in Houston, Texas

Could Houston ISD trustees' ethics rules go from maligned to model?

Wednesday, May 02, 2012, 02:45PM CST
By Mike Cronin
checkbook

Superintendent Terry Grier and board President Mike Lunceford are in favor of helping the Houston schools create what would be some of the strongest rules nationwide governing the relationships between trustees and campaign donors doing business with the district.

Both men said in March that Houston Independent School District officials would adopt the recommendations made by auditors who completed a four-month examination of the way the district buys goods and services.

Null-Lairson, the Houston accounting firm that conducted that audit, counseled HISD officials to develop policies that specified when and how potential vendors contribute to board-member campaigns, and when and how trustees vote on potential contracts with those vendors.

As it weighs that guidance, Houston’s school board has an opportunity to become a national model for trustee-vendor behavior. Trustees could plot a course away from the ethics controversies that have beset the district for more than a year: accusations of bribery, contract steering and conflicts of interest.

By approving the Null-Lairson proposals, HISD would exceed the standards set by Texas state law – and join the Los Angeles Unified School District as among the country’s few large school districts that identify:

  • Caps on vendors' campaign donations.
  • Timeframes for those donations.
  • When trustees may vote on contracts with vendors who have contributed to their campaigns.
  • Penalties for trustees and vendors who violate regulations.

The full board would have to approve any new policies, however. And several trustees said they wanted to explore potential paths before taking action.

Mike LuncefordMike Lunceford

“I have no problem with Null-Lairson’s recommendations. I support them,” Lunceford said. He said he would ask his fellow trustees on Thursday to approve hiring MGT of America, headquartered in Tallahassee, Fla., to write the new policies, at a cost of $25,000 to $35,000. MGT assisted with the audit.

“I want to see how other public entities deal with these issues, and MGT is supposed to be ‘expert’ in this area,” he said.

But Lunceford emphasized that he is “not determined that we have to have a specific policy.”

Trustee Greg Meyers joined Lunceford in that sentiment but said he’d be willing to discuss caps on campaign contributions with his colleagues.

“I’d like to find out what best practices are,” Meyers said. “I want to ensure we have policies that are transparent and reasonable.”

Trustee Juliet Stipeche said she respected Los Angeles schools’ ethics policies and added that she and her fellow HISD trustees “need to reform the current campaign contribution system.”

Those reforms should include “blackout periods after elections so that board members no longer receive contributions in perpetuity and limits on individual contributions,” Stipeche said.

Grier has said his staff would implement the auditors’ recommendations. Whatever the board’s ultimate stance, Grier said he is not concerned.

“I do not worry or speculate about whether our board will pass a particular policy,” Grier told Texas Watchdog in an e-mail last week. “Policy adoption is a board decision. If the board passes a policy, our administration makes sure it is followed.”

Trustees are already barred from voting on contracts for certain campaign donors doing business with the district through E-Rate, a federal program that offers U.S. schools and libraries telecommunications and Internet access at a discount.

“Board members shall not knowingly accept campaign contributions from E-Rate vendors/service providers, including related officers and/or key employees,” HISD’s E-Rate policy states. Trustees cannot vote on contracts for three years with any E-Rate vendor who has, in a year’s time, given more than $500 to the trustee’s campaign fund or done more than $2,000 in business with the trustee.

HISD officials adopted that policy in 2010 after the Federal Communications Commission accused district employees in 2006 of accepting gifts from E-Rate vendors.

Choosing a less stringent path than Los Angeles would put HISD in the same company as Miami-Dade County Public Schools, Clark County (Las Vegas) School District and Dallas Independent School District, America’s fourth-, fifth- and 14th-largest school districts, respectively.

That also would align HISD with school districts throughout Arizona, Florida, Nevada and Texas. Public-schools officials in Mesa, Ariz.; Miami; Las Vegas; and Dallas told Texas Watchdog that they do not have district-level guidelines that outline when board trustees may vote on contracts with vendors who have donated to their campaigns.

