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<DIV><FONT size=2><STRONG><FONT size=5>Public Role, Private
Gain<BR></FONT></STRONG><FONT size=3>Board Chairman, a Banker, Took Actions That
Stood to Benefit His Employer and Customers<BR></FONT>
<P><FONT size=-1>By David S. Fallis and April Witt<BR>Washington Post Staff
Writers<BR>Sunday, December 14, 2008; A01<BR></FONT></P>
<P></P>
<P>When a band of Brookland neighbors packed a public meeting to try to stop one
of the District's public charter schools from moving to their quiet cul-de-sac,
their pleas seemed to receive a warm reception.</P>
<P><A
href="http://www.washingtonpost.com/ac2/related/topic/Tom+Nida?tid=informline"
target="">Thomas A. Nida</A>, chairman of the board that supervises one of the
nation's largest charter school systems, encouraged testimony from the group on
that summer evening in 2007. "And anything else you've got to say, put it in
writing and we'll take it," Nida said, noting that the charter board would not
decide on the move for a month. "That way we will give everybody a chance to
express their views."</P>
<P>What Nida failed to mention was his own stake in the matter. As a senior vice
president at United Bank, he had been working on a $7 million loan to the Elsie
Whitlow Stokes charter school to finance the very relocation that neighbors
opposed.</P>
<P>By the time the <A
href="http://www.washingtonpost.com/ac2/related/topic/D.C.+Public+Charter+School+Board?tid=informline"
target="">D.C. Public Charter School Board</A> approved the move in August 2007
-- with Nida recusing himself from the vote -- the loan deal was done. Nida's
employer would receive hundreds of thousands of dollars in interest payments for
years to come.</P>
<P>Homeowners on the losing end of that dispute had encountered one of the
hidden financial conflicts of interest in the city's burgeoning charter school
movement. Key members of the public bodies that regulate and fund the schools
have taken part in official decisions that stood to benefit themselves, their
colleagues, employers and companies with whom they have business ties, <A
href="http://www.washingtonpost.com/ac2/related/topic/The+Washington+Post+Company?tid=informline"
target="">The Washington Post</A> has found.</P>
<P>The Post's review found conflicts of interest involving almost $200 million
worth of business deals, typically real estate transactions, at more than a
third of the District's 60 charter schools. The conflicts are documented in
thousands of pages of internal charter board documents, land records, tax
returns, audits and other records reviewed by The Post.</P>
<P>In the 12 years since Congress authorized charter schools in the District to
spur competition and improve urban education, charters have burgeoned into an
independent and parallel public school system. They are private, nonprofit
businesses operating under a public "charter" and largely funded by taxpayer
dollars. D.C. students can attend for free. An independent seven-member charter
board now oversees about 26,000 students, more than one-third of the city's
public school population.</P>
<P>Nida, who joined the board in 2003, is the official with the most extensive
financial links to schools he regulates. Since he went to work for United Bank,
it has lent more than $55 million to charter schools, their developers or their
landlords, records and interviews show. As a public official, Nida has voted
repeatedly to increase student enrollment -- and thus taxpayer funding -- for
charter schools that borrow money from his bank, records show.</P>
<P>Nida recused himself from a handful of votes affecting charter schools or
developers doing business with his bank but participated in dozens of other
votes and actions involving bank customers, records show.</P>
<P>Before he was on the board, Nida wrote a banking industry primer on how to
profit from charters by using their flow of public funding as loan collateral.
According to a charter developer's Web site, Nida told bankers: "After 25 deals,
I've had no losses or even late payments. The loans give me my largest margins
and they are the most profitable piece of my portfolio."</P>
<P>In an interview, Nida said that all of his official actions have been
appropriate and that he has taken steps to avoid potential conflicts of
interest. He said he considers it a key part of his job to make sure charter
schools have "adequate and affordable" buildings.</P>
<P>"My role as the board chair is always to do what is best and in the interest
of the students and the school," he said. "Any consideration of the bank, good
or bad, is not a factor. If I think it could be, then I will speak up and recuse
myself."</P>
<P>D.C. law dictates that "no public official shall use his or her official
position or office to obtain financial gain for himself or herself, any member
of his or her household, or any business with which he or she or a member of his
or her household is associated."</P>
<P>Whether an official's conduct violates the city's conflict-of-interest law is
decided "on a case-by-case basis," said Kathy Williams, general counsel for the
D.C. Office of Campaign Finance, which enforces the District's ethics rules.
