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Educators running government-funded tutoring companies create concern over conflicts

As principal of some of the poorest public schools in Alachua County, Beth Le Clear urged her students to take advantage of subsidized tutoring, extra instruction for Florida's neediest kids.

Scores of her schoolchildren — some so destitute they wore grocery bags for underwear — enrolled and got the study help they sorely needed.

But they weren't the only ones who benefited.

When Le Clear's students signed up for the government program, a for-profit company that Le Clear controlled was there to win their business.

State law bars most public servants from contracting with their government employers. But when it comes to taxpayer-funded tutoring, arrangements like Le Clear's are common practice across Florida, a Tampa Bay Times investigation has found.

The newspaper identified more than 100 public school employees — or their immediate family members — who have formed private companies and collected government tutoring subsidies.

Most of the educators steer clear of potential conflicts of interest by contracting only outside their home districts.

Others, though, have encouraged their own students to sign on as clients, a practice that can translate into tens of thousands of dollars in profit.

Of the tutoring companies connected to educators, one in four has made money tutoring children from the educators' own schools, the Times found.

In some cases, teachers and principals earned more from their tutoring businesses than they did from their day jobs.

Presented with these findings, some top administrators at local school districts said they didn't know about the moonlighting. Others ignored potential conflicts or even approved the questionable arrangements.

Le Clear formed her tutoring company, Twister Tutors, in 2007, during her first school year as a principal in Alachua County.

When competitors complained, Le Clear met with her superintendent, the board attorney and other top administrators and pledged to hand over ownership of Twister Tutors to someone else — her sister.

The administrators signed off, trusting her to keep her public job separate from her private business.

Le Clear told the Times she started Twister Tutors to turn around failing schools and added that she has never benefited financially from the company. In fact, she said, "I had to tap my retirement to keep it running."

But she also acknowledged that she remains a shareholder in the business, which in 2012 had $170,000 in its checking account, according to records filed with the state.

Still, nothing about the arrangement troubled her bosses.

"Beth Le Clear's Twister Tutors was treated just like any other provider," Alachua County schools superintendent Dan Boyd said. "I've had nothing ever come to me that would indicate anything other than a professional operation is taking place as far as she is concerned."

Though most school systems, including Le Clear's, ban employees from contracting with their own districts, the ban doesn't extend to family members.

Ethics experts, including Tom Scarritt, a former chairman of the Florida Commission on Ethics, said the loophole undermines efforts to keep school employees honest.

"You're still doing business with yourself," said Scarritt, now an attorney in Tampa. "And you can't have an objective, arm's-length transaction with a company like that."

Government watchdogs said these cases cast a harsh light on district administrators who tolerate such arrangements.

"Really, that shows almost a disregard for the kids, for the taxpayers, for the family," said Dominic M. Calabro, CEO of the nonprofit tax research group Florida TaxWatch. "It would be like school officials watching other school officials walking away with desks, furniture and computers and not saying anything. It's totally unacceptable and should be put to a stop."

State Senate President Don Gaetz, R-Niceville, said the glut of educators running tutoring companies raises serious questions about the program.

"It should not be a less-than-arm's-length, cottage industry for people who can self-refer to themselves or family members for profit," said Gaetz, who served as superintendent of Okaloosa County schools before being elected to the state Senate.

"It's certainly nothing that I as a superintendent ever would have allowed in my school district."

A setup for conflicts

President George W. Bush kicked off subsidized tutoring in 2001 as part of his administration's No Child Left Behind Act.

The program, called supplemental educational services, was designed to shore up struggling public schools by providing private tutors for poor children.

Every year, impoverished families at schools with low standardized test scores are invited to sign up for after-school instruction.

Parents choose their child's tutoring company from a list of vendors approved by the state. Taxpayers foot the bill, paying as much as $1,500 per child.

In Florida alone, the program has put as much as $100 million a year up for grabs. It has given tens of thousands of students access to extra instruction they otherwise couldn't afford.

But federal education law offered little guidance for states setting up the program. The result in Florida and elsewhere has been confusion and lax oversight over hundreds of millions of federal tax dollars.

For instance, though tutors themselves must pass a criminal background check, no law requires the same screening of company owners.

The Times reported in February that Florida's Education Department had approved a rapist, a child abuser, a fugitive and other criminals as operators of subsidized tutoring firms.

