One distraction that Michelle Rhee could do without as she evangelizes around the country for school reform is any whiff of a cheating scandal in the public-school system she led in Washington, D.C.

But that topic is very much alive, thanks to an ongoing investigation by federal officials and the D.C. inspector general into unusual erasures on tests and student academic gains that seemed too good to be true—but that Rhee insists were real.

Now head of her own advocacy organization, StudentsFirst, Rhee says she welcomes the probe. Investigating the troubling allegations can promote public confidence in standardized testing and prove that kids can make dramatic improvements, she says. That assumes, naturally, the findings support her contention that there was no widespread cheating. She says it can also enhance the national dialogue on education reform, and that’s what she’s all about.

StudentsFirst has been lobbying for state changes in education—notably Rhee’s trademark pursuits of ending teacher-tenure rules, installing high academic standards, and offering parents more school choices. Her cheerleading for dumping the teacher-layoff practice of “last in, first out” has become particularly incendiary as anemic budgets force school cutbacks.

She remains the darling of reformers and critics of teachers' unions, and sees herself eventually returning to public education. A flirtation with the state of New Jersey fizzled when her new husband, Sacramento Mayor Kevin Johnson, “put the kibosh” on a bicoastal relationship, Rhee joked in an interview with The Daily Beast. “New Jersey is even farther from Sacramento than Nashville,” where she commutes to be with her kids, who live with her ex-husband, Kevin Huffman, the Tennessee state schools commissioner.

On the D.C. cheating suspicions, Rhee walks a tricky line: while welcoming the investigation requested by her successor, she admits to no mistake in her own failure to seek that probe when she was chancellor. Rhee departed the District a year ago.

“Were there more steps that could have been taken? Sure. But I feel very, very comfortable and confident with the steps we took,” Rhee says.

Rhee offered to speak to The Daily Beast, saying she wants to counter any perceptions that she is ducking questions about the matter. She’s done many interviews. Yet she refuses to be interviewed by the USA Today journalists who ignited a firestorm in March with their investigative story that spotlighted statistically rare improvement at some D.C. schools, and high rates of erasures that corrected wrong answers. The newspaper’s e-mail exchanges with Rhee’s staff reflected her unhappiness with the reporters’ test-centered questions.

The newspaper also raised questions about the depth of an investigation by an outside company that Rhee hired in 2009. That firm found no evidence of cheating.

In declining to hire the firm to examine earlier erasure anomalies on the 2008 tests, Rhee said she had sought “clarity” about precisely what was being questioned by the state superintendent’s office, which had flagged many schools in its first-time erasure analysis. The office assumes the role of a state education department over D.C. Public Schools (DCPS). The results were deemed inconclusive, and Rhee moved on to focus on improving security for future tests.

“In hindsight I can tell you that at the time we weren’t thinking that DCPS was going to be under the microscope in the way that we were on the national scale,” she says.

So does that mean she would have stepped up the investigation had she known that USA Today would be poring through documents and conducting interviews? She says only that her actions “totally made sense” at the time. Now, she says, “we should take every step necessary to clear the air on it and make sure people understand there was real progress that happened.”

Rhee rejects the notion that growing pressure on schools to improve their test scores—sometimes tying teacher pay to student gains—can create an environment for cheating. But in Atlanta, state investigators found this year that pressure to meet testing targets was a major factor in cheating by dozens of educators in 44 schools. Rhee insists the vast majority of teachers “would never compromise their personal or professional integrity,” although “you’ll inevitably have some teachers and educators who unfortunately are making the wrong decision.”

StudentsFirst is pushing states to adopt some of Rhee’s signature positions, such as undoing teacher-tenure systems, promoting high expectations for students, and broadening public-school options for families.

She professes to have no aspirations for elective office—“I’ll leave that to my husband”—but says she misses the hands-on work of being superintendent. “I can’t tell you that 10 years from now I wouldn’t get the itch,” she says.