The Morning Report
Get the news and information you need to take on the day.

John Helgeson, a charter school executive, has a great deal for a public servant.
In 2007, he helped found Charter School Capital, a for-profit Oregon company that loans money to charter schools and buys school properties. In May 2015, he also started making $300,000 a year as an executive vice president at Learn4Life, a nonprofit network of more than 60 charter schools that serves roughly 45,000 students in California.
Charter School Capital lends money to Learn4Life schools and pockets the interest. While working at Learn4Life – which is funded almost entirely by California taxpayers – Helgeson maintained an ownership stake in Charter School Capital. In doing so, Helgeson discovered a way to collect not just one, but two paychecks from California’s cash-strapped public school system.
Learn4Life, which operates nine San Diego locations, serves a unique group of students. Many are at-risk and have dropped or failed out of traditional high schools. The schools are publicly funded and often located in strip-mall storefronts. Students usually come in to meet with a teacher once or twice a week and complete work packets.
Since 2014, Charter School Capital has loaned more than $6 million to two Learn4Life schools in San Diego alone. A charter school borrowing money from a for-profit lender is normal enough. To have a key employee who profits from both is not.
Just two months after Helgeson came on board at Learn4Life, the company increased its business with Charter School Capital. Charter School Capital purchased the 100,000 square-foot corporate headquarters of Learn4Life in July 2015 – making Charter School Capital the landlord of Learn4Life. Now Charter School Capital wasn’t just profiting on its loans to Learn4Life. It was also profiting on a lease. And so was Helgeson.
“It sounds like a classic conflict of interest, where someone is serving two masters,” said Jessica Levinson, former president of the Los Angeles Ethics Commission and a professor at Loyola Law School.
California’s conflict of interest laws mandate that public agencies cannot strike deals with companies in which a board member or key employee of the agency also have a financial interest.
A Voice of San Diego investigation confirmed Helgeson’s simultaneous interest in both companies by linking together business filings, tax records, property deeds and other public documents. When confronted about the conflict of interest, representatives of both companies initially denied or deflected the relationship. Presented with further evidence, they acted surprised.
Learn4Life directed questions about Helgeson to Greg Bordo, a lawyer who represents the company. In an initial interview, Bordo claimed Helgeson completely divested from Charter School Capital before coming to Learn4Life.
“He was no longer an employee at Charter School Capital, he wasn’t on its board and he had no financial interest,” he said. “Nothing like that goes on at Learn4Life, on any level.”
When presented with more concrete evidence days later, Bordo said he was surprised to learn of a conflict.
“From the company’s perspective, we were always under the impression he had divested himself,” he said. “Now with this new information you’ve provided, I’m gonna have to go and look into this more comprehensively.”
As late as December 2016 – some 19 months after he started at Learn4Life – Helgeson and his two co-founders maintained a controlling interest in Charter School Capital, according to a Portland Business Journal article and subsequently confirmed by Voice of San Diego. At the time, the company had done $1.5 billion in deals and was posting 20 to 30 percent growth a year.
Kelliann Amico, a spokeswoman for Charter School Capital, initially deflected questions about ownership. “John Helgeson was a co-founder of Charter School Capital, but is no longer with the firm,” she wrote in an email. In another email, she wrote that he did not have an ownership stake in the company.
After further back and forth, she relented. The Portland Business Journal article “was accurate,” she wrote, meaning Helegeson had ownership in Charter School Capital even as he was working as an executive at Learn4Life, which did business with Charter School Capital.
I asked if the other partners had bought Helegeson out of the company and, if so, when. Amico declined to provide further details, other than to say Helgeson left the company in early 2017. “Charter School Capital is a privately held company,” she wrote.
If Helgeson was bought out in early 2017, that would mean he still managed to double-dip on his earnings for at least 20 months, according to the May 2015 start date at Learn4Life listed on his LinkedIn page. (Bordo confirmed that Helgeson came on board in 2015, but did not provide an exact month.)
“There are a lot of things that could be investigated here, ranging from if there have been false representations to a scheme to defraud the public or not providing services to tax questions,” said Laurie Levenson, a former assistant U.S. attorney who prosecuted white-collar crime and public corruption cases.
One important question for investigators would be “whether or not the deals have been done at fair market value,” said Ellen Aprill, a professor at Loyola Law School who specializes in nonprofit law.
Charter School Capital and Learn4Life deal together in two areas: loans and leases. Voice of San Diego requested Learn4Life’s lease agreement with Charter School Capital, as well as examples of loans between the two companies, but Learn4Life did not make the documents available.
Charter School Capital paid $5.6 million for the building that houses Learn4Life’s headquarters in Lancaster. Just two years earlier, a local real estate company paid $4 million for the same building, according to property records.
Effective interest rates on the loans between Charter School Capital and Learn4Life were not immediately available. But Voice of San Diego obtained several audits through a Public Records Act request that do lay out some of the specifics. Between 2014 and 2018, Charter School Capital loaned at least $6.4 million to two Learn4Life schools in San Diego County. The company stood to make a profit of $397,000, not including fees, according to the audits.
These figures do not account for deals with Charter School Capital in the many other counties where Learn4Life operates.
The financing deals are not typical loans. Learn4Life schools are financed by the state based on attendance, but the schools typically have to wait months for the money to come in. This future money is known as receivables. Learn4Life schools sell their receivables to Charter School Capital at a percentage of their actual value, so they can get a cash infusion when needed. This type of financing is known as factoring, and the deals are typically done at a higher interest rate than a typical bank loan, acknowledged Learn4Life’s attorney Bordo.
Learn4Life also does business with another financing company, Charter Asset Management, according to the audits.
Bordo told me that despite any appearance of a conflict of interest, Learn4Life would have been making the same deals with Charter School Capital with or without Helgeson.
Still, he acknowledged that the legality of the arrangement was murky.
“From a legal perspective, it may or may not be material,” he said. “But given our interest in avoiding even an appearance of conflict of interest, it’s something we need to take a closer look at with the information you’re providing us.”