Charter Principal Gets Caught Engaging in Financial Shenanigans and is Punished with a $215K Payout

Ex-charter school chief gets $215K after resigning in wake of spending controversy

- Los Angeles Daily News, 11/30/16

The administration at El Camino Real Charter High School (ECRCHS) admits that David Fehte charged “more than $6,000” in personal charges on his school-issued credit card. An investigation by the Los Angeles Daily News found that “over the two years, Fehte charged more than $100,000 to the card”, including “$15,500 at Monty’s” Prime Steaks & Seafood and “first-class airfare and luxury hotel rooms”. The LAUSD Charter School Division found that the school had “no policy for Credit Card use” and issued a Notice to Cure on October 28, 2015. Almost a year later the “CSD still had ongoing concerns regarding the capacity and accountability of the Charter School, the charter organization, and its governing board, to operate ECRCHS effectively and in compliance with applicable laws and the terms of its charter”. The LAUSD Board scheduled a hearing to discuss Notice of Intent to Revoke ECRCHS’ charter.

Press reports at the time said that the process was halted when Fehte “heeded calls for his resignation and stepped down after an 11th-hour deal.” However, the Memorandum of Understanding between ECRCHS and the LAUSD did not specify the terms of Fehte’s departure. It only stated that “effective October 26, 2016, David Fehte will not longer be the Executive Director of ECRCHS and will no longer be employed at ECRCHS.” The LAUSD Board should have paid attention to this lack of specificity as Fehte did not actually resign. Instead, ECRCHS’ Governing Board executed an “early termination without cause”.  He was, therefore, eligible to receive “the equivalent of twelve months of gross base salary” or $215K.

The lack of transparency by the ECRCHS Governing Board makes it difficult to determine if they were justified in not determining that Fehte’s termination was “with cause”, which would have prevented the $215k from being diverted from the educational needs of the students. In June, they commissioned a report at a cost of $20,000 to determine if the financial misconduct was “unethical...criminal, or...just a mistake”. However, the Board has refused to release this report to the people who paid for it - the taxpayers. Contrary to the agenda and minutes of the public meeting, their lawyers claim that it was their firm who actually “retained the services of Oracle Investigations Group, Inc.”

According to the terms of their charter, ECRCHS is required to comply with the California Public Records Act and release these documents. Unfortunately, while the LAUSD Charter School Division and the members of the Board have been made aware of this violation (page 1, page 2), neither has shown any interest in ensuring that ECRCHS meets its obligations. Education resources are finite and an Independent Financial Review Panel has warned that the LAUSD is in a “dire” financial position. Yet the District allowed $215k to simply walk away. The next time a Board member complains that a vital program cannot be funded, someone should remind them of their failure to act as Fehte laughed his way to the bank.


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