"The vote is the pivotal point, because therein lies whether there was any
financial gain -- business, financial, familial or otherwise."</P>
<P>Nida expressed surprise that the law is so sweeping and said he views the
issue of conflicts of interest "more narrowly than that." He added: "I have not
had anybody raise the issue heretofore."</P>
<P>He said he believes that he dealt with the potential conflict involving the
Elsie Whitlow Stokes school by notifying other board members about the bank loan
and recusing himself from the board's final vote.</P>
<P>Nida said United Bank pays him an annual bonus based in part on how much loan
business he generates. He said he did not receive any commission on the loan to
Elsie Whitlow Stokes or any other charter school. "Did I personally benefit?
No," Nida said. "United Bank does not compensate that way to anybody."</P>
<P>James Consagra, president and chief executive of United Bank, did not respond
to questions about Nida's compensation or his involvement with charter lending.
He e-mailed a statement saying that United takes "the proper steps to prevent
conflicts of interest. This includes ensuring those who may have a perceived
conflict are not involved in the lending-decision process."</P><B>Building With
Tax Dollars</B><BR>
<P>Since 1996, the District has spent more than $2 billion in local and federal
funds to build and operate charter schools. Much of that public money has gone
to buy, lease and renovate school buildings that are now in private hands.
Charter schools typically finance their property purchases or renovations with
multimillion-dollar loans from banks and other lenders. They repay those loans
using their guaranteed funding from the city. In addition to funding charters'
educational operations, the District is one of the few jurisdictions in the
country to provide charters with a per-child cash "facilities allotment."</P>
<P>The system has provided some charter students with new buildings that are
among the best-equipped in the city. It also has benefited charter schools'
landlords, developers, bankers and investors while taxpayers fund two separate
school infrastructures.</P>
<P>"They are using public money to finance private real estate development,"
said Anne Dougherty, a community activist who opposed locating a charter school
in a neighborhood where two traditional public schools were closing.</P>
<P>Charter schools are overseen by unpaid political appointees on two panels
created by Congress. One is the charter board, which has authority over who can
open a charter school, how fast schools can grow and when they should be forced
out of business. Its members are appointed by the mayor from a list provided by
the federal executive branch. The other is the five-member D.C. Public Charter
School Credit Enhancement and Direct Loan Funds Committee, which awards millions
of dollars in taxpayer loans and guarantees to charter schools and their
developers. Appointments to the committee are split between the public charter
board and the mayor's office.</P>
<P>Nida is not the only member of those bodies whose private business interests
intersected with a public role, The Post's review found.</P>
<P>Barbara "Bobbie" Hart, who chairs the credit enhancement committee, which has
awarded $47 million in taxpayer financing in the past seven years to private
ventures involving charters, is also a vice president at Adams National Bank and
markets loans to charter schools. Since she was appointed to the committee in
2006, it has repeatedly awarded funding to Hart's loan customers, records show.
