1:57pm

Thu October 13, 2011
The Commonwealth

Free Trips Raise Ethical Concerns

Kentucky Education Commissioner Terry Holliday says international trips paid for by an education foundation did not lead to the decision to contract with its business arm. The New York Times reported several states entered into agreements with Pearson after taking trips on its foundation’s dime and this raises thical questions, said Times reporter Mike Winerip.

Pearson’s bid in Kentucky was $2 million more than the lowest bidder, but KDE officials said the decision to contract with Pearson was based on its value, not on its price. Winerip contacted tax experts to help explain the relationship between a business and its foundation.

“I then started calling tax people to get them to explain to me where the line was, where the wall had to be between a foundation and the for-profit arm of Pearson and Pearson Foundation,” he said.

The foundation’s tax forms omitted payments for travel and entertainment expenses to any government officials and the non-profit could be in violation of federal tax-code if it pushes any business interests, said Winerip.

“To me the burden of making the right decision isn’t so much on Pearson. It’s on these state commissioners. They’re the ones that are publicly funded, who are having these public contracts and who have the option. Pearson’s not making them take the trips, they’re doing that on their own,” he said.

Holliday provided a statement that said there were no ethical violations in his trips and his focus was to learn how other countries address similar educational and economic challenges.

Further, KDE’s “legal staff and procurement officials believe that this (KDE) agency participated in the procurement process related to the assessment contract appropriately and with fidelity,” officials wrote to WFPL.

Winerip said he thinks it’ll be the last time commissioners will accept similar free trips.