U.S. agents probe charter's spending

Federal criminal investigators are probing allegations of financial mismanagement at Philadelphia Academy Charter School in Northeast Philadelphia.

The federal investigation is in the early stages but is said to involve representatives from several agencies, including the U.S. Attorney's Office and the Inspector General's Office of the U.S. Department of Education.

The federal authorities are working with the Philadelphia School District's inspector general, who for several weeks has been conducting an inquiry into allegations of financial mismanagement, nepotism, and conflicts of interest at the charter school.

A federal subpoena was delivered Wednesday to a Delaware County technology company after authorities learned that the company had recently been hired to remove hard drives of computers used by the two former top officials at the center of the investigation, according to several sources with knowledge of the investigation.

It could not be determined yesterday when the request was made to remove the hard drives.

The sources said the federal agents want to ensure, in part, that potential evidence in the case is preserved in its original state and to determine when the original request was made to the technology firm.

The computers were used at Philadelphia Academy by former chief executive officer Kevin M. O'Shea and Brien N. Gardiner, the school's founder, the sources said.

The subpoena was delivered to Penn Systems Group Inc. in Edgmont, Delaware County. Penn Systems officials did not return several phone calls left at their office yesterday. It could not be learned when the company must respond to the subpoena.

The company provides technology services for industry and schools throughout the mid-Atlantic region, including support, service and maintenance.

Philadelphia Academy has previously hired the company. The charter paid $142,756 for computer repairs in 2005-06, according to the school's most recent nonprofit report filed with the IRS.

The school received nearly $14 million in local, state and federal funds during the 2006-07 academic year.

After learning that other sources had confirmed the federal probe, the charter board's attorney said the board was cooperating with investigators.

"As was the case with the school district and the Inspector General's Office, the board has authorized us to fully cooperate with the federal investigation," said Henry E. Hockeimer, at Ballard, Spahr, Andrews & Ingersoll. He declined to say when the federal probe began or comment further.

The board of the popular charter school hired the law firm last month to conduct an internal probe of allegations of financial mismanagement, nepotism, and conflicts of interest.

Hockeimer and other lawyers told parents and board members at a meeting last week that the preliminary results of their inquiry found evidence of widespread financial wrongdoing, including the use of school credit cards to buy personal items.

Government officials yesterday declined to comment on the federal probe.

"We can neither confirm nor deny the existence or nonexistence of a federal investigation," said Patricia Hartman, spokeswoman for the U.S. Attorney's Office.

John F. Downs, the district's inspector general, declined comment.

A spokeswoman for the Inspector General's Office of the U.S. Department of Education in Washington did not return phone calls yesterday.

O'Shea's attorney, Ronald H. Levine, said he was not aware of any federal investigation.

Albert S. Dandridge 3d, who represents Gardiner, declined comment.

The school's board last week ended Gardiner's consulting contract and fired O'Shea, the school's former CEO.

Last month, the five-member Philadelphia School Reform Commission delayed a vote on extending Philadelphia Academy's operating charter for five years to give the district's inspector general time to complete his inquiry.

The vote came a day after The Inquirer disclosed that the school's top administrators were getting paid more than most area school superintendents and detailed allegations of nepotism, mismanagement, and conflicts of interest.

As The Inquirer reported last month, Gardiner collected a total of $224,500 in salaries in 2005-06 from Philadelphia Academy and Northwood Academy, another charter he opened. He also received $70,000 from a nonprofit he founded to provide special-education services. Gardiner retired from the school in 2006 but remained as a consultant.

O'Shea, a former city police officer with a high school diploma, was paid $206,137 as CEO in the 2006-07 academic year.

Philadelphia Academy Charter School, which opened in 1999, is one of the district's most popular charter schools, with 1,200 students in kindergarten through the 12th grade. The elementary school is at 11000 Roosevelt Blvd.; the high school campus is nearby at 1700 Tomlinson Rd.