The Herald, Sharon, Pa.

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March 29, 2013

School CEO pays fine

Violation costs Gentile $7,000



“Accountability and responsibility for one’s actions are part of the mantra of what makes the Keystone programs including the Keystone Charter School the success they are today,” James Gentile, founder of the school, said Thursday.

Gentile accepted his responsibility for an ethics violation by agreeing to pay a $6,000 penalty plus $1,000 to cover some of the costs of the investigation.

In a 30-page adjudication report, the Pennsylvania Ethics Commission said Gentile violated the Public Official and Employee Ethics Act when he used his position as a member of the board of the Keystone Education Center to participate in discussions concerning rental and lease payments of buildings used by the school and owned by Gentile and members of his immediate family, working under the corporate name Gentile Enterprises Inc. of Gentile Enterprises LLC, and signed leases for classroom space from Gentile Enterprises as president of the charter school board and the affiliated Keystone Adolescent Center.

Gentile has stressed that the state Department of Education approved the formation of the charter school with the same lease arrangements, but said Thursday that the ethics commission and the state Auditor General, who also has been critical of the arrangement, are independent of the education department.

Gentile resigned as a member of the school board in 2010, shortly after the Auditor General’s Office first pointed out a possible conflict of interest, he said.

He acknowledged that he should not have voted on leases and rent payments as a member of the school board.

“It is a violation because I sat there,” he said. “At the same time, it was approved by the Department Education.”

“(A)t no time did James Gentile intend to create a charter school or place himself on the board for the purposes of gaining some financial benefit through a lease arrangement between the school and Gentile Enterprises,” he said.

Gentile said he was never a controlling force on the school board. The board initially was composed of himself and the superintendents of the Greenville and Reynolds school districts.

“They could always outvote me,” he said.

The board later was expanded to five members.

Gentile said he cooperated fully with the ethics commission.

“I gave them everything I had,” he said. “I have nothing to hide.”

He said he agreed to the penalty because of the power of the commission.

“They can do anything to you,” he said. “They could fine you anything. They could put you out of business.”

Keystone Adolescent Center was created in 1993, and the Keystone Charter School opened its doors in 1997, the first charter school to do so in Pennsylvania.

Gentile Enterprises owns the former West Salem Elementary School, which it bought from Reynolds, at 425 S. Good Hope Road, and the former Marion Restaurant, 270 Sharon Road, also in West Salem.

The school pays Gentile Enterprises about $20,000 a month for the buildings, and Gentile said the lease amounts have only changed once, due to an expansion of one of the buildings.

Gentile Enterprises has spent hundreds of thousands of dollars in improvements to the buildings, including $180,000 for improved sewage treatment and $50,000 for a parking lot upgrade.

“It is extremely critical to understand why it was necessary to create the rental relationship between the school and Gentile Enterprises,” Gentile said. “Act 22, the Charter School enabling legislation, did not allow charter schools to use public funds to acquire real estate. Consequently, if the school was going to exist, it had to rent a facility.”

Gentile Enterprises pays real estate taxes on its buildings, unlike public schools, he said.

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