OAKLAND -- An appellate court has upheld an Alameda County judge's decision to allow American Indian Model Schools to stay open despite allegations that their founder mishandled $3.8 million in school funds.
The decision will allow American Indian Public High School and American Indian Public Charter Schools I and II to keep their charters for the moment. Another judge is expected to rule any day on a lawsuit AIMS filed against Oakland Unified School District challenging the district's revocation of its charter. An audit by the school district and the state found that the founder, Ben Chavis, and his wife, Marsha Amador, allegedly funneled nearly $4 million from the school to companies they owned for construction and classroom rental spaces.
"Everything really is hanging on this next court decision," said Oakland schools spokeswoman Sue Piper.
An estimated 800 students were enrolled in AIMS schools this year, and current Director of Schools Ruben Ruiz said 1,000 are signed up for next year.
The audit, performed in June 2012, found that Chavis, who is no longer involved with the school, misappropriated school funds and broke state laws, including the Political Reform Act, when he directed the school to hire his companies. The audit also found that upon learning about the alleged financial misdeeds, the board did not make significant changes or take any measures to recover the funds. It was later revealed that one of the board members resided in Chavis' home.
A lawyer for the school previously argued Chavis did not break the law because he disclosed the contracts to his school board and recused himself from voting on them. Chavis retired from his role as director in 2007, though the state audit alleged that the financial mismanagement continued through 2011.
After the revelations, the Oakland school district moved to revoke the schools' charters and the Alameda County Board of Education affirmed the decision, notifying the schools in March 2013 that funding would be cut off at the end of the fiscal year, on July 1, 2013. AIMS officials filed a lawsuit challenging the decision, arguing that closing the schools, which have performed well on standardized tests, would cause great harm to the students.
An Alameda County Superior Court judge issued a preliminary injunction, allowing the schools to continue to operate. Soon after, an Alameda County judge issue an order allowing the schools to stay open.
The 1st District Court of Appeal ruled Monday that officials with the Oakland Unified School District had not followed California's 1992 Charter School Act in weighing high levels of academic achievement as "the most important factor" in the decision to revoke the charters.
Ruiz said Tuesday he was pleased with the latest court ruling, but the bad publicity has hurt enrollment.
"This bad press has hurt us so much," Ruiz said. "This year would have been the first year we had two graduating classes at both our campuses, but because of this nonsense with OUSD, we lost all our kids at our downtown campus."
He said all of its 33 high school seniors graduated this year and all of them received college or university acceptance letters.
Ruiz said he has no professional relationship with Chavez, and Chavez is no longer a part of the school.
"We purchased the downtown building from him, and we hope he stays away," Ruiz said. "He's not on the payroll. He's not on the board. He did a great job starting this school, but he does not have a role and he shouldn't."
Reach Doug Oakley at 925-234-1699. Follow him at Twitter.com/douglasoakley.