Archives for September 2009

A state lawmaker, who also serves as a governing board president and as a self-appointed executive for a related government entity that acts on behalf of up to 21 school districts, is again being accused of conflict of interest violations. These allegations now include violations of open meetings laws, financial accounting irregularities and violations under the state procurement code.  The Attorney General’s Office has issued a written request to Deer Valley and Valley Schools Management Group (VSMG) to produce documents by October 13^th related to the expanded allegations.  Also included in the letter is a request by the AG for more information about Solar Schools Arizona, LLC., a private entity believed to have a business interest affiliated with VSMG regarding the installation of solar panels on top of schools in Deer Valley and Scottsdale.

On September 8^th, at a Deer Valley Unified School District Governing Board meeting, State Representative Tom Boone (R-Glendale), who also serves as Governing Board President, was asked by a parent to explain his association with VSMG, where Boone serves as Chairman and CEO.  Boone also appointed himself to serve on the VSMG Board of Management that oversees VSMG.  As a governing board member, Boone oversees the district’s contract with VSMG and was accused of using his role as a state legislator and governing board member to pass legislation that would benefit himself, his family and his business associates.

Boone’s role is attracting attention again because, as the former House Majority Leader and House Appropriations Chairman, Boone was accused in 2006 of other conflicts of interest in a related claim.  But in 2009, these claims have been expanded as more information about his business arrangements has surfaced.

Critics fear that Boone’s roles as a state legislator, governing board president, and board member that oversees his role as an executive for VSMG – a government entity, lack the appropriate oversight as prescribed in state law for a public entity that is funded using taxpayer funds and funds from district employees.

School business officials, teachers’ unions and parents have raised questions about the close relationship between Boone and other former district officials, such as fellow governing board member, Bill Maas, who was a former finance executive at Peoria Unified, and former governing board member and former state legislator, Ted Carpenter.  Allegations were levied against Boone and Carpenter in 2006 for sponsoring legislation that may have been a conflict of interest.

In an article from the Arizona Republic on March 01, 2006, Chuck Essigs, director of the Arizona Association of School Business Officials, said the relationship between Boone and the schools hurts public trust.  “The public wants decisions to be made solely on the basis of what is best for the citizen,” Essigs said. “Once the public feels that decisions are not based solely on that basis, then public trust in government is put at risk.”

When Boone was asked by a parent at the Deer Valley meeting in September about his alleged conflicts, Boone agreed that the appearance of his level of business activity didn’t look appropriate.  “I know it’s a fine line,” Boone said. “Am I concerned about the perception? Absolutely.”

Boone has not filed any conflict of interest statements at the Arizona Legislature since he began serving there in 2002.  He was appointed to the Deer Valley school board in 2007 to replace Ted Carpenter.  Boone had not filed any conflict of interest statements until August 12, 2009, where Boone wrote that “I have or may have a substantial interest in” contracts between VSMG and the school district.  He stated publicly at the September board meeting that the filing of these documents was intended to be ‘retroactive’ to 2007.

Boone has recruited former colleagues from the Arizona State Legislature to work at VSMG, including Michael Bradley, a former House policy advisor and longtime friend of Boone’s who doubles as his campaign consultant.  Boone has also hired Carpenter, Maas and former Paradise Valley Schools administrator Jim DiCello as members of the VSMG Board. Boone, Carpenter, DiCello and Maas are the only four members of the VSMG Board who oversee the business activity of VSMG.  To be eligible to serve on the VSMG board, a prospective member must have worked at one of the other entities that VSMG oversees.

VSMG oversees four other entities that provide financial services for district employees which include insurance, workers compensation, employee benefits and school construction services.  IGAs for these entities were discovered on the website for the Maricopa County Recorder under “Valley Schools,” but no IGA was located for the newer school construction services entity, which plans to install solar panels on school district buildings.

The Republic article also stated, “DiCello said the members of VSMG, particularly Boone, were acutely aware that allegations of impropriety could arise from their arrangement.”

“There are some things about this that don’t pass the smell test,” said John Wright, president of the Arizona Education Association.

Among the issues raised about Boone have been:

* Bradley, a lobbyist hired by VSMG to push legislation on behalf of VSMG, has also run Boone’s campaigns throughout his political career. Boone facilitated the hiring of Bradley in 2005 and handled payments to the lobbyist through the VSMG procurement arm. Boone said VSMG is only a middleman handling the procurement for the schools that wanted to work together on common goals at the legislature. Boone said he played no role in choosing Bradley, who was allegedly the only lobbyist who returned a bid, and said he gives him no direction.  Boone and Bradley are located in the same office, where Bradley now oversees the Valley Schools Employee Benefits Trust entity.

* Documents available at the Maricopa County Recorder’s website include the Intergovernmental Agreement (IGA) from 2005 that details the procurement guidelines under which VSMG operates.  VSMG states that they are exempt from state procurement statutes and have given VSMG the ability to ‘sole source’ goods and services at the discretion of VSMG board members.  As a government entity, VSMG is prevented from exempting itself from the state procurement code.

* VSMG may not have abided by the Open Meeting Law and may have restricted the release of financial information only to the VSMG Board, the Superintendent and the Arizona Department of Insurance.  Requests by members of the public to view public documents related to VSMG were met with a letter by an attorney for VSMG stating that documents will be available on or before October 20, 2009, one week after the deadline set by the Attorney General’s Office.  The letter also states that no further contact should be made to VSMG, but that all requests should be conducted through the VSMG attorney.

* Boone’s wife has been employed by Deer Valley Unified School District for a number of years, which is an alleged violation of state law.  School district policy also says that spouses of employees may not serve on the governing board.  Boone recently co-sponsored legislation in an attempt to amend state statute to reverse this policy.  Boone also has a son who works for the district and a son who works for VSMG.  Maas has a son who works for the Peoria Unified School District in financial services, where Maas also acts as a ‘consultant’ for that department and receives an income.

On Tuesday evening, September 29, the Deer Valley school board will enter into Executive Session to discuss these allegations and to hear from attorneys representing Boone and VSMG.