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Will Accountability Act be Big Financial Boom for Former Governor and Partner?

By Bill Britt
Alabama Political Reporter

MONTGOMERY — What does a former Governor, an investment banker and a scholarship granting organization have in common?

Together, they make a great combination for making money off of the Alabama Accountability Act.

Under the rules of the Accountability Act, Scholarship Granting Organizations ( SGOs) are allowed to take 5 percent of all the money they raise as administrative fees. With $25 million on the line, the race is on to see who can own the lion’s share of the SGO market.

Out of the eight 501(c)(3) non-profits seeking to be the top SGOs under the Accountability Act, the Opportunity Scholarship Fund, LLC, may prove to be the most interesting to watch.

The Opportunity Scholarship Fund was founded by former Gov. Bob Riley, along with investment banker, John F. Kirtley of Tampa Florida.

The Opportunity Scholarship Fund was originally organized with the Alabama Secretary of State by Step Up for Students, Inc., of Tampa, Florida, on October 2, 2013. That filing was quickly abandoned and a new company with the same name was filed by Bob Riley and Associates two days later.

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Step Up for Students, Inc. is a Florida company operated by Riley’s partner, John F. Kirtley.

According to the SGO’s website, “Step Up For Students provides legislatively authorized K-12 scholarships and related support to give economically disadvantaged families the freedom to choose the best learning options for their children.”

In 1998, venture capitalist Kirley, working with the national Children’s Scholarship Fund, founded the Children’s Scholarship Fund of Tampa Bay. In 2001 Kirtley lobbied the Florida Legislature to create the Tax Credit Scholarship Program, also known as Step Up For Students, for low-income students in grades K-12.

The Florida program is managed by Kirtley, who according to a report by the Palm Beach Post, “receives 3 percent for management fees this year, or almost $6.9 million” for administering Florida’s Tax Credit Scholarship program.

What Kirtley called a “passion” to help his State’s “economically disadvantaged families,” has resulted in a very lucrative business for him.

Kirtley’s company has been paid millions for its management work, and he also functions as a major player in funding GOP campaigns in the Sunshine State.

The Palm Beach Post article of Jan. 1, 2013 says that Kirtley’s PAC spent almost $1.5 million in the previous year’s campaign cycle.

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According to the Florida Secretary of State’s records, Kirtley’s political action committees have raised over $6.5 million since 2004.

This has given him a powerful warchest in which to push his school choice agenda with Republican lawmakers.

Kirtley’s “All Children Matter”-Florida PAC raised $4,122,863 from 2004 until it closed in 2009. See doc

His other PAC, Florida Federation for Children has raised 2,393,130.00 since it inception in 2008. See doc

In an odd turn, Kirtley’s PACs have made considerable use of Majority Strategies, a group tied to Mike Hubbard when he was Chairman of the ALGOP. It was Majority Strategies that Hubbard used as a conduit to pass hundreds of thousands of dollars from the ALGOP back into the hands of his own business interest.

Kirtley’s PAC used Majority Strategies not only during the same period, but even before Hubbard, when the company was located in Columbus, Ohio.

The owner of the company Brett Buerck left Ohio during an FBI investigation into possible corruption involving Buerck and the Ohio Speaker of the House.

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The ties been between high-powered lobbyists, flush PACs and Republican politicians seems to underline every mission of the so-called “school choice” agenda.

Like Florida, our state is experiencing a confluence of big campaign contributions and the growing school choice/tax credit business.

As for the SGO set-up by Riley and Kirtley in Alabama: Calls to the business number listed with the Alabama Secretary of State for the Opportunity Scholarship Fund were answered by a voice message from a woman, identifying herself simply as Lesley—on what appears to be cellphone voice mail. It was not possible to leave a message because the mail box was full. The woman is believed to be Lesley Searcy, who is listed as the fund’s Executive Director.

Searcy is the former head of the now defunct Children’s Scholarship Fund Alabama.

A call to the 800 number provided on the Opportunity Scholarship Fund website was answered by a call center. When we asked for Mrs. Searcy or Gov. Riley the operator at the call center became confused saying that they were not an office, and that they only answered the phone to direct people interested in the scholarship fund. She was not aware of any of the officers or the location of the company’s office.

Riley, who has been very busy as a lobbyist since leaving the Governor’s office, has been accused of using his notoriety and connections to enrich himself and those around him.

This new venture has the potential of being very lucrative, especially if the Legislature increases the amount of money that can be raised by the SGOs.

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Currently, the Accountability Act allows for $25 million to be given by individuals and corporations, but there is a plan in place to grow this number over time.

The current law says, “The SGO will ensure that at least 95 percent of its revenue from donations is spent on educational scholarships, and that all revenue from interest or investments is spent on educational scholarships.”

According to the Accountability Act, a company or individual may receive a dollar-for-dollar tax credit for money given to the SGOs. The amount is limited to 50 percent of the person or companies entire tax burden.

According to Kirtley’s web-bio, “Step-Up for Students… provides over 50,000 scholarships to low-income Florida children each year,” he is making millions of dollars administering the SGO.

If Alabama follows the same route as Florida, the SGOs could be a part of the financial boom that is the new “school choice business,” and a new add-on to Riley, Inc.

Bill Britt
Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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