In February 2019, Derek Black, Preston Green and I wrote a short piece for The Conversation arguing that charter schooling has a lucrative loophole that would be easy to close. Our one-sentence version of the problem was this: some “nonprofit” charter schools take public money and pay their owners with it.
Seven years later, that sentence describes the household finances of the Republican nominee for governor of Florida.
On October 22, the Tampa Bay Times and Miami Herald reported that five state-funded charter schools have paid more than $30 million over four years to two private companies run by Erika Donalds, and that one of them, OptimaEd, is slated to collect another $15.7 million this year from a single virtual charter school. Byron Donalds’ own federal disclosures show that the largest share of the couple’s wealth comes from those companies. The election is nine days away.
None of this is new to me. I’ve been writing about these arrangements, on this blog and in peer-reviewed and law review work, for more than a decade, and I’ve been quoted in this story from the start, beginning with CBS’s investigation last December. Here I want to do what a quote can’t: put the Donalds’ arrangements in the frame I’ve built over that decade, with Gary Miron on the business models, with Preston Green on the law of related-party transactions, and alongside the company store, real estate and edu-grift cases I’ve been cataloging here.
The frame: having it both ways, and the gatekeepers who aren’t there
Preston Green, Joseph Oluwole and I started from a simple legal observation in “Having It Both Ways” (Emory Law Journal, 2014). Charter schools claim the funding of public schools and the autonomy of private ones. They are public when the money flows in and private when anyone asks where it went.
A year later, Gary Miron and I laid out the business models themselves in The Business of Charter Schooling: Understanding the Policies that Charter Operators Use for Financial Benefit (National Education Policy Center, 2015). We showed how operators, working largely within existing law, convert public revenue into private gain: management fees paid to affiliated companies, less-than-arm’s-length leases, and third-party entities that use taxpayer dollars to acquire land and buildings the public never ends up owning. We also warned that disclosure rules were weak enough that legal violations, ethical problems or simply bad practices would rarely come to light except through investigative reporting, whistleblowers or litigation. Eleven years later, that is a fair description of how the public learned about Optima: from CBS, the Florida Bulldog, the Herald and a lawsuit.
In “Are Charter Schools the Second Coming of Enron?” (Indiana Law Journal, 2018), Preston, Joseph and I followed that logic to its financial and legal conclusion. Enron’s collapse turned on related-party transactions: special-purpose entities controlled by insiders, sitting on the other side of the company’s own deals. We showed that charter operators were building the same structure, with a nonprofit school on one side and affiliated management, real estate and service companies on the other. Our main point was about gatekeepers. Auditors, governing boards, authorizers and state agencies are supposed to catch these arrangements, and the law gives most of them neither the mandate nor the tools.
The 2019 Conversation piece with Derek Black turned that into three fixes. Prohibit charter owners and operators from leasing or buying property from their own other companies. Require state officials to audit facility purchases and leases. Give charter employees whistleblower protection and a reward for reporting abuse.
On this blog, I’ve since organized the mechanisms into what I call the grift model, four repeating types:
- Enrollment inflation: getting paid for students who aren’t really being educated.
- Related-party transactions: the school’s own leadership on both sides of a contract.
- The company store: a captive vendor the school must buy from, owned by the people running the school.
- Real estate: arranging for a related party to own the buildings public dollars paid for, then leasing them back.
The central finding of that work, laid out in Edu-Grift Top 5 last month, is that the mechanisms moving the most money are the ones nobody has to break the law to run. That is the right lens for the Donalds. Nothing I describe below has been found illegal, and I’m not suggesting otherwise. The problem is the structure Florida permits, and who would be in charge of it.
What the reporting has shown, in order
The record has been built by three sets of reporters over sixteen months. Taken together, it describes a network that started as a nonprofit and migrated its money toward for-profit companies owned by its founder.
