Friday, December 5, 2008

The Cerf investigation report

See Juan Gonzalez' column in today's NY Daily News about the long-suppressed report from the Special Commissioner of Investigation on Chris Cerf, the Deputy Chancellor, as well as the NY Times story here.

Elizabeth Green of GothamSchools has some of the back story here. I was the one who FOILed the report and gave it to Juan last week, and the report as I received it is here.

Though the news reports have so far focused on Cerf's repeated solicitation of a donation for a charity of which he was a board member from his former employer at Edison Schools and the company that acquired Edison, Liberty Partners, there are other points that so far have not be addressed. For example, as the report points out there were mistakes and omissions in Cerf's official financial disclosure forms that appeared to relate to ongoing class action lawsuits against Edison. These forms he was subsequently allowed to amend, though such omissions can also result in termination of employment and criminal prosecution.

Also, it suggests the answer to the question as why, given the risk of public disclosure, Cerf continued to hang onto his Edison stocks, even after taking the position of Deputy Chancellor, even though the DOE had several ongoing contracts with Edison. As the report makes clear, because of the precarious position of Edison, the stocks had little value at the time, but might be worth more in the future, if the company's financial situation improved.

Unfortunately, the heavily redacted report raises as many questions as it answers, such as:

1- There was also a previously undisclosed letter, revealing an agreement between Cerf and Edison that he would consult for Edison for ten years, in return for $2.5 million or five percent of the sale of some amount of Class C and Class D Edison stock.

Cerf argued to the SCI that this document was "meaningless" , since he didn't sign it (though "Accepted" is written over his name on the document). But if there was nothing wrong with him continuing to hold the stocks and this agreement, why did he suddenly divest the stocks the night before the CPAC meeting where he knew he would be questioned about them, and why did he hurriedly renounce the consulting agreement by email, the very morning of the CPAC meeting?

An excerpt from the report:

"At 7:37 am,prior to the scheduled CPAC meeting, Cerf sent an email to [redacted] of Edison, stating, "Per this email, I irrevocably release you and any interests with which you are associated from any and all obligations arising under the document executed on or about the date of my departure." As with his earlier messages to the Liberty and Edison executives, Cerf asked [redacted] to consider a contribution to the Darrow Foundation."

2-What did Klein know and when did he know it? More specifically, if he knew about these stock holdings, why didn't he ask Cerf to sell them before he took at job at DOE? And did he also know about the document which referred to an ongoing consulting agreement, that the Special Investigator obtained from Edison after a subpoena?

3- Why did the Special Investigator never release this report to the public, given the considerable public interest when the investigation was first launched?

4- And finally, and most importantly, what does this say about the larger issue of accountability and lack of oversight, given that Investigator Condon is a Mayoral appointee, just like Joel Klein?
When the office of the Special Investigator position was first created by Executive Order 11 in 1990 by then-Mayor David Dinkins, the Board of Education was not under the Mayor's control, and the original Special Investigator, Ed Stancik, was renowned for his aggressive investigative zeal. Is there adequate political independence and insulation of this office in the current system?

We may never know the answers to many of these questions, though I do intend to appeal the redaction of huge chunks of the information contained in the report.

Anyway, take a look at the report, and you have thoughts on this, please put them in the comments section.



David M. Quintana said...

Leonie keeping digging and FOIL'ing documents...who knows what else is under the rocks at Tweed...BTW, I'm typing this while watching Chris's dad Bennett Cerf as a panelist on Whats My Line from the year 1955 or so, it's on the Game Show

Leonie Haimson said...

That's not the same Chris Cerf, David!