That’s the question Parents United for Public Education and our partners asked a year ago to the City Ethics Board regarding an independent contract between the William Penn Foundation and the Boston Consulting Group (BCG) to re-make Philadelphia’s public schools. Our complaint was the very first challenge under the City’s new lobbying law, which went into effect in 2012. The Ethics Board agreed with us that the written contracts between BCG and the William Penn Foundation “create the appearance that BCG was working for the Foundation, not the School District” and began a year-long investigation. Now we have a response.
In December 2012, Parents United and our partners – the Philadelphia Home and School Council and the NAACP – filed a lobbying complaint around the William Penn Foundation/BCG contract, to which the District was not a formal party. The BCG contract promoted charter expansion, third party management networks, the privatization of certain labor contracts, and identified 60 schools for closing. BCG was presented to the public as a consultant which would study the District and make recommendations. Lo and behold, when the final “blueprint” came out, it was nearly identical to the contract that had been signed months earlier.
The William Penn Foundation solicited donors specifically for the purpose of paying for the BCG contract, and then oversaw a fund at a separate foundation that disbursed those donations directly to BCG. This structure allowed the identities of many who paid for BCG’s work to remain secret, along with any economic interests they may have had in the policies and decisions advanced by the work. The Public School Notebook has reported that the donors included the Philadelphia School Partnership, at least one prominent real estate developer, and individuals and groups with interests and ties to religious and charter schools. The William Penn Foundation also funded a separate communications strategy for the District without the public ever knowing, making it unclear which communications came from the Foundation and which from the District.
According to a letter from the Ethics Board (which we posted below), the investigation reveals persistent attempts to influence the District. Former William Penn Foundation president Jeremy Nowak, for example, reviewed and commented on statements of work before they were finalized and held regular meetings with School District officials, including SRC Chair Pedro Ramos and former interim CEO Tom Knudsen. Witnesses at some of those meetings said Nowak expressed his opinions and felt his “role as a funding source gave him significant influence with and access to District officials.”
Additionally, there was a short timeline in the bidding process for BCG – less than four weeks between the initial bid announcement and the SRC vote to hire BCG.
Despite these concerns, the Ethics Board ruled that the arrangement did not violate the lobbying law because BCG officials, interim CEO Tom Knudsen, and former SRC chair Pedro Ramos asserted that BCG’s work was supervised by the District and not the Foundation. The statements by BCG and District officials assured the Ethics Board that BCG was not actually working for the Foundation, which paid and contracted with them, and, therefore, was not lobbying on behalf of the Foundation.
The Ethics Board acknowledged that the question of whether Nowak lobbied the District in his interactions with it exposes a gray area in the lobbying law. According to the Ethics Board, the law does not address “the relationship that arises when a private entity provides grant funding to a public enterprise such as the School District.” As a result, it ruled that Nowak did not violate the law.
Despite the final ruling, we believe this was an investigation of critical importance to the public interest. The William Penn Foundation is not the only entity seeking to exercise influence through the power of their purse. Locally and nationally, education reform is increasingly being defined by a host of venture philanthropists hovering about and crawling through school districts, using their dollars to demand enormous access and circumvent public process.
The purpose of the lobbying law is to allow the public to know when private money is attempting to influence public policy. The Ethics Board agreed with us that, on the face of it, there appeared to have been lobbying. That is not a transparent process any public entity should engage in.
The Ethics Board ruling raises the question of whether the city lobbying law provides guidance on the role of private grantors to public agencies. Foundations are being granted unprecedented access to influence and shape public policy, including access to non-public documents and private time with public officials outside the public eye. It certainly raises questions about Right to Know inquiries which the District has denied to the public. Parents United is currently embroiled in a court battle over school closings documents that appear to have been shared with foundation officials but not with the general public. We want to make sure that the ethics and lobbying law does not allow for blanket approval of communications simply because a grant is provided at the request of a public entity.
The lobbying law should draw a clear line about when disclosure is required. It is not appropriate that the public learns about such communications only through an investigation of the Ethics Board. The law cannot allow for philanthropy to become a backdoor way around traditional protections in the lobbying law.
It should be noted that the Ethics Board left open the question of whether it would rule differently if a “private grantor seeks to influence a specific administrative or legislative action and provides money to enable the public entity to carry out that action.” We intend to pursue this question further.
The ethics complaint has had other impacts. Jeremy Nowak abruptly left the William Penn Foundation days after we informed the Foundation’s board of our intent to file a complaint. The Boston Consulting Group and Tom Knudsen are no longer with the District a year after the investigation. And more importantly, parents and concerned citizens are sending a clear message that ethics matter for any agency seeking audience with the School District. Parents have no vote in this process, but we deserve transparency and public accountability.
We are extraordinarily grateful to our attorneys at the Public Interest Law Center of Philadelphia who provided us with an excellent legal analysis of this issue. We want to thank District employees for their courage in coming forward to talk with the Ethics Board. And we want to thank the Ethics Board and their staff for a year-long investigation that worked to unravel a complicated and evolving area of the City’s new lobbying law. By accepting our complaint, the Ethics Board acknowledged it was an important case to pursue, and they took this investigation seriously. We may have opportunities to see more defined rulings in this area in the future.
Read more about it:
Dave Davies Off Mic, WHYY, “Ethics board clears Philly School District deal“
Read the full text of the Ethics Board’s ruling here: