State rejects Dunbar charter school, citing chairman’s criminal record

Published 5:59 pm Wednesday, January 13, 2016

Editor’s note: This story has been updated to clarify that the 2005 indictment Kenneth Fox Muhammad received alleged he mishandled funds. Muhammad was not charged or convicted on those grounds, and he pleaded guilty to other charges.


EAST SPENCER — A state panel told a group hoping to establish a charter school in East Spencer that they’ll first have to replace their chairman, a former town mayor and convicted felon.

The North Carolina Charter School Advisory board also expressed concerns about other parts of the Paul L. Dunbar charter organization’s plan, including the company it had selected to manage the school.

The Dunbar charter organization was denied a state charter Tuesday, board member Whitney Peckman says.

Peckman said the entire board met with the North Carolina Charter School Advisory Board in Raleigh to discuss the granting of a charter. The Paul L. Dunbar group hoped to start a charter school in East Spencer, a town which has been without a school since the 1980s.

“It was a disaster,” Board Chairman Kenneth Fox Muhammad El said.

At the start of the interview, Muhammad gave a short presentation of what the group hopes to accomplish in East Spencer.

“Immediately after that, they pulled out a stack of papers,” Peckman said.

The state committee told the Dunbar board they had been made aware that Muhammad was a convicted felon.

“One of the things that occurs during the application process is that the nonprofit board has to submit background checks on all their board members,” advisory board member Sherry Reeves said.

Muhammad in May 2005 was indicted by a grand jury on 34 federal crimes. The indictment said Muhammad — then known as Kenneth Fox — two former East Spencer alderman and a Winston-Salem businessman conspired, solicited and accepted illegal payments. The indictment alleged that Muhammad  and others mishandled large sums of federal funds that East Spencer received through loans, grants, subsidies and other assistance.

Muhammad pleaded guilty to only two of the charges in late 2005 for wide-ranging and covered crimes he committed while mayor of East Spencer until 2001.

The main charge was conspiracy to commit mail fraud, wire fraud, federal program bribery, affect commerce through extortion, use of mail to promote bribery and promote money laundering. He also pleaded guilty to one count of obtaining property through false pretenses.

Muhammad was sentenced to 41 months in prison.
When he was released, Muhammad began pursuing a master’s degree in business management from the University of Phoenix, according to his personal website. He received the degree in 2011, and then began pursuing a doctorate from Walden University in public policy and administration. Muhammad says he is currently in the process of earning a doctorate in public policy and administration with a public management focus.
Muhammad was appointed to the Rowan County Housing Board in 2014. At the time, county commissioners who appointed Muhammad said he deserved a second chance.
Muhammad says it occurred to him that the advisory board would bring up his criminal record, but he hoped that they would be able to move past it.
Muhammad’s history did not turn up in the initial background check, Reeves said, but was discovered later by advisory board member Steven Walker. One of the things the advisory board is charged with is holding charter boards responsible for their use of the state’s money — and Muhammad’s history was cause for concern.

“This board is coming before us, asking us to entrust you with the state’s money, and this is your resume,” she said.

The state Charter School Advisory Board asked the Dunbar group if they were aware of Muhammad’s conviction. They were, Peckman said.

“We had no reservations about his integrity or his intentions or the work he does in East Spencer,” Peckman said.

Peckman said Muhammad has done great work in the community and in East Spencer. Perhaps, she said, the old adage that one can “pay one’s debt to society” is wrong.

“Maybe it isn’t possible to pay your debt to society — this society,” she said.

Muhammad said that if his resignation had been the advisory board’s only concern, he would “gladly resign.”

But a member of the advisory board also expressed concern about the Dunbar group’s management company, Muhammad says. The Dunbar group works with Torchlight Academy Services, which runs Torchlight Academy in Raleigh. Peckman says that Muhammad is well acquainted with the McQueen family, which runs Torchlight.

Muhammad said the committee expressed concern that the Dunbar group’s budget did not reflect a fee for the company’s services. Muhammad said the group had an agreement with Torchlight to only pay them if there was a budget surplus, and that it was difficult to anticipate what that amount would be — so they left it blank.

Reeves says that Torchlight Academy’s school report card rating is an F, and they have an extremely low quality rank among North Carolina schools.

“It was not a stellar choice for a management company,” she said.

Muhammad says the state board’s suggestion was “out of line.”

“I don’t think they have the authority to tell us we need to get a new management company,” he said.

Muhammad believes Torchlight is a good choice for the school because they have experience working operating schools in high poverty areas. Its charter school, Torchlight Academy, in Raleigh has a significant portion of its student population on free and reduced lunches, Peckman says.

“They would be the perfect management company, in my opinion,” Muhammad said.

Peckman and Muhammad both claim the advisory board complimented the school’s educational component, but Reeves said that was not the case. The Dunbar group’s mission was very generalized, she said, and the education plan was non-specific. Reeves also said the school’s budget was “definitely in question.”

“Basically, at each aspect of the application there were items that gave us pause,” she said.

The state board held a vote and denied the application. They told the Dunbar group that they are welcome to submit a new, reworked application in 2016, provided they get a new chairman and a new management company.

“We’re not interested in a different chairman, we’re not interested in a different management company,” Peckman said.

The one thing the Dunbar group and the advisory board agreed on was that East Spencer needs a school.

“It sounds like East Spencer would be a prime location for a high quality charter school, and we certainly want to offer that to those children,” Reeves said, “We want those children to have a high quality education, but we don’t think that’s the means.”

And they may have been denied a charter, but the board of the Paul L. Dunbar group is determined to push forward

“You’re supposed to get a second chance, but the reality of the situation is that you probably won’t. So I’m going to create my own opportunities,” Muhammad said.

Peckman says they’ve started crafting a new plan — a subsidized private school. It’s still in the works, but it may include a sliding scale for tuition, the acceptance of Department of Social Services vouchers and a scholarship program. Muhammad says that with a private school, they would not need a minimum number of students, and would be able to start up far earlier than the charter school predictions.

“We all feel like we all know each other, we all trust each other and we will all go forward together,” Peckman said.

Muhammad says he hopes that the community will continue to support the Paul L. Dunbar group’s initiative to place a school in East Spencer and to positively impact the community.

“We just want to save the children, we’re not worried about the politics,” he said.

Steven Walker, North Carolina Charter School Advisory Board member, says the board only chooses which applications to recommend to the state, and all final decisions belong to the State Board of Education.