Toledo Board of Education President Steven Steel's "perceived" conflict

Note the information presented below provides the reader with source materials to form his/her own opinions. However, opinions of the Coalition are included in the text.

What is a conflict of interest?

What is the conflict of interest involving current Board President Steven Steel?

Why is the conflict of interest important to the TPS community?

What does the Ohio Ethics Commission say about Steel's conflict of interest?

What does legal counsel retained by TPS have to say about Steel's conflict?

How long has Steel known about his conflict of interest? Has Steel been honest with the Board and our community about his conflict of interest?

What should Steel do?

A conflict of interest exists when personal and professional/fiduciary responsibilities are incompatible. Wikipedia describes a conflict of interest as:

".. a situation in which someone in a position of trust, such as a lawyer, insurance adjuster, a politician, executive or director of a corporation or a medical research scientist or physician, has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her duties impartially. A conflict of interest exists even if no unethical or improper act results from it. A conflict of interest can create an appearance of impropriety that can undermine confidence in the person, profession, or court system."

Steel has a "perceived" conflict of interest as his wife is a TPS teacher. In the campaign for Toledo Board of Education, the Urban Coalition sent Steel a letter dated August 16, 2005 suggesting that due to his conflict of interest he should withdraw from the race. In our letter we stated:

In March of 2006, the contract with the TFT expires. Therefore one of the first actions to come before the new board that takes office January 1, 2006 is the negotiation and approval of a new TFT collective bargaining contract. Since your family income, health benefits, etc. are directly affected by this contract, you may have to abstain from voting on this crucial contract in order to avoid any potential conflict and perception of a conflict of interest.

Further in the letter we said:

The perception of a conflict of interest exists in our minds. We believe that this is an issue that will taint every vote you participate in which affects teachers with the question: Would Mr. Steel have voted differently if his wife were not a TPS teacher?

Just why should any of us be concerned about Steel's conflict of interest? Simply put, the public needs a Board independent of "influence" of its collective bargaining units to assure that the interests of Toledo's children and the public are represented by the elected Board and not co opted by the bargaining units.

While doing research, we ran across an excellent reference source, A Collective Bargaining Primer for Michigan School Board Members. Yes, it is for Michigan. As a consequence, some of the references relate to statutes not applicable in Ohio. Nonetheless, it has some interesting information such as the best explanation we have found as to why school board members should be free of conflicts and why unions are actively engaged in selecting their bosses through election (starts on page 55):

School board members take an oath that requires them to faithfully carry out the obligations of their offices to the best of their ability.
However, the collective bargaining process frequently puts them at odds with their statutory and ethical responsibilities. Ronald Booth sums up the slings and arrows that board members face when combining labor relations, human relations and politics:

"If unions do not get what they want at the bargaining table, board members and superintendents can find themselves in jeopardy. If the politics of impasse or strike doesn’t get the superintendent fired, then sometimes it’s the loss of school spirit that often follows the strike or the teachers’ refusal to maintain acceptable relationships with students and parents. Even without the rigors of bargaining, superintendents can seal their own doom through neglect of faculty attitudes. … Today’s teachers not only talk about their problems out of school, they organize campaigns to unseat board members and to remove the superintendent.

That leaves school boards and superintendents on the horns of this dilemma: How do they protect the public from the unions without making themselves the sacrificial lambs? Some boards have said, let’s forget the public and give the unions what they want. Other boards have stood fast against the union’s demands and been ousted at the next election, soon followed to the sidelines by their superintendents. Clearly, what is called ‘collective bargaining’ in the private sector is not necessarily the same thing in the public sector.”

Unions routinely recruit pro-union candidates to run for public office. The unions then use their considerable resources to get these candidates — who often do not reveal their union support while campaigning — elected to school boards. Once elected, these board members give the union clout on both sides of the bargaining table. Tracey Bailey, a former AFT member and 1993 National Teacher of the Year, is a frequent critic of the unions and their political nature, calling them “special interests protecting the status quo” and pillars of “a system that too often rewards mediocrity and incompetence.”

What does the Ethics Commission say about Steel's conflict of interests? On January 15th, we learned through an inquiry to the Ohio Ethics Commission of a letter Steel sent to the Commission dated August 29, 2005 (13 days after our letter to Steel) where he asked for an opinion. And what did he find out? In a letter from the Ethics Commission dated November 3, 2005 (5 days before the 11/8/05 election) the Ethics Commission agreed with our concerns and stated that Steel would not be able to vote. The Ethics Commission said,

However, because your spouse is a board member of the teachers' union, she has a sufficiently definite and direct interest in the master contract to invoke the prohibitions of R.C. 2921.42(A)(l). Therefore, if you are elected and serve as a school board member, you would be prohibited from voting, discussing, deliberating, recommending, or otherwise using your authority or influence, as a board member, to secure ratification of the collective bargaining agreement between the district and the teachers' union.

From the attachment to the letter - Information Sheet on Family Member Hires:

Where an official's spouse is employed by the public agency she serves, and the official is covered under health insurance provided by the agency to her spouse, there is an additional restriction. In that case, the official is receiving a thing of value, for purposes of R.C. 102.03(D) and (E). While the official is not prohibited from receiving the health insurance coverage, she is prohibited from taking any action to approve the union contract if it includes health insurance benefits and she is covered under those benefits.

