Wednesday, January 4, 2012

Starr and Weast discovered to be in business venture together

State agency documents reveal business relationship between current and former superintendents

Documents obtained from a Maryland state tax agency reveal that MCPS Superintendent Joshua Starr oversees a company that funnels contracts to a company owned by former Superintendent Jerry Weast.

It's no secret that Starr is on the Board of Advisors of the Montgomery County Business Roundtable for Education, commonly known as MCBRE.  In spite of its name, MCBRE is an independent business venture and is not owned by Montgomery County government or Montgomery County Public Schools.

Earlier this year, Weast formed a private consulting company, the Partnership for Deliberate Excellence.
According to the website run by another company, the 114th Partnership, a "joint effort" is underway "between the Partnership for Deliberate Excellence, founded by the nationally renowned Dr. Jerry Weast, and the 114th Partnership."

The website run by the 114th Partnership goes on to say, "The 114th Partnership is a national nonprofit program based on the success of the Montgomery County Business Roundtable for Education (MCBRE)." However, the 114th Partnership website does not mention any financial relationship between MCBRE and the 114th Partnership.

Click on image for larger view
But according to documents filed with the Maryland Department of Assessments and Taxation, the 114th Partnership is wholly owned by MCBRE.

Are you confused?  Is it difficult to see the business relationship between Starr and Weast?  Don't worry -- you are supposed to be confused -- as that's part of the motivation for setting up shell companies.


So, let's try to simplify this. 

Superintendent Starr is on the Board of the MCBRE,
which owns the 114th Partnership Company,
which funnels business to the Partnership for Deliberate Excellence,
which is owned by former Superintendent Weast,
and the revenue ends up in Weast's hands.

30 comments:

  1. I smell a RAT again!

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  2. What exactly IS the business of MCBRE and the PDE?

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  3. Heidi,

    Dr. Weast's "Partnership for Deliberate Excellence" and the MCBRE are both education consulting businesses. From a taxation standpoint, the MCBRE is organized as a "nonprofit". Don't be mislead by the term "nonprofit", though. It simply means that individuals who make contributions to the MCBRE can deduct those contributions when they file their income taxes.

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  4. So what? Weast is allowed to make a living. I don't see how this directly affects MCPS.

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  5. Louis, thanks for doing the digging and for posting this on the blog. Does Starr get his 'taste' as a board member? How much money is he raking in from this taxpayer-funded sweet deal? Gee whiz, its Montgomery County. One party, remember. And now we see who's partying.

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  6. THank you for this information. Keep up the good work!

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  7. I checked out the MCBRE IRS forms. The members of the board of directors are not paid, at least as of 2009 (the latest filing published by the IRS). Typically board members on not-for-profit organizations are expected to come up with money from their own pockets or from their organizations, not the other way around.

    Starr, by the way, is NOT a member of the board of directors of MCBRE, he is a member of the advisory board, which is a different thing. He's not an officer of MCBRE either.

    There's no evidence on the MCPS budget site that a payment (of more than $25000 at least) went to the MCBRE from MCPS. The payments from MCBRE that I saw in the 2009 tax return were primarily program expenses (grants to programs, about 50% of the budget) and some operational expenses (80K salary for the exec director). 503(c) have to disclose any transactions with organizations related to directors & officers; there were two (one to Marriott for hosting a fundraising gala, one to Wells Fargo for banking services). In '09 at least they rolled a lot of their donations into the bank; we're talking about $400K or so.

    There's no evidence that I see that MCBRE is an "educational consulting business." They make grants. They pretend to be important. They've decided to "go national" with this 114th idea and are using the MCBRE relationships to help them do it. Pathetic more than sleazy so far.

    Slinging mud at Starr is unfair I think. Your headline is basically misleading.

    Not to say there isn't a rat: namely, the presence of Pearson as a sponsor of both organizations, partnering with Weast's rollout of his consulting business (that's a business) right after the Pearson contract gets signed when Weast was superintendent of MCPS. The revolving door certainly raises concerns.

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  8. Gary, Do you have x-ray vision? Because Starr just came to MCPS in 2011. Have you already read the 2011 tax returns? Don't think so. Looking at old documents that pre-date Starr makes no sense.

    No evidence that MCPS is supporting MCBRE? Where you been? MCBRE was started with over $2 MILLION in MCPS Operating Budget funds. That's our tax dollars that bank rolled this side business when Weast arrived.

