Epic investigation, David Chaney and Ben Harris
David Chaney and Ben Harris, the former co-founders of Epic Charter Schools and the owners of Epic Youth Services, remain under state investigation. (NonDoc)

Oklahoma Attorney General John O’Connor announced late this afternoon that he has granted Oklahoma County District Attorney David Prater’s request to reclaim the investigation — and potential prosecution decisions — of Epic Charter Schools nearly two years after he stepped aside and let O’Connor’s predecessor, Mike Hunter, take the lead.

O’Connor confirmed that the Oklahoma State Bureau of Investigation completed its final report on Epic, a pair of charter schools that came under investigation more than eight years ago owing to alleged mismanagement of public dollars by Epic Youth Services, a private management company owned by Epic co-founder Ben Harris and David Chaney. EYS was receiving $0.10 of every taxpayer dollar paid to the public charter schools in order to manage the controversial learning fund.

“Prosecutions must be based on final and thorough investigations by law enforcement agencies,” O’Connor said in a press release. “Our office has been waiting on the OSBI to complete its full investigation and provide its findings. I appreciate the years of hard work on this investigation by the OSBI and have full confidence in the leadership of District Attorney Prater to take it back and conclude this investigation.”

Prater said he intends to meet with investigators in the coming days to learn what they have discovered.

“I look forward to meeting with the OSBI agents next week where they will disclose their final investigative report to me,” Prater told NonDoc. “After reviewing the report, I will determine what appropriate action will follow.”

Prater had stepped away from his role in the Epic saga in mid-2020 after Andrea Eger of the Tulsa World reported conflict of interest questions surrounding Prater’s wife’s employment at Rose State College, which sponsors one of the two Epic charters.

Prater has maintained that his wife’s position does not pose a conflict, and his request to be placed in charge of the Epic investigation could indicate lingering frustration over Hunter’s prior appointment of Melissa Houston as a special prosecutor to examine the matter in late 2020. Houston presented witnesses and testimony to the state’s multi-county grand jury, which only produced a controversial May 2021 “interim report” that encouraged legislative reform of charter school governance laws. At the time, OSBI’s investigation was ongoing, and the multi-county grand jury report noted that the investigation had not concluded.

It was also reported that Hunter had received campaign contributions from the charter schools’ co-founders, Chaney and Harris, who are no longer associated with Epic after wholesale changes to the schools’ board and management structure.

Flanked by prosecutor Charles Rogers, rear, and Oklahoma County Court Clerk Rick Warren, Oklahoma County District Attorney David Prater files a copy of a grand jury indictment of Rep. Terry and Teresa O’Donnell on Friday, Dec. 17, 2021. (Tres Savage)

Epic already repaying state funds

In October 2020, State Auditor and Inspector Cindy Byrd released her investigative audit of the charter schools. Byrd’s audit said Epic, Harris, Chaney and their Epic Youth Services corporation owed the state millions of dollars for having excessive administration costs and co-mingling public funds with Epic’s endeavors in California.

In December, the Oklahoma State Board of Education voted to withhold $9.1 million in state funding from Epic over 12 months. Combined with more than $10 million in penalties assessed by OSDE in April and a handful of other fines, the state stands to recover about $20 million from Epic.

At a meeting of the Oklahoma House of Representatives’ common education committee and Appropriations and Budget education subcommittee on Feb. 1, Byrd said the financial mismanagement committed by Chaney and Harris is “the largest amount of reported abuse of taxpayer funds in the history of the state.”

Byrd, who is referencing her Epic audit as a key talking point while running for reelection, conducted her examination of the charter schools after a 2019 request from Gov. Kevin Stitt.<

Epic offers two school programs: Epic Blended, which is authorized by Rose State College, and Epic One-on-One, which is authorized by the Statewide Virtual Charter School Board.

In O’Connor’s press release announcing his deference to Prater on the Epic matter, director Ricky Adams said “the Epic Charter Schools investigation has been costly, detailed and complex.”

“Yet it was always focused on determining if taxpayer dollars were being properly spent for the benefit of Oklahoma students,” Adams said. “The investigation was a marathon, not a sprint, always focused on finding the truth and never a referendum on charter schools. Thank you to AG O’Connor and DA David Prater for accepting this case.”

O’Connor’s office recently empaneled the state’s 19th multi-county grand jury, a powerful investigative body used by law enforcement from around the state to compel witness testimony, issue subpoenas and sometimes issue indictments. The new multi-county grand jury will begin its 18-month term with its first session Feb. 8, 9 and 10.

Prater, meanwhile, is leading his own Oklahoma County grand jury in the investigation of public corruption matters. In December, that grand jury charged Rep. Terry O’Donnell (R-Catoosa) and his wife with multiple crimes related to legislation and her appointment as a state Motor License Agent.

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More background on the Epic investigation

Epic Charter Schools will have about $9.1 million of state allocated funding withheld by the State Department of Education. (Megan Prather)

During initial meetings with auditors, Harris refused to reveal how EYS had spent the millions in taxpayer money or how many employees the company had claiming that it would be a threat to his business model.

In May 2021, Epic Charter Schools board members voted to cut ties with Harris and Chaney by terminating their contract with Epic Youth Services.

During an October interim study held by the Oklahoma House of Representatives Common Education Committee on educational management organizations in the state, Epic’s current board president Paul Campbell stated that Chaney and Harris carried out “nothing but a grift and a con job” while running the charter schools. Campbell also said there needs to be a divide between the school and its founders.

“They are not the school, and they are bad actors, period,” Campbell said during the study.

Epic is continuing to deal with other controversies and litigation.

Earlier this month, EYS filed a breach of contract lawsuit against the schools for about $7 million in early December. In January, Epic countersued EYS $9.3 million to make up for penalties.

At their December meeting, Epic decided to seek $9.1 million in reimbursement from Epic Youth Services to make up for the amount being withheld by the OSDE.

Also in December, the board received the resignation of board member Kathren Stehno, who made allegations of misconduct against Campbell and encouraged state authorities to investigate the schools’ current leadership.

(Correction: This article was updated at 11 p.m. Friday, Feb. 4, to correct Tamara Pratt’s connection to Rose State College and to clarify language regarding David Prater’s original departure from the Epic investigation.)