State lawmakers responded to those reports in May, ending a statewide mandate that districts pay into the program. Individual school systems now can choose whether to spend a portion of their federal funding on private tutoring. Many districts are dropping or drastically cutting the program.

Although a state ethics statute forbids conflicts of interest in general, no state or federal rule specifically addresses whether public school employees should be allowed to launch tutoring firms and contract with their own districts.

The agency tasked with screening tutoring companies, the state Education Department, has been silent on the matter as well — but not because the issue has never come up.

After getting complaints from competitors about Le Clear in 2007, the department considered steps to head off conflicts through the application process, internal emails show. Those steps were never taken.

Asked about the inaction, a spokeswoman for the department said nobody there could remember the suggestion or explain why changes were not made.

Leaders of Florida's largest school systems say that federal and state education laws required them to sign contracts with any company approved by the Education Department.

Sometimes that included firms run by district employees or their relatives, they said.

"We weren't given who the owners were. We weren't given any details. And we really couldn't exercise any control," said Pinellas County schools superintendent Mike Grego.

High-margin tutoring

At least one in five of all subsidized tutoring companies in Florida is run by a public school employee, the Times found.

Many firms are small, focusing on a single school system or a handful of districts near the educator's full-time workplace. Others collect hundreds of thousands of dollars in contracts a year.

That kind of cash flow can more than double a public employee's salary, state records show. It worked that way for Pinellas County assistant principal Debbie Colson, who founded her company, All About Achievement, in 2006.

In 2010, the firm won $700,000 in contracts from Florida school districts, including about $350,000 from Pinellas County. State records show the company paid its officers about $250,000 in salary and benefits that year. In corporate filings, the company named three officers, including Colson.

Evenly split, that would have been enough to pay each person $83,000 in 2010. Colson earned $53,000 from her district position.

Payouts like that have brought Florida educators flocking to the subsidized tutoring business.

To identify them, the Times compared owners of more than 450 tutoring companies with a list of the state's licensed educators.

The analysis found that a bare minimum of 100 educators or close family members have gone into business for themselves.

• Bettye Woodson's company contracted with Miami-Dade schools for at least five years while her husband was the district's deputy superintendent. District officials were aware of the arrangement, and Woodson said she enjoyed no special favor because of her husband's position. Her company earned more than $83,000 in 2011-12 alone. "There were many people in Miami-Dade and other districts who made millions. And I was not of that select group," she said. "It was a lucrative kind of thing. Unfortunately I couldn't make that kind of money. Some people are set for life."

• Shandris Hinson, a Volusia County elementary school teacher, started a company that has collected more than $280,000 tutoring in Volusia schools, including in her own.

• Orange County teachers Martha McCormick-Watson and Cordia Scott formed MMWCB Tutoring Services in 2004, and their company went on to win more than $160,000 in 2011-12.

• Rosa Roman, a Broward County reading teacher, started a company that tutored in her school and others, collecting more than $119,000 from the district in 2011-12. She said the business never tutored students from her own classroom, and her son said he acted as the face of the business in Broward to avoid the appearance of a conflict.

Approached by the Times, many educators who earned government tutoring dollars were hesitant to discuss their contracting.

During an initial, hourlong interview, Le Clear pretended to be somebody else. Colson falsely claimed she no longer was president of her firm. Others, including Hinson, did not respond to repeated requests for an interview.

Those who talked more openly defended their side businesses. Many said they became contractors only after witnessing substandard tutoring by other companies.

McCormick-Watson said neither she nor Scott profited from their company. She said they never tutored students from their own classrooms. She added that few in her district even knew the pair operated a side business.

"My current principal had never known. They were two separate lives," McCormick-Watson said. "You actually brought us to light, but we were hidden in the woodwork. And we were definitely not the only teachers that had a tutoring company, but you definitely brought us out of the shadows."

A booming business

It seemed like everyone in Alachua County knew that Beth Le Clear had launched a tutoring business. But what happened after she told her bosses she had sold the firm is less widely known.

After meeting in 2007 with the Alachua County schools attorney and an assistant superintendent — who both have since retired — Le Clear filed paperwork deleting her name from state incorporation records. In her place she listed her sister as president and owner of the firm, Twister Tutors.

But at Terwilliger Elementary — home of the Twisters — it was widely known that the principal was still involved.

During the subsidized tutoring enrollment period, Le Clear would urge her students to sign up as a way of turning their grades around.

