GloucesterTimes.com, Gloucester, MA

November 26, 2012

Loan sparks new charter questions

By Marjorie Nesin
Staff Writer

---- — A woman who personally loaned the Gloucester Community Arts Charter School $75,000 for three weeks — and a $2,500 loan fee — 14 months ago was one of eight participants whose October 2012 observations of the school were compiled to form a site visit report state officials will consider in a discussion of the charter at a special meeting of the Massachusetts Department of Elementary and Secondary Education today.

The actions of Diana Lam, head of school at Conservatory Lab Charter School in Boston, are spurring questions about the legality of the loan on several fronts, including that it was never publicly discussed by the charter school’s Board of Trustees, and whether it was proper for the school or Lam to exchange the cash.

Lam confirmed Monday that she had personally loaned the school money after a “financial person” who works with both the Conservatory Lab Charter and the Gloucester Charter school told Lam the school was in need of a loan, and said she sees no issue with its legality or any perceived conflict of interest.

“We share the same financial person and that’s how that came across,” Lam said in a telephone interview Monday, referring to Cynthia Goncalves. “I actually had not invested in the school. I had never met the director or anything. It wasn’t based on friendship. I just thought they needed a loan, and that’s how it happened.

“I didn’t pass any judgment on whether it was a good school or not. It was a situation that we are sometimes familiar with,” Lam said. “I knew about how difficult it had been (for the Gloucester Community Arts Charter School) to get started, but not much more than that.”

According to documents provided to the Times, the “promissory note,” dated Sept. 14, 2011, is signed by the Gloucester school’s former executive director, Tony Blackman and Lam, with a witness signature from Carol Kennedy Hurley, then special education teacher at the school. The note is not signed off by the school’s Board of Trustees, though Blackman, as executive director hired by the board, was and remains a trustee.

Had the school not paid the loan back by Oct. 5, 2011, the document shows, Lam would have collected an additional charge of $500 each month.

The balance of the school’s loan from Lam was secured by a $590,000 payment from the state, due to the school by Sept. 20, 2011, according to the promissory note.

Lam said that sometimes the charter schools need to go to banks for transition money while they await scheduled allotments of state money. And James Caviston, who chairs the Gloucester Community Arts Charter School’s Board of Trustees, told the Times Monday that neither he nor the full board had any say in borrowing money from Lam because the board had signed off that power to Blackman — authorizing Blackman to make financial decisions on his own — at a prior meeting. There is also no mention of the loan during any publicly accessible meeting minutes.

Caviston said that at the time of the September 2011 loan, the school had undergone difficulty in attempts to secure loans.

“That’s his power to do that,” Caviston said of Blackman. “How he decides to activate that power is his purview.”

But Jason Grow, the former city councilor and a plaintiff in an ongoing lawsuit filed by 15 Gloucester School District parents challenging the legality of the school’s charter and operation, said Monday he found it unusual that the executive director would make such financial decisions alone.

“I find it highly unusual that something of this kind of financial nature would not have been discussed amongst the board at a meeting, or at least discussed at the board level and approved by the board,” Grow said. “To me, it paints a picture again of a board not operating fully in the light of day or not being aware of what’s happening at their school.”

This past October, when it came time for Lam to review the Gloucester Community Arts Charter School as one of eight participants chosen by the state Department of Elementary and Secondary Education, Lam said her previous loan to the school had no effect on her objectivity.

The report to the Board of Elementary and Secondary Education, and to Commissioner of Education Mitchell D. Chester, is being cited today when the board discusses the school’s status and adherence to past conditions. The report found several sweeping problems within the school including a lack of a documented curriculum and a lack of dealing with a number of student behavioral issues.

Chester, in his preliminary statement to the board, noted that the school still has not met at least one condition of its probation of 2010, and warned sternly that, “despite the school’s progress in meeting some of the conditions, evidence shows that (the school) faces substantial challenges to its ability to implement a viable and effective school program.”

The school has faced financial and budgeting problems from its September 2010 start, due in large part to significant enrollment shortfalls that have brought gaps in the state’s per-pupil charter school funding formula. And Chester noted that this year’s October enrollment of 123 students, is below last year’s 136 — and dramatically lower than the projected 212, leading Blackman to eliminate his own executive director’s job to avert further teaching cuts.

Caviston agreed that Lam’s loan to the school would not have impacted her ability to observe and record what she saw and heard at the school, the tasks required of reviewers.

“She took down quotations, she observed. That’s all she did,” Caviston said. “As an observer she would have no influence. She’s there to take down notes.”

Lam, meanwhile, has a lengthy history in the field of education, serving as a schools superintendent in San Antonio, Texas, and then as deputy chancellor of New York City’s public school system under then-Chancellor Joel Klein. But she was fired in 2004 after an investigative report found that she improperly helped her husband, Peter Plates, gain employment with the school district as a regional instructional specialist.

She has headed the Conservatory Lab Charter School, located in Boston’s Brighton neighborhood, since January 2010.

Marjorie Nesin can be reached at 978-283-7000, x3451, or at mnesin@gloucestertimes.com.