The money Epic Charter Schools leaders contributed to Joy Hofmeister’s campaign for state superintendent did have an influence.
But rather than curry her favor, Hofmeister told state auditors earlier this year the donations made her uncomfortable, according to records released Wednesday.
In 2015, just after Hofmeister had taken office, federal investigators were looking into Epic. Because Epic’s founders had supported her campaign, Hofmeister didn’t want to know details, according to records released by the state Auditor and Inspector.
The Education Department’s general counsel, David Kinney, proposed being the sole contact person for the federal investigators.
Kinney also walled off attorney Brad Clark, who joined the department the same year. Clark had previously worked with Epic attorney Bill Hickman. Clark’s wife, Tiffany, once worked with Hickman and continues to serve as Epic’s board secretary.
Education Department staff built what they called a “Chinese wall” around Clark, strictly separating him from all matters involving Epic. Some even signed an agreement that they would exclude Clark from conversations about Epic.
The new details about Hofmeister and Clark’s disconnection from issues surrounding Epic come from state auditors’ records, which include summaries of interviews with Hofmeister and other department staff.
“We just answer questions, or provide information or records, as requested. We don’t necessarily have information on the status of an (external) investigation,” Hofmeister said.
Federal investigations into the school’s enrollment practices and finances dated to 2015, but Hofmeister didn’t find out until the summer of 2018.
That’s when the FBI and the Office of Inspector General, a division of the U.S. Department of Education, interviewed her. She told an investigator she had “no idea” there were issues with Epic.
Now, the Board of Education, acting on advice from Hofmeister and Clark, is attempting to recoup millions of state tax dollars based on the auditor’s report.
Epic, the state’s largest school system with a reported 58,000 students, disputes the findings.
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Epic’s deadline to return the funds is now mid-February — 60 days from the release of the auditor’s work papers, which happened Wednesday. The work papers — 150,000 pages of documents — include emails, memos, employee information and other records.
State Auditor and Inspector Cindy Byrd on Wednesday announced Epic’s financial reports were re-evaluated and now show the school incorrectly classified and reported at least $9.7 million paid to school administrators as non-administrative expenses.
Oklahoma caps spending on administration at 5% for schools with more than 1,500 students; schools that exceed that amount can be penalized. Epic pays 10% of its revenue to the for-profit management company Epic Youth Services.
Epic Youth Services is owned by school co-founders David Chaney and Ben Harris, who have profited at least $10 million from the arrangement, according to an Oklahoma State Bureau of Investigation affidavit.
The audit also found Epic improperly transferred $203,000 in state money to Epic Charter School California.
Concern About ‘Positive Relationship With Epic’
The Oklahoma State Bureau of Investigation began investigating Epic in 2013 at Gov. Mary Fallin’s request. An investigator in a 2019 search warrant affidavit alleged the entire premise of the school was a money-making “scheme.”
Hofmeister has said the department has fielded complaints about Epic for years. But it was the audit, requested in 2019 by Gov. Kevin Stitt, that spurred action from her agency and others. Part one of the audit was released on Oct. 1.
Hofmeister accepted $9,000 in campaign contributions from Epic leaders in her 2014 race against incumbent Janet Barresi, records show. She told an investigator with the Office of Inspector General in the summer of 2018 she was concerned about taking additional donations and “continuing her positive relationship with Epic.” The investigator told her to “just keep doing what she was doing,” the records show.
She continued to accept donations from the school’s leaders during her re-election bid.
Epic co-founders, their wives, and the school’s chief financial officer Josh Brock contributed a combined $40,499 to Hofmeister’s 2018 campaign, state Ethics Commission records show. (They’ve also contributed thousands of dollars to Stitt and Attorney General Mike Hunter Gov. Kevin Stitt.)
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Ryan Walters had held the position in addition to his job as superintendent of public instruction.
Clark’s connection to Epic was more direct. For several years, he worked at Hickman Law Group with Epic’s attorney. Clark was the lead attorney representing Epic in a lawsuit against the state Education Department in 2010.
Clark told the auditors that his wife, Tiffany, stopped working for Hickman in 2015.
She and Clark wed in 2015 at Hickman’s Norman home, marriage records show.
Clark told auditors he didn’t agree with the “Chinese wall” agreement because it was retroactive and had no end date.
But David Kinney, then general counsel for the Education Department, insisted, according to the interviews. Kinney left the department in 2018. Reached by phone Friday, Kinney referred Oklahoma Watch to his attorney, Laura Holmes. Holmes did not respond at the time of publication.
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