North Carolina board seeks funding control over state charter schools after state strips board of other powers

The State Board of Education approved on Thursday a policy that seeks to reassert control over North Carolina charter schools weeks after the General Assembly shifted decision-making for approving these nontraditional public schools to a panel filled with mostly legislative appointees.

The board voted 8-3 to direct the Charter School Review Board to submit to the education board all initial and renewal charter applications that the new panel approves and related financial documents. The State Board of Education will then decide whether to disburse state and federal funds to the charter school after determining if it complies with government funding regulations.

The policy doesn’t include a list of reasons why funding would be withheld, WRAL-TV reported. State Board of Education members supporting the policy say they’re exercising their authority from the North Carolina Constitution to allocate funds to and ensure financial accountability for charter schools, of which there are over 200 statewide.

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Education board Chair Eric Davis said seven charter schools have closed over the last few years, and “at least five of them with questionable financial situations,” The News & Observer of Raleigh reported.

“What judgment will we use in determining funding?” Davis said. “We’ll use the same judgment that we use in determining funding for any school.”

Appointees of Democratic Gov. Roy Cooper to the board voted for the policy, while “no” votes came in part from Lt. Gov. Mark Robinson and State Treasurer Dale Folwell, who are both Republicans.

The State Board of Education of North Carolina is seeking to control funding over the state’s charter schools.

Under previous law, a state Charter Schools Advisory Board made recommendations on charters to the State Board of Education, which had the final say.

But last month the GOP-dominated legislature overrode Cooper’s veto of the bill that renamed the advisory board the Charter School Review Board. Its charter decisions are now final, with the State Board of Education hearing appeals. Eight of the 11 members of the review board are picked by the House speaker and Senate leader.

Republican board members complained the policy was unveiled on short notice, with the board not following its usual practice of waiting a month to adopt a policy.

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“To do this in one day is unfair,” Robinson said. “It’s unprofessional, and it smacks of political pandering and should not be tolerated on an issue this important.”

Davis said the State Board of Education needed to act now because the review board will meet next week to reconsider charter applications for two schools that were rejected by the State Board of Education.

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Republican state Superintendent of Public Instruction Catherine Truitt, the nonvoting board secretary, said the policy is vague, and charter schools don’t get funding until they’re very close to opening.

“I don’t see what a couple of bad actors have done should be a policy that jeopardizes essentially the ability of a charter school to open its doors to the families who’ve chosen to go there,” Truitt said.

The North Carolina Coalition for Charter Schools, a trade association for charters, said the separation of funding and charter application approvals violates state law and threatens the ability of some new schools to open in a state with long waiting lists of students.

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If Smith’s team can prove this in court, then they could undermine Trump’s advice-of-counsel defense. If Trump relied on a lawyer that he knew was drunk and acting recklessly, then that would add to the prosecutors’ argument that Trump was acting with willful recklessness in his attempts to overturn the election.

Giuliani denied the allegations of drunkenness. “It’s unfortunate that political opponents would use a serious problem like alcoholism as part of their efforts to smear Mayor Rudy Giuliani—a man who took down the Mafia, cleaned up New York City, and comforted the world following the September 11th terrorist attacks,” Giuliani’s political advisor Ted Goodman said in a statement to The New Republic.

This isn’t the first time that Giuliani’s alleged drunkenness has come up in a lawsuit. Giuliani’s former associate Noelle Dunphy sued him in May, accusing him of promising to pay her a $1 million annual salary but instead raping and sexually abusing her over the course of two years. Her lawsuit alleges that Giuliani was constantly drunk, talked openly about trying to overturn the 2020 election, and even plotted to sell pardons with Donald Trump for $2 million each.

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SBA program upended in wake of Supreme Court affirmative action ruling

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Thousands of Black, Latino and other minority business owners are scrambling to prove that their races put them at a “social disadvantage” after a federal judge declared a key provision of a popular federal program unconstitutional, extending the U.S. Supreme Court’s recent retreat from affirmative action.

The Small Business Administration’s 8(a) Business Development program was meant to open a pipeline to billions in government contracting dollars for historically disadvantaged groups. But in July, a federal judge in Tennessee struck down a provision of the program that equated race with social disadvantage.

The decision — one of the first to affect the private sector in the wake of the Supreme Court’s June decision upending race-conscious college admissions — throws into disarray an SBA program that has served minority-owned small businesses for about five decades. Legal experts said it could signal trouble for other programs meant to help underrepresented groups win federal contracts, including veterans and women.

Under the new guidelines, being Black, Hispanic, Asian or Native American is no longer enough to automatically qualify as socially disadvantaged — a key step in making it into the program. Instead, in a mass email distributed Aug. 22 by SBA officials, business owners were instructed to submit an essay demonstrating that race had hindered their success.

The revisions sparked a “full-blown panic” from many small-business owners who had benefited from the social disadvantage presumption, said Nicole Pottroff, a government contracts lawyer with Koprince McCall Pottroff in Lawrence, Kan., who for years has helped businesses apply for the program.

