Oakland Tribune / Argus

School Board President’s Travel Agency Took Payments From School District

Board Probes Conflict Issue: In past 4 years, district has paid $66,379 to board President Eileen McDonald’s Travel Store
NEWARK — School board trustees are questioning the district’s longtime practice of doing business with board President Eileen McDonald’s travel agency, about a week after The Argus began investigating the issue.

In a 2-2 vote, with McDonald abstaining, the board Tuesday failed to pass a normally routine bill warrant that included a $92 check to the Travel Store, an agency owned and operated by McDonald. Passage requires a majority vote.

The board then voted to approve the rest of the items on the warrant, a monthly mass of checks that requires board approval.

Trustees also agreed to seek legal counsel and schedule a workshop on the matter.

During the past four years, the district has paid $66,379 to the Travel Store, according to documents obtained by The Argus. District staff members said attaining information from previous years is difficult because the district changed its financial software four years ago.

McDonald on Tuesday cited several reasons why she feels there is no conflict of interest. For example, she does not profit on the transactions, she said. For years, airlines have been cutting travel-agent commissions, and most airlines eliminated commissions altogether after the Sept. 11, 2001, terrorist attacks. Still, some of her colleagues are questioning whether doing business with McDonald’s agency is appropriate.

“As a matter of record, I have misgivings about this,” Trustee Janice Schaefer said. “This looks as if there is an impropriety.”

Schaefer and Trustee Charlie Mensinger voted against approving the original warrant. Trustees Ray Rodriguez and Nancy Thomas voted for it.

In 1995, attorneys opined that the arrangement “does not appear to be a legal conflict of interest,” but it “may result in the appearance of impropriety.”

However, McDonald — who has served on the board since 1990 — must “abstain from votes regarding the payment of her warrants,” according to the attorneys, Gregory Dannis and Claudia Madrigal. According to district minutes, McDonald has not always abstained.

On Aug. 20, 2002, for instance, all five board members approved a bill warrant that included two checks to the Travel Store totalling $2,417,
according to the minutes.

One check paid for a trip to Santa Barbara, taken by then-high school principal Patty Christa, administrator Mike Pittner and teachers James Proffitt and Tanh Huynh.

The other check paid for a flight from Denver for renowned author and literacy expert Ellin Keene, who came to the district to train literacy
coordinators and teachers, a literacy coordinator said.

California law stipulates that elected officials “shall not be financially interested in any contract made by them in their official capacity.”

Wes Stewart, assistant superintendent of business, said because the district never signed a contract with McDonald, there doesn’t appear to be a legal conflict of interest.

“But I’m not a lawyer,” he added.

Government code 1090 also stipulates that elected officials shall not “be purchasers at any sale or vendors at any purchase made by them in their official capacity.”

In statements of economic interests — forms that elected officials are required to file — McDonald has checked the “no reportable interests” box in both 1999 and 2003. District staff members could not locate other forms.

Officials at the Fair Political Practices Commission would not comment about the specifics of the case.

McDonald could not be reached for comment Wednesday, but an employee at the Travel Store relayed a message from her:

“She didn’t understand the concerns the other (board) members had since there has been a legal opinion on file for years stating that there was no conflict of interest,” she said. “Maybe (board members) who had concerns about conflict of interest could have checked with the superintendent’s office about that or talked to her directly. But no one talked to her about it.”

On Tuesday, Schaefer pulled the item off the consent calendar — a cluster of items passed simultaneously — so the board could discuss the matter. McDonald said at the meeting she intended to pull the item herself.

The board then voted to seek legal counsel and schedule a workshop on the matter. A workshop date has not been set.

“The governmental codes are very complicated, and it is critical that we have constant workshops on the interpretation of those codes,” Superintendent Ken Sherer said Wednesday. “Board members as well as most educators are here to serve kids and we do not have a lot of training in the legal areas. … (Workshops) keep us out of emotional conflict.”

McDonald said she has stopped doing business with the district because the district sometimes does not reimburse her in a timely fashion.

The check in question had to do with a $92 charge to change the name of a ticket holder. McDonald told the board she used a credit card to pay the fee months ago, but was not reimbursed. After she called Stewart to ask where her check was, he agreed to process the check and put it on the bill warrant, he said.

Somehow, though, the check was issued twice. One check was canceled and the other went before the board for authorization Tuesday. McDonald said she was doing a favor for the district, because most travel agencies insist on payment before a trip is taken.

But that did not convince several trustees.

Thomas requested the board seek advice from legal counsel, which staff members have agreed to do. McDonald then stated, “We have a legal document already,” referring to the attorney’s letter.

“My understanding is that’s about eight years’ old,” Thomas said.

“But the law hasn’t changed,” McDonald replied.

Rodriguez later made a motion to approve the original bill warrants, but trustees were hesitant to second it.

When business manager Stewart offered the opinion that the board would be abiding by the spirit of the law so long as McDonald recused herself, Thomas seconded the motion.

“I would never, never vote on an issue because of monetary gain,” McDonald said. “I say that from my heart.”