Eye on Education

Court of Appeals Rules White Hat Should Open Its Books – UPDATED

Ida Lieszkovszky / StateImpact Ohio

White Hat Management is named for the white hats founder David Brennan is known for wearing.

In a decision this week, the Franklin County Court of Appeals reaffirmed an earlier ruling demanding that White Hat Management, one of Ohio’s largest charter school management companies, disclose its financial records.

Judge Julia Dorrian wrote the decision on behalf of the three-judge appellate court.

White Hat was initially sued in 2010 by the school boards of ten charter schools operated by the for-profit company.

Under the contracts the school boards signed with White Hat Management, the schools had to turn over 96 percent of their state funding to the company, which then runs the schools’ operations. That includes purchasing equipment, securing facilities, and hiring and firing teachers and administrators.

White Hat has maintained all along that since it is a private company, it does not need to disclose how that money is spent – not even to members of the schools’ boards.

In a 2011 ruling, Franklin County Common Pleas Court Judge John Bender found that since White Hat runs its charters on public funds, the company essentially takes on the role of a public official, and is therefore accountable to the public and the school boards. Bender ordered White Hat to open its books. 

White Hat then appealed, which is how we got to the current decision.

In the decision, Weber specifically refers to testimony given by White Hat’s Chief Financial Officer, Joseph Weber, to say the “assertions of confidentiality may have been motivated as much by a desire to avoid public criticism as to prevent the loss of information to competitors.”

In an email, April Hart, one of the lawyers for the school boards said; ”The decision was well versed, with excellent supporting facts and case law to support the opinion. We are just happy the opinion was fair and take one day at a time.”

White Hat can now appeal the decision to the Ohio Supreme Court. 

UPDATE: 9:40 a.m.

White Hat Management’s lawyer, Charles Saxbe, says the case isn’t over:

“The decision related to a discovery issue and the court deferred addressing the important underlying issue of the characterization of White Hat as a “public official” which it may consider in the school’s pending appeal of Judge Bender’s later opinion.  This case still has a way to go and the parties contractual relationships finally end when this school years closes June 30.”

You can read the entire appellate court decision below.



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