WASHINGTON (Reuters) - A network of more than 150 U.S. charter schools linked to followers of Fethullah Gulen, the Pennsylvania-based Muslim cleric the Turkish government blames for instigating July’s failed coup, has come under growing financial and legal strain, according to school officials, current and former members of Gulen’s movement, and public records reviewed by Reuters.
The publicly financed schools, a key source of jobs and business opportunities for U.S. members of Gulen’s global movement, have sharply slowed their expansion in recent years, public records show.
The slowdown comes amid a series of government probes in more than a dozen states into allegations ranging from misuse of taxpayer funds to visa fraud. The investigations launched by state and federal officials have not resulted in criminal charges or directly implicated Gulen, whose name is not on any of the charter schools. The increased pressure on the schools also comes as the Turkish government is cracking down on Gulen supporters at home and presses hard for Gulen’s extradition.
Just three new schools were opened each in 2015 and this year to date, down from a peak of 23 new schools in 2010, according to a Reuters review of the public records of 153 charter schools and their management companies around the country.
The decline runs counter to the steady growth over the past six years of all U.S. charter schools, which receive taxpayer funds but are exempt from some rules that govern traditional state-run public schools.
At the same time, 15 schools have been closed or transferred to owners with no connection to Gulen’s movement since 2010. In at least 11 of those cases -- including in Georgia, California, Pennsylvania and Ohio - the management firms or individual schools themselves had faced official investigations, Reuters found.
“Since these investigations and pressures from media coverage have been going on, the schools are much more, maybe five times more careful, in terms of their finances, how they hire contractors,” said Hakan Berberoglu, acting executive director of the Illinois-based Niagara Foundation, which aims to promote the inter-faith dialogue espoused by Gulen, its honorary president.
“They are much more careful in how they expand,” he told Reuters.
Berberoglu said that the schools are not officially affiliated with Gulen and are not centrally controlled by anyone.
In another sign of a slowdown, the number of visa applications the schools submitted for guest workers from Turkey and other countries declined to 360 last year from more than 1,000 in 2010, immigration records show. The trend reflects a desire by the schools linked to Gulen followers to avoid further government scrutiny, according to current and former members of the movement.
In the wake of the failed coup, Ankara’s attorneys in the United States have stepped up an aggressive campaign to try to persuade local, state and federal authorities to open new inquiries and discredit the charter schools and other U.S. operations linked to Gulen.
Asked about signs that the movement is under stress in the United States, Alp Aslandogan, Gulen’s spokesman, said: “We are not worried about that.”
Many Gulen supporters in Turkey are now looking to their U.S.-based brethren for material support and safe haven, according to current and former members of the movement.
“It’s been my job to save people, to help people who want to come over here,” said one U.S.-based Turkish businessman, speaking on condition of anonymity because of the sensitivity of his efforts to assist would-be immigrants.
The reclusive imam Gulen, who has lived in self-imposed exile in Pennsylvania since 1999, denies involvement in the coup attempt.
Gulen’s global movement - known as “Hizmet”, which means “service” in Turkish - seeks to spread what his supporters say is the charismatic preacher’s moderate brand of Islam, which promotes Western-style education, free markets and inter-faith communication.
The United States has become the Gulen movement’s most important base of business operations outside Turkey except for Germany, according to independent experts on the movement.
In addition to the schools, followers run a loosely affiliated collection of businesses, civic associations and charities. Some Turkish-American-owned contractors who do business with the schools have been targeted in state and federal investigations over allegations they received preferential treatment, according to current and former members and legal documents.
Berberoglu said the schools have hired and done business with members of the movement because they can be relied on as trustworthy and capable.
“You want these schools to be successful, you need to depend on people that you know,” he said.
Groups linked to the Gulen movement, including several whose directors have also led charter schools, have sponsored hundreds of U.S. congressional trips to Turkey and nearby countries in the past eight years, according to congressional records. But such trips have mostly halted since 2015 when the Justice Department launched a criminal probe of possible irregularities in funding sources for some of the travels.
Aslandogan acknowledged that some of the schools were started by Gulen “sympathizers.” He added that the movement led by the 77-year-old cleric exerts no central control, and some followers say his role is strictly inspirational.
The school network has put down deep roots in the United States over the past nearly two decades with administrators deftly navigating the public funding process.
A series of bond sales have totaled $683 million since 2006, according to data collected by Reuters. Bond sales by four of the school chains alone in 2014 – the latest annual data available for this niche - accounted for 6 percent of the entire tax-exempt U.S. charter school bond market that year.
U.S. lawyers for Turkish President Tayyip Erdogan say they suspect the schools are a front that generates $500 million annually that is funneled from Gulen’s movement for subversive activities against the Turkish state, such as bribing officials. The attorneys do not provide specifics on how they believe this is done.
Aslandogan, Gulen’s spokesman, dismissed the accusations as “false” and unsubstantiated, describing it as part of a vendetta against “movement participants” outside of Turkey.
In at least one instance - a Texas case – the Turkish government’s post-coup accusations against a large school chain have prompted renewed scrutiny.
The Texas Education Agency said in late July they were reviewing a complaint filed by the Turkish government’s legal team of alleged fiscal improprieties by Harmony Public Schools, a Houston-based firm that runs 48 charter schools.
In the complaint, lawyers for the Turkish government accused Harmony of misusing $18 million in public funds, funneling money to Gulen’s organization and also of discriminatory employment practices. No decision on whether to open a formal investigation has yet been announced
Soner Tarim, one of Harmony’s founders, denied any wrongdoing and said there was no “underlying conspiracy” in running the non-profit schools.
“The purpose was really to create math and science expertise,” Tarim told Reuters.
Tarim acknowledged, however, that his company has been squeezed by having to spend more on legal fees and public relations. “So it has some effect on our resources,” he said, “but not our reputation.”
Additional reporting by Andy Sullivan, Kouichi Shirayanagi, Stephanie Kelly and Daniel Bases. Editing by Stuart Grudgings