Pearson-Gate Claims More Corrupt Junketeers

Below is Michael Winerip's Jan. 1 piece on the fetid corporate cesspool that is Pearson Education and Pearson Foundation.  I have taken the liberty to highlight the public officials who have been bought by Pearson's generous junkets.  Below Winerip's piece is a late December piece by Winnie Hu.

Junketeers in London

January 1, 2012
New Questions About Trips Sponsored by Education Publisher
By MICHAEL WINERIP

In the summer of 2010, Lu Young, the superintendent of schools in Jessamine County, a Lexington, Ky., suburb, took a trip to Australia paid for by the Pearson Foundation, a nonprofit arm of Pearson, the nation's largest educational publisher.

Ten school superintendents went on the trip, which cost Pearson $60,000. While the foundation described the visit as a way "to exchange ideas on creating schools for the 21st century," there was ample time for play. "Everybody's highlight of Canberra was to get to see the kangaroos," Ms. Young said on a video produced by the foundation.

Six months later, in Frankfort, Ky., Ms. Young sat on a committee interviewing executives from three companies bidding to run the state's testing program. While CTB/McGraw-Hill submitted the lowest bid, by $2.5 million, Ms. Young and the other committee members recommended Pearson.

In April, Kentucky's Education Department approved a $57 million contract with Pearson. And then, over the next six months, the commissioner who oversees that department, Terry Holliday, traveled to both China and Brazil on trips underwritten by - that's right - the Pearson Foundation.

Were the trips an effort by the foundation to influence government officials so the company would obtain a lucrative state contract?

A spokeswoman for Dr. Holliday said that the selection "was based on best value and not simply a low bid," and Ms. Young said that the trips and the contract selection were "completely unrelated."

"I never had any conversation or discussion with anyone from Pearson about the awarding of the testing contract during this trip or later," Ms. Young wrote in an e-mail.

There is a fair chance that Ms. Young has not heard the last word on this.

For several weeks, New York State's attorney general has been investigating similar trips involving two dozen education officials from around the country who traveled to Singapore; London; Helsinki, Finland; China and Rio de Janeiro as guests of the Pearson Foundation. The trips, and the fact that most of these officials come from states that have multimillion contracts with Pearson, were the subject of two of my columns this fall.

Last month, the attorney general, Eric T. Schneiderman, issued subpoenas to the Manhattan offices of the Pearson Foundation and Pearson Education. Mr. Schneiderman is looking into whether the nonprofit, tax-exempt foundation, which is prohibited by state law from undisclosed lobbying, was used to benefit Pearson Education, a profit-making company that publishes standardized tests, curriculums and textbooks, according to people familiar with the inquiry.

Mark Nieker, president of the Pearson Foundation, wrote in an e-mail, "Our practice is not to comment about the existence of government investigations." He added, "It just is not true that the Foundation's support of conferences attended by education officials has the purpose of helping Pearson corporate to win contracts."

Pearson has paid for the trips through the Council of Chief State School Officers. The foundation's most recent tax form, from a year ago, lists a $100,000 contribution to the council.

Mr. Nieker wrote that the foundation trips reflect "a long-term commitment to foster a productive dialogue between education leaders from the United States and some of the world's best-performing and most improving school systems."

The conferences have also included top executives from the Pearson company, giving them the opportunity for meetings with state commissioners. Mr. Nieker has not responded to several requests to provide names of the Pearson executives who attended, but I was able to identify 12 who went to Finland and nine who were on the trip to Singapore. The only executive at the Australia conference Mr. Nieker would confirm is Kathy Hurley, a vice president for both the company and the foundation.

Marcus S. Owens, a lawyer who was the director of the Exempt Organizations Division of the Internal Revenue Service for a decade, said New York's investigators were likely to look at if representatives from other education companies were invited to the conferences, "along the lines of how a trade show works."

"If it's only Pearson, that doesn't have the feel of a real education conference," he said. None of the lists of attendees obtained include people from other firms.

Also troubling, Mr. Owens said, was that the foundation left blank the line on its federal tax forms where nonprofits are supposed to list payments to public officials for "travel or entertainment."

He sees parallels between the Pearson situation and an investigation by the United States attorney's office in Arizona of the nonprofit organization that runs the Fiesta Bowl. In November, a former chief operating officer for the Fiesta Bowl nonprofit was indicted by a federal grand jury for filing tax returns that failed to list payments to political campaigns and lobbyists.

Mr. Nieker, the Pearson Foundation president, said the situations were not parallel. "We strongly dispute any valid comparison and question the ability of tax experts you cite to make such a comparison without knowledge of the relevant facts."

While several commissioners have said they had prior approval for the trips from state ethics officials, oversight appears to have been lax.

