Former Erie Rise charter school under another investigation. What's being looked at now

The shuttered Erie Rise Leadership Academy Charter School, already under federal investigation over an education grant, has been drawn into another probe as it continues its extended process of financial dissolution.

The Pennsylvania Ethics Commission is looking at documents connected to the school and has interviewed its human resources director for information, Erie Rise representatives said at a hearing on its dissolution in Erie County Common Pleas Court.

A lawyer for Erie Rise, Zainab Shields, told Judge Marshall Piccinini on Monday that commission investigators met "for hours last week" with Aubrey Favors, the HR director, and that she was at the interview.

Shields said Erie Rise might "not necessarily" be a party to the probe, but that she sat in on the interview to represent the school. The investigators asked for documentation, and "we have an obligation to respond," Shields said.

Erie Rise's consultant, Christian Anderson, also confirmed the Ethics Commission investigation when he testified at the court hearing. Anderson said he had helped gather documents for investigators. Testimony indicated the documents included contracts.

The disclosure of the Ethics Commission probe comes about 10 months after investigators with the U.S. Department of Education searched the offices of Erie Rise, at West 10th and Cascade streets, on June 7 in a probe that is ongoing. The department's Office of Inspector General was looking for records about a multimillion-dollar federal grant for after-school programs for students from low-income families, according to Anderson's testimony at a court hearing on Erie Rise earlier this year.

The Department of Education investigators on June 7 also searched the offices of the Booker T. Washington Center at East 18th and Holland streets in Erie. The community center had partnered with Erie Rise to implement the after-school program under the federal grant issued as part of the 21st Century Community Learning Centers program.

Judge could decide soon on receivership

On Monday, Shields and Anderson brought up the Ethics Commission investigation in court as an example of why Erie Rise has yet to complete its dissolution despite closing to students on June 30. They said Erie Rise's remaining employees have spent time responding to the commission's requests while also trying to wrap up outstanding financial issues.

Piccinini has been monitoring the dissolution at the request of the Erie School District. The district is arguing the process should have been finished months ago, though state law sets no firm deadline for the dissolution of a shuttered charter school. Virtually all of Erie Rise's assets, including more than $2 million in the bank, are to revert to the Erie School District under state law.

The Erie School District got Piccinini involved by suing in January for the appointment of an independent receiver to oversee Erie Rise and quicken the pace of the dissolution to prevent the dissipation of public assets. Erie Rise is arguing that a receivership is unnecessary and that its three remaining employees, plus Anderson, its consultant, can continue to handle the dissolution.

Piccinini since February has held a series of hearings to monitor the dissolution and to help him decide whether to appoint a receiver, whom Erie Rise would pay. Such an appointment could lead to staffing changes.

Piccinini expressed displeasure on Monday with the pace of the dissolution. He gave the Erie School District a week to give him the names of three proposed receivers. Piccinini said he has yet to decide whether he will appoint a receiver, but he said he was losing confidence in Erie Rise's ability to finish much of the dissolution by the school's self-imposed deadline of May 30.

Concerns about timeliness "were not lessened today, but increased," Piccinini told Shields and Anderson.

What could happen with an Ethics Commission probe?

Also at Monday's hearing, Shields and Anderson provided no further details on the Ethics Commission investigation other than to explain how it had taken up their time in recent days. The two appeared in court via video conference. Shields is from Philadelphia and Anderson is from Maryland.

Ethics Commission investigations are confidential and typically remain secret, short of disclosure in court or the commission's issuance of a final action. The Ethics Commission investigates complaints about conflicts of interest and related concerns under the state Ethics Act, which applies to public officials and public employees. Violations of the act can lead to such actions as the filing of administrative financial penalties and a commission referral to a district attorney for the filing of criminal charges.

"Erie Rise is cooperating fully with the Ethics Commission," Shields said in an email to the Erie Times-News, which asked if she had comments other than what she and Anderson said in court. "We expect to promptly satisfy their concerns. This inquiry was likely prompted by the School District's insistence for a Receiver."

Representing the Erie School District on Monday were lawyer Michael Musone and Neal Brokman, the assistant Erie schools superintendent who is the district's liaison with charter schools. They did not mention the ethics investigation in court.

Based on the information that Anderson and Shields disclosed in court, "The district is aware of an Ethics Commission investigation of Erie Rise," Brokman said in an interview. "We decline further comment because it is an active investigation."

The executive director for the Ethics Commission, Mary Fox, was not immediately available for comment.

Judge again questions the number of Erie Rise employees

Erie Rise, with about 300 students in kindergarten through eighth grade, closed on June 30 after the Erie School Board revoked its charter due to poor academic performance and other issues. The school had operated at the former Emerson School at West 10th and Cascade streets, but since the closure it has been leasing space for its remaining employees at the Booker T. Washington Center.

The number of people Erie Rise still has on its payroll has been a major concern for Piccinini. At the last hearing on the dissolution, on April 9, he questioned Shields and Anderson about why Erie Rise, with no students, needs three full-time employees: Favors, the HR director, who Erie Rise said earns $90,000 a year, and two other employees who each earn $36,000 a year.

Erie Rise is continuing to pay those employees as well as the school's lawyers, an outside financial firm and Anderson, who is getting $76,000 in 2024 to oversee the winding up of the school's financial affairs. Erie Rise paid Anderson $110,000 in 2023, according to testimony at the court hearings.

Piccinini at the April 9 hearing directed Erie Rise to take a "hard look at the outstanding staffing obligations for a nearly dissolved school" at the next meeting of the charter school's board, on April 11.

Evidence Erie Rise presented at Monday's hearing showed that all three Erie Rise employees are still on the payroll. Anderson explained to Piccinini that Erie Rise needs the employees to help with records retention and other tasks while he handles unforeseen matters, such as the Ethics Commission probe and the federal investigation.

"We are eager to wrap this up," Anderson said of the dissolution process. "I understand this has taken some time. But we have some extenuating circumstances."

Piccinini responded that he had grown more concerned over the pace of the dissolution since the last hearing, on April 9.

"I do not agree that things have gotten better," he said.

Contact Ed Palattella at epalattella@timesnews.com or 814-881-0238. Follow him on X @ETNpalattella.

This article originally appeared on Erie Times-News: Ethics commission looks at Erie Rise in new probe of charter school