Nicholas Trombetta's unique charter school saved town of Midland



Nicholas Trombetta's frustration over having to bus high school students from Midland, Beaver County, to East Liverpool, Ohio, prompted the former Midland superintendent to create a cyber charter school.

Founded in 2000, the Western Pennsylvania Cyber Charter School, which later dropped "western" from its name, would grow to become the state's largest cyber charter school with more than 11,000 students expected to enroll this fall and a budget of about $115 million.

The growth of the school and its related spinoffs is credited with the rebirth of Midland, a town that faltered after the shuttering of the Crucible Steel Mill in 1982 and the closing of its high school four years later.

U.S. attorney outlines case against Trombetta

A 41-page indictment made public this morning outlined the federal government's allegations against Nicholas Trombetta, who founded the PA Cyber Charter School, and his accountant, Neal Prence. (Video by Steve Mellon; 8/23/2013)

PA Cyber's complicated network of spinoff firms is also at the heart of a federal indictment announced Friday by U.S. attorney David Hickton. Mr. Trombetta faces fraud and tax-related charges, and his accountant Neal Prence also faces tax-related charges. Attorneys for both men said they will plead not guilty.

While residents and business owners in Midland still praise Mr. Trombetta as a hero for building a business that brought economic salvation and returned a high school to their town, critics point to the indictment as proof that the state should examine the funding formula for charter schools -- it gives the same tuition to cyber charters as to brick-and-mortar charter schools.

Ron Cowell, a former state legislator and president of the Education Policy and Leadership Center, said that when the Legislature approved the charter school law in 1998, the Internet was in its infancy and legislators did not envision how the law would apply to cyber charter schools, which don't have the facilities costs associated with brick-and-mortar charter schools.

"There's a growing recognition there needs to be more monitoring of these things," Mr. Cowell said.

But along Midland Avenue, where many residents saw Mr. Trombetta walking on a regular basis, you'll see fresh PA Cyber Charter buildings and the Lincoln Park Performing Arts Charter School, and hear all about how he helped the town withstand the collapse of the steel industry.

"Physically, the town looks better than it did in years after the mills closed down," said Don Pickering, a lifelong resident of Midland and owner of City Hardware, the oldest hardware store in Beaver County. "It's been a shot in the arm. Every bit of business helps."

PA Cyber has an account at his store, which opened almost 100 years ago.

Jim Cayton, also a longtime Midland resident, echoed that sentiment. "Midland was getting pretty shabby until the cyber charter school came."

But ask them for reactions to the indictments handed down Friday and the answers get more complicated.

"People really like the guy and don't want to see him in trouble," Mr. Cayton, 66, said. "He's brought a lot of employment over to Midland."

"I don't really know how to react to it," said Mr. Pickering, 71. "I'm very pro-Midland and I just hope there's no negative impact on the town."

When Mr. Trombetta founded PA Cyber, he got in on the ground floor of the cyber education movement in Pennsylvania. An Aliquippa native and former wrestling star from Quigley High School, he became superintendent of the Midland School District in 1995, a year after high school students were forced to attend school in East Liverpool because neighboring districts did not want them.

Mr. Trombetta believed the cyber charter school would give Midland students another option and provide opportunities for other students who didn't want to attend traditional schools.

It opened with 527 students in grades K-12 who came from 54 districts in 17 counties, although just four of the original group were from Midland. Initially, Mr. Trombetta served as both the superintendent of the Midland district and as chief administrator of the cyber school, although in later years he resigned as Midland superintendent.

Enrollment in PA Cyber grew steadily and quickly outpaced Mr. Trombetta's home district. By 2006, Midland had 450 students, 400 employees and a $4.4 million budget, while PA Cyber had 4,400 students, 400 employees an a $30 million budget.

That same year, Mr. Trombetta was instrumental in the opening of the $23.5 million Lincoln Park Performing Arts Center in Midland, which would also be the home of the new Lincoln Park Performing Arts Charter School for grades 7-12, which had received a charter from the Midland school board.

The center was paid for, in part, with $10 million from the cyber school and $3 million from the Midland district -- an arrangement that raised eyebrows and prompted some to call for more oversight into how Mr. Trombetta was using PA Cyber funds.

A year earlier, Mr. Trombetta had launched the National Network of Digital Schools, which he described as the vehicle that would take national the programs created in Midland. The PA Cyber board voted to contract with NNDS to manage the charter school in return for 12 percent of its profits.

By March 2007, a statewide grand jury, under then-Attorney General Tom Corbett, heard several months of testimony about alleged financial improprieties among the entities in Mr. Trombetta's network, including possible violations of laws concerning charter schools, campaign finance, corporate governance and nonprofit organizations. But no indictment was ever brought as a result.

At the time, Mr. Trombetta explained the scrutiny as the price he paid for being an upstart who was ruffling feathers, saying: "People want to throw stones at people who are successful."

He also told the Pittsburgh Post-Gazette at the time: "We are a transparent organization. We have offered at every turn our willingness to cooperate with every state agency because at the end of the day we believe we will be standing tall and proud."

In 2008, the state Department of Education told PA Cyber to eliminate any appearances of conflict of interest and as a result, Mr. Trombetta ended most of his roles outside of PA Cyber, including president of NNDS and an officer of the Lincoln Park Performing Arts Center. But after Mr. Corbett became governor, those demands were dropped.

PA Cyber continued to grow at a steady pace, and controversy appeared to die down until about a year ago.

In May 2012, Mr. Trombetta announced abruptly to his staff that he would be stepping down from PA Cyber as of June 30. In July 2012, federal agents searched the school's headquarters in Midland, its accountants' office in Koppel and properties rented by its spinoffs in Ohio.

In September 2012, the cyber charter fired its director, finance director, personnel director, compliance officer and longtime lawyer. It's unclear if the firings approved by the school's board were related to the federal investigation.

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said Mr. Trombetta's indictment should not be seen as a reflection on cyber charter schools. "It's a personal indictment. It's not an indictment of what the school has done or the quality of education or the students to go to PA Cyber," he said.

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Mary Niederberger: mniederberger@post-gazette.com or 412-263-1590. Alex Zimmerman: azimmerman@post-gazette.com, 412-263-3909 or on Twitter @AGZimmerman. First Published August 24, 2013 4:00 AM


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