Thomas Ultican looks at the state of the charter school industry in California in the coming year. Reposted with permission.
There was another major effort in Sacramento to reform charter school laws in order to head off a repeat of the A3 disaster. In May 2019, the San Diego District Attorney charged 11-people with scheming to use non-classroom based charter schools to steal more than $400 million from the state education budget. Eventually the A3 grifters all plead guilty, but shockingly no-one spent a day in jail. This year, state legislators failed again to reform purposefully weak charter school laws meanwhile the privatization movement is still infested with graft.
Billionaires have been the wind beneath the charter school movement’s wings.
The first California charter school was authorized in 1994. The original charter school law capped the number of schools at 100; however Netflix CEO, Reed Hastings, successfully campaigned to end that limitation.
The California Charter Schools Association (CCSA) was founded in 2003. John Walton, a billionaire member of America’s richest family, was on the first CCSA board. He died in a plane crash in 2005 and his billionaire niece, Carrie Walton Penner, assumed his seat on the board. She served on the CCSA board from 2005-2015. (TIN: 51-0465703)
Billionaire Reed Hastings was a CCSA board member from 2007 until 2015.
In Executive Director of the Network for Public Education (NPE) Carol Burris’s yearlong study of charter schools, she admits not knowing how much billionaire money goes to the CCSA but noted:
“The 2017 Board of Directors include New York’s DFER founder, Joe Williams, a director of the Walton Education Coalition; Gregory McGinty, the Executive Director of Policy for the Broad Foundation; Neerav Kingsland, the CEO of the Hastings Fund; and Christopher Nelson, the Managing Director of the Doris & Donald Fisher Fund. Prior Board members include Reed Hastings of Netflix and Carrie Walton Penner, heir to the Walmart fortune.“
Other billionaires were also busy supporting the charter school movement. The history tab at the NewSchools Venture Fund (NSVF) website states:
“NewSchools Venture Fund was created in 1998 by social entrepreneur Kim Smith and venture capitalists John Doerr and Brook Byers.” (Byers and Doerr are colleagues from the Kleiner Perkins venture fund.)
“We were among the first and largest investors in public charter schools and the first to identify and support multisite charter management organizations, which launch and operate integrated networks of public charter schools.”
At the time, “entrepreneur Kim Smith” was a graduate student at Stanford. She was co-chair of the Stanford business school’s entrepreneur club and wanted to get Amazon founder Jeff Bezos as a speaker for the club. She asked an acquaintance, John Doerr, to help and he agreed on one condition. In an education session at Al Gore’s house, the name NewSchools had been created. Doerr wanted her to come up with a use for the name.
Bezos spoke at her club and she wrote a two page paper outlining NSVF.
The push by billionaires to privatize public education using charter schools has become clear. It makes little sense for the future of education in America but billionaires don’t care. Bill Gates and the Walton Family Foundation are the largest individual donors to NSVF totaling $226,881,394 in grants as documented in the 2020 article Organized to Disrupt. However, this is only a fraction of the total billionaire largess. Over the last 20 years, billionaires John Doerr, Laurene Powell Jobs and John Sackler have served on the NSVF board.
The billions of dollars invested in growing the charter school movement has lead to steady growth.
However, the rate of growth is decreasing. From 2014 to 2020 the California charter school growth averaged 5% a year. From 2021 to 2025 the growth has fallen to 1% a year.
Research by NPE revealed the Achilles heel plaguing charter schools; they are not stable. In the first three years of operation, more than 15% of charter schools close their doors and eventually half of all charter schools go out of business. Charter promoting organizations like CCSA and NSVF counter that charter schools get better test results, but testing by California’s Department of Education shows the opposite.
Results Posted by California Department of Education
Reforming the Charter School Law
More charter schools appear to be following the A3 path. Highlands Community Charter and Technical schools received the results of a scathing audit on June 24 this year. Auditors found that the school improperly received over $180 million in state funds. The entire 7-person board has resigned or been forced out.
The audit identified millions of dollars in over-payments stemming from inflated attendance figures. Investigators noted conflicts of interest, questionable expenditures, gifts and the hiring of unqualified individuals. A high-ranking employee earned $145,860 annually but lacked an expected bachelor’s degree. She is alleged to have secured the position through her mother, who served on the board at the time.
Inspire, another non-classroom based charter school system using a similar model to A3, was the subject of a state audit in 2019. The founder and CEO, Nick Nichols, had to resign and pay back $1,055,834 for advances he took. The 12 charter schools, which made up the system, all remained in business independently after the demise of Inspire.
Required 2022 tax forms show that at three former Inspire schools, 15 people are averaging $157,000 in salaries to supervise 7806 students. When I asked what has changed, a teacher at one of the schools responded, “Now we have multiple Inspires with each school being a location where families and friends are being hired into high paying jobs that they are not qualified to hold.”
Chair of the California Assembly Education Committee, Al Muratsuchi, introduced Assembly Bill 84 in response to the reports about charter school fraud. The Torrance Democrat, who intends to run for superintendent of public instruction in 2026, declared he has no intention of “going after the charter schools that are acting responsibly and providing good educational services for their kids.” He added, “AB 84 is about going after the bad actors that are committing fraud and engaging in corruption through the current lack of transparency and accountability that we have with our statewide charter oversight system.”
CCSA CEO Myrna Castrejón came out swinging. She claimed the anti-charter school forces have brought a “bare-knuckle” fight. The highly paid Castrejón asserted, “Make no mistake, we still have opponents who are not going to stop until they strip out our autonomy entirely and/or cripple us.”
I noticed when looking through CCSA tax documents that Castrejón received $199,128 in total salary and benefits in 2009. Since then she has continued to make huge money fighting to advance charter schools and keep them as unregulated as possible. She set out to destroy AB 84.
Muratsuchi introduced AB 84 on December 20th, 2024. In February 2025, Castrejón’s launched her counter attack. She got Sacramento Democratic Senator Angelique Ashby to introduce Senate Bill 414, which claimed, “This bill makes a broad set of changes to charter school law related to audit procedures, financial oversight, governance, and funding determinations.” The political fight became about which reform bill is better, with the charter school industry supporting SB 414 and public school educators supporting AB 84.
Interestingly, a perusal of Ashby’s campaign contributions listed Reed Hastings and his wife, Pat Quillin as big donors. It also shows a large contribution from a charter school PAC belonging to the California Charter Schools Association Advocates, the political arm of CCSA.
After a protracted fight, Muratsuchi withdrew AB 84 with the expectation that Ashby would withdraw SB 414. However, there was a feeling among legislators that they needed to deliver something for the governor to sign. On 9/13/2025, SB 414 achieve final passage with 22 Democratic senators not voting.
In an email to EdSource, California Teachers Association President David Goldberg declared:
“SB 414 not only fails to address the issues that have led to massive cases of fraud in some charter schools, but it also significantly weakens existing requirements for non-classroom-based charter schools to prioritize spending on student learning. We urge the governor to veto this legislation and are dedicated to our fight for meaningful reform next year.”
Governor Newsom concurred. In his veto message, the governor wrote:
“I deeply appreciate the efforts of the author and the negotiating parties to develop legislation that builds on these recommendations and the findings from the State Controller. However, this bill falls short. While the oversight and auditing provisions are meaningful, other sections are unworkable, would face legal challenges, and require hundreds of millions of dollars to implement. Additionally, provisions added late in the legislative process undermine important agreements my Administration made during my first term.”
Myrna Castrejón and her billionaire supporters won this round and California’s charter school laws remain extremely vulnerable to the scofflaws that she represents.