Houston ISD trustees are banned from accepting gifts -- including certain campaign contributions -- from technology vendors doing business with the school district under a federal program called E-Rate.

The new ethics rules on gifts also apply to the more than 200 employees and consultants who have contact with E-Rate vendors, the new HISD official in charge of E-Rate compliance said Thursday. The rules come after the district paid $850,000 to settle a lawsuit with the Federal Communications Commission, which was brought after HISD employees were accused of improperly accepting gifts from technology vendors in 2006. The school district also agreed to adhere to a compliance agreement drafted by HISD and the Department of Justice.

The compliance agreement prohibits any E-Rate program employee and HISD trustees from accepting certain gifts -- specifically, "any gifts, meals, entertainment, or any other thing of value from any outside entity (or any consultant or other individual representing such an entity) that provides or seeks to provide goods or services pursuant to the E-Rate Program either directly or through a joint venture or resale arrangement."

But the details on the rules are still fuzzy, and the official in charge of compliance, Richard Patton, punted on many of the answers board members had about the specifics during a training session for the board members on the rules. Patton said he'd have to get HISD's lawyers to answer questions such as: Can a phone company donate to a golf tournament a trustee organizes? Can a trustee accept a meal from an HISD parent employed by the school's phone company? What about stock holdings?

"We are trying to anticipate and establish controls so we can react in a positive way and comply with the compliance agreement," Patton said. "The agreement is very gray. Do the same policies apply to sister companies of HISD E-Rate Vendors?"

The ceiling on a campaign donation --- at $500 a year --- is much higher than the cap for other gifts --- described as anything that would be worth more than a greeting card or a writing pen, a detail that elicited some laughter from the trustees.

Trustees are also banned from doing more than $2,000 in business with any individual or company on the list of E-Rate vendors Patton provided. He said the list would be updated.

"Once a name is on the list, it will not be taken off," Patton said. "If someone was the head of a company last year but is not two years from now, their name will still remain on the list because they are still considered an E-Rate vendor."

Patton said HISD would establish controls to help board members meet the requirements.

One recommendation is for trustees to allow HISD to research each individual campaign contribution before a trustee formally accepts it by depositing the money or cashing the check.

But that could bring with it a heavy administrative cost, one legal expert said.

University of Texas School of Law Adjunct Professor Steve Bickerstaff also said he has not heard of any other school district overseeing individual campaign donations.

"I understand why, given the history with the program, that HISD would want the board to be very careful of accepting money," Bickerstaff said. "I will not say whether it is good or bad. But, whether it is legal, I am not aware of any precedent."

Bickerstaff is a former election law litigator and said school boards have a fair amount of power to allow their campaign donations to be regulated in this way. But the tab could get expensive, he said.

Trustee Harvin Moore said his campaign treasurer could do the research for him as long as an updated electronic list is provided. No decision on how trustees would hold themselves accountable to the policy was made, but trustees ultimately have the final say on whether HISD will scrutinize every campaign donation.

HISD hired Patton in February. Patton was an auditor with Duke Energy and was recruited by a headhunting firm that reportedly charged $67,200.

E-Rate funding was frozen in 2006 after three HISD employees were accused of of accepting meals and other gifts from E-Rate vendors. Patton said due to this prior incident the compliance policy for HISD is much more stringent. 

Patton said he was glad to see so many questions raised by the trustees.

"It shows that they are taking it seriously," Patton said. "That is a positive sign."

HISD trustees have to sign the certification form by the end of this month, Patton said.

Contact Lynn Walsh at 713-228-2850 or lynn@texaswatchdog.org.

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