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From July 1992 to March 1996, Baltimore’s public-school system contracted management and instructional services in 12 of its schools to a for-profit corporation called Educational Alternatives Inc. (EAI). It wasn’t exactly what you’d call a success.

Under the company’s trademark phonics-heavy teaching method, which it calls the Tesseract Methods, reading scores on the Comprehensive Test of Basic Skills slightly improved Baltimore’s abysmal average and hit the 41st percentile. But the stint was nonetheless wildly unpopular.

An independent report found that the seven privatized elementary schools alone were costing Baltimore City roughly 11 percent more per pupil than the comparison schools. The report called the Tesseract Method little more than “a collection of useful teaching strategies” with “little evidence of a well-thought-out plan for implementation.” And the Baltimore Teachers Union and its parent group, the American Federation of Teachers, sued EAI in 1993, alleging that the company had violated the city’s charter by denying citizens the right to decide how schools should be run.

The suit was eventually dropped, but a scathing series of articles by Gary Gately in the Baltimore Sun over the next two years chronicled an ongoing list of corporate malfeasance: EAI, Gately wrote, had tampered with control groups and misrepresented test scores to oversell its record, illegally dismantled pre-existing special education programs in the Baltimore schools, abused Chapter 1 federal funds, and lied about increases in student attendance. The company was found to have billed the city for more than $1 million in legal fees, accounting expenses, and travel and entertainment costs in 1992 and again in 1993, according to the articles. And in 1994, EAI stockholders filed a class-action lawsuit against the company for misrepresenting its investment portfolio and making unethical accounting decisions.

Baltimore politicians piled on, calling the privatization experiment a waste of money and a failure. After refusing to take a $7 million cut in its budget, EAI was run out of Baltimore on March 4, 1996, one year and three months short of the end of its five-year contract.

The company similarly lost contracts in Hartford, Conn., and Dade County, Fla., during the same period of time. And its efforts to come into D.C. were rebuffed. “It was extremely nasty,” says Mary Levey, counsel and analyst for Parents United for the D.C. Schools. “The more anybody learned about EAI, the less popular that idea became.” Last January, in the wake of these incidents and other changes at the company, EAI changed its name to the Tesseract Group.

Given its track record, you might wonder where the company would be welcomed again—no matter what it was named. But Tesseract had to look no further than Southeast D.C., where a desperate neighborhood and the current vogue for charter schools made forgetting the past an acceptable substitute for history lessons. Stiffed by the District years ago, the firm is now making its way back to town inside the Trojan horse of the latest educational trend.

The Rev. R. Vincent Palmer is worried that kids in his Southeast D.C. neighborhood will miss out on charter schools. “Our children need the benefits of the kinds of educational alternatives that are being offered in other parts of the city,” he says. “And I’ve forged headlong into trying to make that a possibility.” The Congress Heights clergyman is so eager to make it a possibility, in fact, that he’s hitched his wagon to Tesseract—despite all the publicity generated by the company’s track record.

Palmer filed an application for a charter with the board last year, along with 12 other would-be schools. In February, his SouthEast Academy of Scholastic Excellence passed the board’s rigorous selection process, one of only two schools approved this year, according to Nelson Smith, executive director of D.C.’s charter-school board. Smith says the proposed school—which will serve 875 students in grades K through 6, with plans to expand through grade 12—would be the first charter school east of the Anacostia River. And it will be the first school in D.C. managed by Tesseract.

Palmer says he isn’t fazed by the company’s history. “I had heard [that Tesseract] had been in Baltimore, so I had to find out why it was that they were no longer involved in Baltimore,” says Palmer. “After doing some research, I discovered that it was more political than anything else.”

Palmer is convinced that the company’s history won’t impinge on his plans for the SouthEast Academy, and he hopes to take advantage of the group’s experiences and established curriculum. “I don’t anticipate similar problems here,” says Palmer. “Tesseract knows right now that the board has hired them to manage the school. This is not Tesseract School. This is the SouthEast Academy Charter School. We will make sure that they get what is required to operate the school properly, but we will be ultimately responsible for the school.”

The District’s chartering authority is allowed to approve 10 charters each year. On general principle, it doesn’t grant charters to groups like Tesseract. “Under D.C. law, the charter schools must be nonprofit organizations,” says Smith. “This charter was awarded directly to Palmer’s organization, but management of the school has been contracted to Tesseract. Technically, they can do that.”

Palmer has sent representatives from his seven-member board of trustees to evaluate Tesseract’s charter and private schools in Arizona and says he’s impressed with their programs. Tesseract’s management plan offers small class sizes—roughly a 12-to-1 student-to-teacher ratio—teacher aides,

computers in every classroom, and a “child-

centered” core curriculum heavy on reading, writing, and arithmetic. It’s worth mentioning that the board member inspection tour was subsidized by Tesseract.

Building on his 22 years as a pastor at Rehoboth Baptist Church, Palmer is willing to forgive the company’s alleged trespasses in Baltimore and take its representative’s words at face value when they say the company has changed and the situation is “altogether different.” His feeling is that all sins were erased when the charter board approved his application.

