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Why Are Top School Officials From Washington Getting Paid To Meet With Tech Companies?

screenshot of ERDI web site
Education Research and Development Institute is a for-profit company that hosts gatherings in which superintendents and other school officials receive honoraria for giving feedback on technology products in development.

 (Updated at 10:55 am on Aug. 17, 2018, to clarify that the Kent School District has a policy requiring that employees inform their supervisors in writing of potential conflicts of interest.)

As fall approaches, families are starting to shop for school supplies including notebooks and markers. But increasingly, the work of school is done digitally – from online homework apps to web portals for accessing grades.

District superintendents play an important role in deciding what software to buy, and because of that, education technology companies look for ways to get their attention.

Parents in the Kent School District have raised concerns about a company that pays honoraria to superintendents, including the one from Kent, to meet with technology companies and give feedback on their products.

They say it creates a conflict of interest for the superintendent to get paid to meet with companies that eventually want to make sales.

What’s clear is that education technology has become a big business. There are juggernauts like Apple and Microsoft, of course. Then there are also a lot of startups trying to get their products into schools, and they’re attracting venture capital.

Investors have poured more than $19 billion into education-technology startups in the past five years, according to CB Insights, a data company that tracks investments. All of those education-technology companies want to find a way into school districts.

But the Kent School District has been struggling with a budget crisis. And that’s why some parents are questioning how the district has been spending money, including on technology.

At a Feb. 14, 2018, school board meeting, Kent Superintendent Calvin Watts said he had just returned from a gathering with technology companies.

“(I) want to first share that I most recently had the opportunity to serve as a consulting superintendent in Education Research and Development Institute, otherwise known as ERDI,” Watts said.

Education Research and Development Institute is a Chicago-based company. It’s for-profit and it’s been around for three decades. ERDI is basically a go-between. It hosts what it calls institutes in places like Florida and New Orleans. Companies pay ERDI to come to the institutes to show their products to school superintendents and get feedback. ERDI usually covers travel costs for the school officials and pays them an honorarium of about $2,000.

“I did receive an honorarium in the amount of $2,250,” Watts said at the school board meeting.

Watts said he had taken vacation and furlough days during the conference. But his comment that he had received payment for meeting with the companies raised the ire of some parents and community members.

Credit Ashley Gross / KNKX
Kent Superintendent Calvin Watts, who took the position in 2015, said he's participated in ERDI events five or six times since then.

They were already angry because the district has had to lay off staff and administrators and cut back spending on supplies to try to rein in costs that depleted the district’s fund balance in recent years and led the school system to borrow from its capital fund.

The parents started digging. They found two clients of ERDI that the district has bought software from, and in May, they filed a complaint calling for the school board to terminate Watts or appoint a third-party investigator. Among the issues they raised was Watts’s participation in ERDI events.

Parents' Concerns

“The thing that causes me to have concerns is the fact that money is changing hands,” said Abraham Ritter, an attorney who’s been advising 27kSD4change, the community group that lodged the complaint.

“ERDI collects money from its constituent vendors and that money is sent along to the superintendents, which vet those products. At that point, the superintendents receiving that money, they know where that money’s coming from,” Ritter said. “And later they have those vendor companies which are members of ERDI selling them products. They know on what side of the bread the butter is. They know, they’ve already been paid. It’s a pay-to-play program.”

ERDI executives declined to do an interview. But in an email, ERDI Chairman Emeritus Paul Dulle said the company just provides a forum for school officials to give “unvarnished and impartial feedback” on new products.

“Our policies are made very clear to educators who participate that they should seek any required approvals from their boards to participate in this process and we do not in any way encourage or initiate any conversations about opportunities that they may want to pursue outside of this setting; that lies solely in the hands of school leaders and their boards,” Dulle said.

An ERDI spokeswoman also said that Watts didn’t sit on any panels at ERDI events with the two companies that parents raised concerns about.

In an interview, Watts said he’s participated in five or six ERDI events since 2015, when he took the job in Kent. He said he doesn’t agree that there’s any conflict of interest and that his participation helps companies refine their products so schools benefit from better technology.

“At the core of ERDI is the importance of corporate partners not having to waste money on providing resources to school districts that may not support the needs of the organization, that may not improve educational outcomes for students, that may not support more effective teaching and learning because they’ve not had a vetting process,” he said.

The parents who filed the complaint say they couldn’t find any record of Watts having gotten prior approval from the school board to participate in ERDI. Watts said he did and school board president Maya Vengadasalam confirmed that. KNKX asked for documentation of the approvals through a public records request five weeks ago but haven’t received it yet.

