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Questions Remain About No-Bid Consulting Contracts

by | May 3, 2012 11:36am () Comments | Commenting has expired | Share
Posted to: Education

Since becoming Connecticut’s Commissioner of Education this past fall, Stefan Pryor has brought in highly paid consultants with ties to the charter school community to help craft Gov. Dannel P. Malloy’s sweeping education reform package.

Last week, allegations surfaced that these contracts were hidden from normal bidding procedures by the use of the State Education Resource Center (SERC), a quasi-public agency that is primarily funded by the Department of Education.

A whistleblower complaint  filed last Friday by Tom Swan of the Connecticut Citizen Action Group alleges that the contracts were performed through SERC in order to circumvent the state’s contracting laws.

Pryor initially told the Connecticut Post that operating the contracts through SERC was legal because the state agency was a nonprofit and therefore didn’t have to follow state bidding procedures. Swan’s complaint, however, claims that SERC is not registered as a 501(c)(3), and has not filed the requisite reports with the Attorney General’s office. A search for SERC on the site nonprofit database GuideStar.org returned no results, and the center is not registered as a charity with the Department of Consumer Protection.

Jim Polites, an Education Department spokesperson, said that SERC qualifies as a nonprofit because it operates under Rensselaer Hartford Graduate Center Inc., a job-training facility in Hartford. The SERC website lists Rensselaer as its “fiscal agent.”

The complaint questions the status of SERC as a nonprofit and refers to a previous legislative attempt in 2011 to “establish” SERC as a 501(c)(3) — the provision never became law.

Swan’s complaint, which the Malloy administration has dismissed as “reckless,” calls for the contracts to be terminated and the contractors banned from working in Connecticut for five years.

“What it is starting to look like is that this administration is trying to use SERC in a similar manner to how the Rowland administration used [the Connecticut Resources Recovery Authority],” Swan said.

The Malloy administration had no comment beyond what it told the Connecticut Post last Friday, when the governor’s chief legal counsel said Swan’s allegation was “reckless” and “devoid of any evidence.”


According to emails  obtained by Swan under the Freedom of Information Act, the biggest of the contracts — $195,000 — was for consultant Jonathan Gyurko, senior vice president of Leeds Equity, an investment group that specializes in the “knowledge industry,” according to its website.

Leeds Equity was paid $195,000 for just under four months of work, specifically to “assist in the development of a legislative strategy and package.” The Leeds contract also shows that the firm “will assist in the analysis of collective bargaining agreements, within and outside of Connecticut, and produce recommendations on how innovative collective bargaining arrangements” can help the commissioner turn around failing schools.

The emails show that money for the contract was initially budgeted through the Council of Chief State School Operators, which is a national association of education commissioners of which Pryor is a member. But on Jan. 19, William Cox of DSA Capital emailed representatives of Leeds Equity to tell them that the contract would instead go through SERC, though the emails didn’t explain why.

Asked about the decision to change funding sources, Polites offered the following in an email Wednesday:

“In Connecticut, to assist Commissioner Pryor’s transition following his appointment, CCSSO has provided expert assistance to the state Department of Education (SDE) on topics such as organizational design and the departmental transition. CCSSO was open to engaging others regarding additional subjects. However, SERC was specifically created by the General Assembly to assist the department in the provision of programs and activities that promote educational equity and excellence. The State Education Resource Center (SERC) is ideally situated to work with SDE on ongoing priorities.”

As of Wednesday afternoon, Cox did not respond to phone calls seeking comment, and the DSA Capital website showed a screen saying that the site is “under construction.”

Last year, Cox was paid $60,000 by the state of New Jersey to assemble a team of consultants to assist in reform efforts there. The contract with Connecticut was not part of Swan’s Freedom of Information complaint.

Peter Lyons, Leeds Equity’s Chief Financial Officer, referred press inquiries to the Department of Education.

Sharon Palmer, president of AFT Connecticut, said that she thought it was haste in education reform efforts that led to the contracts being signed.

“He wanted to get some consultants in right away,” she said, “so he rammed in some no-bid contracts to get off and running quickly.”

Pryor, one of Malloy’s last appointments, wasn’t hired until September 2011, just months before the start of the so-called Education Session.

“We certainly would not like to have that practice continue, particularly as it goes to [the education reform bill],” Palmer said.

Asked if she expects anything to come of the whistleblower complaint, she said, “I hope so,” but stopped short of agreeing with the call for the contractors to be banned from doing business in the state for five years.

A spokesperson for SERC declined to comment for this article and referred all questions to the Department of Education.

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(15) Archived Comments

posted by: CONconn | May 3, 2012  11:59am

This man believes he is above the law. This behavior should not be tolerated at the capital. Beyond the cronies that were awarded no bid contracts, Pryor hired his buddies to work for the SDE at pay increases of $30,000+ over what they were originally making in their states of origin. We have a deficit, but Pryor (illegally?) spends, spends, spends in the name of “education reform”... all so he can open the door to more spending, but this time on the same private companies he founded before becoming the comissioner!