Hart has recused herself from all but two votes involving applicants that had
given her loan business or were about to, records show. Hart declined to
comment.</P>
<P>Another public official whose private business overlapped his public position
was Karl Jentoft, a developer who has served on both the credit enhancement
committee with Hart and on the public charter board with Nida. Jentoft became a
charter school developer seven years ago with the help of a bank loan he secured
through Nida.</P>
<P>Jentoft joined the credit committee in 2006, and last year moved to Nida's
charter board. In that capacity, he reviewed and recommended a lease benefiting
a controversial charter school project opposed by residents in the Brady Hall
neighborhood, not far from <A
href="http://www.washingtonpost.com/ac2/related/topic/Catholic+University+of+America?tid=informline"
target="">Catholic University</A>. Within weeks, the developer hired Jentoft as
a consultant on that and another charter project and began paying him $14,000 a
month.</P>
<P>Once hired, Jentoft tried to assuage the concerns of residents who feared
that moving two charter schools to a single building in their neighborhood would
lead to a big increase in traffic and noise. He logged on to a local Internet
discussion group last March and introduced himself as the "owners'
representative" on the project. "We are working to resolve some of the obvious
traffic flow issues," Jentoft wrote.</P>
<P>A stunned homeowner, Steve Lowe, shot back questions: Was he the same Karl
Jentoft who sat on the charter board? If so, "why did you fail to mention
this?"</P>
<P>"I did not include this or additional hobbies/projects because I do not think
they are relevant to the current project," Jentoft responded. "I am not acting
in my capacity as a Public Charter School board" member on this project.</P>
<P>Nida also had ties to the Brady Hall project. He was an unpaid board member
for the developer, the Charter Schools Development Corp. His bank, United Bank,
also was financing the project with loans that eventually totaled $9.2
million.</P>
<P>The charter board green-lighted the Brady Hall project in May, with Jentoft
and Nida recusing themselves. Jentoft, who recently resigned from the charter
board and moved to London, said in an e-mailed response to questions from The
Post: "Any potential conflicts of interest were discussed with the organizations
involved, have been documented as part of the public record, and have been acted
on appropriately."</P><B>More Kids, More Cash</B><BR>
<P>For all their educational goals, D.C. charter schools are businesses
navigating market realities. For each child it enrolls, a charter school
receives a minimum of $11,879 annually in tax money. The need to borrow large
sums to buy or renovate real estate drives many charter operators to expand as
quickly as possible to maximize taxpayer funding: more kids, more cash.</P>
<P>The growth of charter schools coincided with a decline in the number of
school-age children in the District. Competition from charters accelerated the
exodus from the traditional public school system and left school buildings with
acres of empty classrooms.</P>
<P>Some District school officials have been resistant to sharing space with
charters, and some charter operators preferred to find their own buildings to
avoid the city bureaucracy. As a result, only about 25 percent of charter school
campuses lease space in public schools or other government buildings. Most of
the rest bought their own buildings or lease from private landlords.</P>
<P>Some charter school critics have complained that the system allows taxpayer
funds to be used for private gain. The <A
href="http://www.washingtonpost.com/ac2/related/topic/Council+of+the+District+of+Columbia?tid=informline"
target="">D.C. Council</A> responded two years ago with a requirement that if a
charter closes down, its net assets, including real estate, must be turned over
to the city. However, the law contains so many loopholes that District taxpayers
are unlikely to recoup their expenditures. It also does not prevent a charter
from selling its building, keeping the proceeds and moving somewhere else.</P>
<P>The law also protects banks and other creditors, mandating that outstanding
loans be repaid before any assets are returned to taxpayers.</P>
<P>That was not the first time that elected officials have considered the
interest of bankers in the District's charter network. One reason Congress
dictated in 1996 that D.C. charter schools be initially authorized for 15 years
-- three times as long as in most states -- was to help them secure long-term
bank loans, according to the activists who prodded lawmakers to create the
system.</P>
<P>In 2004, when then-Mayor <A
href="http://www.washingtonpost.com/ac2/related/topic/Anthony+A.+Williams?tid=informline"
target="">Anthony A. Williams</A> tried to cap facilities allotments to charter
schools during a citywide budget crunch, the "vigorous opposition" of bankers
