Did people close to Clayton Wilcox benefit from CMS deals he helped broker?

Former Charlotte-Mecklenburg Schools Superintendent Clayton Wilcox, who resigned under pressure this summer, pushed for the district to buy digital learning technology from a company that employed his son and a longtime business associate.

Wilcox’s interactions with Fuel Education and other companies doing business with CMS led a senior administrator to report his concerns in a February 2018 letter to school board members, which the Observer obtained.

Government watchdogs and those who study ethics law said the agreement CMS signed with Fuel Education raises questions about whether people with ties to Wilcox inappropriately benefited financially from his public position.

It’s not clear that the deal was tied to Wilcox’s resignation, but the whistleblower letter alleges it was part of a disturbing pattern of behavior.

“Dr. Wilcox’s relationship with vendors is of great concern to me in terms of jeopardizing the credibility of the district,” says the letter from Brian Schultz, who was the district’s chief academic officer at the time. “While I think that being on a first name basis with vendors can be beneficial, I am worried that relationships with vendors can influence decisions and blur judgment.”

Schultz left CMS in June 2018 with one year remaining on his contract to become chief academic officer for Guilford County Schools. He is now an assistant superintendent of auxiliary services for Cabarrus County Schools. Schultz refused comment for this story and would not provide reporters a copy of the letter.

Wilcox’s employment contract with CMS, which paid him $307,000 a year in salary, prohibited him, his spouse, children and immediate relatives from activity that “creates either an actual or potential conflict of interest.”

Charlotte-Mecklenburg Board of Education member Rhonda Cheek said she and school board chair Mary McCray read the complaint letter and asked the district’s legal department to review the allegations.

An attorney for the district determined that Wilcox’s interactions and ties with Fuel Education did not represent a direct conflict of interest, Cheek said. The lawyer also concluded there were no grounds to suspend Wilcox, she said.

McCray refused comment for this story via text message on Monday, saying she was not feeling well and unavailable to answer questions.

Education technology companies have aggressively marketed digital learning to CMS and other school districts, prompting concerns about potential conflicts of interest and criticism that little rigorous research exists showing the products lift student performance even though they cost taxpayers millions of dollars.

The Observer reviewed hundreds of pages of school district documents obtained through public records requests, including purchase orders, expense reports and calendars. Reporters also interviewed a dozen current and former CMS officials and others who have worked with Wilcox in another school district.

The Observer found:

Less than a month after taking over as superintendent in 2017, Wilcox met with executives from Fuel Education, where his son, Tanner, worked as a national account manager.

In early 2018, CMS agreed to pay the company about $135,000 for one year of licensing and teacher training for a digital language tool, though the district already had a contract with another vendor for similar services, according to copies of purchase orders.

Since 2017, Clayton Wilcox has been paid as much as $8,000 by the Education Research & Development Institute, a for-profit business that helps product vendors get face time with school superintendents, according to an executive from the company. Wilcox involved himself in talks between CMS and companies that participate in that organization’s conferences.

ERDI said that in the past two years Wilcox has attended four of its conferences, where companies show their products and solicit feedback from school leaders. At least three of those came after Wilcox joined CMS.

Wilcox served on advisory panels as a research faculty member at conferences, ERDI said. The company did not provide the specific amount of money it paid to Wilcox, but said that panel members typically receive $2,000 per conference.

ERDI also pays for superintendents’ travel to and lodging at conferences. In recent years, the arrangement has come under scrutiny from law enforcement in several districts, including Baltimore and Beaufort County, S.C.

Fuel Education is a subsidiary of K12 Inc., a company listed among past and present participants in ERDI.

In February, CMS said it had reached an agreement with another company that has taken part in ERDI. ThinkCERCA, a Chicago-based company that produces literacy software, expanded its pilot project with the district to all high schools.

CMS agreed to the deal, which will pay ThinkCERCA nearly $2 million, according to copies of the contracts. CMS officials submitted forms waiving a competitive bid process for those contracts.

Before the deal was signed in July 2018, Wilcox had three meetings or phone calls scheduled with Eileen Murphy, the founder of ThinkCERCA, according to his calendar.

Wilcox and Murphy were scheduled to talk four times in 2019, the calendar says.

Two researchers who study technology and commercialism in education said staffers with expertise in reading, math or other subjects should vet technology and review evidence of whether the products lead to better student outcomes.

Superintendents often lack advanced knowledge needed to determine whether a product is the right choice, said John Pane, a senior scientist at the Rand Corp., a nonprofit policy think tank.

Few digital learning products are tested in a rigorous, scientific setting before they are brought to market, Pane said.

According to Wilcox’s calendar and multiple CMS officials, he met with vendor executives and sales representatives repeatedly to talk about CMS buying their products.

