Upheaval amid ‘alarming’ revelations at William Koch’s Florida school

The youngest of the billionaire Koch brothers had a dream: to found a private high school where academically gifted students of all socioeconomic backgrounds would do hands-on projects and learn by solving problems. He poured more than $75 million into building the school, the Oxbridge Academy of the Palm Beaches.

But Friday, he fired the head of school and declined to renew the contracts of the athletic director and the football coach. The moves came after a sexual harassment complaint and an internal investigation into accusations of kickbacks, grade-changing, excessive spending and violations of the rules governing high school sports.

It turned out, William I. Koch said in an interview, that a “power elites group” in the school “ran the asylum.”

Koch, 76, is chief executive of Oxbow Carbon LLC, an energy development holding company based in West Palm Beach, Florida, and is the younger brother of Charles G. and David H. Koch, who are known for supporting conservative Republican causes. Referred to by some journalists as “the other Koch brother,” he established Oxbridge Academy to much fanfare in 2011.

The school, which has 580 students, has many perks, including a physical therapist on staff, chef-prepared lunches, an equestrian club and a flight simulator. The debate team spent hundreds of thousands of dollars traveling to competitions nationwide, Koch said.

“We are finding alarming things of how money was misspent,” Koch said at his company’s offices. “If people think they’ve got a honey pot, there’s going to be a lot of bears around it, trying to get it.”

A few years ago, students requested that the school establish a football team, an idea the administration embraced enthusiastically. But that was when the troubles took off. An athlete who read at a third-grade level was given a full scholarship, the football team had its own locker room and the coach earned more than $200,000 a year, according to tax records and interviews with former employees.

The former head of school, Robert C. Parsons, whose official title was president and chief executive, is a former chief financial officer at the U.S. Naval Academy. Parsons started at Oxbridge in 2011 with a compensation package worth $1 million, tax records show, seven times his academy salary. Eventually, he made about $600,000 per year at the school.

But in interviews former employees questioned Koch’s decision to hire Parsons in the first place, because he was suspended for five days after a 2009 Naval Inspector General report accused him and his former boss of operating a “slush fund” to pay for tailgate parties.

Koch said he did not think Parsons’ record at the Naval Academy was a red flag because the government is “all screwed up.”

For his kids

He said he founded the school to give his own children a better academic experience than he had. By his account, he went from being an awkward ugly duckling who was flunking out of middle school in Kansas, to a military academy cadet who embraced a love of study. He longed for a place where students, not teachers’ unions or principals, ruled.

He completed a doctorate at MIT, but acknowledges that he still cannot spell very well.

And he chokes up just talking about the troubled students who have made a turnaround at Oxbridge, which his children attend and which his son has just graduated from.

“My biggest failing is I’m too trusting of people,” Koch said.

Oxbridge was created in less than a year on a 45-acre campus that once held a Jewish community center.

“I don’t know if people appreciate how much happened here in five years,” said Bob Kaufmann, the chairman of the school’s executive committee who has been given the task of reducing spending. “This is a happy place for children.”

Oxbridge graduates have been accepted this fall to nearly all of the Ivy League universities. One senior won a $100,000 Siemens scholarship for inventing a water-purification method.

“The intention was really good,” Mark Bodnar, the school’s former vice president for technology and security, said about Oxbridge. “It sort of went off the rails a couple of years in.”

Bodnar, who had been on the admissions committee, said that the committee’s recommendations were often overruled by the football coaches.

He said that there were so many academically struggling athletes that tutors were overwhelmed and the players had to be put in classes separate from the rest of the student body.

John Klemme, the academic dean who will take over as head of school, said that some of the struggling students “would have been written off” at other schools, but had found their way to a superior education because of their football prowess.

“This is not to be a rich kids’ school,” Klemme said.

Koch said that about 40 percent of students – including those who do not play football – get some kind of scholarship.

Problems beyond sports

The problems at Oxbridge, where tuition is $31,500 per year, went beyond sports. In interviews, several former employees said Parsons had created a “toxic” work environment. Employee turnover was high and tens of thousands of dollars were spent on severance packages, tax records show.

“If he likes somebody and she’s a pretty girl, they got a signing bonus or a higher salary or a bonus,” UlleSinisalu Boshko, the school’s former controller, said of Parsons.

Boshko, who said she was given a large pay increase to leave one of Koch’s companies to join Oxbridge, said she had been demoted after fending off Parsons’ advances for months. She filed a complaint with the Equal Employment Opportunity Commission, which is pending, and then she went public. Her accusations led to an investigation of the entire school by The Palm Beach Post.

Reached by a New York Times reporter on the phone for comment last week, Parsons hung up. Reached on Sunday, he said, “I’m not interested,” and hung up again.

After inquiries from The Post, Koch hired a team of accountants, lawyers and a retired FBI agent to look into the conduct of school officials, including whether employees were rigging bids with vendors and whether they had broken rules by housing students in their homes.

Koch said he had not be able to verify any “super sexual harassment” beyond what he called “PG-13” comments like “God, that girl’s hot” or “She’s got a great behind.” But the investigation, he said, turned up information that led to the firing of Parsons and the forcing out of the athletic director and coach.

Koch said the investigators did not find any evidence of kickbacks to employees from vendors. He said that if any evidence of grade-changing emerged, the employees responsible would be fired. He said budget watchdogs would be hired to cut costs and pay closer attention to spending.

“The attitude that was there at the school was that they had a rich guy backing it and they could do whatever they wanted,” he said.

He also wants to figure out how to get others to donate to the school, he said. That was one reason he did not name the school after himself.

This story was originally published June 2, 2016 at 6:29 PM with the headline "Upheaval amid ‘alarming’ revelations at William Koch’s Florida school."