion in Chicago, internal emails obtained by WBEZ through an Freedom of Information Act request show.
Camelot CEO and President Todd Bock told WBEZ that the company’s relationship with Solomon and Byrd-Bennett wasn’t special, nor was it unusual. To drum up business, Camelot forges relationships and financial partnerships with organizations and education leaders across the country, Bock said. It’s how they get their brand known in the market place.
But these situations can blur ethical lines, according to Paul Vallas, who served as CEO of Chicago Public Schools from 1995 to 2001 and went on to lead several school districts, including in Philadelphia and New Orleans.
“There’s a lot of … let’s call it inbreeding” Vallas said. “You have vendors working for other vendors … or you have vendors with multiple contracts with other vendors. And they become sort of mutually supportive and I think that does raise questions.”
Vallas said it’s essential that companies and school districts are open about the nature of these arrangements.
Solomon was just one of many, mutually beneficial relationships Camelot developed as it launched in Chicago. The company also allied itself tightly with politically-connected black pastors — clergy who Mayor Rahm Emanuel relied on for his re-election, who helped sell some of his most controversial policies, such as the longer school day, and who are now benefiting financially from Camelot’s presence in Chicago.
The pastors helped Camelot make inroads into several communities on the South and West sides where Camelot wanted to open schools. Camelot, using taxpayer money, now pays more than $600,000 a year to four of their churches or church-related organizations for classroom space each year. The company also paid two pastors outright to help with community outreach and to recruit students.
No one from the school district or the mayor’s office responded to questions from WBEZ about these relationships. The mayor’s office said it does not get involved with school district contracts.
Bock said the pastors were key to Camelot getting traction in communities with the greatest needs.
But to long-time observers, the way Camelot rose in Chicago seems like an old story.
“It just stinks of fishiness; it is so vintage Chicago,” said Prexy Nesbitt, an activist who has worked in Chicago for decades and served in Mayor Harold Washington’s administration. “It is the way in which democracy articulated itself, with these little favors and relationships. At its most corrupt form, it would be the political machine.”
A good model
Longtime youth advocate Jack Wuest was excited in 2009 after winning a provision in a new state law that allowed for five new multi-site alternative schools. At the time, officials estimated there were more than 50,000 dropouts on the streets of Chicago and only 5,000 available seats in existing “second chance” high schools.
In Chicago, alternative schools had been run almost exclusively by community organizations with deep roots in the city. Wuest, a force in that field for decades, hoped these type of groups would open the new schools.
But at just about this time, the school district was undergoing a major change in leadership as Emanuel replaced long-time Mayor Richard M. Daley. Emanuel’s first two picks to lead the Chicago Public Schools were out-of-towners who believed in school choice and privatization.
“I didn’t care who the operator was as long as they could get the job done,” said Jean-Claude Brizard, who served as CPS CEO from 2011 to 2012.
He oversaw the opening of the first Camelot school in September of 2012, shortly before he was pushed out. The next CEO, Byrd-Bennett, would go on to open 15 more alternative schools, all of them run by four out-of-state companies, three of which were for-profit firms.
District leaders said they turned to these companies because they had the capacity to open schools quickly, filling an urgent need for seats.
School officials said Camelot won contracts by convincing the district it had a strong model -- one that is intensely strict and emphasizes structure.
They said at the time say they were impressed with Camelot because it partnered with Jobs For the Future, a 36-year-old, Boston-based organization. The group helped Camelot train teachers how best to engage teens and young adults who have struggled in school.
“(Chicago) has not done a good job with these kids,” said Lavonne M. Sheffield, superintendent-in-residence for Jobs for the Future. “The value of Camelot is that it is a tested model and they know what works and what doesn’t work.”
Prior to coming to Chicago, Camelot had opened about two dozen schools across the country, though, some had already been closed for a variety of reasons.
Camelot now runs 43 schools around the country, including the six in Chicago. In a statement, a CPS spokesman offered support for Camelot, saying “Alternative programs like Camelot work to accomplish a crucial mission for our city.”
Tierra Hill, an 18-year-old student at Camelot’s South Shore campus, said the school’s small size works for her and she has connected with caring adults there. Unlike other new alternative schools that are mostly online, almost all of Camelot classes are teacher-led. Hill describes her history teacher as her “best friend.”
Camelot’s schools so far are performing better than those run by the other new operators when it comes to attendance and graduation rates and the rate at which students are earning credits, district data shows. However, Camelot fares slightly worse than those long-time alternative schools run by community organizations.
Camelot certainly wasn’t the only new alternative school firm trying to make connections in Chicago. Internal CPS emails obtained by WBEZ show that leaders at two other companies knew Byrd-Bennett and took their concerns directly to her, bypassing Jennifer Vidis, the woman who ran the program for CPS.
“Part of the challenge for me is that both of the providers have a relationship with her and went directly to (Byrd-Bennett) and not to me or my team when issues surfaced,” Vidis wrote in the summer of 2013. “This is frustrating…”
But Camelot still managed to grow faster than the other firms, ultimately earning contracts to run four alternative schools for dropouts and two SAFE Schools for expelled students. And, Camelot secured a plumb none of the others had: Access to district-owned buildings.
Camelot has secured about $50 million in contracts with CPS overall and this year will take in about $15 million. Budget documents show that the company expects about $410,000 in profit this year and pays itself about $1.1 million off the top in management fees.
Bock notes that Camelot gets less than it expects each time CPS cuts school budgets, which the district did just recently.
CPS emails also show Byrd-Bennett pushed for Camelot’s expansion. Shortly after being promoted to the CEO position, her chief of staff told Vidis in an email that Byrd-Bennett wanted to give Camelot a contract to open another school, with the option for another four.
