St. Paul, Minn. (June 10, 2021) — Community leaders and elected officials call for a moratorium on charter schools in St. Paul after reports revealed a St. Paul charter school, Hmong College Prep Academy (HCPA), lost $4.3 million after making an illegal investment with a New Jersey hedge fund, according to a press release from St. Paul City Council member Nelsie Yang.
“I am furious to learn that HCPA illegally invested $5 million in a New Jersey hedge fund,” Yang said at a news conference at the St. Paul Capitol with elected officials and community leaders. “The high-risk investment has resulted in a substantial loss. This funding should have been used to support students, educators, and the school.”
This is the same school that was recently issued $36 million in tax-exempt conduit bonds from the City of St. Paul’s Housing and Redevelopment Authority board, a request that only two city councilmembers, Yang and Mitra Jalali, voted against.
Present at the June 10 news conference were Yang, Ward 6 Council member Athena Hollins, State Representatives John Thompson, D-66B, and Annaka Larson, D-67A; Jeff Garcia, Saint Paul Federation of Educators; Clayton Howatt, Parents for St. Paul Schools; Greta Callahan, Minneapolis Federation of Teachers, and Shaun Laden, MFT president, to express their disappointment in the lack of accountability.
“The unchecked growth of charter schools – both new schools and the rapid expansion of existing schools, has an impact on our city and our public school community,” Larson said. “Charter schools receive public dollars, yet are not held accountable for how that money is used the way our public schools are. When losses like this happen, it is our communities that pay the price; both financially by being asked to pick up the financial pieces, and institutionally, when students lose their school.
“SPFE has included, in their contract, an agreement with Saint Paul Public Schools that would support a moratorium on new charter schools in Saint Paul until a study is completed and has been reviewed for impacts on our students and community,” Larson added. “We believe the recent news about HCPA drives home the point that it is time for us to press pause on charter school growth and reflect on this impact.”
Howatt said the events at HCPA are unfortunate, especially for the students and staff of HCPA, as they have the most to lose.
“The notion that an institution funded with public dollars, has millions of dollars to gamble in a high risk hedge fund points to a clear lack of oversight,” Howatt said. “We feel these latest developments further support our stance that a moratorium on new and expanding charter schools is necessary until we can ensure our educational system in St. Paul benefits students, families, and our broader community, not hedge fund managers.”