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For several months now, my media outlet has closely followed an ongoing legal drama involving Charleston Day School (CDS) – one of the most prestigious private academies in South Carolina.
The school – which caters to some of the Holy City’s most affluent and influential families – allegedly lied to state and federal officials to secure tax money during the Covid-19 pandemic. Specifically, school leaders claimed more than half of their student body – 50.78 percent of students, to be precise – came from “low-income families.”
Laughable, right?
Founded in 1937, Charleston Day attracts children of the Lowcountry upper crust whose parents shell out $28,190 per year, per child on its kindergarten programs – and $29,675 per year, per child for students to attend first through eighth grade, according to its tuition page.
“Are we really to believe half of Charleston Day’s students come from ‘low-income’ families?” I noted last spring.
This opportunistic falsehood – which I described as “outlandish” – nonetheless enabled the school to secure nearly $80,000 from the S.C. Department of Education (SCDE) as part of the federal government’s Emergency Assistance to Non-Public Schools (EANS) program.
In addition to suspected EANS fraud, questions were also raised about various Charleston Day disbursements tied to the nearly $600,000 the school received from the federal Paycheck Protection Program (PPP).
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News of these dubious financial representations were first reported by this media outlet in February of 2022. Prior to my reporting on Charleston Day’s questionable finances, I filed a story on how school leaders had removed a trustee (and kicked his three children out of school) after the trustee and his wife raised questions about its shifting Covid-19 policies.
Subsequently, the school was sued in federal court by the trustee – Charleston, S.C. attorney Matt Austin. According to Austin’s lawsuit, Charleston Day leaders engaged in “retaliatory actions against (him) and his family after he engaged in protected activity by attempting to ascertain the scope of — and curtail — (the school’s) misappropriation and misuse of federal funds.”
These “retaliatory actions” allegedly included removing Austin from his board seat, kicking his three children out of school, and conspiring with leaders at other schools to keep the children from being able to enroll at those institutions.
In reviewing court files related to this case, new details – and startling admissions by the school – have come to light.
For example, on December 20, 2021, CDS officials allegedly acknowledged “cutting off Austin’s access” to a web portal “approximately an hour” after he began reviewing minutes from previous board meetings “in order to obtain more information about (the school)’s acquisition and use of federal Covid funds,” according to filings.
After being blocked from accessing the portal, Austin allegedly sought to obtain the information via an email request to a school employee.
“Do we have to give him this?” the employee reportedly asked an attorney representing CDS at the time, according to court documents obtained by this media outlet.
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RELATED | CHARLESTON DAY CHAOS
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“Yes, you have to give it to him,” the lawyer responded.
At the time Austin’s access was denied, he had obtained information documenting “a significant increase in CDS’s surplus that would not have been possible but for the PPP and EANS funds.”
“The documents further showed that – on October 12, 2021 – the board voted to transfer this surplus from the previous fiscal year to the (school’s) endowment,” court filings noted. “The financial records also showed that CDS treated PPP and EANS funds as if they were gross receipts rather than specifically allocated and earmarked loans and grants. The financial records further showed that CDS did not have problems making payroll during the Covid-19 pandemic.”
If true, that would contradict what the school claimed on its application for emergency federal assistance – and what it told parents in announcing the receipt of the loan at the time. According to a letter to CDS parents dated May 7, 2020, former board chairman Rutledge J. Young III claimed the school would be using the funds “as intended by the PPP program to support our existing faculty and staff and to reduce disruptions to the ongoing operations of the school.”
Another point of interest? After Austin was removed from his position on the board on February 11, 2022, court records reveal he spoke with federal prosecutor Emily Limehouse about what he had uncovered at the school.
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“Limehouse told (Austin) that the government would investigate (his) allegations and that she believed (he) was a whistleblower,” the documents alleged.
In its response to the allegations raised by Austin, attorneys for the school have drawn a bead on his wife, Francie Austin – deputy city attorney for North Charleston, S.C. and the daughter of former U.S. attorney Bart Daniel.
According to the depositions of CDS board members Emma Hershey and Ross Hostetter, they presumed Matt Austin had shared a draft email regarding the school’s mask policies with his wife – which constituted a “confidentiality breach as it related to Charleston Day School policy.”
“You believe that (Austin) violated confidentiality as it relates to that letter that was going (out) to discuss the school’s policy on masks, correct?” Austin’s attorney, Bill Nettles, asked Hostetter during a recent deposition.
“Correct,” Hostetter answered.
However, Hostetter subsequently admitted he had “no information” to support that theory.
“That was one scenario where we were concerned about where and how (Francie Austin) may have received access to that letter,” Hostetter said in his deposition.
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Pressed on the point by Nettles, Hostetter acknowledged he couldn’t “point to anything specific” to suggest Matt Austin sent his wife the email. In fact, he later acknowledged he “may have” remembered Matt Austin affirmatively telling him he had not sent the email in question.
In her deposition, Hershey referred to the email leak as “a clear breach of confidentiality,” but she also stated under oath that she had no proof Austin’s wife received the email in question from her husband.
“I have no proof that that happened,” she said during her deposition.
Court records indicated Francie Austin received the email in question from a teacher while her husband was traveling in California, meaning the alleged “confidentiality breach” used as justification for his removal from the board never happened.
The court records obtained by this media outlet in connection with this case indicate a key mediation deadline is looming later this month. We will keep our audience apprised of any pertinent developments ahead of that deadline.
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ABOUT THE AUTHOR …
Will Folks is the owner and founding editor of FITSNews. Prior to founding his own news outlet, he served as press secretary to the governor of South Carolina, bass guitarist in an alternative rock band and bouncer at a Columbia, S.C. dive bar. He lives in the Midlands region of the state with his wife and eight children.
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2 comments
Go ask Alice even if she is never 10 feet tall.
This case is a microcosm of the larger world of the “Covid Karens” and the adjacent grifters who looted the federal treasury to obtain assistance funds that they never needed to begin with, and when the more honest people raise questions about it, they circled the wagons and attacked those who were asking questions that need to be asked. I hope the Austins release every one of these depositions as they happen, and nail whomever was orchestrating this affair to the wall. And if any of those people were attorneys, I hope they make ethics referrals to the Bar against them for engaging in inethical conduct unbecoming of the profession.