Sunday, January 16, 2022

A short history of Seth Andrews after he pleads guilty to embezzlement in federal court

Bank surveillance photo of Seth Andrew from DOJ indictment

Seth Andrew, founder of Democracy Prep charters and former Advisor to Arne Duncan and the White House on the use of education technology has pleaded guilty to stealing more
more than $200K from the charter network he founded, in order to receive lower interest rate on a mortgage for an apartment he had purchased in NYC.  

Seth started Democracy Prep in 2005 when he was only 28 years old.  The charter school's curriculum was portrayed as focused on instilling "civic values", and the network was encouraged to expand rapidly by then-Chancellor Joel Klein, who gave his charters space in NYC public schools.  I met Seth a few years later, when he reached out to me and gave me a tour of one of his co-located charter schools in Harlem.  

I found him an intriguing character, obsessively throwing a rubber ball against the wall while we walked through the halls of the school, and never taking off his baseball hat though the network had a rigid dress code for students, who were forbidden to wear hats, wear the wrong color socks or the wrong kind of belt.  When we were touring the school, he stopped one student in the hall and berated her for having her Uggs showing. I wondered how long he would last at his own charter school before being suspended or pushed out.  I later learned that his baseball hat was something of a calling card for Seth, and it is even mentioned in the indictment document.

Democracy Prep  is a "no excuses" charter chain, known for its strict disciplinary practices and high attrition rates.  I questioned him about their demerit system which called for keeping students after school for small lapses of behavior, to sit in a room silently, without being able to read or do homework. We discussed Eva Moskowitz, founder of Success Academy, and when I asked him if she didn't give a bad reputation to the charter school movement, he said he thought she was useful because she kept negative attention off other NYC charters like his.

In 2012, the network received $9.1 million from the US Department of Education to expand to states outside New York, and then another $12.7 million in 2016, aided by recommendations from former NYC Chancellor Joel Klein, former DOE "Chief Equity Officer" and scandal-plagued Harvard professor Roland Fryer, and former Louisiana State Superintendent John White.

In 2013,  Andrew was appointed senior advisor to Arne Duncan and  superintendent-in-residence at the U.S. Department of Education; you can see the cast of characters who congratulated him on Twitter. He later served under Obama at the White House Office of Educational Technology, while continuing to be on the payroll of Democracy Prep, according to this CNBC article

In 2016, he helped start a charter school in DC, the Washington Leadership Academy. based on virtual reality.  The school won the $10 million XQ prize from Laurene Powell Jobs'  Emerson Collective.  He explained the benefits of having an imaginary science lab to a reporter:

“During that time, no child will be burned, no child will have a chemical spill, and it will cost the school a fraction of what building a lab would require.” said Andrew.

After leaving the Department of Education, he served as Global Director of Policy & Partnerships at Bridge International Academies from 2017 to 2018, which runs for-profit schools in India and Africa, and which I have critiqued on this blog here and here

Andrew left BIA to run an organization called Democracy Builders, and in 2020, he announced that they would buy the campus of the now-defunct Marlboro College in Vermont to start a hybrid college program for low-income students, dependent on federal funding. 

But later that year, in April 2020, he was arrested and charged with wire fraud, money laundering, and making false statements.  Through complex maneuvers taking place over several months between March and November 2019, as described in the Justice Dept. indictment, he had transferred over $218,000 from three Democracy Prep's escrow accounts that they are required to retain, and deposited these funds into his own accounts.  His goal was to qualify for a lower mortgage rate for a Manhattan apartment on Central Park West that he and his wife had purchased in August 2019 for $2.37 million.

According to Chalkbeat, the embezzlement was first noted by the SUNY Charter Institute, in a renewal report dated February 2020 for two Democracy Prep schools.  As  the report states:  

The 2018-19 audited financial statements ... continued to identify concerns regarding the internal control structure of the merged education corporation and network. ...Recently, a network contractor discovered a theft of approximately $142,000 in two of the education corporations dissolution reserve fund bank accounts during the 2018-19 fiscal year. The auditor deemed these amounts to be uncollectible and wrote them off in the financial statements....

The most recent audit report for June 30, 2019 reported material weaknesses in record keeping of general ledger accounts and transactions, lack of reconciliations, and overall lack of timely analysis of the financial records and accurate reporting. This, in turn, put the board in a position of not having accurate and up to date information for fiscal decision making. In addition, a cash theft from inactive bank accounts went undetected for months during 2018-19.

Nevertheless, SUNY recommended the renewal of these two charter schools.

Andrew's indictment was first announced April 27, 2021.  After pleading guilty last week, his defense attorneys have now released a  statement that for over two decades, Andrew "has worked tirelessly to expand educational, democratic, and technological opportunity to disenfranchised communities around the world."  His sentencing is scheduled for April 14.  Though the maximum charge is 20 years in prison, the prosecutors and his defense lawyers agreed in a written plea deal that a sentence of 21 to 27 months would be appropriate.

After his departure from Democracy Prep, its expansion has not gone easily. In 2018, its DC charter school in  DC announced it would close , for poor performance as well as "suspension and expulsion rates...drastically higher than citywide averages." Other members of the chain have also experienced serious financial and management problems, as reported here.

More recently, Democracy Prep has been accused of racist practices by former and current students and staff. Seth Andrew subsequently wrote a somewhat ambivalent apology on Medium in June 2020, that he later deleted but is archived here. 

Is this the end of Seth Andrew on the corporate education stage?  Who knows. He seems to have an infinite capacity to re-invent himself and acquire powerful patrons. I wouldn't put it past him to bounce back after prison to launch some other trendy edu-company or product.

A video of his Ted Talk from 2012 is below.


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