SB 188, Howard Stephenson sneaks provision into charter school bill specifically allowing conflicts of interest

At the end of my budget post last week, I mentioned that I generally have no beef with charter schools, but that I have problems with legislators using them for financial gain. Howard Stephenson sponsored a bill that could possibly reap direct financial benefits for sitting legislators and other influential GOP insiders on charter school boards. The most ethical full-time lobbyist on the hill--so ethical that he can earn his substantial living by being paid to advocate for laws that benefit his secret clients--yet NOT have any important conflicts of interest as a legislator, pushed this bill which dealt with another substantial policy issue, removing the cap on charter school enrollment.

SB 188. The frustrating part is that those in charge of acting as gatekeepers were asleep at the wheel. The executive summary of the bill mentions on Line 20 that it "modifies conflict of interest provisions applicable to charter school officers."

Click on the link above and then listen to the file, Senate Education Committee 2/24, of the Senate Education Committee hearing for the bill. The relevant sections are about 17-18 minutes long, but the relevant part to this post is only about a minute and 5 seconds long, from 4:00 minutes into the audio to 5:05. Senator Stephenson has a staff lady basically read the executive summary and explain it to the committee, and she explains the basics of allowing conflicts of interest in that minute. Following this, the State Superintendent of Public Schools, Larry Shumway, (whom I generally like and applaud for his ability to work with legislators), some State Charter School Board members, and the legislators get sidetracked off onto a minor issue: whether the new non-voting member of the State School Board should be called a delegate instead of a non-voting member. They chew on this over and over and never even talk about the principal issue of the bill, whether the enrollment cap should be lifted, let alone the conflict of interest provisions or committee to review charter school loan requests. I have reservations about lifting the cap purely because of funding considerations, but charter schools are serving a lot of children well.

Next, you can click on the link to the floor debate in the Senate (scroll down to near the bottom of Part 2 and look for SB 188). It's 12 minutes long with another minute for voting. I watched the video; I'm assuming the audio is the same length. Once again, Senator Stephenson gives the short explanation of the conflict of interest provision from 1:35 to 1:57. The Senate debates about the "non-voting delegate" amendment for the majority of the time and the bill passes without one question being asked about the other provisions. Does no Senator see any problem with this?! Now I can understand that possibly this was dealt with extensively in interim, but I know all of the legislators who talk so much about poorly informed people signing voting initiatives did not read this bill. I don't think Senator Stephenson was even very familiar with it in committee. They just trust each other because they are all so trustworthy and stuff. I blogged about this last year as well.

Now to the floor debate in the House (The SB 188 video is about halfway through Part 2). At first I was happy with Representative Lockhart's presentation. She first moves a technical amendment. From about 1:30 to 2:30, she gives a much better summary of SB 188. She focuses on the change in the charter school enrollment cap and lists some other provisions. However, she curiously omits both the conflict of interest change and and the new non-voting member of the State School Board that the first two debates fixated upon. Representatives Allen and Cosgrove at least ask some questions about other sections of the bill. Small little bravo as it is also obvious they are not familiar with the bill and haven't read it. No one else asks a question. At about 6:30, Speaker of the House, Dave Clark, says there are no other questions and turns the bill over to Rep. Lockhart for final summation. At this point, when debate has been cut off, she mentions those last two items she omitted from her initial explanation. At 6:35, she brings up the new position on the State School Board. From 7:00 to 7:17 she "explains" the conflict of interest provisions. Here's my rough transcription:

"And then there's also at the end of the bill some issues having to do with members of charter school boards and potential conflicts of interest and how they deal with those conflicts of interest as it relates to their individual schools."

Whether on purpose or not, this is a dishonest description. The relevant part of the bill is on lines 270-282. The original text of that section of law read:

A charter school officer or a relative of a charter school officer may not have a financial interest in a contract or other transaction involving a charter school in which the charter school officer serves as a charter school officer.

