The Gaddie family has been in the education business for decades. In the 1970s, members operated the John Hancock Academy in Mesa, teaching children back-to-basics that included phonics, morality and other conservative values. Later, they moved to higher education, operating the Mountain States Technical Institute to teach vocations like mechanics and air-conditioner repair to the dropped-out and the downtrodden.

During that time, the Gaddies were charged, fined or investigated by nearly every government and private agency that has some sort of say in the school business.

Before finally filing for bankruptcy in 1991, Mountain States was sued multiple times by creditors who hadn't been paid and by students who claimed their student-loan and grant money had disappeared. Now the Gaddies want state funds to open two charter schools, one a traditional school for young students, the other a vocational school for older students. They very well may get the money.

Since the charter school law was passed last year, Arizona has run straight to the front of the class. Within the last five months, the state has approved more than a third of the charter schools in the entire country.

At a time when the public school system is overburdened with students, social ills and regulations, it has become abundantly clear that Arizona's method of solving the state's education problems is to build a new system. This one is market-driven, competitive and on contract to take over the state's obligation to teach its children. Education is now a business venture.

Charter schools function much in the same way as defense contractors. They are private businesses contracted by the state to educate children. The state pays an amount equal to that of public school funding--about $3,500--for each student enrolled. Arizona is one of only two states (the other is Minnesota) that allows private schools to be chartered. It is the only state that allows charter schools to be profitable. That's an appealing notion when you consider that public education is a $1.7 billion-a-year industry in Arizona.

Arizona is also the only state that allows charter schools to function as independent legal entities. Charter schools are free from much of the nearly 800 pages of regulations in the Arizona Education Code. They don't have to employ state-certified teachers. They don't have to pay them a standard wage. They may not have to contribute to their retirement funds. "If you can wake up in the morning and fog a mirror, you're capable," says Kay Lybeck, president of the Arizona Education Association, the state's largest teachers union.

Ironically, the same state government that created a monstrosity of regulation for the public school system decided that charter schools were better off without most of it.

And already, there is a push to further free their hands. The Goldwater Institute is lobbying to allow charter schools to skip the state's daunting accounting requirements--including a cap on how much money schools can hang onto from one year to the next--and even more of the education code.

There are about 140 charter schools in the country, scattered across 11 states. By June, Arizona will have an astonishing quarter of all the charter schools in the entire nation. The state allows a total of 50 to be approved each year, but does not limit the total number of charter schools that may operate in the state.

Charter schools are a growth industry.
"The interest is incredible," says Linda Fuller, who heads a five-person department that processes charter school applications at the Department of Education. "I don't think anybody thought there would be this many applications."

In the meantime, the abuse that can come with charter schools is demonstrated by a situation in California.

The Los Angeles Unified School Board revoked a charter earlier this year from Edutrain, Inc., which had run a special school for dropouts since May 1993. The school, home to more than 500 students, was nearly $1 million in debt and owed the L.A. district at least $240,000 for students it had never enrolled. At least part of the money reportedly had gone to lease Edutrain's principal an expensive sports car, pay his rent and hire a bodyguard, as well as underwrite a $7,000 staff retreat in Carmel.

Delite Gaddie, a Mesa mother of five children, was so disgusted with her children's education that she and her husband, Ernest, got in their Volkswagen bus in 1970 and drove across the country to observe a school in Virginia with a reputation for success. There, they saw children learning to read by using the McGuffey Reader. They were inspired to start the John Hancock Academy in Mesa upon their return home. The school was attended by the Gaddie children and a few others. The Gaddies sold that school nine years later. Next stop was Mountain States Technical Institute, a vocational high school, and later postsecondary school. The Gaddie sons and daughters worked at the school, too, as did the daughters' husbands. It was truly a family business.

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Lisa Davis