- The Washington Times - Thursday, August 8, 2002

PHILADELPHIA (AP) The Education Department announced this week it will investigate how Edison Schools Inc. obtained its contract to run 20 low-performing schools here.

The probe was requested by Rep. Chaka Fattah, a Democrat, who wants to know whether the for-profit company and state Education Secretary Charles Zogby conspired to influence the bidding process. Edison has denied wrongdoing, and a spokeswoman for Mr. Zogby said he had acted appropriately.

Earlier this year, the School Reform Commission awarded Edison, the nation's largest private manager of public schools, a five-year contract totaling nearly $60 million to run the schools. Six other entities won contracts to run 25 other schools.

Mr. Fattah asked federal education officials to determine "whether Edison Schools improperly conspired with state officials to corrupt the selection and contracting process."

Mr. Fattah also said he wanted to determine whether state officials used "intimidation and threats to withhold additional state dollars" a reference to Mr. Zogby, who threatened to cut off nearly $55 million in new state funding unless the school district gave nearly all the cash to 45 schools targeted for privatization.

Last week, Mr. Zogby and the School Reform Commission agreed to a compromise that will deliver $25 million to the 45 privatized schools and a subsidy of $881 per pupil to Edison.

John P. Higgins Jr., acting inspector general of the Education Department, said in a letter to Mr. Fattah on Tuesday that a federal investigation will begin within two weeks.

Edison spokesman Adam Tucker said the company did nothing wrong and is being singled out because of its high profile in Philadelphia. Gretchen Toner, a spokeswoman for Mr. Zogby, said: "We have not done anything inappropriate."

Edison is the focus of a separate state investigation regarding a $2.7 million contract it was awarded last year to study Philadelphia's troubled schools. The study laid the foundation for Gov. Mark Schweiker's city school reorganization plan, which led to a state takeover in December.

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