The corruption conviction of disgraced ex-Chicago Public Schools CEO Barbara Byrd-Bennett illustrates the potential dangers of no-bid contracts while highlighting another potential pitfall: The problems that can arise when school leaders consult on the side for for-profit educational companies.
Increasingly, school officials throughout the country are moonlighting for education firms that sell everything from textbooks and software to professional development services.
And in many cases, these same companies are also doing business with the taxpayer-funded districts those officials oversee.
Experts say the trend is troubling. Not only does it create a conflict of interest or the appearance of one, it can also lead to something far more serious.
“Does this sidetrack superintendents so they take their eyes off the ball?” says Samuel E. Abrams, director of the National Center for the Study of Privatization in Education, at Columbia University. “Does it lead to a give and take? Does it lead to a certain kind of coziness with these companies that does not serve the school district well?”
In Byrd-Bennett’s case, federal prosecutors allege she was promised bribes and kickbacks in exchange for steering $23 million worth of CPS business to the SUPES Academy, a provider of professional development for principals.
Byrd-Bennett, who pleaded guilty and is awaiting sentencing, had worked as a consultant for the company before Mayor Rahm Emanuel tapped her to lead CPS.
But she wasn’t the only school district leader with financial ties to SUPES.
A review by the Better Government Association and Catalyst Chicago identified dozens of superintendents and other high-level officials from districts across the country who worked as consultants for SUPES in Chicago.
And in a half-dozen of these cases, these paid consultants worked at districts that had also given contracts to SUPES or Synesi Associates, LLC, a related company that’s also named in the indictment.
Federal prosecutors have declined to say whether they’re looking into superintendents elsewhere, although they say the investigation is ongoing. No school district official outside of Chicago has said they’ve been contacted by federal investigators.
Notable findings from the BGA/Catalyst review, based on public records and interviews:
- SUPES gave a paid consulting position to Baltimore County schools Supt. Dallas Dance in 2013, just months after his school board awarded the company a no-bid $875,000 contract. The district’s ethics commission looked into the arrangement following initial news stories about Byrd-Bennett and SUPES. The panel determined Dance violated district policy by not asking permission from the school board prior to accepting the consulting work, which involved training CPS principals.
- Prompted by Byrd-Bennett news coverage, Iowa City school board members recently began raising questions about Supt. Stephen Murley’s ties to SUPES. Murley’s school board hired Synesi to do a $60,000 “operations review” in October 2011. The deal was approved following a quasi-bidding process. The next year, Murley started working for SUPES, training CPS principals. Murley told the BGA/Catalyst there’s no conflict because the district permits him to do “speaking engagements.”
- The St. Louis school board awarded a $125,000 principal training contract, through a bidding process, to SUPES in 2012, just before Supt. Kelvin Adams started consulting for SUPES in Chicago, where he did principal training. The St. Louis district also awarded a $16,500 no-bid deal to Synesi in 2011. After questions from a reporter, school board President Rick Sullivan asked an independent attorney to review the district’s contracts with the companies, but Sullivan believes Adams is a man of “integrity” and didn’t do anything wrong.
Other school districts that hired SUPES and had officials consulting for the company include: Huntsville, Ala., Prince George’s County in Maryland, and Washoe County (Reno), in Nevada.
Procurement officials in Washoe County ended their three-year contract with SUPES in 2012, just after the first year and shortly after the resignation of Supt. Heath Morrison, who went on to work for SUPES during his next superintendent gig. Morrison, who now works for the McGraw Hill publishing company, said through a spokesman that there was no conflict of interest because he took the consulting gig after leaving Washoe County.
“I didn’t know he ended up working for them,” says former Washoe County schools Trustee Barbara Clark, who doesn’t remember the district’s contract with SUPES. “I think a lot of superintendents probably end up becoming consultants for companies.”
In both the Huntsville and Prince George’s County cases, the officials who went on to get side jobs with SUPES joined the school districts after the contracts were already in place.
Questions on payment
There are references to contracts in both St. Louis and Prince George’s County in Byrd-Bennett’s indictment. In an email to one of SUPES’ co-owners asking about how much she’d get paid, Byrd-Bennett writes: “I know we calculated PG and St. Louis….what is it for Chicago, assuming we hit the full amount?”
It’s unclear whether Byrd-Bennett was referring to payments for herself or officials in St. Louis and Prince George’s County, which is known by its abbreviations. (Officials in Prince George’s County treated reporters’ questions about the SUPES contract like a records request and have not provided any information.)
Attorneys for one of SUPES’ owners, Gary Solomon, say they’ve seen no evidence to indicate anything criminal took place outside of Chicago. Solomon and SUPES co-owner Tom Vranas were also indicted in the federal corruption case and have both pleaded not guilty.
It’s unknown how much the various SUPES consultants made for their work for SUPES, although sources say they were paid between $1,200 and $1,500 per year for each CPS principal they coached. A BGA/Catalyst review of district records from the contract with CPS shows that the consultants worked on average with about six principals.
Sources say that so-called “master teachers” earned as much as $25,000 for giving trainings to larger groups. The official in Huntsville says she was paid $26,000 for her work as a SUPES coach in another school district and is still owed $2,000 for her work in Chicago. (Another former consultant also said he is still owed money.) One former consultant whose district did not have a contract with SUPES said he made $34,000 in one year for his work for the company in Chicago and another district.
In Byrd-Bennett’s plea agreement, she says that she expected to receive a job with SUPES, bank accounts for her relatives, and a “signing bonus consistent with those received by other superintendents when they become consultants, and thus worth hundreds of thousands of dollars.”
Shelly Kulwin -- an attorney for Solomon, SUPES and Synesi -- assures that large signing bonuses weren’t the norm for retired superintendents who joined SUPES as consultants.
Instead, his interpretation is that Byrd-Bennett knew that as a matter of common practice, superintendents often receive “signing bonuses when they [go] to companies after leaving the public arena. That’s what she wanted from SUPES.”
Attorneys for Byrd-Bennett declined to comment for this story.
A lot of offers
Michael Hinojosa, just named superintendent of Dallas schools, said he never received a bonus for becoming a consultant for SUPES and ProACT Search, a headhunter company that, until recently, was also owned by Solomon and Vranas. In previous jobs, Hinojosa hired these companies -- and he got his most recent job after a ProACT search.
Hinojosa says superintendents get a lot of offers, especially as they move up the ranks. He doesn’t “see anything wrong with consulting work as long as you’re getting your job done at home and you’re very clear with your board.”
CPS’ ethics policy prohibits employees from having a financial interest in a company that has a contract with the district. CPS officials say they have put new checks into place to prevent future conflicts of interest, but even CEO Forrest Claypool admits there’s “no magic bullet for integrity.”
Abrams, the Columbia professor and author of “Education and the Commercial Mindset," says that the federal pressure on test-driven results gave rise to a whole new group of companies that promised that they could turn around schools. Like SUPES, these companies use proven school leaders to do training and mentoring, creating more opportunities for superintendents and more circular associations.
This is the crux of the problem, he says, just as it has been for professors of finance who consult with investment banks and hedge funds: candid assessment of policy may conflict with personal interest. “And we can't make good policy if we can't assess it candidly,” he says.
This story was reported by Sarah Karp, of the Better Government Association, and Melissa Sanchez, of Catalyst Chicago. A condensed version of this story was published in the Chicago Sun-Times.
