Sarah Karp and Catalyst broke a big story back on July 30, 2013. It took a while, but today, as a result of that story, the FBI is investigating a north suburban company and the CEO of Chicago Public Schools, Barbara Byrd-Bennett.

Why?

It all began at the end of that week’s regular school board meeting, when loads of anonymous issues are crammed into one nebulous action, usually enacted with a unanimous vote. This meeting was no different, but Karp was able to discern that, buried among the routine promotions, transfers and purchases was a pretty big contract. A $20 million contract for which there had been no competitive bidding.

“CPS has not given a no-bid contract that big in at least the five years prior to letting this contract,” Karp tells us. “So in just going through the Board reports it sort of raised an eyebrow – it’s a lot of money, why would you do that? What it turns out to be is a for-profit company located in Wilmette that originally provided training for aspiring superintendents.”

And CEO Barbara Byrd-Bennett used to work for them.

That company is called the SUPES Academy. It was run by two individuals, and its stated mission is to help train principals and other higher-up officials in school systems. They function by hiring similar officials from around the county to hold seminars and offer mentoring to less-experienced or struggling school personnel.

Shortly after CPS signed the contract, the seminars began. The first, Karp says, was an unanticipated  mandatory meeting for principals in the middle of July.

“The principals, immediately they were upset about it,” she says. “The thing they really complained about was that the trainers from outside often didn’t  know Chicago well, that often the sessions weren’t specific as to what they needed on a day-to-day basis, that they were supposed to each be given a mentor, and some of their mentors were superintendents who had their own jobs, and  so would just, you know, text them every now and then or email them – hey, how’s it going? Not exactly that close mentor relationship. So principals were saying, y’know, we would really like some professional development. It’s a very difficult job.”

One of the still-unexplained mysteries is why CPS decided to let a “sole-source” contract for something so readily available in this market. Sole-source, or no-bid contracts are usually reserved for purchasing items, such as proprietary software or specific equipment, that can only be obtained from one vendor. Chicago has no shortage of universities and companies offering professional development. And there was no questioning of the action as it passed through the Board meeting.

“They did it in the summer,” Karp explains. “Two weeks after they closed fifty schools. A lot of people did not pay attention…a lot of people were just burnt out. And I think that if you’re gonna try and put something like this in place that might smell a little bit funny, it was actually a pretty good moment to do so. Also, we have an appointed school board. (Bennett) is appointed, there was little discussion and it was passed by unanimous vote. This was just something that immediately smelled funny to me.”

So Karp and Catalyst started to dig.

“After a pretty long FOIA fight, I was able to get the list of people who are supposedly mentoring Chicago Public High School principals and doing the trainings,” she tells us. “And these are superintendents all across the country. And they’re coming to Chicago, maybe for an afternoon or a weekend and they’re getting paid – this is a private organization, so I don’t know exactly how much they’re getting paid – I’ve been told it’s in the thousands of dollars. And if you look at some of their names, their school districts have contracts with SUPES.”

She wrote about one superintendent from Baltimore County who did work in Chicago. “The ethics panel in Baltimore County sanctioned him and made him pay back the money because they said – well, you can’t be working for a place that has a contract with us.”

Barbara Byrd-Bemmet’s contract ends in a couple of months, and the Sun-Times has reported that City Hall sources say the contract won’t be renewed unless she gets out from under this investigation with a clear record.

Over the past several months, the Mayor and Byrd-Bennet have been very public about their claims that the dropout rate at CPS is declining, and the graduation rates are spiking upward. Now we know at least one way in which more CPS students have been graduating. They’re passing through so-called “alternative schools”. Alternative schools have been around for decades, offering specific services for troubled kids.

“They re-enroll dropouts,” Karp says. “They provide a second chance for dropouts.”

But suddenly there are many, many more of these “schools”.

“Under Barbara Byrd Bennett, last year they sort of quietly, again, without much fanfare, decided to bring in all these little alternative schools. Now they call them options schools. Thy’re for-profit, and most of them are computer-based. So it’s basically kids going in on computers and being able to pass classes very quickly.”

In essence, these establishments put kids in front of laptops and serve them proprietary software that replicates the normal high school experience, but in a radically compressed time-frame.

“One week, two weeks, some kids a month, to rack up a credit,” she says. “Most years, kids can get between four and six credits in high school. But we found kids who, in two months they ascended from freshman year to sophomore year.”

And it took some fancy footwork to get these “schools” into a position where their credits could legally be counted toward graduation. “In Illinois, you cannot have a for-profit school,” Karp explains. “It’s against the law. So they had to set them up as units of one of the divisions of CPS. So they’re getting contracted in the same way we’d contract someone to clean the bathrooms. So they’re not schools, technically.”

One of the most remarkable aspects about these schools is the fact that, when their students graduate, they are counted as graduates of their former high school, thereby bumping up the graduation rates of many CPS high schools.

“By the way, the State, when they look at who graduated and they do graduation rates, they do not count kids who get alternative diplomas,” explains Karp. “These kids are getting counted. Chicago Public Schools is figuring out how to count them.”

There are lots of “alternative schools” popping up across the city, some as small and anonymous as a single store-front in a strip mall. And their quality, Karp says, is variable. Catalyst looked into the operations of several.

“One of the most questionable was Magic Johnson Bridgescape, where kids can pass these classes pretty quickly. On the day our story came out, suddenly Rahm Emanuel got $250,000 (from Magic Johnson as a campaign contribution.) Magic Johnson is getting paid to basically brand those schools. He’s getting paid, I think, hundreds of thousands of dollars per school. And the big problem with this is, if it’s just putting a few kids in front of a computer for a few hours, that’s a very inexpensive proposition.” Karp says the critics are starting to ask tough questions. “Why are we spending the exact same amount of  money on that kid, and giving it to a for-profit organization that, we could be doing that ourselves?’

“The Magic Johnson Bridgescape (schools), they’re run by Edison Learning,” she explains.”They are paying, through their budget, four hundred thousand dollars per campus – the campuses have about 200 kids – to Edison Learning to use their software. Now, that’s like two thousand dollars per kid to log on. That’s a lot of money.”

Investigations are continuing, as reporters like to say. And here at Chicago Newsroom , we like to celebrate good reporting.

You can see Sarah Karp’s original reporting on SUPES here. And the joint reporting by Catalyst and Becky Vevea/WBEZ on alternative schools is here and here.