“I had a lot of initial calls from clients, from blog readers, from contractors across the board, asking: ‘What does this mean?’” she said, adding that she has seen a “massive influx” of businesses needing help with crafting the essays.

Approximately 4,800 businesses participate in the 8(a) program, and nearly 4,000 of them were certified under the presumption of social disadvantage, according to the SBA. In 2020, 8(a) firms were awarded $34 billion in government contracts, according to a Congressional Research Service report.

“The SBA is proud of our work to promote equity and level the playing field in federal procurement to attract a diverse supplier base and ensure competition, innovation, and performance,” SBA Administrator Isabella Casillas Guzman said in a statement, adding that the agency is working with the Justice Department to determine its next steps.

In the meantime, additional SBA staff are being trained to review the narratives, according to the agency, which is working with the Justice Department to create additional guidance for businesses and the agencies they work with. The Justice Department declined to comment on whether it will appeal the judge’s ruling.

Michael Rosman, general counsel of the Center for Individual Rights, a conservative public interest law firm that sued the SBA on behalf of a White business owner, Celeste Bennett, praised the court ruling. In a statement, Rosman said that “we and our client are pleased that we were able to achieve a significant goal of the litigation: eliminating the explicit use of race in determining who is entitled to participate in a very advantageous federal contracting set-aside program.”

The upending of the 8(a) program marks one of the first casualties in the business world of the Supreme Court’s landmark decision holding that race-conscious admissions programs at Harvard and the University of North Carolina violate the Constitution’s guarantee of equal protection. The 8(a) program’s reliance on the presumption of social disadvantage was similarly unconstitutional, District Judge Clifton L. Corker wrote in his July 19 order enjoining the SBA from using the presumption.

Corker, who was appointed by former president Donald Trump, referred to the Harvard case nine times, in what observers called one of the first interpretations of the Supreme Court’s affirmative action ruling. “The facts in Students for Fair Admissions, Inc. concerned college admissions programs, but its reasoning is not limited to just those programs,” Corker wrote in a footnote.

The SBA changes come amid a broad legal assault on diversity, equity and inclusion (DEI) initiatives in the private sector, one that has only intensified in the wake of the Harvard and UNC decisions. Edward Blum, the conservative activist behind the two college admissions cases, has several pending lawsuits targeting private-sector DEI programs. And in July, more than a dozen Republican attorneys general fired off letters warning the nation’s largest companies that explicit racial quotas and preferences in hiring and promotions would invite legal action.

That a judge struck down the SBA’s use of the presumption of social disadvantage “wasn’t completely surprising to us because we’ve known that there’s been a number of cases that have been brought [and] funded by conservative legal foundations that have always questioned any affirmative action,” said Antonio Franco, managing partner at PilieroMazza, based in Washington, which works with government contractors to apply for the 8(a) program.

After the Harvard-UNC rulings, Franco said he remembered thinking it was “only a matter of time before that same kind of ruling comes out with regard to the 8(a) program.”

Other government business programs meant to benefit disadvantaged groups may also be vulnerable, Franco added. He cited the Transportation Department’s Disadvantaged Business Enterprise program, which dispenses transportation-related construction contracts to minority-owned businesses. Though different from the 8(a) program in some respects, it relies on the same social disadvantage presumption.

Pottroff said the Harvard-UNC rulings have essentially made no SBA program safe from scrutiny and legal challenges, including the Service-Disabled Veteran-Owned Small Business program, Women-Owned Small Business program, the Small Disadvantaged Business program and the Historically Underutilized Business Zones program — all of whose certifications are key in helping disadvantaged business owners win contracts throughout the federal government.

“I am very concerned that the [8(a)] program itself is going to be on the chopping block at some point, and I think that is why SBA is swiftly implementing things and trying to appease the courts … because they don’t want the entire program to be on the chopping block,” she added.

To qualify for the 8(a) program, a small business must meet several requirements — including being 51 percent owned by U.S. citizens who are socially and economically disadvantaged. Economic disadvantage is defined as having a personal net worth of $850,000 or less, an adjusted gross income of $400,000 or less and assets totaling $6.5 million or less. Social disadvantage is defined as racial prejudice — or cultural bias — within American society stemming from circumstances beyond an individual’s control, and people of certain races and ethnicities were automatically assumed to be socially disadvantaged without further proof.

Those who did not benefit from the presumption of social disadvantage were required to write a narrative citing specific instances in which an objective distinguishing feature negatively impacted a business owner’s advancement in the business world, and that disadvantage must be “chronic and substantial,” according to Pottroff. Often, business owners who applied to 8(a) through the narrative did so on the basis of their gender, sexual orientation or a disability, she said, and they were often extensive and detailed documents. Though they had a high success rate, Pottroff said, crafting narratives requires the help of lawyers and imposes a substantial financial burden.

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