    Here's a refresher for readers:

    "Read further into the materials and you will note that although the businesses "founded" MCBRE, our own Superintendent of Schools, Dr. Jerry Weast, was really the driving force behind the organization. The start up ran into funding complications and was supported entirely by MCPS, operating as an affiliate within the MCPS Department of Family and Community Partnerships."

    http://parentscoalitionmc.blogspot.com/2009/07/mcbre-mystery-solved.html

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  9. "Beginning with the 2004 -2005 school year, MCPS eliminated its support of MCBRE, forcing the organization to become disentangled from MCPS."

    No directors (or advisors) have been paid by MCBRE recently. Why do we expect that Starr is getting paid? The most likely conclusion is that he is not.

    Starr may be in the process of getting sucked into the Weast-style revolving-door business, but that's a different story.

    This story led one commenter to conclude that Starr was on the take and that taxpayers were still funding this, both of which appear to be false.

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  10. Sounds like a "six degrees of Kevin Bacon" connection to me, but conspiracy theory away if you must.

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  11. @11:18 - How is the current superintendent sitting on the Board of the organization that OWNS the company that is promoting the Weast consulting business any separation at all?

    Please explain?

    Starr's organization owns the company that is promoting Weast.

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  12. Oh, and the phone number for MCBRE and 114th are the same. The office staff are the same. So if you want to pretend like they are two different companies, have fun. The reality is the same office and staff working under 2 different names.

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  13. Gary, MCPS invested $2 million into MCBRE. By converting into a 501(c)(3) several years ago and more recently changing its bylaws to allow it to provide services nationwide, ownership of the corporation has been transferred. However, the major investor in MCBRE (the taxpayers, via MCPS) has not received any reimbursement for their $2 million investment.

    Let me simplify things: A $2 million company that was formerly owned by the taxpayers has been quietly swiped by Weast and associates.

    We don't know if Starr is being paid for his oversight of MCBRE. But we do know that MCPS hired Starr to run the school system, not to indulge in outside business ventures. At the very minimum, now that MCBRE is entirely independent of MCPS, it should be paying MCPS for Starr's time -- or Starr should depart from the Advisory Board of MCBRE.

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  14. MCBRE apparently meets 3 times a year, and that's the board of directors, which is not the advisory board on which Starr sits, which may meet by e-mail if at all. To say that MCBRE is "Starr's" or that he provides "oversight" is just not accurate. Starr is affiliated with MCBRE and sits on the advisory board because you couldn't very well have a roundtable without the head of the public schools, could you? The question is whether that affiliation is appropriate or not. Personally I'm far less concerned about Starr than I am about the Pearson rep.

    Is it accurate to consider MCPS' initial payment in setting up MCBRE an "investment" whereby they receive some kind of equity stake in the business? I am not sure that is an appropriate characterization of the relationship between 501(c)(3) organizations and their donors. (This leaves aside the appropriateness of MCPS' cash funding of the venture in the first place, which is a valid criticism).

    There's funny stuff going on, but the way I would tell it is thus: Jerry Weast makes friends in the local business community in MoCo and in the broader "educational think-tank" community, and convinces MCPS to fund MCBRE to make them all feel like they're doing important things. When Weast needs to build his business post-MCPS, his friends "go national" and help bulid broader relationships for Weast's new business. And somehow, just before Weast exits MCPS, it signs a major contract with one of the founding sponsors of both MCBRE and the national organization. But this is just one piece of a larger puzzle.

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  15. Since when is Pearson a local Montgomery County business? Where exactly is the Pearson headquarters located in Montgomery County?

    And by the way, there were no founding "sponsors". Please. Give the MCPS taxpayers credit where credit is due. Taxpayers set up and funded MCBRE. MCBRE didn't exist without taxpayers paying the bills.

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  16. Gary,

    You said "you couldn't very well have a roundtable without the head of the public schools, could you?"

    The connection between MCPS and MCBRE is history. The MCBRE's focus is no longer MCPS. It's a corporation looking for customers throughout the USA. Go look at the corporate bylaws change that the MCBRE recently filed with the Maryland Department of Assessments and Taxation.

    And why are you concerned about the Pearson rep? He isn't paid by MCPS -- but Starr is.

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  17. The headline breathlessly states: "Starr and Weast discovered to be in business venture together," asserts that MCBRE is a "shell company," and indicts Starr for things that he likely has not done.

    These are misleading statements - the evidence for this is that some commenters were in fact misled into accusing Starr of getting his "taste" of taxpayer money.

    Make no mistake: I have no illusions about what MCBRE or the 114th are about. Indeed, I think that the original post distracts from the substantive criticism that can be made of ventures like this (which has less to do with whether MCPS gets its "investment" back and more to do with the cozy relationships among vendors, these nonprofit organizations and MCPS staff pre- and post-employment).

