K12, Inc. charter company (Ohio Virtual Academy (OVA) in Ohio): in trouble with shareholders?
A December 15 issue of Politico sheds light on the K-12, Inc. low performing charter school operation. Company stocks have fallen; K-12, Inc. agreed to pay $168.5 million to settle alleged violations in California and shareholders want information from the company about expenditures for lobbying.
Former OVA employees have alleged that K-12, Inc. is being paid for students not being served.
As reported previously, the National Collegiate Athletic Association (NCAA) doesn't recognize OVA credits.
POLITICO's Morning Education: Will shareholders shine a light on virtual charter?
Shareholders of the nation's largest online charter school operator - K12 Inc. - are set to vote this morning on a proposal to require the for-profit company to be more transparent in how it spends money on lobbying efforts. A group of shareholders, represented by Arjuna Capital, say the company spends millions on state lobbying, even as its stock has fallen and revenue has dropped. They want the company's board to prepare an annual report detailing spending on "direct or indirect lobbying or ... grassroots lobbying communications." They also want the company to report K12's membership in, and payments to, any tax-exempt organization that writes and endorses model legislation - such as the American Legislative Exchange Council, or ALEC.
- K12 has had some setbacks. This summer, K12 Inc. agreed to pay $168.5 million to settle alleged violations of California's false claims, false advertising and unfair competition laws, though the company admitted no wrongdoing. In 2012, K12 settled a federal lawsuit for $6.8 million. The suit alleged its executives inflated stock prices by misleading investors with false student-performance claims.
- "K12 would probably get failing marks on its results, but it absolutely flunks when it comes to transparency," said Natasha Lamb, managing partner at Arjuna Capital. "K12 is dependent on taxpayer dollars, yet there is neither transparency nor accountability to taxpayers, students, or investors."
- K12's board of directors is urging shareholders to vote against the proposal, saying in SEC filings that the recommendations are "unnecessary in light of the company's existing internal policies regarding oversight of lobbying activities and expenditures, the current public availability of much of the information requested by the proposal and the potential concerns related to enhanced disclosures."