HISD trustees bolstered their financial ethics policies in January. They prohibited campaign donations from any vendor bidding on a contract from 30 days prior to the solicitation for services through the contract’s execution.

The same policy also bans communication between vendors and trustees during that time period.

Trustees must also disclose relationships with potential vendors, and abstain from voting on contracts involving them, when they or immediate family members have a financial interest at stake, a policy that follows state law.

But the overseers of America’s seventh-largest school district – with an annual $1.6 billion budget and 203,000 students – have sometimes been reluctant to impose tougher guidelines on themselves. They chose in December to postpone indefinitely a vote on a more rigid ethics policy, which was aimed at curbing improper trustee influence on contracts but did not directly address the question of trustees voting on contracts with their contributors.

Board members in Los Angeles may not receive or solicit campaign contributions of more than $250 from vendors involved in a potential contract with the district from the start of a competitive-bidding process to three months after its conclusion.

The country’s second-largest school district, Los Angeles currently enrolls about 664,000 students and has a roughly $6.5 billion annual budget.

Los Angeles district trustees must recuse themselves from the process and abstain from the vote if they have received donations totaling more than $250 from an interested vendor during the year prior.

Judy NadlerJudy Nadler

Those are the kinds of ethical guidelines that please Judy Nadler, senior fellow for government ethics at the Markkula Center for Applied Ethics at Santa Clara University in California.

“It is generally problematic for school-board members to be in any kind of relationship with vendors,” said Nadler, who also is a former Santa Clara mayor. “There are inherent conflicts.”

Even dollar and time thresholds, such as those set by the Los Angeles school district, don’t matter “because the public perception is that the trustee voted on a contract because he or she knew someone who contributed to his or her campaign or had some other type of relationship (with the vendor).”

Like Dallas public schools, HISD adheres to Texas law, which does not place caps on donations and is silent on trustees voting on contracts for vendors who contribute to campaigns.

That troubles but doesn’t surprise Nadler.

“My experience, over and over, is that school districts, in particular, are not as well scrutinized as city council members,” she said. “So it’s dangerous territory when trustees engage in these kinds of (vendor) relationships.”

Some trustees may not support any new policies regarding HISD contracts, vendors and trustee behavior. Vendors funded nearly half of incumbent trustees’ campaigns over a three-year period, Texas Watchdog found last fall.

Larry Marshall, who is the longest-serving board member with 14 years, has stated many times during public meetings since the fall that existing policies governing relationships among board members and vendors are strong enough.

He successfully led the charge to put an ethics proposal for trustees on hold in December, with the support of five other board members. The proposal had already been watered down at the urging of Marshall and Trustee Paula Harris.

Marshall did not return two calls requesting comment for this story.

Marshall also has pointed out repeatedly during public meetings that HISD trustees shouldn’t have to terminate their friendships with vendors and that ethical problems do not exist for the HISD board – at least during his tenure as a trustee.

This despite Marshall being a defendant in an ongoing civil lawsuit filed in December 2010 that accuses him of taking bribes to award a contract to one company rather than another. Marshall has said the suit is baseless.

Last year Marshall set the stage for a local doctor, Kenneth Wells, to land a no-bid consulting deal with HISD for $640,000. Due in part to questions about the deal raised by Texas Watchdog, HISD officials have put contract negotiations on hold.

The Null-Lairson audit itself came about due, in part, to heavy criticism and media attention from Texas Watchdog and others over how the district has done business in recent years.

Often school-board members don’t see their relationships with vendors as wrong, “which is worse,” Nadler said.

“If you don’t see losing your independence and perspective as bad, then what do you see as bad?”

***
Contact Mike Cronin at mike@texaswatchdog.org or 713-228-2850. Follow him on Twitter at @michaelccronin or @texaswatchdog.

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Photo of checkbook by flickr user RikkisRefugeOther, used via a Creative Commons license.

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