Deal providing tax-exempt bonds to Nashville charter schools brings criticism

Working with a politically-connected law firm, two Nashville charter schools used an obscure Metro Nashville board to receive tax-exempt bonds for their projects that are drawing intense scrutiny after going unnoticed by other city officials for months, according to the Tennessean.

The deals approved by the Metro Health and Educational Facilities Board for Rocketship and Purpose Prep charter schools do not use local taxpayer money and contain no provisions that would put taxpayers on the hook. But critics on the Metro Council and the Nashville school board say the charters should go to banks for private financing and not use the facilities board, which can issue tax-free bonds for nonprofit groups.

They directed particularly sharp criticism at a $7.74 million in bonds for Rocketship, which is part of a national charter school network.

On the same day in February that its bond issuance was finalized, Metro Nashville Public Schools sent a letter notifying Rocketship that state monitors “found several violations at (Rocketship Northeast) concerning state and federal laws governing the education of students with disabilities, English learners and homeless students.”

The bond deals also could represent a conflict of interest, according to public officials, for prominent law firm Adams and Reese. The firm’s lobbying division represented pro-charter school group 50Con at the state legislature, while a partner at the firm served as legal counsel for the Metro board on the bond issuance.

In addition to the Rocketship bond deal, the board also approved $3.5 million private placement bond deal for Purpose Prep to acquire and renovate its property.

…“This whole situation reeks and appears borderline corrupt,” said school board member Will Pinkston, who has made opposition to charter schools a centerpiece of his time on the board. “Adams and Reese has a clear conflict of interest and the Health and Educational Facilities Board needs to be investigated for facilitating a scheme that could lead to Nashville taxpayers funding charter schools in other states.

“Even if what they did isn’t illegal, it’s certainly unethical and undermines the public trust. Bottom line: This backwater board needs to be held accountable and shouldn’t be using Metro-backed bonds to get in the charter school real-estate business.”

…Pinkston said he was especially concerned that Adams and Reese advised the Metro board on the deal. The law firm’s work is paid for by the applicants. Barnett is a partner at Adams and Reese.

Several attorneys at the firm registered at the state to lobby for 50Can, a national pro-education reform group that backs charter schools. Formerly known as Students First, 50Can supports an array of education reform measures including policies friendly to charter schools.

(Cindy) Barnett, the partner at the firm (who handled the work), said her involvement did not represent a conflict.

“There is no conflict,” she said. “The Board has narrow authority, which is all set forth in the state statute. The Board has very limited discretion and does not make policy. Consideration by the Board is not an expression of endorsement or preference. Borrowers appearing before the Board are represented by their own legal counsel, not Adams and Reese.”

Adams and Reese also lobbies for Metro government at the state legislature.

Note: Senate Majority Leader Mark Norris works as “special counsel” with Adams and Reese. The  firm’s lobbying team has long been led by the highly-respected Gif Thornton, who is also managing partner. The firm also runs a PAC, which distributed more than $50,000 in contributions last year.

Leave a Reply

Your email address will not be published. Required fields are marked *