Christopher Koch, state superintendent of education in Illinois - which has $138 million in contracts with Pearson - went to China, Brazil and Finland with the foundation. The only Pearson compensation he listed on state ethics forms was the cost of the flight to China, $4,271 for business class. Asked why hotels, meals and the other flights were not documented, a spokesman for Dr. Koch, Matt Vanover, said, "What we're looking at is a litmus test; they just want to make sure he's not traveling first class."

David Steiner, the former New York education commissioner, has said that the entire value of a foundation-sponsored trip he took to London in 2010 was $2,000.

Pearson paid for the Australia trip through the American Association of School Administrators. Mr. Nieker said the superintendents on the trip were selected by the association, not the foundation.

In Montgomery County, Md., the now-retired superintendent, Jerry Weast, approved an unusual contract in June 2010, in which Pearson paid the district $2.5 million to produce curriculum materials that the company would then sell worldwide.

Two months later he was on the plane to Australia.

Dr. Weast, who has come under fire from parents groups, said the curriculum contract was a unique way to generate income for public schools in hard economic times.

Daniel A. Domenech, executive director of the administrators association, said the group had taken its last Pearson trip. "Given the climate in public education today, we won't go on trips," he said.

When told about the attorney general's investigation, Dr. Domenech said: "I guess that means we better get our records set up. If there's an investigation, I'm sure they'll want to look at them."

E-mail: oneducation@nytimes.com

This article has been revised to reflect the following correction:

Correction: January 2, 2012

An earlier version of this article misidentified a former New York education commissioner. He is David Steiner, not Richard Steiner.

December 21, 2011
Testing Firm Faces Inquiry on Free Trips for Officials
By WINNIE HU

New York State's attorney general is investigating whether the Pearson Foundation, the nonprofit arm of one of the nation's largest educational publishers, acted improperly to influence state education officials by paying for overseas trips and other perks.

The office of the attorney general, Eric T. Schneiderman, issued subpoenas this week to the foundation and to Pearson Education seeking documents and information related to their activities with state education officials, including at least four education conferences - in London, Helsinki, Singapore and Rio de Janeiro - since 2008, according to people familiar with the investigation.

At issue is whether the activities of the tax-exempt Pearson Foundation, which is prohibited by state law from engaging in undisclosed lobbying, were used to benefit Pearson Education, a for-profit company, according to these people. Pearson sells standardized tests, packaged curriculums and Prentice Hall textbooks.

Specifically, the attorney general's investigation is looking at whether foundation employees improperly sought to influence state officials or procurement processes to obtain lucrative state contracts, and whether the employees failed to disclose lobbying activities in annual filings with the attorney general's office. The inquiry follows two columns about the conferences by Michael Winerip in The New York Times this fall.

If there is evidence that the foundation engaged in substantial lobbying and failed to disclose it, it could face fines and lose its tax-exempt status under state and federal laws. No subpoenas were issued to state education officials, the people with knowledge of the matter said.

In a statement Wednesday, a Pearson Education spokeswoman said, "As a matter of policy, Pearson does not comment on government inquiries or potential legal proceedings." A spokesman said the foundation "does not currently have a comment" about the inquiry, and added, "nor is it our practice to offer comment on legal proceedings or government inquiries."

In New York, Pearson Education most recently won a five-year, $32 million contract to administer state tests, and it maintains a $1 million contract for testing services with the State Education Department, according to state records. The last contract was awarded after David M. Steiner, then the state education commissioner, attended a conference in London in June 2010 that was organized by the Council of Chief State School Officers and underwritten by the Pearson Foundation.

Dr. Steiner, currently a dean and professor at Hunter College, said on Wednesday that his trip had been cleared by an ethics officer at the Education Department. "I am sure that there was no sales pitch," he said, adding that "given the many attendees and presentations, I cannot be sure that there was nobody speaking at some point in the conference who was from Pearson rather than the Pearson Foundation or other organizations."

But Dr. Steiner said "there is zero link" between his trip and the state's subsequent contract with Pearson. He said that he had no direct involvement in the decision to select Pearson and that his role was to report the recommendation to hire Pearson, made by the department's staff, to the Board of Regents. "I followed exactly our rules and protocols," he said. "I still believe it was a useful and informative and professional activity that had been properly cleared."

Tom Dunn, a spokesman for the Education Department, said that state officials selected Pearson after a competitive bidding process in which the department's staff members scored and ranked each bid. He added that the attorney general and the state comptroller both reviewed and approved the contract.

"Our contracting process is always followed to the letter," he said, "and the Pearson contract was no exception."

But some advocates for students and academics said Wednesday that the investigation was long overdue.

"Despite a history of scoring errors, contract manipulation and corporate misbehavior, there's been almost no public oversight of companies such as Pearson," said Bob Schaeffer, a spokesman for FairTest, an advocacy group opposed to standardized testing. "It's great that New York's attorney general has now decided to examine the examiners and begin holding them accountable."