Superintendents get $2,000 consulting fees to hobnob with vendors
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Superintendents get $2,000 consulting fees to hobnob with vendors
07:24 PM CDT on Friday, July 23, 2004
By SCOTT PARKS / The Dallas Morning News
One in an occasional series.
RANCHO MIRAGE, Calif. ˆ The Resort, perched on a sandy hillside and
surrounded by purple-hued mountains, sat baking under the desert sun
Inside the luxury hotel on Frank Sinatra Drive, school superintendents
from across the United States ˆ including the Dallas-Fort Worth area ˆ
spent three days talking business with companies that want to sell their
wares to school districts.
Textbook publishers, food-service vendors, computer manufacturers and
many other companies all want to increase their share of the lucrative
educational market. The school superintendents came to California's
desert to help them.
In return, the superintendents got an all-expenses-paid trip and a
$2,000 consulting fee.
Business ethicists say the conference creates the appearance that
companies and superintendents have formed an exclusive club with the
potential to affect the contracts awarded by districts.
07/18: Superintendents get $2,000 consulting fees to hobnob with vendors
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05/08: Moses works as consultant for lawyers on DISD payroll
"I find it troubling that money from the private sector is finding its
way into superintendents' pockets," said Diane Swanson, a business
professor and founding chair of the Ethics Initiative at Kansas State
University. "There is something wrong with blurring that boundary with a
cozy group of people who may not be operating at arm's length."
The superintendents, dressed in colorful casual attire, arrived here
from small districts (Whitefish Bay, Wis., with 3,000 students) and
large (Clark County Schools in Las Vegas with about 280,000 students).
They characterize themselves as tough-minded professionals who feel no
obligation to buy from the companies that paid to bring them to this
"If a company comes here to sell, it's here for the wrong reasons," said
Doug Otto, superintendent of the Plano Independent School District. "If
it's a good product, it stands on its own."
Annette Griffin, superintendent of Carrollton-Farmers Branch ISD, said
interacting with company executives gives her a chance to stay on the
cutting edge of product developments that help students learn. She said
she donates some of the money she earns to a scholarship fund.
"I'm looking for the magic bullet," Dr. Griffin said during a brief
interview in a meeting-room lobby overlooking the hotel pool.
"This is the only organization I've found where companies come to us
with new ideas and we have the opportunity to say how they can be
structured to better serve children. We are not here to make the vendors
feel good. We are brutally honest with them."
Dallas ISD Superintendent Mike Moses didn't travel to Rancho Mirage, but
he was listed among the participants in last winter's conference in
Oakland, Calif. So was his brother, Monte Moses, superintendent of
Colorado's Cherry Creek School District.
Dr. Moses, who resigned his job with the Dallas school district last
week, was unavailable for comment on his consulting work.
In some states, the law requires superintendents to disclose their
sources of income on publicly available questionnaires. Texas does not
require financial disclosure for superintendents.
The Dallas Morning News has examined employment contracts for
superintendents in 26 of the largest school districts in Texas. Twenty
of them, including the contracts of Drs. Otto and Moses, contain
language that allows outside employment. Dr. Griffin's contract also
allows her to take outside employment, said John Tepper, president of
the Carrollton-Farmers Branch school board.
Some contracts require superintendents to get school board approval
before accepting consultancies. Others say the outside work cannot
interfere with the superintendent's official duties.
Pots of money
Big dollars are at stake.
Most people view school districts as places that educate children. But
they also can be viewed as big pots of taxpayer money with plenty of
companies trying to get their share. The annual operating budget for
Dallas ISD is $1 billion.
The U.S. Department of Education says the combined budgets for public
school districts exceed $500 billion a year. Wal-Mart, the world's
biggest retailer, is less than half that size. The gross domestic
product of Argentina is less than $500 billion.
A big chunk of a school district's budget goes for teacher and staff
salaries. But another big chunk also goes for a multitude of contracts
with private companies.
Elfreda Massie, vice president of strategic relationships for Harcourt
Achieve in Austin, came to The Resort to talk about her company's
instructional materials and professional development programs for
teachers. During one meeting, she told superintendents, "We are trying
to take the market for products and services for English-language
Educational Resource and Development Institute Inc., a privately owned
company in Grand Island, Neb., brings superintendents and company
executives together twice a year: a summer conference and a winter
ERDI is the brainchild of Mike Kneale, a former superintendent and
motivational speaker. He founded the company 18 years ago and runs it
with his son, Mike Jr.
"The whole concept was to create a forum where educators can learn from
the companies and vice versa," Mr. Kneale said. "We want to make
products more appropriate for the school setting."
ERDI literature lists 72 companies and more than 80 superintendents and
other school leaders on its participant rolls. Some of them attended
last week's conference. Another group will attend a second conference in
Rancho Mirage this week.
Because ERDI is not publicly traded, little information about its
finances is available. For example, Mr. Kneale declined to discuss how
he structures the fees he charges his client companies.