who then had about $150 million in outstanding loans to charter schools
persuaded the D.C. Council to overturn his efforts, according to a 2006 report
by the pro-charter group Friends of Choice in Urban Schools. The report noted
that the council directed the mayor "to work out any future changes in the
formula with public charter school representation and their creditor
institutions."</P>
<P>Bankers and developers moved into early leadership roles on the city's
charter bodies. Joseph F. Horning Jr., a D.C. real estate developer and a board
member of City First Bank, was a founding member of the charter board who
sometimes voted and deliberated on matters involving schools that did business
with his bank. In response to questions from The Post, Horning said he did not
consider his banking position a conflict because he was an unpaid director and
he had no idea which charter schools did business with City First.</P>
<P>No banker has had more influence than Nida, 60, who grew up in Southeast and
resides part time in an apartment in Northwest. He has lived much of his adult
life in Front Royal, Va., where he owns a historic home and plays the drums in
his church band, the Flock.</P>
<P>In the late 1990s, Nida joined City First Bank and pioneered lending to
charter schools. He wrote an article in 2002 for a banking journal touting the
profitability and exponential growth potential of lending to charter schools,
charter developers and their investors. "With added public funding, including
federal credit enhancement funding, this market will continue to grow," Nida
wrote. "The market is there, or soon will be there. . . . In all, this is a
lending opportunity worth pursuing."</P>
<P>After that article was published, Nida was sitting at his desk when the <A
href="http://www.washingtonpost.com/ac2/related/topic/The+White+House?tid=informline"
target="">White House</A> called. The executive branch has authority to name a
slate of three prospective members for each vacancy on the D.C. charter board. A
White House aide told Nida that his name had "bubbled up from a number of
sources," Nida said in an interview. The mayor ultimately appointed him.</P>
<P>The D.C.-based Friends of Choice in Urban Schools took credit for nominating
Nida to the charter board. Leaders of the organization described Nida as an
analytical, hardworking man of integrity who pioneered charter lending and made
a huge contribution to a system that has produced a number of high-quality
schools that serve the District's poorest children.</P>
<P>"In D.C., as in many other cities, there are a small number of bankers,
developers, contractors and business people who really took a risk on charter
schools early on and made it possible for charter schools to grow and thrive,"
said <A
href="http://www.washingtonpost.com/ac2/related/topic/Robert+Cane?tid=informline"
target="">Robert Cane</A>, the group's executive director. "Tom Nida is one of
the first. Without these people, we wouldn't have 35 percent of the kids in
charter schools."</P>
<P>About six months after Nida began serving on the charter board in 2003, he
changed banks. He worked briefly at Eagle Bank before United Bank recruited him,
he said. United then began aggressively seeking charter business, records
show.</P>
<P>Of the $55 million United has lent since then to charters, their landlords or
developers, Nida has been directly involved in loans worth at least $35 million,
as loan officer or a bank representative, according to records and interviews.
United loans have paid for the purchase, refinancing or renovation of buildings
used by at least 10 of the 60 schools that Nida regulates.</P>
<P>Charter schools are required to submit any contract worth more than $25,000
to the board for review and approval. Nida reviewed and recommended approving
some contracts even when his bank was funding the school or its landlord,
records show.</P>
<P>Nida said United Bank's charter school lending in the District is managed by
a colleague, Thomas McCracken, whose office is a few desks away from Nida's.
Nida said he acts as a "mentor as necessary" to McCracken's staff. Nida and
McCracken serve together on the bank's credit committee, but Nida said he
recuses himself from voting on loans involving charter schools. "Whenever there
is a charter school deal that comes up," Nida said. "I opt out of the
conversation, unless somebody asks me a question."</P>
<P>McCracken said in an interview that when charter school operators approach
Nida for a loan, Nida does not directly negotiate with them on United's behalf.
"He refers them all to me," McCracken said.</P><B>Reclaimed Warehouses</B><BR>
<P>Two of the first charter-related loans that Nida helped arrange at United
Bank went in 2004 to developers planning a cluster of schools along a desolate
block of Edgewood Terrace in Northeast.</P>
<P>The potential of Edgewood Terrace had caught the attention of Bethesda-based
developer Fred Ezra and his associates after a pioneering charter school, D.C.
