Franklin Towne Charter High School in Philadelphia and its former chief executive have agreed to pay a combined $3.9 million to resolve federal allegations that the school manipulated a 2023 admissions lottery to keep Black applicants out, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced Friday.
The school will pay $3,639,328.77 and former CEO Joseph Venditti will pay $275,000 under separate agreements. Prosecutors contend that in January 2023, Franklin Towne, "acting through or at the behest of Venditti, manipulated what should have been a random admissions lottery to reduce the chances of black applicants being admitted."
The case was brought under the False Claims Act, the federal law usually associated with contractor fraud, rather than as a civil rights suit. The theory is that Franklin Towne was taking federal education money at the time, through grants under the Elementary and Secondary Education Act and pandemic relief funds administered by Pennsylvania, and that accepting those funds meant certifying compliance with Title VI of the Civil Rights Act of 1964, which bars race discrimination by any school receiving federal assistance. Rigging a lottery, in the government's framing, made those certifications false.
"Racial discrimination has no place in school admissions," U.S. Attorney David Metcalf said. "Selecting or excluding students because of their race is illegal and violates the agreements schools sign when they accept federal grant money."
The Justice Department said both settlement amounts were based on analyses of the defendants' ability to pay. It also acknowledged, under its guidelines for crediting cooperation and remediation, that the school has since replaced its CEO and hired an independent third party to conduct every future admissions lottery. The claims are allegations only, the office said, and there has been no determination of liability.
What the school looks like
Franklin Towne Charter High School enrolls about 1,290 students. Federal enrollment data shows the student body is 46% white, 32% Hispanic, 2% Asian, and 17% Black. Its sister school, Franklin Towne Charter Elementary, is 70% white and 7% Black.
Those numbers stand out in Philadelphia. Across the city's 218 district-run schools, students are 42% Black and 15% white. The city's 81 charter schools taken together lean further the other way, at 58% Black and 11% white. A charter high school that is 17% Black is an outlier in either group and that is what put the school under scrutiny in 2023.
Charter schools are public schools funded largely with tax dollars and open to any student in the city. When applications exceed seats, Pennsylvania law requires a random lottery. Preferences for siblings and, in some cases, for students in a defined neighborhood are allowed; anything that sorts applicants by race is not. The mechanics of that system, and how they differ from district schools, are in our explainer on what a charter school is.
The oversight question
Jamila Davis, special agent in charge of the U.S. Department of Education Office of Inspector General's Eastern Regional Office, said the office "will continue to pursue allegations of violations of the False Claims Act in carrying out our important public service." The inspector general's office investigated the case alongside the U.S. Attorney's Office; Assistant U.S. Attorneys Peter Carr and Fernando I. Rivera handled it.
The settlement arrives as the federal government's posture on race in schools is shifting in the other direction on most fronts. The Education Department earlier this year directed districts to stop what it called racial balancing in student discipline. The Franklin Towne case is a reminder that the False Claims Act, with its treble damages and whistleblower provisions, gives prosecutors a tool that does not depend on the Office for Civil Rights. It is also the second large charter settlement in a month, after DeKalb County agreed to pay its charters $29.5 million in a funding dispute, though the two cases have nothing in common beyond the sector.
Franklin Towne did not admit wrongdoing. The independent lottery administrator it has hired will run the next admissions round.
Sources
U.S. Attorney's Office, Eastern District of Pennsylvania: Franklin Towne Charter High School and Its Former CEO Agree to Pay Nearly $4 Million
TheGrio: Philadelphia charter school, former CEO agree to pay nearly $4 million
Enrollment and demographic figures from allk12's analysis of National Center for Education Statistics (NCES) Common Core of Data.