| When | Outlet | What it found |
|---|---|---|
| Oct 2026 | CBS Miami | Byron Donalds said his wife has no charter business involvement today; his campaign then clarified that OptimaEd still contracts with Optima Classical Academy. |
| Oct 2026 | Tampa Bay Times / Miami Herald | Five state-funded charters paid more than $30 million over four years to Optima Management Services and OptimaEd; OptimaEd is budgeted to receive $15.7 million from Optima Classical Academy this year. Most of the couple’s wealth comes from her companies. |
| Jan 2026 | Florida Bulldog | Treasure Coast Classical Academy’s lawsuit alleges an undisclosed conflict of interest with Summit Construction, which built or renovated much of the network. |
| Dec 2025 | CBS News (aired on CBS Mornings) | From 2020 to 2023, four Optima-launched schools spent about 30% of their government funding, roughly $35 million, on outside firms tied to Erika Donalds. All four have since cut ties with Optima; a fifth school in Fort Myers never opened. |
| Sep 2025 | Florida Bulldog | After Bulldog’s first story, Rep. Donalds amended his 2023 disclosure to report her stakes in the companies. Treasure Coast alleged Optima reassigned its staff to OptimaEd after the board rejected that plan. |
| Jun 2025 | Florida Bulldog | The foundation and its schools paid more than $10 million to her two for-profit firms. The two Jacksonville schools cited “deficiencies” in Optima’s accounting when they ended their contracts in 2023. |
The sequence is worth tracing. Erika Donalds founded the nonprofit Optima Foundation in 2017 and used it to open classical charter schools in Stuart, Jacksonville and Naples. She then formed OptimaEd (2020) and Optima Management Services (2022), both for-profit. When three flagship schools left the foundation in 2023, Naples Classical signed instead with her for-profit firms, and its payments rose by more than a quarter, according to the Bulldog. The foundation has since been renamed the Education Freedom Foundation.
What I’ve said along the way
When CBS News asked me about Optima last December, I made two points. The first was about results. As I told CBS:
“Florida’s charter sector is not strong, and Optima schools, at least the four schools that seem to be in that affiliated mix, perform even less well.”
The second was about structure. Nonprofit schools paying for-profit companies with overlapping stakeholders is not unique to Optima; it runs across the charter industry. And charter finances are far more opaque than district finances, which is exactly why it took reporters, auditors and a lawsuit to piece this together.
When the Herald came back to me this month, the question had changed. It was no longer only about how a charter network is run. It was about who would regulate the sector. I said:
“Having people connected to or in positions of power to regulate these things who are benefiting from them not being regulated, in my view, is problematic.”
And on the novelty of it:
“I don’t know if any governor in particular has the same kind of personal wealth accumulated in that one space over which they then would have regulatory authority.”
I also told the Herald something I want to repeat here, because it matters for fairness: the Donalds are far from the biggest profiteers from the flow of public education dollars to private companies. The dollar figures in their story are modest next to the cases below. What’s different is the job.
The company store, Florida edition
In The Charter School Company Store (2016) and its sequel last month, I described operators who require the people and schools they control to buy from a store the operator owns. Relay’s required credential for Uncommon’s teachers in Newark. Academica’s two invoices in Miami, management fee and rent, both ending in one family’s accounts. CSMI in Chester, where it took a public-records fight to see the books.
Optima fits the pattern at three registers:
- Back office. The schools paid Optima Management Services for management and administration, and paid Educator Solutions, a payroll firm owned by a pro-charter state legislator, nearly $7 million from 2020 to 2022, while Erika Donalds drew more than $500,000 in salary from that firm (Florida Bulldog).
- Curriculum and instruction. OptimaEd, 81% owned by Erika Donalds per her husband’s disclosures, supplies Optima Classical Academy’s entire program: teachers, curriculum, technology and VR headsets. That school’s payments to OptimaEd went from about $1.1 million in 2023 to $2.1 million in 2024 to a budgeted $15.7 million this year.
- The relabeling. Treasure Coast’s lawsuit alleges that when its board rejected a proposal to hand Optima’s duties to OptimaEd, Optima reassigned its staff to OptimaEd anyway. That is the company store in its purest form: the vendor decides it is the vendor.
The virtual school is the clearest case, and the most important going forward. The campaign told CBS Miami that state funding goes to the charter school, and OptimaEd is simply paid under its contract with the school. That is true, and it is the whole point. Optima Classical Academy exists as a public charter so that it can receive state and local funds; OptimaEd exists as a private company so that it can keep them. The charter is public when the money comes in and private when it goes out. Preston and I called that having it both ways.
The real estate and construction layer
The grift model’s fourth type, real estate, is where the biggest money in this sector moves. In The Charter Money Trail I traced the usual three hops: management fee, then a related real-estate entity, then tax-exempt bonds repaid out of the school’s own per-pupil funding. And in We Bought It Twice I explained how the public ends up paying for a building it never owns.
