Vivid scenes, key details fill charter report Posted on July 21st
The walls began closing in on Kevin M. O’Shea in early April when an Inquirer reporter called to ask him about allegations of nepotism, misappropriation of money, and conflicts of interest at the Philadelphia Academy Charter School. His daughter, Tara, took the message.
At a hurriedly convened meeting with Board President Rosemary DiLacqua later that day, DiLacqua recalled, O’Shea appeared “concerned” and “panicky.”
At a session with board members the next day, O’Shea, the school’s chief executive officer, described the byzantine empire of charter schools and nonprofits created by his boss, Brien N. Gardiner, a former public school principal who founded the Philadelphia Academy Charter. Gardiner and O’Shea were paying themselves and family members hundreds of thousands of dollars.
When the meeting was over, O’Shea walked a board member to the door and remarked, “Dude, I think I’m f-.”
Later, after The Inquirer first reported in mid-April that the school district’s inspector general was investigating the charter, Megan Simmons, a school administrator, asked O’Shea how he was holding up.
“They won’t find anything in my office,” he replied, “because I cleaned it out.”
Indeed, shortly after the article appeared, Eileen McGrody, an administrative assistant at the school, saw O’Shea emptying files in his office - next to a trash can.
Those frantic scenes are recounted in a remarkable, 62-page report released Thursday by the school’s board. The report alleges that Gardiner and O’Shea defrauded the 1,200-student school in Northeast Philadelphia and misappropriated hundreds of thousands of dollars for personal gain.
In the world of dry and technical investigative documents, this one stands out as a detailed and riveting work of nonfiction that includes a sequence of events, biographies of key players, and a litany of questionable expenditures, from $6,072 worth of Flyers tickets to “brazenly false” dinner receipts.
Even with 270 footnotes, the “Report to the Board of Directors of Philadelphia Academy Charter School” reads like a “Lifetime movie script,” said Lisa George, one of the parents who first raised the allegations of wrongdoing.
“I think we were a little disgusted, finally seeing everything in one place,” acting Board President Joseph Resta, who replaced DiLacqua after she resigned, said Thursday night after the board released the scathing report and adopted its findings.
“It’s really disconcerting,” said Resta, who pushed for the internal probe and will leave the board at the end of the month. “I think the report is going to stand by itself.”
The board hired the legal team April 17 to conduct the probe - two days after The Inquirer reported that the Philadelphia School District’s inspector general was investigating, and that a web of charter and business entities had enabled Gardiner and O’Shea to earn more than most superintendents in the region.
In both its attention to detail and its scope, the report reads like a Justice Department narrative, which is hardly a surprise. Compiled by lawyers at Ballard Spahr Andrews & Ingersoll, its principal author was Henry E. Hockeimer, a hard-charging former federal prosecutor.
While the prose is lawyerly, Hockeimer’s team possessed a clear eye for telling details. The lawyers allege, for example, that Gardiner and O’Shea used the school’s credit cards from Lowe’s and Home Depot to buy more than $3,477 worth of items for Gardiner’s Shore home in Cape May and O’Shea’s in Beach Haven. The school, they note, also paid for a $175 chandelier for Gardiner’s Shore house.
But lawyers say there may have been more questionable expenses. Neither Gardiner nor O’Shea agreed to be interviewed or produced any requested records. And as the section titled “Before Ballard’s Investigation Commenced” reports, the attorneys found “substantial evidence” that “O’Shea removed or destroyed documents” between April 5, when board member Resta first contacted Ballard to discuss conducting the probe, and April 17.
Simmons, the high school coordinator, told the lawyers that she had seen O’Shea leaving the high school April 5 with “approximately five full expandable files of documents.”
The next day at the school, Simmons recounted, she thought she heard a document shredder, though DiLacqua, a Philadelphia police detective, denies any shredding took place.
In all, the Ballard lawyers interviewed more than 30 witnesses and “reviewed thousands of documents.” The result is a clear and engaging account filled with memorable scenes and interesting facts.
There’s an account that says O’Shea, a former city police officer with a high school diploma, met with school coordinators after he was suddenly elevated to CEO in 2007 and informed them: “I demand your loyalty.” Several teachers said O’Shea, who often berated faculty, would point to the badge identifying him as CEO and say: “This means I’m important.”
Elsewhere, the report alleges that O’Shea’s sister Constance, the elementary coordinator, removed three hard drives from school computers and had a security firm destroy them.
The report describes her as a tyrant. “As with her brother Kevin, most faculty members interviewed by Ballard who had interacted with Connie O’Shea reported that she was abusive to faculty and that she inappropriately disciplined or favored students.”
O’Shea’s daughter, Tara, also worked at the school. Although she was paid $28,522 as an administrative assistant, attorneys found that her sole job was personal assistant to her father. She stocked the vending machines her father owned with candy and soda that the charter purchased at Sam’s Club and then turned the proceeds over to her father, who pocketed the money, lawyers said.
Employees said they had regularly seen her counting “piles of cash” in her father’s office.
O’Shea is alleged to have “systematically siphoned cash from virtually every aspect of [the school’s] operations, even going so far as to misappropriate money raised by the Student Council and National Honor Society that was intended for the Marine Corps’ Toys for Tots program.”
Gardiner’s alleged “frauds” were complex and included what appears to have been a no-interest $70,000 loan to one of his other businesses, the report says. Lawyers also found that $710,000 was used to buy a $1.4 million property at 6632 Bustleton Ave. for use by Philadelphia Academy Services, a nonprofit Gardiner founded that has a $2.1 million special-education contract with the school district.
The charter board fired Gardiner and Tara, Constance and Kevin O’Shea in May.
Last month, the Philadelphia School Reform Commission voted unanimously to give the Philadelphia Academy Charter School a new, five-year operating charter starting Sept. 1, provided the school agreed to meet a list of 20 conditions, including replacing its board and severing all ties with Gardiner, O’Shea, their relatives, and any entities in which they are involved.
The commission has not yet released the report of the district’s inspector general.
“We have not seen the [Hockeimer] report,” the district said in a statement Friday. “We continue to follow the investigation of the operations of Philadelphia Academy Charter School with interest.”
The charter’s board plans to make public this week the five volumes of exhibits referenced in the report’s footnotes.
To read the report to the Philadelphia Academy board, go to http://go.philly.com/ charterreport
Contact staff writer Martha Woodall at 215-854-2789 or martha.woodall@phillynews.com.
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