Preparatory Academy, bought a rat-infested warehouse and began converting it
into an educational showplace.</P>
<P>Ezra-related companies purchased two neighboring vacant warehouses and
marketed them to charter schools. "We have a little charter school team here,"
president Fred Ezra told the Washington Business Journal in June 2004. "And
we're going to be contacting all the charter schools."</P>
<P>United Bank struck loan commitments with the Ezra interests for up to $11.6
million to purchase and renovate the warehouses. Nida was the loan officer,
records show, and he acknowledged that he toured the buildings with the buyers
on behalf of the bank.</P>
<P>Although large direct loans to charter schools are supposed to be reviewed by
the charter board, loans to their developers or landlords are not subject to
that scrutiny. Nida repeatedly participated as a charter board official in
discussions and decisions involving tenants or potential buyers of Ezra's two
warehouses, records show. Meeting minutes do not indicate that Nida disclosed
his private involvement.</P>
<P>One warehouse tenant, William E. Doar Jr. Public Charter School for the
Performing Arts, leased 22,000 square feet on the top floor at 705 Edgewood.
Doar's leaders wanted to expand to use all the available space in the warehouse,
which would mean even more rent for its landlord.</P>
<P>To afford and make use of the larger space, Doar asked to enroll more
students. In February 2006, Nida and the charter board agreed to let Doar grow
eventually to almost 800 students and serve additional grades, even though the
school had not yet "implemented a curriculum for the school's current grade
levels," charter board records show.</P>
<P>Doar's rent was now so high -- $679,000 the first year and then escalating to
more than $1 million, records show -- that the school could "probably purchase
the facility for what is being paid monthly in lease payments," the charter
credit enhancement committee noted in October 2006.</P>
<P>The school needed the charter board's permission to hire a contractor to do
renovations. On behalf of the board, Nida reviewed and recommended approving the
contract, records show. To fund the renovations, Doar made arrangements to
borrow $1.6 million. Its lender? United Bank.</P>
<P>In October 2006, Ezra's company sold its other warehouse, at 707 Edgewood, to
D.C. Prep, the charter middle school down the block that had touched off the
street's renaissance two years earlier. Nida and the rest of the charter board
had voted to allow D.C. Prep to open an elementary school on the new campus.
Again, minutes do not indicate that Nida's financial ties to the seller came up.
An Ezra associate declined to comment on behalf of the investors.</P>
<P>The real estate market had turned. The warehouse sold for $5 million -- more
than twice what the United Bank-financed developer had paid in 2004. "They
totally flipped it to us," said Emily Lawson, D.C. Prep's founder. "From that
perspective, it was frustrating."</P><B>The Math Mentor</B><BR>
<P>After one school complained to the public charter board about the onerous
lease it had signed with its landlord, Nida later quietly became the landlord's
banker.</P>
<P>Washington Mathematics Science Technology Public Charter was on probation in
2003 for what the assistant principal called a "storm" of financial woes. School
leaders complained to the charter board that part of the problem was their
lease, escalating to more than $1.3 million a year, at a hulking former garage
in Southeast known as the Blue Castle because of its faux turrets and garish
paint job. Washington Math survived financially by subletting some of its space
to another charter, Eagle Academy.</P>
<P>An independent reviewer for the charter board reported in 2002 that
Washington Math's lease with the building's owners was "troubling" and risky.
The next year, the reviewer said the terms of Eagle's sublease unduly favored
the Blue Castle's owners. But Nida defended the sublet, pointing out the strong
position of the landlord.</P>
<P>"I'm not sure that Eagle Academy had any real negotiating leverage with the
landlord for this space, given the current shortage of affordable, adequate
space for charter school facilities," Nida wrote in a fall 2003 memo. The
charter board approved both leases.</P>
<P>By late 2004, records show, Nida sold a loan to the landlord with the strong
position. United Bank lent $9.5 million to Bethesda-based 770 Limited
Partnership to refinance and improve the Blue Castle, by then home to three
charter schools. Nida signed one loan document and is listed on others as United
Bank's representative. Despite Nida's business ties to the Blue Castle, he
continued to vote on board matters involving its tenants.</P>
<P>"If I did a loan to a landlord and they just happen to lease to a charter
school, I don't think that takes me out of the running of being able to review
accountability plans and those types of things," Nida said.</P>
<P>By late 2005, Washington Math had become sound enough to be looking to move
into its own place. To do that, it would have to get out of its lease, find a
50,000-square-foot building and secure financing. "We could not get a loan . . .