In the Optima network, what the record shows so far is construction, not ownership. According to the Florida Bulldog, one Jacksonville firm, Summit Construction Management Group, built the $14.4 million Jacksonville Classical Academy campus (2019), renovated Jacksonville Classical East for $1 million (2022), built the $20 million Naples Classical campus (2020), signed an $11 million deal with Treasure Coast (2023), and was slated to build the Fort Myers school. Treasure Coast’s lawsuit alleges the foundation had an undisclosed conflict of interest with Summit, and that Summit set up investment vehicles that put money into Erika Donalds’ other ventures. Those are allegations in a civil complaint, and neither Summit nor Donalds responded to the Bulldog’s questions.
The Fort Myers campus is the other open question. CBS reported that Donalds sought, in August 2025, to transfer the building to another charter operator after the school failed to open; local reporting says that operator plans to open it. I don’t know the terms of that transfer, and neither, as far as I can tell, does the public. That is the gap: who financed the building, who holds title, and what the public paid for are exactly the questions the related-party framework says to ask, and exactly the ones Florida’s disclosure rules make hard to answer.
Our 2019 recommendation applies directly. A charter’s founders and operators should not be able to lease or buy property from, or route construction through, entities tied to themselves without independent review, and the state should audit those deals as a matter of course.
Where this sits among the big edu-grift stories
In scale, Optima is a mid-sized case. Here it is next to the five largest I ranked in Edu-Grift Top 5, plus Oklahoma’s Epic case. These are different kinds of numbers over different periods, so read them as orders of magnitude, not a league table.
| Case | Mechanism | Headline figure | Legal status |
|---|---|---|---|
| National Heritage Academies (MI + 6 states) | Real estate | $853.6M in bonds (2021) | Legal; no charges |
| A3 Education (CA) | Enrollment inflation | ~$400M generated, ~$80M allegedly diverted | Guilty pleas |
| Epic Charter Schools (OK) | Related-party management | State auditor: $145M in spending undisclosed | Founders charged in 2022; deny wrongdoing; headed to trial |
| Chester Community / CSMI (PA) | Company store + real estate | ~$122M combined | Audited; no charges |
| ECOT (OH) | Enrollment inflation | $117M ordered repaid | School closed 2018 |
| White Hat (OH) | Company store + equipment | ~$100M over a decade | Upheld, 4–3, Ohio Supreme Court |
| Optima network (FL) | Company store + related-party services | >$30M over four years, $15.7M budgeted this year | No charges; one civil suit |
Two lessons from that table matter for Florida.
First, the cases that ended in court were the ones built on fake enrollment. The ones built on structure, the company store and real estate, mostly survived review. White Hat won in Ohio’s Supreme Court. NHA’s $853.6 million deal closed. The Optima arrangements look like the second kind, which is why “nothing illegal” is not a defense. It’s the diagnosis.
Second, several of these stories are also political stories. ECOT’s founder gave heavily to the officials who oversaw his school. Academica’s founder had a brother-in-law on the Florida House committee that funded charter facilities. In Arizona, lawmakers who wrote charter law profited from charter real estate, which Derek, Preston and I noted in 2019. The Donalds case moves that pattern to the top: not a donor, not a legislator, but a governor’s household.
Their side of it
The Donalds and their supporters have made several arguments, and they deserve a fair hearing.
- Independent boards. Each school is owned and governed by its own nonprofit board, which makes its own decisions (a source close to Donalds, to CBS).
- Temporary by design. Erika Donalds told the Herald the schools’ partnerships with her foundation were always meant to be temporary, and she disputed the claim that the foundation mismanaged the Jacksonville audits. The campaign says the brick-and-mortar schools have moved to self-management and those contracts have ended.
- Separation. Byron Donalds has no management role in and no direct ownership of her companies, the campaign says, and he has said he would draw a line between her business and the state’s if elected. The renamed foundation, it says, now provides its help to schools free of charge.
- Parents choose. Families decide whether to enroll; funding follows them, and losing students means losing money. That, the campaign argues, is a layer of accountability beyond government oversight.
- Results. Her spokesperson told CBS the schools’ academic performance eventually improved. Erika Donalds has said she has “nothing to hide.”
- Bias. Defenders called the CBS coverage sexist, and argued that a school delayed by hurricane damage and financing problems says little about her record.