He said he makes deals with competing companies in a market segment ˆ
two or three textbook publishers, for example ˆ to blunt criticism that
ERDI is working for one company over another or that a superintendent
might be working for one company over another.
"No exclusive deals," Mr. Kneale said.
In addition to paying all expenses for superintendents to attend the
conference, ERDI pays up to $400 to defray the expenses for a spouse,
Mr. Kneale said. Each superintendent gets a flat $2,000 fee to attend. A
"full participant" who attends both summer and winter meetings earns
$4,000 a year in fees, he said.
The corporate panels that form the backbone of ERDI operations ran
Monday, Tuesday and Wednesday.
They worked this way: Company representatives spent three hours in a
hotel meeting room with five superintendents. Information revealed can
be sensitive. The companies sometimes roll out new ideas for products.
What is said in the room is supposed to stay in the room.
The companies set the agenda. They can request the superintendents they
want on their panel based on district size, geography or desire to gain
more business in a certain district.
Karen Mortensen, executive education consultant with Sagebrush Corp.,
said membership in ERDI is well worth the fee. She said Sagebrush, which
sells software and school library products, pays $22,000 a year to
attend two conferences.
"What we get is dedicated time with key school leaders from across the
country," she said. "And we get to mingle with them and other reps in
social settings. It would not be acceptable to be pushing product while
I'm at ERDI. I would be building relationships."
Ms. Massie, the Harcourt Achieve executive, was interim superintendent
of public schools in Washington, D.C., until April. She said, "We use
the superintendents like a focus group. It's a piece of our
research-based approach to business."
The agenda for Ms. Massie's session included "What's Keeping You Up At
Night," "Federal Legislation Update 2004" and "Partnering With Your
Carol Wolf, another Harcourt Achieve vice president, initiated a
conversation with the superintendents on an issue not on the agenda.
How, she asked, does a sales rep determine whom to contact first in a
district? All bureaucracies are different, and superintendents in large
districts are notorious for not taking most vendor phone calls.
"How do you figure out who are the decision-makers?" Ms. Wolf asked.
"In my job, I never purchase anything," said Carlos Garcia,
superintendent of the 8,000-square-mile Clark County School District in
Las Vegas. "But when you're a superintendent in a small district, you do
'No play at all'
Superintendents might participate in four or five corporate panels
during the three-day conference, which would mean 12 to 15 hours of work.
"There is no play at all," Mr. Kneale said.
Dr. Otto of Plano and Dr. Griffin of Carrollton-Farmers Branch both said
they took vacation time for the Rancho Mirage conference, which opened
last Sunday with a "superintendents only" meeting, followed by an
evening reception with live orchestra music.
The fact that ERDI pays the superintendents' expenses and consulting
fees ˆ and that the money doesn't come directly from school district
vendors ˆ is an important distinction, said Drs. Otto and Griffin.
"ERDI assigns us to the corporate panels, and we have no say in what
company we are meeting with," Dr. Otto said.
But the distinction is lost on some business ethicists.
"The superintendents must be careful that ERDI is not just acting as a
shield for companies that want access to them," said Dr. W. Michael
Hoffman, executive director of the Center for Business Ethics at Bentley
College in Waltham, Mass. "Ultimately, they are serving the companies
that are paying the guy to put on the conferences."
Business ethicists say school board oversight is critical to keeping
school superintendents within safe boundaries.
No one knows how much superintendents tell their trustees about their
after-hours consulting activities or how many questions trustees ask
Dr. James Campbell Quick, of the University of Texas at Arlington,
likens superintendents to tennis players and school board members to
"Everyone needs someone to make their line calls," he said. "Aggressive,
healthy players will get close to the line and need help remembering
where the boundaries are. The board's responsibility is to ask enough
questions to determine what game the superintendent is playing."
The News interviewed Mr. Tepper, the Carrollton-Farmers Branch school
board president, and Mary Beth King, president of the board in Plano,
about their superintendents' participation in ERDI.
Ms. King and Mr. Tepper said they do not know how much ERDI pays their
superintendents or how the fees are calculated.
"Quite frankly, we don't ask," Mr. Tepper said.
Both school board presidents said they feel well briefed about ERDI and
understand its program. They expressed confidence in their
superintendents and said they had no reason to believe personal
relationships with ERDI companies influence decision-making on contract
"I know my superintendent [Dr. Otto] and I know his ethics," Ms. King
said. "I do not perceive this as a problem."
Mr. Tepper agreed. "I don't think there is a conflict of interest or the
appearance of one and that is because she [Dr. Griffin] has been very
forthright with us about the ERDI situation," he said.
"I don't think Dr. Griffin can be bought for what they [ERDI] are
2004 winter and summer participants
Education Research & Development Institute documents obtained by The
Dallas Morning News list the following school leaders as having
participated in it's programs.