Wilcox’s interactions with potential vendors represented a departure from a procurement process meant to prevent abuses and ensure taxpayer money is spent wisely, said two former CMS administrators who were involved in the district’s procurement decisions.

They requested anonymity to speak with reporters, saying they feared reprisals from CMS that could harm their careers.

In CMS, vendors typically work with central office administrators during the initial phases of the procurement process, according to a brochure CMS produces for suppliers and vendors and interviews with two former administrators who had been involved in purchasing decisions before leaving the district.

CMS superintendents in most cases make the final decision near the end of the process after a team of administrators has gathered information and made a recommendation, the former administrators said.

As Wilcox set aside time to meet with vendors, some senior district administrators and community partners were agitated that Wilcox did not make time to meet with them about issues they considered pressing or did not respond to phone calls and texts, according to the 2018 complaint letter and interviews with some current and former CMS officials.

Wilcox was suspended in July and then resigned only months after receiving a $37,000 a year pay raise. He has never publicly explained his departure and school board members said they cannot comment, citing state personnel laws.

Wilcox did not respond to calls and a text message seeking comment for this story.

School board member Sean Strain said that the board discussed the conflict-of-interest allegations involving Wilcox and his son, but said he could not elaborate.

Strain said the issue was not relevant to Wilcox’s departure from the district.

Other school board members refused comment, did not return phone calls or referred questions to McCray or Cheek.

CMS oversight questioned

CMS policy says a possible conflict of interest occurs when an official is in position to influence a decision that can benefit themselves, a relative or associate.

Weeks after taking over as superintendent, Wilcox scheduled a meeting for July 26, 2017, with executives from Fuel Education, according to records and two people with direct knowledge about the meeting.

At the time, Wilcox’s son, Tanner, worked for the company as a national account manager, according to Tanner Wilcox’s LinkedIn profile.

K12, the parent company of Fuel Education, also employed Don Kidd, who was vice president of strategic sales for the company. Clayton Wilcox served on the advisory board of another company where Kidd was president.

Kidd attended the meeting between CMS officials and Fuel Education, according to the former CMS administrators.

In his complaint letter, Schultz said he learned that Wilcox had previously done business with the company and knew the executives extremely well. The letter does not say how he obtained the information.

Schultz was confused by the meeting because the district already used a similar product, according to his complaint letter.

CMS licensed the Fuel Education product to allow after-school students “to be able to access reading and math supplementary resources that CMS already licenses,” according to the district’s purchase order.

At the end of the meeting, the letter says, Wilcox said that his son worked for Fuel Education, but said his son would not benefit personally if CMS signed an agreement with the company.

“I was shocked to say the least, that he would put himself, or the district, in the position to have to explain this entanglement of friends, family and business,” Schultz wrote.

During the first half of 2018, records show, CMS and Fuel Education signed the deal that brought a digital language learning product to the district’s after school program. The one-year agreement ended earlier this year, records show.

Ethics experts said what happened raises red flags.

“It certainly sounds like this warrants more investigation,” said Norma Houston, a professor at the UNC School of Government who teaches government ethics.

“I use a smell test and this definitely smells,” said Jane Pinsky, director of the North Carolina Coalition For Lobbying and Government Reform.

Open-government advocates said the deal should raise questions about the school board’s oversight of Wilcox. Cheek said the board fulfilled its obligations.

Questions prior to CMS

Wilcox faced questions about his relationship with vendors years before he came to CMS.

In May 2014, Kidd was president of LTS Education Systems, which sold digital game-based learning programs to school districts. Wilcox was working as superintendent of Washington County Public Schools in Maryland when LTS named him to its advisory board.

Five months later, Wilcox helped expand the use of LTS in Washington County Public Schools. The district agreed to pay the company $231,000 for a one-year license for elementary schools.

Wilcox said he received no compensation for his work at LTS, according to an October 2014 report from the Herald-Mail in Hagerstown, Md.

In the summer of 2015, Tanner Wilcox worked at LTS as an intern, according to his LinkedIn profile.

In the months before Wilcox joined CMS, the Observer editorial board reported that he allowed athletes in Washington County Public Schools to participate in a discredited company-sponsored University of Maryland chocolate milk study without letting the athletes, their parents or school board members know what was happening.

Wilcox denied the school district agreed to participate in the study, but documents contradict his statements, according to the report from December 2016.

Kidd now works for Achieve3000, a software company that makes a literacy platform, as its vice president of strategic partnerships, according to his profile on LinkedIn.

Tanner Wilcox joined Achieve3000 in November 2018.

Through a spokeswoman for Achieve3000, Kidd and Tanner Wilcox refused comment.

