One Down, More to Go, the ECOT Slippery Slope

One Down, More to Go, the ECOT Slippery Slope

State’s Actions and Decisions Should Frighten Every Ohioan

By Scott Pullins

“that way madness lies…”

King Lear – By William Shakespeare

On Tuesday, July 3, 2018, Ohio Attorney General Mike DeWine filed a document with the Franklin County Common Pleas Court that alleges that his office will attempt to recover nearly $200 million personally from ECOT Founder William L. Lager.  Somehow, mysteriously, this filing quickly made itself to the front page of the Columbus Dispatch, although it didn’t reach the court’s docket until days later.  

This filing is also very irregular because the Ohio Attorney General is not a party to this action.  In fact, the Ohio Attorney General has not even requested court permission to intervene in this case.  An earlier request from Ohio’s Auditor of State to intervene was denied.

The Attorney General argues that Bill Lager should be held personally responsible for money that was paid to companies that he either owned or allegedly controlled. 

Their argument for piercing the corporate veil of these limited liability companies is rather ridiculous and should send chills down the spine of any federal, state, or local government contractor, along with the entirety of Ohio’s school choice movement. 

The school was granted tax exempt status by the Internal Revenue Service and filed its first annual tax return for the tax year 2000 in December of 2002.  It has filed its annual tax returns without challenge by the IRS every year since then. Likewise, as a charitable organization the school was required to file certain information with the Ohio Attorney General on an annual basis.  From what I can determine, the school has done so without question or issue.

The school was audited by the Ohio Auditor of State on an annual basis starting with a special audit in 2001.  During the first few years there were recommendations by the State Auditor that Altair provide more detailed monthly invoices to better document their services.  That issue was remedied starting in July 2007. However, a review of each of these annual audits does not show that William Lager was ever considered as an agent or a public official for the school.  

Instead, the Ohio Attorney General’s office now argues that it has authority to assert these claims against Lager because of a recently completed trial court case in Cincinnati.  The case can be found here.  DeWine’s office argues that he could not intervene earlier because charter schools are governed by the Ohio Department of Education and this recent case gives him additional authority.

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