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  18. This "corporation looking for customers"? Who precisely are the "customers?" All those school districts with extra money? Or do we mean private-sector donors? In which case they are not customers, since they are not the recipients of any services provided. What's the corporation - the one with one (two?) employees and some consultants? There are no "owners" with the right to residual profits (unless you count what happens if it liquidates, in which case any remaining assets go back to ... oh, back to local or state governments for public purposes).

    The 114th/MCBRE could be, among other things, a mechanism of steering donor money (to consultants) and publicity/recognition (to consultants, administrators and ex-administrators), and that comes with its own problems, but that's a different issue from the one you're portraying. Publicity/recognition (and money, for that matter) are not horrible incentives/inducements for people to do things, IF what they do yields beneficial results AND their other relevant decision-making is not distorted by these incentives.

    So one might inquire as to whether the work and programs that these (private) donors have paid for over the past six years has yielded positive, negative, or neutral results for Montgomery County and/or MCPS. And one might inquire as to whether official decisions made by people receiving publicity/recognition and/or money from MCBRE have been distorted by that relationship.

    I honestly don't know about the first question, and I am concerned by the second, at least regarding Weast, largely based on the coalition's reporting to date:

    http://parentscoalitionmc.blogspot.com/2011/12/pearson-weast-timeline.html

    http://parentscoalitionmc.blogspot.com/2011/12/pearson-foundation-grant-sends-weast.html

    http://parentscoalitionmc.blogspot.com/2011/10/exclusive-weast-started-consulting.html

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  19. To be clear, MCPS is funded by taxpayers. The annual budget is over $2B. That amount is more than the entire rest of the county government receives put together, including police, firefighters, emergency responders, social services, DEP, all of it. So, it is not that MCPS made an "initial payment." The taxpayers made that payment. MCPS is not an 'it;' MCPS is a government agency funded by taxpayers. MCPS didn't 'fund' MCBRE. The taxpayers did, at great expense to the rest of our community, of which many members are now in dire straits. And, as a reminder, the MCPS superintendent is a public employee. The superintendent works for the elected BOE. That is who is ultimately legally responsible -- the elected BOE.

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  20. @ Gary: What "donors"?

    You've seen the MCBRE financial information? Who are the donors that you reference. MCBRE has received lots of taxpayer funding and support. MCBRE started out in taxpayer paid for MCPS offices.

    And thanks, but yes we would like our investment in MCBRE (now 114th) back. Also, our $500,000 investment in Wireless Generation. Classrooms and teachers are the legal beneficiary of our education tax dollars, not risky investments in private companies.

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  21. One of the supporters of 114th.org is MCBRE which is supported by Hess Construction. Hess is an MCPS general contractor.
    Go to MCBRE/board.

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  22. UPDATE: The MCBRE Board of Advisors elects the MCBRE Board of Directors. That's according to the in depth Harvard Case Study on MCBRE.

    You can buy the Case Study for $6.95 and learn all about how MCBRE runs and its history:

    http://hbr.org/product/montgomery-county-business-roundtable-for-educatio/an/309105-PDF-ENG?Ntt=+MCBRE

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  23. What is going on with this story - are there any updates?

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  24. Ensuring accountability is vitally important, but there seems to be a positive side to the 114th Partnership that has largely not been discussed. The MCPS contains many of the nation's most successful schools and students and examples of how to make both succeed, particularly where diversity is a challenge. The MCBRE appears to have had an important role to play in this. Spreading that success story and approaches to replicating it, which is what the 114th appears to be about, should be super important to a nation that continues to lag globally in K-12 education (no longer in the top 20). The 114th is taking those lessons nationally - even California's vaunted education system is to be taking it seriously (San Rafael City School System in Marin Country signed up).

    Yes, it is fundamentally important to ensure that everything is indeed on the up and up, which was the genesis of this discussion. The facts indicate that MCPS has created a winning approach that our nation could benefit from, and the 114th is spreading the word on how to replicate the performance elsewhere. This should be good for the nation, if replication is successful, and is also something that MCPS parents and the people of Maryland in general should be proud of while, of course, maintaining accountability in the use of public funds.

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    Replies
    1. Accountability? Please show us where you see that?

      Produce the documents that establish that San Rafael "signed up" for something. Then show us exactly what they signed up for. Documents only, please.

      MCBRE had no role in anything, other than putting out press releases as directed by the Superintendent who sat on their Board.

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    2. And just for the record, MCPS isn't even top in the state of Maryland.

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    3. We have an update on this story.

      In spite of all the fanfare from various school districts, San Rafael City Schools still has not signed a contract with Weast's Deliberate Excellence company. This SRCS deal has gone nowhere.

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    4. Ms. Sartucci, et. al, you are brilliant.

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    5. This post and the research of this information are from Louis Wilen.

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