CMS was already using Achieve3000 when Kidd and Tanner Wilcox came to the company. Records show the district spent at least $146,000 on the company’s software from September 2018 to August 2019.

CMS policy says employees should disclose any possible conflicts of interest to the school board chair, superintendent or their immediate supervisor.

McCray, the school board chair, wouldn’t comment, and it’s unclear whether Wilcox disclosed connections with Fuel Education or Achieve3000 to her.

Corporate courting

Fuel Education is one of dozens of education vendors with ties to the Education Research & Development Institute.

ERDI typically pays superintendents to attend industry-funded conferences and offer feedback about products, said David Sundstrom, chief compliance office for the Florida-based company.

Wilcox’s relationship with ERDI dates to at least 2004, when he served as the superintendent of Pinellas County Schools in Florida. His employment contract with that district prohibited him from working as a paid consultant without the written approval of the board.

However, the contract allowed him four days a year to attend ERDI events, to be taken on personal leave or vacation days.

Under his CMS contract, Wilcox was not allowed to accept or engage in outside employment as an employee, independent contractor or otherwise for profit unless the school board chair granted permission.

Wilcox served as a “faculty member” for ERDI at two conferences in 2017 and two more in 2018, Sundstrom said. As part of his role, Wilcox sat on panels and offered comment to vendors.

Wilcox had one 2018 payment from ERDI conveyed as a donation to the Charlotte-Mecklenburg Schools Foundation, a nonprofit that raises money to help the district, Sundstrom said in an email.

The payments for three other conferences in 2017 and 2018 were issued to Wilcox personally, Sundstrom said. He said he did not have records indicating whether Wilcox also donated that money to charity or kept it himself.

It was not clear whether McCray approved Wilcox’s payments from ERDI.

Critics say the relationships between superintendents and ERDI represent a conflict of interest since vendors often seek to sell the technology to districts.

Alex Molnar, a University of Colorado professor who studies commercialism in education, said companies sometimes pay superintendents for consulting work and put on conferences that are effectively “wonderful vacations that are called something else.”

The FBI has subpoenaed records from the Beaufort County, S.C. school district, including information about its connections to ERDI and more than 30 other companies, according to a December 2018 report from the Island Packet.

In April 2018, a former superintendent of Baltimore County Public Schools, Dallas Dance, was sentenced to six months in jail after he pleaded guilty to four counts of perjury for failing to disclose income for his outside consulting and speaking engagements, including payments from ERDI, according to The Baltimore Sun.

ERDI’s Sundstrom said critics have wrongly accused ERDI of trying to influence superintendents. The business advocates for no vendors or products, he said.

Sundstrom acknowledged that the payments superintendents received have created a perception issue, but he said ERDI simply tries to compensate officials for their time and effort.

Starting in January, he said, ERDI will no longer pay superintendents directly. Instead, the payment will go to a charity chosen by the superintendent, Sundstrom said.

“We don’t want the appearance of impropriety,” Sundstrom said.

Houston, the UNC School of Government professor, said there is no case law in North Carolina that can help determine whether payments from ERDI to superintendents or other school officials are allowable under the law or represent an illegal gift or favor.

“There is a lot of gray area with ERDI,” said Houston, adding that all vendors at ERDI conferences represent a potential future business partner. “ERDI is not a contractor, but is it really just a pass through? You can’t just do an end run around state statute.”

CMS operations suffered?

Wilcox took time to attend ERDI and other technology conferences, according to his travel records. At the same time, some high-ranking district officials were frustrated by his schedule, according to Schultz’s letter.

CMS has about 147,000 students — making it one of the largest school systems in the nation — and a complex busing system that moves about 100,000 students daily.

Wilcox’s lack of availability hindered “the timeliness, accuracy and clarity of school delays/cancellations, make-up dates and early notification,” says the complaint letter from Schultz, the former CMS administrator.

“Dr. Wilcox has missed multiple district and community engagement meetings such as the first summer graduation, community board meetings, CMS Foundation meetings, cabinet meetings, etc. and has further added to the lack of trust in Dr. Wilcox’s leadership.”


Why did we report this story?

The Observer began reporting this story in July, after then-Charlotte-Mecklenburg Schools Superintendent Clayton Wilcox resigned without explanation after he was suspended with pay. Neither Wilcox nor the school board has ever explained to the public what led to his departure.

After a reader called with a tip to examine the company that employed Wilcox’s son, we began requesting records of business transactions between the district and the company.

Interviews with a dozen current and former CMS officials, as well as those who had worked with Wilcox in another district, revealed how Wilcox circumvented a procurement process designed to prevent conflicts of interest. We also reviewed hundreds of pages of calendars, travel records, and purchases to understand the superintendent’s business ties.