It should be noted that Steel did not share this opinion with anyone on the board or legal counsel until January 2008 even though the Coalition and Board member Fisher had asked Steel to provide documentation regarding his wife's status with the TFT and information on when he terminated his health care benefits through his wife's employment with TPS. At the January 3rd Board organizational meeting Steel in defending himself against the allegations of conflict of interest provided the Board with Ethics Commission Advisory Opinion 82-003. He provided no further information even though he had a letter from the Ethics Commission citing Advisory Opinions 85-009, 87-008, 88-007, 89-005, 85-015, 86-010, 92-012 and 92-017. In addition the Ethics Commission cited R.C. 4117.10 and 4117.20 and suggested he consult the school district's legal counsel for advice. There is no record of Steel ever completing his due diligence by requesting a legal opinion from District legal counsel. From the commission letter:

You may also wish to consider whether provisions of law that are outside the jurisdiction of the Ethics Commission would affect your service as a school board member. For example, under R.C. 41 17.1 O(C), the "designated representative" of a board of education "is responsible for negotiations in the collective bargaining process." The board of education must then accept or reject the proposed collective bargaining agreement reached between the board's representative and the employee organization. See RC. 41 17.10(B) and (C). See also R.C. 4117.20 (prohibiting a person who has an interest in the outcome of bargaining which is in conflict with the public employer's interest from participating on behalf of the public employer in the collective bargaining process, except that the person may vote on ratification of the
agreement).

For more guidance about the application of these provisions you may wish to consult the school district's legal advisor if you are elected.

Squire, Sanders and Dempsey provided TPS with a legal opinion (Supporting documentation for legal opinion) which is dated 1-16-08. SSD states in their opinion:

Despite the restrictions discussed above with respect to an individual's contract or terms of employment, the ethics law does not prohibit a board member from discussing or voting on a union contract when the spouse is a member of the union unless: (1) the spouse is an officer or employee of the union; (2) the spouse is on the contract negotiating team; or (3) the board member receives health insurance benefits through the spouse's coverage with the district. While a union's master contract is a public contract, an individual teacher's interest in the master contract is not sufficiently definite and direct as to invoke the prohibitions of R.C. Section 2921.42(A)(l), which prohibit a public official from using the influence of office to secure the employment of a family member.

SSD states further:

We understand that Dr. Steel does not receive health benefits through his wife's District coverage. Thus, so long as his wife is not an officer or employee of the union or a member of the union's contract negotiating team, under the applicable opinions of the Ohio Ethics Commission with respect to R.C. Chapter 102 and R.C. Section 2921.42, the applicable opinions of the Ohio Attorney General with respect to R.C. Sections 33 13.33 and 33 19.20 and the limited case law precedents and guidance available with respect to these provisions and R.C. Section 4117.20, Dr. Steel would not be prohibited under any of those statutes from participating in the discussions and deliberations of the Board and administration with respect the collective bargaining agreement between the Board and its teachers' union or from voting on the collective bargaining agreement presented for the board's approval.

We draw your attention to the statement above "the limited case law precedents and guidance available with respect to these provisions and R.C. Section 4117.20." From what we have learned there is no case law involving 4117.20. This makes the interpretation of this statute suspect. Squire, Sanders and Dempsey is relying totally upon the opinions of the Ethics Commission. Further, SSD does not provide any guidance as to how the Board and Steel should proceed. They simply clear the way, barring any subsequent lawsuit that would clarify 4117.20, for Steel to participate in the negotiations process involving the TFT.

4117.20 Prohibiting conflict of interest in bargaining.

(A) No person who is a member of the same local, state, national, or international organization as the employee organization with which the public employer is bargaining or who has an interest in the outcome of the bargaining, which interest is in conflict with the interest of the public employer, shall participate on behalf of the public employer in the collective bargaining process except that the person may, where entitled, vote on the ratification of an agreement.

(B) The public employer shall immediately remove from his role, if any, in the collective bargaining negotiations or in any matter in connection with negotiations any person who violates division (A) of this section.

Effective Date: 04-01-1984

The key elements that have not been determined by case law are: 1) What constitutes an interest? 2) Is being a decision maker, such as a Board member, considered a participant in the collective bargaining process?

Common sense would imply that directing the process, determining priorities, evaluating tradeoffs and other activities such as these would be considered participating in the collective bargaining process.

We also have determined that Superintendent John Foley also has a wife who is a TPS teacher. So, it could be construed that Foley should also recuse himself from being a participant in the collective bargaining process. Foley was the contact person in obtaining the legal opinion from Squire, Sanders and Dempsey. As Foley also has the same conflict of interest as Steel, by inference it seems apparent why the SSD opinion is vague and does not provide guidance on how the Board should proceed. What questions were legal counsel asked to respond to by Foley?

So why did Steel keep the Ethics Commission letter to himself? Well, of course, this is only speculation as we can't read minds, but here are some reasonable explanations.

1. To release the letter before the 11-8-05 election may have spelled defeat. Steel finished third in a race for three seats and beat appointed Board member Steven Thomas by just 711 votes (21,761 to 21,050). It would have also confirmed the Coalition's concern about a Steel candidacy for School Board.

2. Releasing the letter also would have sparked interest by the board to assure that Steel complied with the applicable laws as interpreted by the Ethics Commission. (We still don't know when Steel withdrew from the health plan and if he violated state statute during the two years this letter was kept secret.

What should Steel do? RECUSE himself from voting, discussing, deliberating, recommending, or otherwise using his authority or influence, as a board member, to secure ratification of the collective bargaining agreement between the district and the TFT to avoid any appearance of impropriety.