Suit alleges abuse of power at a top-ranked SC Midlands charter school

Allegations of corruption, misspending and strong-arming follow a legal battle regarding management of a top-ranked charter school in Lexington County, according to a lawsuit filed earlier this week.

Pinnacle Charter School Management Group LLC filed suit in Richland County against Charter Institute at Erskine accusing the institute of defaming Pinnacle in an attempt to prematurely sever a contract to run several charter schools including Gray Collegiate Academy in West Columbia and Legion Collegiate Academy in Rock Hill, according to court documents.

Charter Institute at Erskine said it had been investigating legitimate concerns about how Pinnacle was operating three of its charter schools, one of them being Gray Collegiate, according to a statement from Sarah Timmons, a Greenville attorney who is representing the Charter Institute.

Those concerns include allegations of inappropriately awarding subcontracts, paying for duplicative services, unnecessarily hiring lobbyists and “potential financial irregularities,” according to Timmons’ statement and court documents.

“We are very disappointed that Pinnacle, a for-profit, out-of-state company that receives millions of dollars from South Carolina Public Schools each year, chose to respond in this manner and that they continue to refuse to produce documents which belong to the school and the taxpayers of South Carolina,” Timmons said in the statement. “The Charter Institute will not be intimidated or deterred from fulfilling our statutory and legal obligations, including monitoring the legal and fiscal compliance of our schools.”

Pinnacle has spent $15,000 on lobbyists between January 2020 and the end of May, according to S.C. State Ethics Commission records. Between June and December 2019, Pinnacle spent $4,000 on lobbyists, records show.

Rebuffing Erskine Institute’s allegations, Pinnacle said in court documents it has consistently received high marks from an independent auditor.

Pinnacle alleges its operations are above board and it deserves credit for the school’s “excellent” rating from the S.C. Department of Education — the highest-possible rating — its 99% graduation rate, $1.8 million in cash on hand and athletic championships.

Unlike traditional schools, which are operated by a linear chain of command down from the district superintendent to the teacher, Gray Collegiate has a charter sponsor and management companies. The charter sponsor is Charter Institute at Erskine. Gray Collegiate is run by a board of directors, which hired Pinnacle to create Gray Collegiate Academy, organize its curriculum and run the day-to-day operations, according to court documents.

Pinnacle acknowledged in the suit that the Erskine Institute has oversight of Gray Collegiate, but Pinnacle argues the institute consistently undercut Pinnacle with the intent to interfere with its contract to run Gray Collegiate and other charter schools.

Pinnacle alleges the Charter Institute shared private financial information, including salary data, with school boards of schools run by Pinnacle. Erskine Institute also amended a fraud prevention policy “designed solely to oust Pinnacle,” according to the suit.

That policy, Pinnacle alleges, gives the Erskine CEO sole ability to determine what constitutes fraud and has been “weaponized” against Pinnacle, according to the suit.

Pinnacle is represented by Eric Bland of Bland Richter LLP and S.C. Rep. Todd Rutherford of The Rutherford Law Firm LLC. The State has reached out to Bland and Rutherford for comment.

This story was originally published October 23, 2020 at 3:37 PM.