“They were concerned first of all that we had an excellent curriculum, that we had looked into a site to house the school, that the board understood its responsibility to the school and to the Public Charter School Board, and that the management company recognized its place,” says Palmer. “I wanted to make sure that Tesseract recognized that they could not run the charter school like their own private schools. They answer to us; we answer to the charter school board. The governance of the school is placed on us, and we’ll be the ones held accountable.”

Finding a forgiving preacher was serendipitous, because Tesseract has had its eye on Washington for a long time. As early as 1991—shortly before the $44 million disaster in Baltimore and long before the D.C. School Reform Act—EAI had been lobbying to open a school in Southeast.

At the time, the company was a small, for-

profit management firm looking to hawk its Tesseract Method to early pioneers in the public-school privatization movement, and it needed proving grounds for its product. D.C.’s school system was interested, but the legislation didn’t yet exist to navigate such a project through the murky waters of bureaucracy.

There are some key differences between Tesseract’s involvement with SouthEast Academy and EAI’s role in Baltimore. Most important, the charter school will get the same per-pupil amount as public schools, plus whatever it can raise through its own efforts. Still, a repeat performance isn’t out of the question.

“You have to understand that it’s not a Tesseract school; it’s only a Tesseract-managed school,” says Joe Smith, Tesseract’s director of charter school development. That distinction was enough to convince Palmer and his colleagues, and Smith says the school will have safeguards and an escape hatch to prevent the kind of problems encountered in Baltimore. “The school belongs to the SouthEast Academy Board of Trustees. We’re under a performance contract.”

Furthermore, Joe Smith says his company’s experience in Baltimore has been misrepresented, and he stands behind his company’s history. In front of Palmer and his staff, Smith echoes the official spin of “Promises Delivered,” a polished PR package from 1997 in which the company touts its time in Baltimore as an unheralded success. “Based on a federal audit and an independent assessment of our test scores, Tesseract was doing very well in Baltimore,” he says, contrary to the findings of at least three independent studies.

That argument drives teachers unions crazy. “We did a whole study of what they were doing there,” says Bella Rosenberg, assistant to the president of the American Federation of Teachers. “And then the independent studies came through, and it turned out we were actually being quite gentle. You could have bought a very fine public education for very many students with the money that was wasted in Baltimore. It got so egregious that eventually the school board had to do the right thing.”

The controversy of turning public schools over to private companies has been brewing for the last 20 years, and profit motives have always been under scrutiny. Again, Joe Smith says he doesn’t understand the hubbub, noting that public schools contract with private companies all the time.

But not all private companies have generated the animosity that Tesseract has. “It boils down to this: Charter schools should be genuinely public and accountable to the public,” says Rosenberg. “They must meet standards that are at least as high as other public schools’, and they need something more than just a better widget. The Tesseract Method has failed dismally in a number of places, and EAI alone is responsible for any rotten thing that’s happened to them.”

But Elizabeth Smith, who will be the executive director at the SouthEast Academy, says she’s impressed with that very same teaching method. “My No. 1 goal is to make sure that every student who walks through the doors at SouthEast Academy leaves the school with marketable skills and will be so highly motivated that they’ll want to continue their education,” she says. The motivation, she says, will come from Tesseract’s curriculum.

Beyond the technicalities of getting a charter, the SouthEast Academy has one more big hurdle to clear before it can begin serving its community and allow students to pass through its doors: It needs to find a set of actual doors and a building to hinge them to.

The most logical of the sites Palmer and his board say they have scoped out for the school is the recently abandoned Safeway building at the intersection of Martin Luther King Jr. Avenue and Milwaukee Place SE. When Safeway abandoned the site last summer, community activists raised a ruckus over Ward 8’s lack of commercial infrastructure. Perhaps it’s a sign of D.C.’s uncritical stance that at a recent community meeting, there was less concern about who was running the school than whether it would land in the neighborhood’s dairy aisle.

“It’s not a done deal, and I’m trying to stop it,” says Sandra Seegars, a community activist in Congress Heights. “We have churches and schools all over down here, but nowhere to buy food. If the preacher at Rehoboth Baptist Church wants a school so bad, I say close the church down and put it there.” Seegars has suggested a handful of other abandoned sites for the school, including the former Rite Aid building on Martin Luther King Boulevard, two blocks south of the Safeway building.

“Some community people have been adamant that another grocery store should go in that lot, because they want to be able to do their shopping without having to take a bus,” says Palmer. “I can understand that, but so far nobody has put forth a serious proposal to do it, and it just looks like it isn’t going to happen.”

Because Palmer hopes to expand the school to eventually include grades 7 through 12, the Safeway building is one of only a few suitable sites available in the area. He held a Ward 8 community meeting at the adjacent Police & Boys Club in February to dispel myths about his plans (one prevalent rumor in circulation had incorrectly identified the proposed school as a prison), but he says neighbors still aren’t convinced. “They don’t care what goes in there, as long as it’s a grocery store,” jokes Palmer. “If I have a choice between being able to walk to the grocery store or allowing my child to go to a school that will give him the kind of education he needs to survive in this world, I’m going to inconvenience myself to go get those groceries somewhere else.”CP