Originally Published: September 11, 2018 7:49 p.m.
PHOENIX (AP) — A state legislator who owns a charter school is poised for a payday after the Arizona State Board for Charter Schools approved the transfer of his for-profit charter-school chain to a newly formed nonprofit company.
The vote will let state Rep. Eddie Farnsworth sell for-profit Benjamin Franklin Charter School’s four campuses — paid for with state tax dollars — to the nonprofit company for between $11.8 million and $29.9 million, according to Charter Board records.
The longtime Republican state representative also will retain nearly $3.8 million in “shareholder equity” in the for-profit company, and could receive a management contract to continue operating the schools, The Arizona Republic reported .
Benjamin Franklin Charter, which reported a $194,241 profit in fiscal 2017, receives about $20 million a year in state funding.
Farnsworth, in an interview with The Republic, said he is deserving of a big financial reward because he took the risk in 1995 to start his charter school chain and personally guaranteed millions of dollars in loans to launch Benjamin Franklin.
Farnsworth told the board that if he had wanted to make money, he merely could have sold the schools and cashed out. “I make no apologies for being successful,” he said.
The transfer plan calls for the new nonprofit operator to hire a contractor to manage the schools, an arrangement similar to other charter chains like Basis and American Leadership Academy.
Records submitted to the Charter Board appeared to show Farnsworth had already been hired to manage the schools.
But he said the document was a draft intended to give board members an understanding of the management contract.
Farnsworth built his school chain more than two decades ago and became its sole owner in 2017, when he used $2.2 million of Benjamin Franklin funds to buy out his partners, Sharon Clark and Roy L. Perkins Jr., records show.