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Ben Chavis, founder of the American Indian Public Charter School, listens to the deliberations of the Oakland Unified School District Board, as they reached a decision to renew the school's charter, on conditions, for another two years, at the conclusion of a special meeting Wednesday, April 4, 2012 in Oakland, Calif. Chavis had been accused of financial malfeasance and the school of having teachers without proper credentials. (D. Ross Cameron/Staff Archives)

OAKLAND -- The governing board for Oakland's American Indian Model Schools -- which boast some of the highest test scores in California -- has been put on notice: If they don't make swift changes to the way the organization is run, it could be shut down.

A 1,080-page document from the Oakland school district cites numerous violations, from financial fraud and financial conflicts of interest to nonexistent board oversight. It gives the organization 60 days to remedy the problems and provide a written response or have all three charters pulled.

The violations -- and much, if not all, of the evidence -- compiled in the thick document stem from a report published in June by the state's Fiscal Crisis & Management Assistance Team. The inquiry was prompted by whistle-blower complaints from former employees.

Investigators found that founder and director Ben Chavis, his wife, Marsha Amador, and their numerous real estate and consulting businesses received about $3.8 million in public funds between mid-2007 and the end of 2011. And the organization's governing board, which is responsible for ensuring the proper use of public money, did nothing to prevent it from happening, the report concluded.

For a time, Chavis, himself, served on the board while he was employed as the organization's director -- and while his company leased buildings to the schools and his wife handled the books.

"There was no indication that the AIMS Board took any steps to account for the founder's financial interests in the agreements it approved, or was even aware that such agreements were illegal," said the notice from Oakland Unified.

The three schools run by the American Indian Model organization are: American Indian Public Charter School (grades 5-8) at 3637 Magee Avenue in the Laurel District; American Indian Public Charter School II (K-8) at 171 12th Street in Chinatown; and American Indian Public High School, also on Magee Avenue.

The original American Indian charter school opened in 1996 to help the city's Native American students and others who were struggling in the traditional system. Chavis took over in 2000, overhauled the curriculum and instituted tough and sometimes unorthodox disciplinary practices, such as making students sit on the floor when they hadn't completed their homework. He later added a high school and a second middle school, American Indian Public Charter School II. As of 2011-12, only six of the 641 students attending any of the schools were Native American, according to the California Department of Education.

For the charter revocation process to officially begin, the Oakland school board must approve the provisional "Notice of Violation" that has already been delivered to the charter organization. The board is scheduled to take up the matter at5 p.m. Thursday during the regular board meeting.

If the Oakland school board approves the violation notice, the American Indian board has 60 days to respond. If the district is not satisfied with the response, the school board may take the next step and issue an "Intent to Revoke" notice, which is followed by a public hearing and a final decision within 30 days.

Regardless of what the Oakland school district's staff members recommend, the fate of the American Indian schools will rest with the Oakland school board.

At a packed hearing in April, the board wrestled with a staff recommendation to close one of the three schools -- American Public Indian Charter School II, whose charter was up for renewal -- even after the investigators released initial findings that pointed to conflicts of interest and financial fraud. Supporter after supporter pointed to the schools' near-perfect scores, which were not part of the fraud investigation's scope, and said the board would be depriving students of an excellent education if it closed their school.

Ultimately, in a split vote, the school board voted to renew the school's charter, allowing it to expand to include grades K-8.

"We don't have one school in the Oakland school district with that kind of score," board member Alice Spearman, who has described Chavis as a friend, said at the hearing. She added, "I, for one, don't want to be on CNN as part of a group of people that can't even see beyond."

Messages left with American Indian were not immediately returned on Wednesday.

Jon Glover, who worked as a teacher and administrator at American Indian charter schools for five years until 2011, said the developments have been hard to watch. "My big hope is that the kids have an opportunity to be well-served -- whether it be there or somewhere else," he said.

Read Katy Murphy's Oakland schools blog at www.IBAbuzz.com/education. Follow her at Twitter.com/katymurphy.