Some of this is fair. Independent boards did, in the end, act: all four original schools have cut ties with Optima, and one sued. That is the gatekeeping system working, late. But each of these points answers a question other than the one I’m asking. The question is not whether parents can leave, or whether any single contract was lawful. It is whether a governor can neutrally oversee a funding system that supports his household, and whether Florida’s rules would let anyone see it if he couldn’t. On the parental-choice argument in particular, I’d point readers to Experimenting With Our Children: parents can leave a school, but the child who lost the years doesn’t get them back.
Why it matters for a governor, and what should change
In the Enron article, Preston, Joseph and I argued that related-party abuse is a gatekeeper failure. The governor is the gatekeeper of last resort. A governor signs the budget that sets per-pupil funding, appoints the state board and education commissioner, and decides whether to sign or veto charter, facility and oversight legislation. Erika Donalds has promised an “economy of education” in which “profit is not going to be a bad word,” the Herald reported. The Herald also reported that Florida’s ethics code applies to the governor but not to his spouse, though it could require him to recuse from some charter-related actions. Recusal from the core of a state’s education budget is not a workable answer.
Nor is it a problem only the Donalds can create. Florida already puts the smallest share of its economy into its public schools of any state, and its rules let the Optima arrangements surface only through reporters and a lawsuit. Whoever wins on November 3, the state should close the loophole. Updated for Florida, our 2019 agenda would be:
- Ban related-party facility and service contracts between a charter school and companies owned or controlled by its founders, operators or their families, or require independent, at-market review before any such contract is signed, not a footnote in an audit afterward.
- Audit facility purchases, leases, construction and conveyances as a matter of routine, including any transfer of a school building to another operator.
- Protect and reward whistleblowers inside charter schools and their vendors.
- Treat management and instructional vendors as public for records purposes when they perform a school’s core functions, as Pennsylvania’s Office of Open Records did with CSMI.
- Extend the ethics code to cover financial interests of the governor’s household in entities receiving state education funds, with divestment, not recusal, as the remedy.
None of this is about being for or against charter schools. As we wrote in 2019, charter schools run on public money. The public should be able to see where it goes, and no one in a position to set the rules should be on both sides of the deal.
Sources
My prior work
- Green, P. C., Baker, B. D., & Oluwole, J. (2014). Having it both ways: How charter schools try to obtain funding of public schools and the autonomy of private schools. Emory Law Journal, 63(2). Discussed here.
- Baker, B. D., & Miron, G. (2015). The business of charter schooling. National Education Policy Center.
- Green, P. C., Baker, B. D., & Oluwole, J. (2018). Are charter schools the second coming of Enron? Indiana Law Journal, 93, 1121.
- Black, D. W., Baker, B. D., & Green, P. C. (2019, February). Charter schools exploit lucrative loophole that would be easy to close. The Conversation.
- Baker, B. D. (2015). We bought it twice but we no longer own it. School Finance 101.
- Baker, B. D. (2016). The charter school company store. School Finance 101.
- Baker, B. D. (2026, Sept. 6). The charter money trail. School Finance 101.
- Baker, B. D. (2026, Sept. 10). The charter school company store, revisited. School Finance 101.
- Baker, B. D. (2026, Sept. 13). Edu-grift top 5. School Finance 101.
- Baker, B. D. (2026, Oct. 2). Experimenting with our children. School Finance 101.
Reporting on the Donalds and Optima
- CBS News. (2025, Dec.). Florida charter school company run by GOP rising star left parents scrambling.
- Florida Bulldog. (2025, June). Firms belonging to wife of Rep. Donalds grabbed millions in charter school contracts.
- Florida Bulldog. (2025, Sept.). New disclosures only deepen mystery of Rep. Donalds’s wife’s charter school companies.
- Florida Bulldog. (2026, Jan.). Charter business owned by Rep. Donalds’ wife cut side deals with construction firm, lawsuit claims.
- Tampa Bay Times / Miami Herald. (2026, Oct. 22). How Byron and Erika Donalds’ wealth hinges on millions in state education dollars.
- CBS Miami. (2026, Oct. 25). Byron Donalds discusses the final stretch in his gubernatorial campaign with Jim DeFede.
- Accountabaloney Florida. (2026, Oct. 17). Who lives with the consequences?
Other cases
- Oklahoma Attorney General. (2025, Nov.). Criminal case against Epic Charter Schools co-founders moves forward.
- KJRH. Epic Charter Schools: A decade of investigation.