Other Superintendents' Participation

But in looking at ERDI, it turns out Watts isn’t the only one from the Puget Sound region who’s participated. The superintendents of Tacoma and Highline school districts and the chief information officer of Seattle Public Schools have gone as well.

Tacoma Superintendent Carla Santorno said she appreciates the chance to talk with other superintendents.

“This is a time where I can sit with other people from 30,000-kid districts and talk about what their issues are, what they’re doing about solving them,” she said. “Sometimes we talk about, `Hey, did you see that social media thing? What did you think? How could you use it?’”

Santorno said she’s donated the honoraria she gets from ERDI, with the bulk going to the Foundation for Tacoma Students. The foundation confirmed that.

Santorno, Highline Superintendent Susan Enfield and Seattle Public Schools Chief Information Officer John Krull all said they get the proper approvals and that they value participating in ERDI because of the opportunity for professional development. They also said it gives them a chance to find out what new tools are available that could be beneficial to their students.

Regarding questions about potential conflicts of interest, Enfield said she’s been deliberate about removing herself from purchase decisions. 

“I share a promising service or product with the appropriate person on our team and let them determine if it meets our needs — I do not make that call,” Enfield said in an email.

Krull said Seattle Public Schools has “standard purchasing procedures that involve various people and approvals. I am transparent about conferences I attend and do not let that attendance influence purchasing decisions.”

But for parents in Kent who have raised concerns, the issue comes down to whether scarce resources are being used wisely, and whether technology companies are using connections through ERDI to curry favor with top school officials.

Even now that the state Supreme Court has ended the McCleary school-funding lawsuit after the legislature voted to steer more state dollars into public education, there are still questions about whether schools have the funds they need.

Kids run laps to raise money for their school’s PTA. Teachers collect donations online for classroom supplies.

Against that backdrop, it’s fair to ask how are these big-ticket technology decisions getting made? One person who knows this world from the inside is Frank Catalano. He’s worked in marketing for education technology companies including Pearson.

`Nod-Nod, Wink-Wink'

Catalano said companies see ERDI as a way to make inroads with potential customers.

“It’s sort of this subtle nod-nod, wink-wink that can occur over time when the companies say, `Hey, if I send a sales person along with my product people, maybe I can make a deal happen somewhere down the road,’” Catalano said. “That’s where it gets dicey, that’s where you can have an appearance of conflict of interest. That actually may be a real conflict of interest, depending on how overt the company handles it.”

Catalano said when he was at Pearson, he told his marketing team not to take part in ERDI because of these issues. And he said conflict of interest questions pop up in the news every few years. One recent high-profile example is former Baltimore County Public Schools Superintendent Dallas Dance.

Dance is now serving time in prison for perjury stemming from lying on financial disclosure forms about outside consulting income he got – including payments from ERDI.

Catalano said that’s an extreme case but highlights the need for transparency.

“If you are taking taxpayer dollars for your full-time job and you got this consulting arrangement with ERDI or a similar organization because of your taxpayer-funded full-time job, you need to disclose what’s going on,” he said.

Credit Ashley Gross / KNKX
Kent School Board President Maya Vengadasalam (third from right) says the board is concerned about potential conflicts of interest that arise when the superintendent participates in ERDI and will address that in contracts with current and future superintendents.

And that’s what’s been difficult for parents in Kent trying to figure this out. Disclosure requirements differ by district. The Seattle and Tacoma school districts require senior staff to fill out a form listing potential conflicts of interest. Highline and Kent do not.

Kent School Board President Maya Vengadasalam said in an email that the board is concerned about potential conflicts of interest that arise when the superintendent participates in events such as ERDI and that “it will be addressed in the contracts with current and future superintendents.”

She also said the Kent school board is discussing adding a requirement that senior staff fill out a form to disclose potential conflicts of interest. 

However, the district already has a policy on conflicts of interest that requires that employees "inform their supervisors in writing of reasonably foreseen potential conflicts."

In July 2017, Ashley Gross became KNKX's youth and education reporter after years of covering the business and labor beat. She joined the station in May 2012 and previously worked five years at WBEZ in Chicago, where she reported on business and the economy. Her work telling the human side of the mortgage crisis garnered awards from the Illinois Associated Press and the Chicago Headline Club. She's also reported for the Alaska Public Radio Network in Anchorage and for Bloomberg News in San Francisco.