UCSN

"As UNO grew, Rangel and Mullins engineered an increasingly complicated organizational structure that allowed the parent nonprofit—let’s just call it the UNO mothership—to reap financial benefits from the schools and spin off for-profit companies on the side. Here’s how the relationship between the parent company and the charter schools worked. Technically, UNO’s charter school network, UCSN, was separate from UNO. But the two entities shared the same CEO (Rangel, who made $250,000 a year) and COO (Mullins, who made $190,000) and even the same board members—a situation fraught with potential conflicts of interest. Remember Advantage, the outside firm to which Rangel had turned over the day-to-day management of the schools? UNO dismissed the firm around 2000 after Octavio Paz posted poor academic results. “We felt we were terminated capriciously,” says Steven Wilson, the founder of the now-defunct Advantage. “They wanted to self-manage.” UNO did just that—and began paying itself a “management fee” of $1 of every $10 it received from local, state, and federal sources. (Some years UCSN kicked up more. In 2012, those fees totaled $5 million.) Under Rangel and Mullins, UNO had control over how that cash was spent.