if we were on the hook with a lease at the Blue Castle," said Shawn O'Reilly,
then treasurer for Washington Math and now a member of the credit enhancement
committee.</P>
<P>Nida helped. Privately, he said, he had advised school leaders on how to get
out of their predicament. Then he took a series of official actions that
effectively helped clear the way for the school to buy a building with a $6.6
million loan from United Bank, records show.</P>
<P>First, to get out of its lease, Washington Math needed Eagle Academy to take
over its space. Eagle would need to enroll a lot more children to afford that.
Nida and fellow members of the charter board took care of that Dec. 19, 2005,
voting to almost double Eagle's enrollment ceiling to 260.</P>
<P>Next, Washington Math needed a big vacant building. One soon became
available.</P>
<P>At a public charter board meeting Jan. 23, 2006, Nida proposed revoking the
charter of the New School for Enterprise and Development, which was in a
50,000-square-foot renovated warehouse on Bladensburg Road. Like several other
charters with troubles, New School had appeared before the board repeatedly and
had been placed on probation. Revocation is the charter board's harshest
punishment. At the time, it had meted out the sanction only once before, records
show. In proposing to close New School, Nida decried its "lack of achievement
and lack of results," minutes show. The motion carried.</P>
<P>Former New School board chairman Albert Hopkins Jr. said he disagreed with
the decision to close New School. "I could never understand why they were in a
hurry to have us sell the building," Hopkins said.</P>
<P>Washington Math's leaders were optimistic that they would benefit from New
School's demise, records show. But then Eagle Academy announced that it planned
to buy its own building rather than sublet the Blue Castle space.</P>
<P>Nida blocked Eagle's plan. At the charter board meeting Feb. 21, 2006, he
lectured Eagle's leadership on problems with its proposed building purchase.
"Mr. Nida concluded that the Board has decided not to take action on this
request," board minutes note.</P>
<P>Eagle Academy soon struck a deal to sublet Washington Math's space, and in
August 2006, Washington Math bought the defunct New School's building for $8.9
million -- funded with a $6.6 million loan from United Bank. Weeks later, Nida
and the rest of the charter board approved Washington Math's move.</P>
<P>At board headquarters, a Post-It note attached to Washington Math's contract
for the building purchase indicates that Nida personally approved that, too.
