By Chas Sisk | The Tennessean
Gov. Bill Haslam owned a block of shares in K12 Inc., the education company behind a troubled online school in Tennessee, but sold the investment before taking office or weighing in on two bills that affected the company directly.
Haslam invested at least $10,000 in K12 Inc. in July 2008, when he was mayor of Knoxville, but had sold off all of his shares by July 2009, when he was running for governor. The investment was reported in a filing with the Tennessee Ethics Commission, as required under state law.
Haslam said he did not know about the investment before The Tennessean inquired about it last week. The governor said the investment, one of about 350 listed in a disclosure that he signed in January 2009, had been made by an investment manager.
"The honest answer is I wasn't aware that I ever did," he said at a meeting with The Tennessean's editorial board. "I, a long time ago, found that there were people who know how to manage my investments a lot better than I do, so I haven't made investment decisions in a long time."
Haslam declined to provide details about the amount he invested in the company, how many shares he owned or the timing of the transactions. Spokeswoman Alexia Poe cited the governor's long-standing policy against sharing such information about his investment portfolio.
Poe said the governor's track record suggests his one-time investment has not swayed him to favor the company.
"We've been tougher than not on K-12," she wrote in an email.
Virginia-based K12 Inc. was founded in 1999 and currently provides online teaching to more than 100,000 students, mostly by partnering with local school districts. The company's early supporters included former U.S. Secretary of Education William Bennett, Oracle CEO Larry Ellison and so-called "junk bond king" Michael Milken, who pleaded guilty in 1990 to six charges related to securities fraud.
K12 Inc. reported an operating income of $45.7 million in the fiscal year that ended June 30, but the company has been criticized as providing an inadequate education to large numbers of its students.
The Tennessee Virtual Academy, which K12 Inc. operates on behalf of Union County Public Schools, has ranked among the worst in the state in each of its two years of existence.
Haslam's investment came about eight months after the company's initial public offering in December 2007. The governor said he sold off the stock at a loss, a claim consistent with the company's stock history.
The investment appears only once in his disclosure filings. State law does not require him to record stock sales on which he earns less than $1,000.
Haslam moved his stock portfolio into a blind trust when he became governor in January 2011, making it impossible for anyone other than his investment manager to know whether he has reinvested in the company since then.
Haslam signed the bill in 2011 that allowed K12 Inc. to begin operating in Tennessee, but he also has been critical of the school's performance. Last year, he introduced and signed legislation that allows the Department of Education to close virtual schools that repeatedly post failing test scores.
Reach Chas Sisk at 615-259-8283 or firstname.lastname@example.org, or on Twitter @chassisk.