How New Jersey Private Schools Misuse Public Funds

I almost threw out the letter.

It was June 2013, and I had just published a major expose in The Star-Ledger about how one of New Jersey's most politically connected engineering firms parlayed secret -- and illegal -- campaign donations into millions of dollars in government contracts. With a trove of internal documents I had obtained, the report for the first time named the politicians in all corners who had profited from the firm's crimes. The story was a bombshell, and letters and emails poured in from all corners. One in particular asked me to shift my focus to political contributions and questionable conduct by the owners and top officials of one of New Jersey's private schools for students with disabilities. I had no idea what these schools did, who paid for them, or that they even existed.

And that's when the letter almost went into the trash.

But my better instincts prevailed, and I tucked it into a pile of odds and ends on my desk. A few weeks later, the state auditor released a report on the state Department of Education's office of special education programs. Toward the end of the report, the auditor included an observation that much of the spending at private special-needs schools, overseen by the department, appeared questionable. The report was generic, mentioned no facilities by name and gave few details as to what was occurring. But it matched some of the problems that had been described in that reader's letter. I pulled it out of the pile, called up the reader and asked to meet for lunch. A story was born.

New Jersey guarantees an education to every child, but sometimes students' disabilities are so complex that public schools must send them to other schools, such as these private ones, which offer specialized services. Our four-month investigation, "Private Schools, Hidden Riches," found the state's about 170 private special-needs schools operated in a twilight zone of the education system, under a special set of rules that allowed them to spend taxpayer money in ways public schools cannot. But unlike public schools, there are no elected officials to hold accountable, no school board meetings to attend or budgets to examine. As a result, questionable spending -- nepotism, high salaries, fancy cars, generous pensions and shady business deals -- have continued for more than a decade.

The investigation was a combination of working sources and combing through thousands of documents obtained using the state's public records law, including audits, school program materials, disclosure forms and correspondences with state officials. I used state business filings to connect school owners with companies that were doing business with their schools -- companies that, in many cases, were their own. The investigation included an online database allowing the public for the first time to see how much money executives and other top officials at the schools earned.

The work drew an enormous response: a high-level review by Gov. Chris Christie, a hearing by the state Assembly, the resignation of a state education ethics commissioner, pledges by the schools to improve public accountability and widespread calls for better regulations. Follow-up stories into the questionable care of disabled children at a residential treatment center linked to one of the schools led the Christie administration to announce that it would no longer do business with the facility, and the center shut down. But, nearly two years later, not everything is better.

The Christie administration has yet to propose any new regulations for the schools, allowing them to continue to operate under a different set of rules than public schools, and allowing them to spend money in ways many consider inappropriate. Officials say they are working on a proposal. The state Legislature -- despite widespread calls for change and the Senate president, Stephen Sweeney, declaring, "We're going to fix it" -- has taken no steps in the absence of new regulations.

But New Jersey taxpayers now know more about how their money is spent, thanks to one reader who took the time to write a letter. Journalists are always scouring for the next story, even when they're knee-deep in the current one. But never should we disregard the very people we serve, our readers, who often are the ones who lead us down our next path, blow the whistle on wrongdoing or connect us with people who can provide us the information we need to report a story. Throwing out that letter might have killed a major investigation before it was ever born, and as much credit for the story must go to the reader who took the time to care enough to write it.

This post is part of a series produced in conjunction with the Livingston Awards for Young Journalists. The awards identify top talent early in their careers (entrants must be under 35) and boost winners by presenting them to the senior levels of the profession at an annual lunch in New York City. For more information on the program, run by the University of Michigan and supported by the Knight Foundation, read here.