Referring to the charter school by its initials, the note said, "Tom approved
this agreement via e-mail w/appropriate parties from WMST."</P>
<P>Nida was not the loan officer for the United Bank loan to Washington Math and
said in the interview he had nothing to do with the transaction. He said all his
decisions about that school, Eagle Academy and New School were made in the
interests of students and not to benefit United Bank or himself.</P><B>The
Pushback</B><BR>
<P>In some areas of the city, homeowners began pushing back against rapid
expansion of charters in their neighborhoods. They were unaware that they
sometimes were complaining to public officials with private ties to the projects
they opposed.</P>
<P>In the fall of 2006, Elsie Whitlow Stokes Community Freedom Public Charter
School was planning a move to a former seminary at the top of a dead-end street
in the Brookland neighborhood.</P>
<P>Elsie Whitlow Stokes was still under the authority of the D.C. school board,
which under the original congressional legislation had granted charters to more
than a dozen schools and performed its own oversight. The public charter school
board, however, was making plans to assume authority over Stokes and the other
Board of Education charter schools.</P>
<P>Nida said that his public charter board was willing to regulate the
additional schools. "There's no reason they should be cast adrift," he told The
Post. The D.C. school board scheduled a Nov. 8 vote on exiting the charter
business.</P>
<P>Two days before the vote, Nida wrote a letter to Elsie Whitlow Stokes
officials. He offered a $6 million, 25-year loan from United Bank to help the
school purchase and renovate the former seminary in Brookland.</P>
<P>"We look forward to building a mutually beneficial relationship with your
school," Nida wrote on United Bank letterhead, noting that the deal included a
$60,000 origination fee, with $10,000 due on acceptance. "Thanks for this
opportunity to be of service."</P>
<P>Collateral for the loan would be all of the charter school's assets and all
the taxpayer facilities funding, the letter said.</P>
<P>(United Bank eventually struck loan deals with three of the Board of
Education schools newly coming under Nida's purview, records and interviews
show.)</P>
<P>It would be another nine months before unwitting Brookland neighbors had the
opportunity to stand before Nida and the public charter board in July 2007,
asking them not to permit the school's move.</P>
<P>A month later, the charter board approved the Stokes relocation, with Nida
recusing himself. By then, Nida had directed District officials to start sending
taxpayer funds intended for the school directly to his bank to secure the loan.
"Please make this change as soon as possible," Nida wrote on his bank
letterhead.</P>
<P>"They shoved it in our face, and that was it," said Vicki Langford, a
Brookland resident who only later realized that Nida had been involved in
financing the move. "It feels like it is one big scam."</P>
<P>In 2006 on <A
href="http://www.washingtonpost.com/ac2/related/topic/Capitol+Hill?tid=informline"
target="">Capitol Hill</A>, a zoning battle with homeowners prevented AppleTree
Early Learning Public Charter School from operating a school on a residential
block. So AppleTree asked the charter board in early 2007 for permission to
increase its enrollment from 36 to 180 and open in two other locations.</P>
<P>Enrolling the extra preschoolers would bring the school's taxpayer funding to
more than $3 million annually, records show. That would allow the school's
operators to borrow more money, they told Nida and his colleagues. "Greater
scale will provide us with greater opportunities for facilities financing," an
AppleTree official said, according to a reporter's tape recording of the
February 2007 meeting. The official explained that AppleTree needed $900,000 to
ready the new space.</P>
<P>As the board prepared to vote, a commissioner from one of Capitol Hill's
neighborhood advisory bodies tried to comment. "This is not a public hearing,"
Nida said, silencing the elected official. "This is a public meeting. And the
agenda does not have public comment."</P>
<P>The charter board voted unanimously to approve AppleTree's enrollment
request, although the school had failed to meet its current enrollment ceiling.
And soon, Nida's employer, United Bank, lent AppleTree Institute $900,000 for
its renovations, records show. Nida went on in his official capacity to
recommend approval of AppleTree's lease, vote for its request to open new
locations and vote months later to increase the school's enrollment yet
again.</P>
<P>In the interview, Nida said he knew AppleTree officials needed a loan but did
not consider recusing himself from the matter because he did not know they had
decided to use his bank and had nothing to do with the transaction. "If I knew
that they were dealing with United Bank specifically," Nida said, "I might have
taken a different approach."</P>
<P>Nida said he was benefiting the community as both a charter school banker and
a regulator. "I have done what I needed to to serve as best I could in this
capacity," he said.</P>
<P>"If I have had any involvement with charter schools facilities of any kind,
it is because there's been such an overarching need for charter schools to get
access to any facilities anywhere, anyhow," Nida said. "In my connectedness with
the charter community as lender originally and working with other lenders along
the way, and as a person who is a resource, you know, at a national level for
charter school facility financing, I am in the middle of this whether I like it
or not."</P>
<P><I>Staff writers James V. Grimaldi, Theola Labbé-DeBose and Joe Stephens and
researchers Rena Kirsch, Meg Smith and Julie Tate contributed to this
report.</I></P></FONT></DIV></BODY></HTML>