The week’s biggest Idaho education news isn’t from the Statehouse. It comes from Virginia, where for-profit online education giant K12 Inc. and its chief executives are the target of a class-action lawsuit that alleges “continued fraudulent practices.”
K12 Inc. runs the Idaho Virtual Academy and iSucceed Virtual High School, and the corporation and its executives have given tens of thousands of dollars to State Superintendent Tom Luna’s political campaigns. As Dan Popkey wrote on IdahoStatesman.com this morning:
Virtual schools giant K12 Inc., which spent $44,000 supporting Superintendent of Public Instruction Tom Luna's re-election bid in 2010, is being sued by a shareholder for allegedly making false statements to investors about students' test performance.
The class-action suit was filed Monday in federal court in Virginia, where K-12 is headquartered. Defendants include the company, CEO Ron Packard, and CFO Harry Hawks.
The suit – first reported earlier this week on the Washington Post’s Virginia Schools Insider blog – follows a wave of bad publicity for K12 Inc. Most notably, a December 12, 2011, article in the New York Times depicted K12 Inc. as “a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.” It alleged that K12 Inc. runs a massive call center with a high-pressured sales focus on pushing up enrollment numbers; that workers are paid bonuses on the number of students they sign up; and that K12 Inc. spent more than $26 million in advertising in 2010. (Ironically, K12 Inc ads appeared above the Post's story about the lawsuit, as well as above a copy of the lawsuit posted online at the Scribd.com website.) K12 Inc. profits tumbled 34 percent the week the article appeared, and company lobbyists have been in bunker mode ever since.
Later today, Luna declined comment on the lawsuit but praised K12 Inc.’s work in Idaho. Both the Idaho Virtual Academy and iSucceed Virtual High School have representatives on Luna’s Technology Task Force, the 38-member panel that has made recommendations on how to implement Senate Bill 1184, which mandates one-on-one laptops for high school students and online credits for high school graduation.
A year ago, Luna sought to require eight online credits for graduation. That triggered some of the strongest public outcry to the Legislature in recent Idaho history, so Luna rolled the mandate back to four classes before passing the buck to the State Board of Education in the final version of his legislation. At that time, Gov. Butch Otter boasted to Betsy Russell at Eye on Boise that four credits would be the minimum and he envisioned students taking “12 or 15” online classes.”
Amid continuing controversy, the State Board settled late last year on a rule requiring two credits, making Idaho the first state to have such a requirement. The Senate and House Education Committees have approved the rule this Legislative session.
After Senate Bill 1184 passed last April Fool’s Day and Otter signed it a week later, the IEA and parent allies collected more than 75,000 signatures in 40 days to put it and the two other education reform bills to a vote of the people this November. Propositions, 1,2, and 3 will be on the ballot this fall. Voting “no” will overturn them and decrease the threat of corporate profiteering in our public schools.
REMINDER: The Idaho Legislature’s Joint Finance-Appropriations Committee will hold a public “listening” hearing Friday morning. Sign-ups start at 7 a.m., and the hearing (from 8 to 10:30 a.m.) will air on Idaho Legislature Live. (Choose the Auditorium channel.) If you can’t attend, you can email your comments.