Later that same day, the chief of staff repeated her demand: “Let me reiterate. The CEO wants the contract signed by the end of this week.”
Camelot made a strategic hire early on to help secure its footing in Chicago. Sean Stalling, a former CPS principal and network chief, said he knew the organization was hiring him not only because of his expertise in education. Bock said Stalling was introduced to Camelot by Solomon.
“I had established relationships, not just in the district, but in the community,” Stalling said. “It is smart to get someone who sort of knows the landscape and is able to advise.”
Bock also said Camelot knew Stalling had a good relationship with Byrd-Bennett: “That didn't do anything for us,” Bock said “We hired Sean because we liked him.”
Camelot used a similar strategy in Philadelphia. In 2008, Camelot officials paid a charter school consultant more than $100,000 a year to help them navigate and expand in the Philadelphia School District, according to a story in the Philadelphia Inquirer.
That consultant later was investigated by the schools inspector general for conflicts of interest, mismanagement and nepotism associated with two charter schools he founded. The consultant killed himself before the investigation concluded.
Stalling said he left Camelot on good terms after Byrd-Bennett’s indictment. By then, Camelot already had hired another staffer with deep ties to CPS -- Quentin Mumphery, a black pastor who worked for CPS for five years facilitating community input.
Black pastors and Camelot
Somewhere along the way, Camelot officials realized that forging relationships with black pastors was key to gaining a foothold on Chicago's South and West sides. That was taken a step further as the black pastors became tied financially to Camelot.
“First thing is, you can't get a meeting ... you can't walk into some of these neighborhoods on the South Side of Chicago without, as I said, doing the grassroots work,” said Bock.
Bock said he learned this by happenstance while driving around Chicago. When Camelot got its first CPS contract April 2012, Camelot had to find a building to house the school. Bock and his colleagues were driving around the Far South Side when they saw Mount Calvary Baptist Church on 111th Street. They noticed a school attached to the church.
“That is literally how we found it,” Bock said. “So we knocked on the door and got Pastor (Tyrone) Crider's name and went to meet him and had a conversation.”
Camelot wound up renting its first building from Crider, who became a paid consultant to Camelot. WBEZ reached out to Crider but he said he is ill and unavailable for comment.
Crider introduced Camelot’s leaders to other influential pastors who could help them put down roots in different communities, according to Bock.
It worked. At four of Camelot’s six schools the company is now paying rent -- with money from Chicago Public Schools -- to black churches or non-profit organizations led by a pastor.
The EXCEL Academy of Roseland, located in Morgan Park, sits next door to Mt. Calvary Baptist Church. Camelot pays the church $254,000 in rent annually to house the school.
Bock said Camelot gravitated to the churches because many had old schools that weren’t in use during the week. Camelot runs full-day programs with as many as 375 students at each school and needs significant space with classrooms, he noted.
And there were few other options. Using shuttered CPS-owned schools was tough because Byrd-Bennett had promised the 50 schools closed in 2013 would not be used by charter schools. Camelot is not a charter but that rule made it hard to access closed CPS buildings.
Despite that, Camelot ultimately found a way into two former school buildings -- and church-run organizations benefited from the transaction. One is already owned by a church-run group and the other is in the process of being sold. After a sale, the school district gives Camelot extra money to pay rent to the church group.
Camelot said none of this was planned in advance but they’re happy with the way it’s worked out.
"It has been a challenge every day and I think we certainly understand more now than we did as kind of wide-eyed rookies to the Chicago market, but it has made us a better organization," Bock said. "And at the end of the day...we have 600 kids that have a high school diploma and are in some kind of secondary placement because of Camelot and we're proud of that."
CPS officials said the sale of its properties benefits the school district because maintaining the buildings is a financial liability. After a sale, a CPS spokesman said, the district “no longer has to incur the significant costs associated with the site's maintenance and upkeep.”
However, Camelot and charters using CPS buildings are required to pay -- using CPS taxpayer dollars -- for utilities and repairs, including making them handicap accessible. In fact, Camelot is currently putting a $600,000 elevator into one building.
Two of the pastors told WBEZ that they bought the buildings to help CPS’ get them off their books and because they want to use the space to do good for their communities.
Walter Turner III, the pastor involved with buying a former school building in South Shore, said he hopes to put a health clinic in the school and use the space for economic development and for programs for seniors.
But community activists are wary of these entanglements.
Brandon Johnson, a political organizer with the Chicago Teachers Union, said that black pastors justify agreeing to these deals because they see them as a way to secure some resources for their community.
But in the process they give up their independence, he said.
“These folks are being used ultimately to move the agenda of the fifth floor," he said, referring to the mayor's office at City Hall, "which continues to destabilize these communities and in exchange for that is the ability to pay rent and pay their lights."
These sweetheart deals raise questions about what’s motivating CPS and the Emanuel administration, which relies on black pastors as a political power base. The mayor’s office said he is not involved with handing out CPS contracts. His office did not respond to requests for comment on these relationships.
Wittingly or not, Nesbitt said Camelot has become a player in a new version of a very old Chicago game.
Under the old Chicago political machine, parishes were kept happy and in the fold through cleaning streets and giving parishioners jobs and, in some case, church leaders got contracts or even payoffs, Nesbitt said.
Like mayors before him, Emanuel has capitalized on his relationships with black pastors.
Nesbitt said he now worries that privatization has opened up a whole new way for the mayor and the city to quietly satiate these black Chicago leaders.
Sarah Karp is a reporter for WBEZ. Follow her at @sskedreporter or @wbezeducation.
Reporter Becky Vevea contributed to this report.
Investigative reporting and in-depth journalism at WBEZ is made possible in part with support from Doris and Howard Conant.