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Execs at Kenny Gamble’s charter school operator implicated in federal bribery probe

Prosecutors accused two unnamed officials at Gamble's Universal Companies of paying kickbacks to the former president of the Milwaukee Public School board.

Rahim Islam, left, was one of two top executives at the charter school and real estate development nonprofit run by famed music producer Kenny Gamble, right, to be implicated in a federal bribery probe on Thursday.
Rahim Islam, left, was one of two top executives at the charter school and real estate development nonprofit run by famed music producer Kenny Gamble, right, to be implicated in a federal bribery probe on Thursday.Read more / File Photograph

UPDATE 4/12/19: In a statement, Universal Companies said Shaheid Dawan was removed as the nonprofit’s CFO and acting CEO during an emergency board meeting Thursday after the allegations raised in Bonds’ case were made public.

“The Board of Directors recognizes the important and integral role Mr. Dawan has played in the success of the Universal organization for nearly 25 years and does not want these issues to impugn the solid reputation and the positive work that Universal has done to improve the community and change lives,” the nonprofit said in a statement

Two top executives of a charter-school operator launched by Philadelphia music producer Kenny Gamble have been implicated in a bribery scheme involving education officials in Wisconsin.

In federal charges announced Thursday against Michael Bonds, the former board president of Milwaukee Public Schools, prosecutors alleged that officers of Universal Companies — the Philadelphia-based education and real estate development nonprofit Gamble founded a quarter-century ago — routinely paid kickbacks to secure benefits for their charter school operations in Milwaukee.

Gamble, who gained fame with partner Leon Huff in the 1970s for developing the distinctive “Sound of Philadelphia,” was not implicated in the filing and has not been accused of wrongdoing.

The two Universal executives allegedly behind the payoffs also have not been charged. Court filings did not identify them by name but listed their positions at Universal — which correspond to former CEO Rahim Islam and current CFO and acting CEO Shahied Dawan, according to the nonprofit’s tax records.

Bonds, the Milwaukee school official, was charged in federal court in Philadelphia with conspiracy and violations of the U.S. Travel Act through what is known as a criminal information, a charging document employed when a defendant has agreed to plead guilty before a grand jury indicts him..

The charges come after the FBI investigation first became public with November 2017 raids on Islam’s home and Universal’s Southwest Center City offices.

Islam, along with Gamble, was a founding member of the nonprofit, which since its inception in 1993 has focused on charter-school operation and developing affordable housing in Philadelphia.

Universal operates seven charter schools in the city: Universal Institute, a traditional charter school in Southwest Center City, and six former low-performing School District schools that the district turned over to Universal to manage.

But the company’s financial health has come under scrutiny here. After Universal laid off school staff and office workers before the end of the 2015-16 school year, then-City Controller Alan Butkovitz raised concerns about the nonprofit’s management and payments had made to related companies.

One of the nonprofit’s schools — Audenried — is in limbo after the district threatened to end its contract in 2016 for failing to meet academic and financial standards.

The case filed against Bonds alleges Universal was similarly struggling to balance its books in Milwaukee, despite receiving more than $11 million from the school board to operate two charters there in 2013-14.

Still, court filings state that Islam pushed to expand Universal’s Wisconsin operations and began bribing Bonds to secure a lease renegotiation for one campus that would allow the nonprofit to defer $1 million in payments it owed the district.

In total, according to federal prosecutors, Islam and Dawan allegedly paid Bonds $6,000 between 2014 and 2016 in checks disguised as payments for textbooks from African American Books & Gifts, a company the Milwaukee school board president created.

Bonds abruptly retired from his post last year, a decision he explained by saying he intended to focus on writing books. He assured voters at the time that there was no other reasoning behind his decision.

It was not immediately clear Thursday whether he had retained an attorney or when he might make his first appearance in Philadelphia federal court. If convicted, he could face up to 10 years in prison.

Michael M. Mustokoff, a lawyer for Universal, declined to respond to the charges, as did Islam’s lawyer. Dawan and Gamble did not respond to repeated calls Thursday afternoon.

Staff writer Maddie Hanna contributed to this article.