By Howard Blume | LA Times
February 12, 2010 -- Los Angeles schools Supt. Ramon C. Cortines earned more than $150,000 last year for serving on the board of one of the nation's leading educational publishing companies, a firm with more than $16 million in contracts with the school district over the last five years.
Scholastic Inc. provides the main reading intervention curriculum for the Los Angeles Unified School District, a program that is part of the company's fast-growing educational technology business.
Cortines has disclosed his relationship with the New York-based company, and officials say he has avoided any decisions on Scholastic contracts.
Cortines' role, however, has generated criticism among some former senior officials and current employees. They said the corporate tie creates an appearance of impropriety.
"My objection is the perception it creates and the door it opens for others to do the same thing," said former school board member Marlene Canter, who sits on the city ethics commission and who said she admires Cortines.
Board members, including Canter, never examined his outside employment in the rush to elevate the respected Cortines from the district's No. 2 position after a board majority suddenly decided to replace predecessor David Brewer in 2008, she said.
No current board members expressed concerns.
"Ray has done all the proper things he has to do" in terms of disclosure, school board President Monica Garcia said. "It's never been something that's been hidden. I don't know what is interesting here." Echoing others, she added: "I never met a person with more integrity than Ray Cortines."
Cortines has recused himself from dealing with matters that might involve Scholastic, said chief academic officer Judy Elliott.
"Mr. Cortines has never been involved or part of any instructional decision about any intervention program," she said.
Abdicating major instructional decisions in the nation's second-largest school district is an unsatisfactory solution, said former school board member Jeff Horton, because the superintendent is ultimately responsible even when he delegates.
And if Cortines isn't involved, he should be, Horton said, given the importance of addressing poor reading skills among tens of thousands of students.
Cortines said he performs his duties with Scholastic Inc. as needed after work, on weekends and on vacation days. The board meets in New York about five times a year for one or two days. Cortines sometimes participates by phone.
For 2009, Cortines' compensation from Scholastic totaled $151,186, according to filings with the federal Securities and Exchange Commission. Of that, $82,500 was in fees earned or cash payments; $36,042 in stock awards, and $32,644 in option awards. His compensation for 2008 was $165,785; for 2007, $122,406. Older filings did not list individual board member compensation.
Cortines joined the district in April 2008 at a salary of $250,000. He became superintendent the following December, voluntarily retaining the same salary in recognition, he said, of the district's budget problems. Cortines' wage is below average for a large school system, according to the Council of the Great City Schools.
Outside earnings are "not uncommon at all," said Michael Casserly, the council's executive director. He did not provide specific examples, but said "many districts allow it as a way to supplement the compensation of their superintendents."
But school superintendents in Chicago, Miami, Long Beach and Charlotte, N.C., are prohibited from receiving compensation from a vendor. Nor would it be allowed in New York City, unless approved by a city conflict-of-interest board, said officials in those systems.
For Scholastic, Cortines serves on more subcommittees than any other member on the 10-person board: audit; human resources and compensation; nominating and governance (which he chairs); strategic planning and stock grant.
Cortines' prime asset is "his long history as an educator," said Kyle Good, Scholastic's vice president for corporate communications. "Dr. Cortines does not participate in any conversation or event that might take place in LAUSD that could involve Scholastic."
Cortines said he presumed that his value to Scholastic has been his "management and business skills having dealt with large budgets and reorganizations in difficult times."
A lobbyist for another publisher noted that Scholastic benefits from Cortines' title as well as from his reputation.
Scholastic, the U.S. publisher of the Harry Potter series, dominates the domestic school book fair and book club business as both a publisher and distributor. The company also develops and markets books and software for instruction, including the federally sanctioned Read 180, which the district mandated for high schools in 2007.
Previously, the district had relied primarily on a reading program from a Scholastic competitor. In the fall, district officials expanded the intervention program to 58 middle schools with large numbers of poor readers.
Secondary schools may use a program other than Read 180 only with the approval of one of eight local superintendents.
Read 180 also has emerged as the preferred intervention strategy for some groups competing to run 12 struggling schools and 18 new campuses. The superintendent will make the final recommendation this month on reform plans, after weighing a number of factors, including their strategies to help low-performing students.
Scholastic's growing education technology segment, including Read 180 and other programs, earned it $160 million last year, the company said. Its annual earnings exceed $2 billion.
Since Cortines' arrival, L.A. Unified has paid Scholastic more than $5.2 million for services and products, district records show.
Cortines has served on the Scholastic board since 1995, the same year he stepped down as chancellor of New York City's school system.
He remained on Scholastic's board in 2000 during a six-month stint heading L.A. Unified and, in 2006, when he became a Los Angeles deputy mayor.
Under both city and school district rules, Cortines' supervisors determine whether secondary employment poses a problem.
At the district, "you can't participate in any decision-making for any matters in which you are financially interested," said ethics officer Yea-Lan Chiang.
Cortines, 77, a national figure in education, has served as superintendent in Pasadena twice, San Jose and San Francisco as well as New York City.
He has taught in universities and helped guide numerous education and arts-related organizations.
He has also actively mentored other superintendents and consulted with the Broad Foundation, which has helped to pay for members of his senior staff.