Conflict of interest? ABSOLUTELY!

posted by: Noteworthy | May 3, 2012  12:33pm

The Charter Chums got caught with their hands in the cookie jar. This was intentional deception with a clear desire to restrict to whom the contract was awarded in order to get the desired outcome Pryor et all wanted. “Reckless and devoid of any evidence” - really? I think not or perhaps Malloy’s counsel was speaking of Pryor and Malloy. Oops. Better call in Oh No Ocho.

posted by: Linda12 | May 3, 2012  2:22pm

SB = Stefan’s buddies. Who knew?

New positions created at the SDE too and hefty salaries…

Imagine all the teachers we could put in classrooms to work with our neediest students when you add up the consultants fees and these salaries

posted by: brutus2011 | May 3, 2012  4:34pm


Now we are finding out about Stefan Pryor finagling no-bid contracts in possible violation of state law and/or ethics.

Should we be surprised that Malloy’s appointed State Commissioner of Education isn’t an educator but is a founder of private charter schools?

This effort by Malloy and Pryor on behalf of privatizing public schools couldn’t be any more clear on its face: breaching the firewall between public funds and private profit in the most vulnerable sector—education or educating our youngest and most vulnerable citizens—the urban poor.

Yes, this is about our, no my, kids. And I find the privateer’s feigned caring about my kids to be most offensive.

I would rather all the privateers just go on their way and continue to find profits wherever they can.

Only please do not try to exploit the rising productivity of teachers and profit off of our children.

posted by: state_employee | May 3, 2012  5:20pm

Stefan Pryor should step down.

posted by: Speak up | May 3, 2012  5:24pm

Besides creating jobs for Yale friends and looking for consultants to help consultants write SB 24, does anyone know what Pryor does all day?

I read in a Ken Dixon article that he said SB24 wasn’t privatization.

These are his words: “it is reorganization through mechanisms and policy proposals.”

What does that mean exactly?

Can anyone decipher the meaning or is it just lawerly bull?

posted by: TerryW | May 3, 2012  5:30pm

Reckless? Reckless?

Actually, I find Pryor and Malloy to be reckless.

They tried to ram this down everyone’s throats in a short legislative session hoping noone would take the time read, analyze and understand it. They underestimated the elected officials and they definitely underestimated the teachers.

I give Pryor three years TOPS!

posted by: Educated | May 3, 2012  6:20pm

It’s time to have some standards in place regarding Education Commissioners.  I found the benign hand-wringing of McQuillan pretty insulting, but Pryor is positively offensive.  He and his rheeforming cronies will stoop at nothing in their quest to defraud poor districts of their education dollars.  Go back to your dubious development activities, Pryor.

posted by: jonpelto | May 3, 2012  7:00pm

Here is a question.  Who paid Cox and DSA Capital the reported $60,000 to advise Pryor on which consultants to hire for Connecticut?  Considering Cox helped recruit, select and negotiate contracts costing CT taxpayers $250,000 or more – don’t people have a right to know who picked up Cox’s tab.  In New Jersey DSA Capital appear to have played a role in selecting a company called Wireless Generation for a $500,000 contract to help develop New Jersey’s failed Race to the Top application AND THEN DSA Capital ended up a subcontractor to Wireless Generation on that very contract.  The evidence is that at least one of the two companies that Cox helped recruit have already hired sub-contractors with ties to Commissioner Pryor when he was in New Jersey.… what more is there that hasn’t been revealed?

posted by: mbracksieck | May 3, 2012  8:50pm

“Leeds Equity, an investment group that specializes in the “knowledge industry,” according to its website.”

Where’s Dacia Toll’s husband telling us that the rheeformers (thanks “Educated” for that one) are only concerned about the kids?  Are the kids’ best interests served by teachers or by the “knowledge industry”?  I guess, if you have “knowledge” in your description you must really know things?

posted by: mbracksieck | May 3, 2012  8:53pm

I like this one too: “The State Education Resource Center (SERC) is ideally situated to work with SDE on ongoing priorities.”  No kidding.  Especially when those priorities seem to be giving as much public money to Pryor’s prior acquaintances as it can without having to go through all the trouble of public oversight in order to dismantle public schools.

posted by: Linda12 | May 3, 2012  9:39pm

Additional interesting information in reference to connections or as Malloy refers to it:  those alliances and relationships:

This paragraph is essential:

When Pryor co-founded Amistad Academy, the acclaimed New Haven charter school, Klaus was its first treasurer and a board member for several years.
He later became a co-founder of Achievement First, and married Dacia Toll, its current co-CEO and president.
He also was a founding advisory member of ConnCAN, which he says was formed as an advocacy organization to promote quality education in all public schools.

posted by: CONconn | May 4, 2012  6:00am

He understands it’s all about the children. So he became a banker.

posted by: Educated | May 4, 2012  6:42pm

Mbracksieck, I can’t take credit for “rheeformers” nor for “rheevisions” which is what charter school and privatizing educational leaders do when they want to make absolutely sure that students fill in the bubbles correctly.  Just a little erasing and rheevising, as was done when Michelle Rhee was school chancellor.

posted by: champ358 | May 5, 2012  1:47pm

Pryor is being reckless in pursuit of his charter/privatization goals. Charters were not established to allow Yalies to run roughshod over state and local education laws and policies.

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