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State suspects voucher foundation broke law

Education officials ask for an investigation after the group can't account for $400,000 in voucher money.

STEPHEN HEGARTY
Published September 24, 2003

Suspecting criminal activity in the disappearance of $400,000 in school voucher money, Education Commissioner Jim Horne has asked the Florida Department of Law Enforcement to investigate an Ocala foundation.

Last month, Horne said his own office had been unable to account for money the Silver Archer Foundation was supposed to have used to provide scholarship money for poor students. At the time, Horne directed his inspector general to investigate because James K. Isenhour of Silver Archer was refusing to cooperate.

Now, that investigation is complete and it "indicates the probable criminal activity by Mr. James K. Isenhour as owner and operator of the Silver Archer Foundation," according to a letter sent from Inspector General John M. Franco to the FDLE on Tuesday. "We believe the misappropriation ... constitutes theft and a scheme to defraud."

The criminal investigation marks a new chapter in the ongoing scrutiny of Florida's school voucher programs. Until now, criticisms against voucher programs have focused on matters of state rules.

"I don't want to prejudge Silver Archer - I don't know what they did - but this program was an invitation for fraud waste and abuse," said Rep. Dan Gelber, D-Miami Beach. "This program needs major reformation. It's an embarrassment."

Isenhour's foundation was authorized to collect money through the state Corporate Tax Credit Scholarship Program. Under the program, corporations can forgo paying state taxes if they donate an amount equal to their tax bill to one of the scholarship funding organizations. The organizations are supposed to use the money to pay tuition for low-income children.

Franco found that Isenhour took in about $400,000 from private companies. He sent an estimated $168,000 to a private school, but did not devote any of the money to private scholarships for low-income children as the law requires, Franco wrote. Franco's letter did not say which school received money from Silver Archer.

The scholarship funding organizations are largely unregulated by the state. After the problems with Silver Archer surfaced, Horne questioned his own department's handling of the approval process that authorized Silver Archer, which is not incorporated or registered in Florida, to participate. Isenhour had owned a correspondence school in Ocala until it went bankrupt. And he has a long history of lawsuits and criminal charges, but no convictions.

The head of one of the other scholarship funding organizations welcomed the criminal investigation.

"If anyone has taken advantage of a program for low-income kids, they should be brought to justice," said John Kirtley, director of Florida Pride in Tampa.

Kirtley formed an association of scholarship funding organizations and proposed standards of conduct for the organizations. Silver Archer was not a member of the association.

Florida's three school voucher programs have been under fire in recent months, as newspapers and critics found multiple examples of lax oversight. Last year, Horne cut off funding to a private school in St. Petersburg that was operating out of a private home until code violations forced a temporary move to a local library branch.

In July, Kirtley of Florida Pride stopped voucher payments to children attending an Islamic school co-founded by Sami Al-Arian, a former University of South Florida professor alleged to have terrorist ties. And in August, Horne initiated an investigation into the money missing from the Silver Archer Foundation.

Florida Chief Financial Officer Tom Gallagher also has initiated audits for the state's three voucher programs. Among other things, Gallagher said he is examining the state's contract with two companies running "virtual schools" for 1,000 students in kindergarten through eighth grade because many of the children may not have previously been enrolled in the public schools.

- Information from the Associated Press was used in this report.

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