Arlene Ackerman, San Francisco Unified School District
Anthony Amato, New Orleans Public Schools
Brian Benzel, Spokane (Wash.) Public Schools
Ken Bird Westside (Neb.) Community Schools
Ed Brand, Sweetwater Union (Calif.) High School District
Ken Burnley, Detroit Public Schools
Billy Cannaday Jr., Chesterfield County (Va.) Public Schools
Rudy Castruita, San Diego Office of Education
Gerald Dawkins, Saginaw (Mich.) City Schools
Ken Dragseth, Edina (Minn.) Public Schools
Debra Duvall, Mesa (Ariz.) School District
Jim Easton, Lafayette Parish (La.) Public Schools
Mark Edwards, Henrico County (Va.) Public Schools
Barbara Erwin, Scottsdale (Ariz.) Unified
Greg Firn, Milford (Conn.) Public Schools
Steve Farrar, Lincoln Unified (Stockton, Calif.)
Mike Flanagan, executive director, Michigan Association of School
Karen Forys, Northshore (Wash.) School District
Alton Frailey, Cincinnati Public Schools
John Fryer, Duval County (Fla.) Public Schools
George Garcia, Boulder Valley (Colo.) Public School District
Carlos Garcia, Clark County (Nev.) School District
David Gordon, Elk Grove (Calif.) Unified School District
Peter Gorman, Tustin (Calif.) Unified School District
Carmen Granto, Niagara Falls (N.Y.) City School District
Terry Grier, Guilford County (N.C.) Schools
Annette Griffin, Carrollton-Farmers Branch ISD
Barb Grohe, Kent (Wash.) Public Schools
Bill Habermehl, Orange County (Calif.) Department of Education
Jim Hager, Washoe County (Nev.) School District
Joe Hairston, Baltimore County (Md.) Schools
Beverly Hall, Atlanta Public Schools
Bill Harrison, Cumberland (N.C.) County Schools
Patricia Harvey, St. Paul (Minn.) Public Schools
Howard Hinesley, Pinellas County (Fla.) School District
Peter Horoschak, South Orange-Maplewood (N.J.) School District
Sandy Husk, Clarksville-Montgomery Schools
Carol Johnson, Memphis Public Schools
John Kriekard, Paradise Valley (Ariz.) School District
Nadine Kujawa, Aldine ISD
Michael Lannon, St. Lucie (Fla.) County Public Schools
Pam Lannon, Lake County (Fla.) Schools
Mary Leiker, Kentwood (Mich.) Public Schools
Earl Lennard, Hillsborough County (Fla.) School District
Dave Long, Riverside County (Calif.) Office of Education
Ben Marlin, Collier County (Fla.) District School Board
Elfreda Massie, District of Columbia Public Schools (former interim)
Larry Maw, San Marcos (Calif.) Unified School District
Max McGee, Wilmette (Ill.) School District
Bill McKinney, Region IV Education Service Center (Houston)
Frank McKinzie, Elmwood Park (Ill.) School District
Gail McKinzie, Indian Prairie (Ill.) School District
Ray McMullen, Department of Defense Education Activity
Maggie Mejia, Sacramento (Calif.) City Unified School District
Leonard Merrell, Katy ISD
Hector Montenegro, Ysleta ISD
Mike Moses, Dallas ISD
Monte Moses, Cherry Creek (Colo.) School District
Jim Murphy, executive director, New Jersey Association of School
Connie Neale, School District U-46 (Ill.)
Ruben Olivarez, San Antonio ISD
Doug Otto, Plano ISD
Stan Paz, Tucson (Ariz.) Unified School District
Dennis Peterson, Minnetonka (Minn.) School District
Lane Plugge, Iowa City Community School District
Gerrita Postlewait, Horry County (S.C.) Schools
Jim Rickabaugh, Whitefish Bay (Wis.) School District
Stewart Roberson, Hanover County (Va.) Public Schools
Stan Scheer, Littleton (Colo.) Public Schools
Rick Schneider, Pasadena ISD
Darlene Schottle, School District Five (Mont.)
Althea Serrant, U.S. Department of Education, Region 2
John Simpson, Norfolk (Va.) Public Schools
Kevin Singer, Grapevine-Colleyville ISD (recently left to lead Manheim
Township (Pa.) School District)
Dennis Smith, Placentia Yorba-Linda (Calif.) Unified
Keith Sockwell, Northwest ISD
Tony Stansberry, Lee‚s Summit (Mo.) School District
Jim Surratt, Klein ISD
John Thompson, Pittsburgh (Pa.) Public Schools
Frank Till, Broward County (Fla.) Public Schools
Doris Walker, Clover Park (Wash.) School District
Gene White, Washington Township (Ind.) Metropolitan School District
Robert G. Witten, Central Susquehanna Intermediate Unit 16 (Pa.)
Alvin Wilbanks, Gwinnett County (Ga.) School District
Clayton Wilcox, East Baton Rouge Parish (La.) Public Schools
Joseph Wise, Christina (Del.) School District
SOURCE: ERDI documents
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