Energized Contract is a Noxious, Corrupt Weed that should have been Pulled

"Every dollar that goes into Bullock’s pocket is taken from the classroom...In 2014, Bullock was awarded six years’ retroactive pay from ESTEM and a third charter school company, Inspired for Excellence Academy, Inc., effectively a bonus of $1.2 million...The loans to Bullock comprise 58% of EEA’s assets, an extremely high concentration of credit risk."

Roots of Corruption Run Deep in HISD

By Sarah Terrell 

After a good hard rain, it’s easier to pull weeds from the garden; the ground is soft and the roots cannot hold tight.

The Chronicle unleashed a deluge of news in early April, about self-dealing at HISD’s largest group of in-district charter schools, the Energized group, founded and led by Lois Bullock. But it was not enough to free the tough, deep roots of corruption at HISD.

Bullock heads up three corporations operating eight charter schools. The largest are Energized for Excellence Academy, Inc. (EEA) and Energized for STEM Academy, Inc. The Chronicle reports that over the last five years, Bullock received $17 million from the three companies.  Much of this was for management fees and rent on the EEA campus she owns. Bullock’s private corporation also received millions in low-interest or non-interest loans from EEA.

In 2014, Bullock was awarded six years’ retroactive pay from ESTEM and a third charter school company, Inspired for Excellence Academy, Inc., effectively a bonus of $1.2 million.

Every dollar that goes into Bullock’s pocket is taken from the classroom. EEA students are 80% Hispanic, and 96% economically disadvantaged. They deserve the maximum financial support the community can give. They are not getting it.

Bullock and her schools have been entrenched at HISD for about twenty years. Former Trustee Mike Lunceford is now in business with Bullock, starting a charter school in Beaumont.  Superintendent Lathan proposed that ESTEM take over ten underperforming HISD schools last year. That proposal sank when citizens who organized to speak against the privatization were ousted by police from the board room, a horrible, embarrassing incident for the district.  Though the expansion effort failed, two months later Energized’s existing contracts were renewed, despite questions about their finances.

Under Lathan’s leadership, Energized gets no financial scrutiny. Energized sends annual financial statements to HISD. At the board meeting April 4th, Chief Financial Officer Rene Barajas refused to answer questions about the fees and loans. “That is entirely between that particular charter and another organization… I never attested to the fact that they are financially solvent at all,” he complained, seeming aggravated at any expectation that he read and evaluate the Energized financial statements. 

The loans to Bullock comprise 58% of EEA’s assets, an extremely high concentration of credit risk. Last year, two in-district charter schools, Victory Prep North and South, went bankrupt during the school year, displacing students and costing HISD hundreds of thousands of dollars.  “We do not have a routine monitoring system for charters because they are expected to monitor themselves,” an HISD official told the Chronicle. 

Barajas says it’s still not his job to watch HISD’s charters for financial warning signs.

It’s also not Legal’s job. Elneita Hutchins-Taylor, General Counsel, said HISD did no investigation of financial issues raised by citizens last year. Nor did HISD investigate the issues raised by the Chronicle. “We got a confidential legal opinion on the legality of the corporate structure,” she offered.

When asked to confirm the loans and the $1.2 million bonus, Hutchins-Taylor dodged. “I cannot speak to the details of that transaction.” The Public Information Department, which reports to her, provided the financial statements analyzed by the Chronicle.

Lathan was asked whether the contract renewal should occur in October, so parents and students would have time to plan for the next year, if the contract were not renewed.  No trustee wants to close schools, but especially not on short notice. Lathan replied that an October review applies only if her staff were recommending closure.  They are recommending renewal, so the April vote is fine. Gotcha!

Public school principals and superintendents cannot profit from private companies serving their own schools. They don’t set their own pay, or award themselves retroactive salary. If they loaned themselves cash from school funds, it would be fraud. 

Bullock is openly scamming the system, and HISD lets her get away with it. Board members voted 5 to 4 to renew the Energized contracts. Trustees Santos, Sung, Lira, and Vilaseca-Ocampos voted no.

HISD could have found the excessive fees and loans themselves, but everyone is claiming “not my job!” Lathan and her staff deliberately look the other way while Bullock takes the students’ money, year after year.

After the vote, cheering rose from the seventy or so Energized parents, students and teachers in the audience. They left in a tall white chartered bus, refusing to speak to the Chronicle’s reporter.

Pulling noxious weeds is hard, and you need everyone to pitch in. If not, the weeds will take over the yard. Energized seems to have colonized its corner of HISD long ago.


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