WATCHDOGS: Federal funds for clout school operator despite probe

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Weeks after being raided by federal authorities, Concept Schools asked the U.S. Department of Education for about $340,000 for its Horizon Science Academy-Southwest Chicago Charter School, 5401 S. Western Ave. | Leslie Adkins / Sun-Times file photo

Des Plaines-based Concept Schools applied for and was awarded a nearly $340,000 federal grant for a new school on the Southwest Side despite being under investigation over allegations the clout-heavy charter-school operator was involved in defrauding a federal grant program, a Chicago Sun-Times investigation has found.

Concept — whose privately run, publicly financed schools include four campuses in Chicago — applied to the U.S. Department of Education for the money five weeks after the FBI and other federal agencies raided Concept locations across the Midwest on June 4, 2014.

Those 19 locations included its headquarters and Chicago Math and Science Academy in Rogers Park, the Sun-Times has reported.

The Department of Education approved the grant last year for Concept’s Horizon Science Academy-Southwest Chicago Charter School, 5401 S. Western Ave., awarding nearly all the money Concept asked for — $337,138 over three years.Concept had asked for more than $343,000 over two years, noting that most of the students at the school come from low-income families.

They were to receive about $200,000 of that last year, though an Education Department spokeswoman said Friday the money is now on hold.

In its grant application, Concept said the money would cover expenses including textbooks for 450 students, furniture, laptops and printers for administrators, supplies and travel to conferences.

Concept didn’t mention the raids — carried out as part of what an FBI spokeswoman told the Sun-Times remains an ongoing investigation.

But the charter operator did mention its board of directors included a Cook County circuit judge, Dominique Ross, and that its advisory board included G.A. Finch, former chief of staff to Cook County Board President Toni Preckwinkle.

Finch, a lawyer in private practice, said Concept vice president Salim Ucan offered him a spot on the advisory panel four or five years ago.

“I was asked to be on it and never heard anything further,” Finch said Friday.

The Department of Education awarded the money even though the agency’s own inspector general’s office was involved in the investigation.

Geoffrey Wood, a special agent with that office, filed the “application for a search warrant” that convinced a federal judge in Chicago to approve the June 2014 raids, which sought records concerning Concept’s involvement in the government’s “E-Rate” program. That program provides money to extend Internet access to schools serving low-income students.

According to a sworn statement from Wood, Concept violated government open-bidding rules by steering more than $5 million in grant money to companies with insider ties to the charter operator. Those “related vendors” did work for Concept under the E-Rate program, according to Wood.

He testified he had reason to suspect Concept and many of its taxpayer-financed charter schools had “engaged in a scheme to defraud a federal program” for at least seven years.

Concept’s president, Sedat Duman,signed the certification forms for the E-Rate grants and also signed the application for the latest grant, records show.

A spokeswoman for the Cleveland office of the FBI, which is leading the probe, declined to comment because, she said, “It is an ongoing investigation.”

Catherine Grant, a spokeswoman for the Department of Education’s Office of Inspector General, said Friday, “Our investigation is ongoing, and, per our policy, we do not discuss our ongoing work.”

Asked whether the inspector general’s office let other agency officials know it was looking into Concept, Grant said, “It is our normal practice to inform the department when we open an investigation.”

Dorie Nolt, the Department of Education’s press secretary, said Friday: “We are monitoring this situation, and we have restricted Concept charter schools’ access to federal grant funds. As we learn more details about this matter, we will take additional steps, as necessary.”

She would not say when the agency moved to freeze the grant to Concept.

Concept Schools’ headquarters in Des Plaines. | Tim Boyle / Sun-Times

Concept Schools’ headquarters in Des Plaines. | Tim Boyle / Sun-Times

All that Concept officials would say was that they were “gratified” and “proud” to win the grant, “awarded to only five schools in 2015,” according to a company spokesman.

Founded in 1999 by Turkish immigrants, Concept is one of several charter chains nationwide with ties to Fethullah Gulen, an influential Muslim cleric from Turkey who has lived for years in Pennsylvania. After falling out with Turkey’s leader, he faces charges of trying to overthrow the government.

From Des Plaines, Concept oversees more than 30 campuses in seven states, including four schools in Chicago with a total of about 2,200 students.

Its Chicago Math and Science Academy and Horizon Science Academy-Southwest Chicago Charter School were awarded their charters by the Chicago Board of Education, which provides most of their funding.

Two other Concept campuses in Chicago were granted charters by the Illinois State Charter School Commission, which ordered CPS to fund them over Chicago school officials’ objections.

Concept has close ties with political figures including Illinois House Speaker Michael Madigan, D-Chicago, who visited the Rogers Park campus and filmed a video testimonial.

His son, Andrew Madigan, also has visited CMSA. And the company where younger Madigan works — Mesirow Insurance Services Inc. — has had business with Concept in Chicago.

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