At district sign-up events, company representatives would call out to parents that the firm was owned by a principal, said John Abbitt, co-owner of a competing company called ABC Appletree. Parents flocked to enroll at the Twister table, Abbitt said.

When the school year started, the company hired Le Clear's teachers as tutors. It also leased classroom space from Terwilliger. Le Clear, as principal, set the rates and signed off on the rental agreements.

Records show she charged Twister Tutors about $27 an hour, the same amount paid by other companies that leased from the school.

When Le Clear got her next assignment, as head of the F-rated M.K. Rawlings Elementary in 2009, she brought Twister Tutors with her.

After she took over as principal, the company started renting space from Rawlings, too, records show.

Soon, students from both schools were signing up with Twister Tutors. Billing records for the 2011-12 term show that 70 percent of the children enrolled with the company attended one of the two schools.

The numbers helped Twister Tutors earn about $150,000 from Alachua County that year, more than any other tutoring vendor doing business with the district.

Principal's hidden role

Though Le Clear's sister, Jill Viveiros, was listed as owner of Twister Tutors, public records offer scant evidence that she handled many aspects of the Florida business.

Le Clear, not Viveiros, controlled company bank accounts, state application records show.

And though Viveiros' signature appears in state provider applications and district classroom lease agreements — records that Le Clear also signed as principal — it looks nothing like Viveiros' signature on publicly filed loan documents for a home in Mooresville, N.C.

Viveiros lives in North Carolina, but a state directory of tutoring vendors lists an address for her in Gainesville. That listing leads to a UPS mail drop about 4 miles from Le Clear's house.

The phone number listed in the directory for Viveiros is registered to Le Clear, and Le Clear answered when a Times reporter called in March, asking for Viveiros.

Le Clear said Viveiros wasn't in just then, but she offered to answer questions. She didn't identify herself as she explained how the company began. The whole thing started with a principal, she said.

Then she started talking about herself in the third person.

"She's a turnaround principal," Le Clear said of herself. "She's always working in low-income schools. She was principal of a high-poverty elementary, and her experience was not good with (tutoring) companies.

"Somebody at the district said anybody could own a company. 'You should start your own company.' But she didn't want to do that, so she talked to Jill about it."

When confronted about her identity, Le Clear acknowledged who she was. "I'm just very cautious," she said, and declined to say more.

In a second interview two months later, Le Clear said her firm enjoyed no special advantages because of her position in the district. She said district and state officials had reviewed complaints about her and "nothing was ever founded, because I always played fair."

She acknowledged that she had an ownership stake in the company. But she said she never paid herself a salary or made any money from the business.

Reached in June, Alachua County schools superintendent Dan Boyd defended Le Clear, whom he described as dedicated and talented. He said he and other top district officials were aware of her business arrangement and that, in their eyes, there was nothing wrong with it. He said it wasn't a secret.

"That would imply a shady personality who's trying to hide something," he said, "and this woman, it's not in her nature."

How we did the research

To identify public school employees who also run tutoring companies, the Tampa Bay Times used corporate filings from state-approved tutoring vendors to build a list of more than 1,100 company operators.

Using a computer analysis, the Times compared that list to a database of more than 200,000 certified Florida educators.

The newspaper flagged similar names and exact matches. It also flagged teachers who share an uncommon last name — based on U.S. Census Bureau data — with tutoring operators.

Matching on last name alone allowed the Times to identify company owners who might be related to public school employees.

The Times searched specifically for husband-wife operations by assigning probable genders to first names, then isolating cases in which tutoring contractors and educators in the same county shared a last name and had opposite genders.

The various matching formulas identified more than 1,000 strong possible matches. A reporter examined each potential match and found about 100 cases statewide.

There are limits to the methodology. Relatives with different last names were not captured, nor were relatives with the most common last names, such as Smith.

As a result, the 100 matches discovered by the Times should be considered a minimum number.

456 Number of state-approved tutoring companies.

83 Companies run by certified educators.

30 Educators who run companies that contract with their own districts.

$8.5M Amount earned by companies connected to educators.

$4M Amount earned by educator-run companies that contract with the educator's district.

Numbers from the 2011-12 school year, the most recent period analyzed by the Times.

Educators running government-funded tutoring companies create concern over conflicts 08/09/13 [Last modified: Saturday, August 10, 2013 7:05pm]
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