- The Washington Times - Thursday, January 22, 2004

The Education Leaders Council (ELC), a pro-Bush administration group representing reform-minded chief state school officers, is in turmoil over findings of mismanagement and irregularities in documenting time spent on federal grant projects.

The group’s auditors questioned the propriety of Lisa Graham Keegan, working under a consultant contract as ELC’s $235,000-a-year chief executive officer, sitting on the corporation’s board and helping set policy.

The auditors, Draper & McGinley of Frederick, said the arrangement conflicted with federal regulations.

Billie Orr, who just resigned as ELC’s $200,000-a-year president, also had worked under a similar automatically renewable contract arrangement.

Mrs. Keegan said she arranged the consultant contracts for herself and Ms. Orr “for tax purposes” through their respective consulting firms in Arizona when she resigned as Arizona’s state superintendent of public instruction.

She arranged for the ELC board to hire John Schilling, her aide at the Arizona department, as ELC’s $150,000-a-year chief of staff. Mr. Schilling, in turn, then signed the consultant contracts for Mrs. Keegan and Ms. Orr on behalf of ELC.

The auditors also said the organization improperly had documented time spent by Mrs. Keegan, Ms. Orr and other ELC staff as a basis for charging two federal projects for a major portion of their salaries.

The projects funded through the U.S. Department of Education are a $10 million computerized school-instructional program called Following the Leaders and the council’s federal subcontract to help implement a $5 million-a-year alternative teacher-licensing program, the American Board for Certification of Teacher Excellence (ABCTE).

ELC charged $732,022, or 61 percent of its total wages, to the two federal projects in 2003.

Leaders of the centerpiece ABCTE project and National Council on Teacher Quality, its co-founder with ELC, last month severed ties with the state school officers group.

“The issue is larger than ELC. If word gets out about any of this, my fear is that it will have several labels — ‘scandal’ and ‘incompetence’ come to mind — and will make ELC look like every other status quo incarnation of the existing [education establishment] cartel,” board member Cheri Pierson Yecke, Minnesota’s state education commissioner, wrote to other directors after they reviewed the audit report at their annual conference in Nashville last September.

The Washington Times recently obtained internal board documents about turmoil still under way within ELC since that meeting.

William J. Hume, a founding benefactor of ELC whose family helped propel Ronald Reagan and both George Bushes to the presidency, quit the council’s board of directors after Mrs. Keegan and a majority of other directors rebuffed his request for a more detailed independent review of the group’s finances and grant operations.

Mr. Hume, who contributed $700,000 to “seed” ELC’s expansion when Mrs. Keegan joined the group in June 2001, declined to comment on his departure.

William J. Moloney, Colorado education commissioner, also stepped down as board chairman after clashing with Mrs. Keegan over his proposals to “rescue” the council from “procedural disarray.”

Mr. Moloney’s main complaint was that Mrs. Keegan and Ms. Orr, who worked for her at the state Department of Education, remained in Arizona the past several years for personal and family reasons and ran the group’s Washington office from there most of the time.

“At the heart of it, you have someone who is charismatic, a wonderful public face, but a bad manager,” Mr. Moloney said of Mrs. Keegan. “Her inability to manage was compounded by the fact that she never left Arizona.”

Mrs. Keegan defended her decision for the three top officials to remain in Arizona.

“We are in 23 different states, I mean my job is on the road, so that’s a given,” she said.

“The organization has been extremely honest and responsible in the way we have managed the things that we have been charged to do. But that does not mean it’s been wildly efficient at all times. It doesn’t mean that I’ve done a good job of managing staff, particularly after Billie left. Billie is a manager, and that’s why she was here.”

Jim Horne, the new chairman and a certified public accountant, said ELC has taken steps to correct management deficiencies.


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