There was NO potential for conflicts of interest. The new bill text reads as follows (The underlined parts represent the additions or changes being made to the current law.):

270 (3) (a) [A] Except as provided in Subsections (3)(b) and (3)(c), a charter school officer
271 or a relative of a charter school officer may not have a financial interest in a contract or other
272 transaction involving a charter school in which the charter school officer serves as a charter
273 school officer.
274 (b) If a charter school's governing board considers entering into a contract or executing
275 a transaction in which a charter school officer or a relative of a charter school officer has a
276
financial interest, the charter school officer shall:
277 (i) disclose the financial interest, in writing, to the other charter school officers;
278 (ii) submit the contract or transaction decision to the charter school's governing board
279 for the approval, by majority vote, of the charter school's governing board;
280 (iii) abstain from voting on the issue; and
281 (iv) be absent from any meeting when the contract or transaction is being considered
282 and determined.

The bill doesn't "deal" with potential conflicts of interest; it puts them into code!! The board members of a charter school used to not be able to make money off of the school, and now they can. OK, they can't be part of the meetings to decide. But did any legislator think about what it would be like to work closely in a policy group (like the legislature or a charter school board--management being respectively the executive branch and the school administration) with someone who provides a service, omit them from a meeting on purchasing that service, and then have to tell them at the next meeting that their company did not provide as good a service as a competitor? They didn't think there would be any undue pressure there? They honestly thought this was a section of code that needed changing to better serve the charter school students of Utah? Or did they even know about it?

Following this non-explanation, Speaker Clark immediately opened the unanimous voting in favor of the bill.

Did no one in the House even read the executive summary?! Even if Rep. Lockhart didn't bring it up until it was too late to comment on it, was no one curious about the conflict of interest section? Couldn't that provision have been easily amended out, leaving the actual meat of the bill? Let's place unprovable bets on what percentage of the legislators in both houses had read the bill at this point. I would feel confident saying under 10%.

The Trib's education reporter, Lisa Schencker, who does a sporadic job of in-depth coverage as opposed to the other papers who only cover controversial school legislation, covered the story both in committee and after final passage. She reported the main point about the removal of the charter school enrollment cap, but just got a quote from Stephenson the first time, repeated it the second time, and didn't dig any deeper.

I'd love to hear any justification for allowing conflicts of interest at public charter schools. I'm serious. Is there some wonderful service out there currently not being provided to the charter school students that some charter school board member will now provide? Is this wonderful service worth allowing someone's close colleagues to vote on whether he/she personally profits from their position of influence at a charter school? Who thinks Senator Stephenson knows at least one person by name who just happens to be a legislator or GOP donor and will immediately profit from this bill? Maybe even someone who contributes secretly to the Utah Taxpayer's Association?

1. So, please be angry at the end result of a tiny section of this bill expressly permitting conflicts of interest in charter school board expenditures.

2. Please be angry at the lack of review given this bill through a committee hearing and three separate floor hearings. There were a total of two questions asked not about the member/delegate semantics debate. This criticism does not just include legislators, but education representatives, including Superintendent Shumway.

3. And really think about the broader issue this one example represents of how the legislature works. A registered corporate lobbyist with secret clients sits as a Senator in our state legislature. He has frequently misrepresented his bills in committee and floor presentations (Example 2009, Example 2008) and abused legislative process (Example 2010) in order to push his pro-corporate, anti-school, money-making agenda.

This same Senator passed a bill, SB 275, allowing voter initiative proponents--almost exclusively establishment Republicans who oppose sharing power--to have an extra month to go door-to-door claiming that "deceptive signature-gathering practices" result in "lemon laws." He and the rest of the legislative leadership claim that no one is reading the initiative due to "half-truths and misrepresentations" and they don't know about the secret, horrible provisions that are unfair to the virtuous legislators.

Think about this post and think about their position. Be angry that the legislators reflexively trust each other and excuse their repeated lack of proper review of laws (Self-admitted example from 2007--this link is to a really long post full of great examples and quotes, relating both to bad legislative decisions and their attack on voter initiatives and referendums. It's worth the read.) while constantly insulting the public who are easily fooled by "hucksters."

I think this perspective helps better understand Dave Clark's comments about wanting Kevin Garn "back with us" and the standing ovation he received. Too many legislators instinctively and instantly rally to their own little club and defend it against all outsiders. Sign the voter initiatives for Fair Boundaries and ethics reform and take a larger step toward limiting conflicts of interest and money in our state legislature.