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Monday, March 5, 2007

Conflict of Interest Letter to Public Advocate Gotbaum

Lisa Donlan, CEC member for District 1, shares her Feb 21st letter to Public Advocate Betsy Gotbaum. Her letter was forwarded to Special Schools Investigator Richard Condon, helping to trigger the investigation of Deputy Chancellor Christopher Cerf.

I am troubled by the glaring double standard regarding the Department of Education’s determination of conflicts of interest for unpaid parent CEC members as compared to top officials at Tweed. In January and February 2006, Christopher Cerf and Joel Rose were hired as paid consultants by the Tweed, despite the fact that DOE had and continues to spend millions on a tutoring contract with Newton Learning, a profit-making Edison subsidiary.

Cerf, the former Chief Operating Officer of Edison, held $6 million stock in Edison until recently, and Rose was hired by DOE directly from running Newton. According to conflict of interest rules, even if a consultant is working less than 20 hours per week for the City, he is barred from having an ownership interest in any firm that does business with his agency. Yet it is unclear if Cerf was ever asked by Tweed to apply for a waiver from divesting his Edison stock from the Conflict of Interest board, and if so, whether such a waiver was granted and on what grounds. At the time Rose was hired, Newton was under investigation for misconduct by the Special Investigator Richard Condon. In March 2006, one month later, a report was released, revealing that Newton had engaged in numerous unethical and possibly illegal practices, including bribing students and teachers. And yet following these disclosures, Rose was not dismissed from his consultant’s position.

More recently, Cerf was appointed as Deputy Chancellor, and Cerf in turn hired Rose as his chief of staff. According to an article in the New York Times, even then Cerf was not instructed by officials at DOE to divest himself of his Edison stock, and it was later disclosed that he only sold the stock voluntarily the day before he was going to be questioned about his financial holdings at a meeting of the Chancellor’s Parent Advisory Council. To this day, it is unclear why DOE decided that Cerf should be allowed to keep his stock in Edison while working as a consultant, and later when he became a full time employee, with substantial influence over the Department’s finances, contracts, and policies. Moreover, at no point was Rose apparently told that he would have to have to take a hiatus between his employment at Newton and at Tweed. Yet repeatedly, parent members of Community Education Councils have been instructed that they will be barred from filling their elected positions if the companies they work for have any financial relationship with DOE, despite the fact that CEC positions are unpaid and members have no influence over district contracts or finances. Moreover, after resigning their positions, former CEC members have been told that they cannot take any position with a school in their district for three years, supposedly because of the possibility of a continued conflict of interest.

CEC members have also been unfairly barred from any association with a community-based or social service organization that provides programs or tutoring services to schools in their district, even if the services are provided free-of-charge and their position with the organization is unpaid. They have also been barred from ordinary involvement in special programs at their children’s schools.

Some examples are below.

In June 2005, officials at Tweed tried to block Paul Mondesire from serving on his CEC in District 3 because he was at the time working for the development office at Channel 13, which apparently had a small contract to train city teachers in the use of instructional technology. Only after an article appeared in the New York Times about this matter did DOE relent, and allow Mondesire to apply for a conflict of interest waiver.

Another example of this double standard occurred at the same time in District 30 in Queens. Zinovia Abatzis, elected to the CEC, was told she could not serve because she had a job as a lab technician at Marymount Manhattan College. DOE claimed Abatzis had an incurable conflict of interest, because MMC has a contract with the DOE. Yet she was not connected in any way with this contract, nor would she in any way financially benefit or be able to influence any future contracts as a CEC member.

More recently Marge Kolb, an elected CEC member in District 24, Queens, drafted a letter to the parents of students in her son's school, asking if they would consider making a donation towards the immersion Spanish language program that had been previously funded by a an elected official. The school’s principal told her to contact the DOE ethics officer, who in turn referred the matter to the Conflict of Interest Board, which ruled that she could not sign the letter.

Rita Laguer, a first term CEC member ran successfully for the second term and was elected President in District One. She later resigned from her CEC, and a year and a half following her resignation, applied for and was hired as a Parent Coordinator at PS 140, a high needs K-8 school in District 1. She has now been told by an official in her region that she must resign from her position as Parent Coordinator, since conflict of interest rules bar CEC members from working for any school in their district for three years after their term. Yet the
conflict of interest policy on the DOE website says that even full-time paid employees are prohibited from appearing before their agency on business for only one year.

Moreover, all CEC positions are volunteer, and have no influence or control over any contract at the schools or the district in which they serve. On the other hand, Joel Rose and Christopher Cerf were allowed to hold highly paid jobs at Tweed, with potentially huge influence over financial decision-making that could benefit their former company, Edison, and in Cerf’s case, while continuing to hold a large financial interest in Edison. In Rose’s case, he also went directly from his job at Newton to his consultancy at Tweed, with no hiatus.

These cases display a glaring double standard on the part of the administration towards parent volunteers elected to serve on their CECs, without any influence on contracts, as compared to high-level officials at Tweed, with real power to benefit the earnings of their former companies. They also reveal that despite claims to the contrary, the strict and irrational conflict of interest policies pursued by Tweed towards CEC members effectively discourage parents from being involved in their schools and serving on their these bodies.

Lisa Donlan


Institutional Memory said...

The concept of "conflict of interest" is passé, at least when applied to FOJ (Friends of Joel).

It has been replaced by a much more convenient, if less ethical, construct: "confluence of interest."

Now, we can only hope that the investigation into Cerf (and, ultimately, Rose, Marsal, Alvarez, McKinsey, Edison, Newton, et al) has some impact.

Breezybluff said...

I'm betting that Richard Condon's investigation of Chris Cerf's ties to Edison will be a whitewash. Recall that the post of Special Investigator was set up by the mayor so that the mayor would have a role in checking on corruption at the Board of Education, over which he had no control. Now the Special Investigator is appointed by the Mayor and the Mayor is in charge. What is the likelihood that Mr. Condon will tell the Mayor that Cerf had a conflict of interest when Edison was getting contracts and Cerf was a consultant to Klein? Or that he had a conflict of interest when he became Deputy Chancellor and did not relinquish his holdings of Edison until he was about to face a crowd of angry parent leaders?