Dot Woodfin: Conflict of Interest at HISD

Today, we review a 2004 draft memo (the "Memo") prepared by the Houston ISD Office of Internal Audit. This document relates to a Conflict of Interest investigation involving Dot Woodfin, the current Board President and CEO of The Galloway School.

Link: April 2, 2004 Houston ISD Memo

In 2004, Dot Woodfin was manager of Houston ISD's Character Education Department. Ms. Woodfin had co-founded a company called MindOH! which produced Character Education software. About 95% of MindOH!'s $200,000 in revenues were generated through sales to Houston ISD. HISD's internal audit department investigated the apparent conflict of interest of having a district employee's company sell a product to the district. Here are some highlights from the memo:

Mixed Reviews of Quality of MindOH! Software

It appears that the decision to purchase software similar to that which MindOH! offered was at the discretion of individual campus principals. At least two HISD principals did not see the value of MindOH! software.

A principal at Edison Middle School reported to the internal auditors that he initially used MindOH! software for two years free of charge. He dropped it because he "didn't feel the software was worth the asking price" of $5,000. (Memo, page 2)

Another principal at E.O. Smith Middle School claimed that "the reason I have the software is that it is included in the grant package and he had no choice but to use the software" (Memo, page 2). The Memo seems to indicate that this principal never made a purchase request for MindOH! software and that he did not want it. The internal auditors called Pamela Branch, the Grant Coordinator, to provide details regarding the matter. The Memo doesn't make it clear what role Ms. Branch had in the purchase of MindOH!, but it seems clear that the purchase went outside the normal process of originating at the campus level. We're left to wonder who forced MindOH! on E.O. Smith Middle School.

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Dot Woodfin had an Active Role in Facilitating the Purchase of MindOH! Software

We'll just let the language in the Memo speak for itself to explain this matter:

Ms. Woodfin has an actual conflict of interest because she provided advise [sic] via e-mail in the purchasing of the MindOH! software. (Memo, page 3; emphasis added)

This seems pretty clear. Ms. Woodfin advised HISD employees how to complete a purchase that she had a financial interest in.

Ms. Woodfin contacted the Purchasing Department to "speed up the process as the schools are anxious to get the program."

It looks pretty bad that Ms. Woodfin attempted to "speed up the process" to transfer taxpayer funds from HISD's checking account to an entity Ms. Woodfin had a financial interest in.

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Conclusions

Again, the Memo speaks for itself.

1. Prohibited acts under State of Texas rules:

Ms. Woodfin has a real conflict of interest with HISD because she acted in an administrative role to facilite the payment of MindOH! Software, and has an ownership interest in MindOH!. Grant funds were used to make the software purchase from MindOH! Th[is] is prohibited by The Financial Accountability System Resource Guide Module 1. (Memo, page 4; emphasis added)

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2. Conflict of Interest under Texas statutes (Local Government Code):

Ms. Woodfin has a real conflict of interest with HISD because she is an employee of HISD, and an interested person because of the value of her investment in MindOH! as a founder. (Memo, page 5; emphasis added)

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3. Conflict of Interest under HISD's Charter:

Ms. Woodfin is employed by HISD so there is a real conflict of interest, because she is directly interested in any purchase made by HISD from MindOH!. HISD has made purchases in the amount of $58,495.00 with GF1 Funds and $129,500.00 with SR1 Funds. (Memo, page 5; emphasis added)

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Ms. Woodfin has a history of serious conflicts of interest, some of which smack of self-dealing. It is virtually impossible to acquire hard or soft copies of financials from The Galloway School. Therefore, it is almost impossible to determine if Ms. Woodfin is engaged in similar activity related to her position as Board President and CEO of The Galloway School. Tuition paying parents -- BEWARE.

Dot Woodfin: Ethics Probe

From a July 2005 article in the Houston Chronicle:

The recently retired director of a Houston ISD program that teaches students moral values is under investigation for a possible violation of the school district's ethics policy.

The inquiry into former character education manager Dorothy "Dot" Woodfin is focused on her ties to MindOH, a character education curriculum company she co-founded in June 2000 while working for the Houston Independent School District. The principals of about 30 HISD schools spent $195,995 with the company between June 3, 2002, and Oct. 29, 2004.

Dot Woodfin and a possible ethics violation. This doesn't seem to be the kind of person you'd want as Board president and CEO of The Galloway School. But that's what Ms. Woodfin is doing now.

The Chronicle continues:

HISD officials also revealed little about the investigation's progress, which grew out of a financial review of MindOH invoices last year.

Well, HISD officials may have revealed little to the Houston Chronicle, but TGS Watch has been provided with internal Houston ISD documents about this matter created by HISD's internal audit department. Documents reviewed by TGS Watch show that the following statements may not provide an accurate picture of the situation:

Woodfin didn't solicit HISD business, but made regular sales calls to other school districts ...

Top HISD officials, including former Superintendent Kaye Stripling, knew Woodfin was a part owner in the company and raised no ethical questions about the arrangement ...

Woodfin severed ties with the company last fall [2004], selling her interest in the company when Saavedra questioned whether it conflicted with her oversight duties for the school district

Stay tuned ...

Jay Aldis (Bracewell & Giuliani) writes a Dumb Letter

Bonnie Cerace throws a temper tantrum

Just a reminder to check in with Galloway School Concerned Parents on a regular basis.  There are several new posts there including a rather amusing letter from Bracewell & Giuliani's Jay Aldis, the attorney representing The Galloway School. Be sure to join the fun ... a lot of readers are having a good time with Mr. Aldis' letter in the comments.

Bonnie Cerace: Assault with a Deadly Weapon

Mrs. TGS Watch likes to talk on the phone.

She likes to talk on the phone A LOT!

Recently, Mrs. TGS Watch found herself talking on the phone with the District Court Clerk in Dallas County. Mrs. TGS Watch talked about children. She talked about vacations. Most interestingly, during the course of the conversation, the Court Clerk informed Mrs. TGS Watch that the principal of The Galloway School, Bonnie Cerace, had been charged with Aggravated Assault with a Deadly Weapon.


Sadly, the Court Clerk was unable to tell Mrs. TGS Watch what the final disposition of the case was. That was disappointing.

We don't believe any other school in the country has a principal who has been charged with Aggravated Assault with a Deadly Weapon. That isn't exactly the kind of thing The Galloway School should be proud of.



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***UPDATE***
May 11, 2012
10:10 p.m. CDT

Shortly after placing the case number of Ms. Cerace's charge for Aggravated Assault with a Deadly Weapon in the comments, a friend of TGS Watch provided us with a court record that provides information on the disposition of the case. The record indicates that the Aggravated Assault with a Deadly Weapon charge filed by the Irving Police Department was reduced to a misdemeanor. Furthermore, it looks like Ms. Cerace received a probated sentence. Please review the document yourself. It isn't easy to decipher, but it is a primary source.

*** FURTHER UPDATE ***

See the discussion related to this matter here. The Dallas County court document clearly indicates that The Galloway School principal Bonnie Cerace was charged with Aggravated Assault with a Deadly Weapon. The document states:

MISDEMEANOR REDUCTION_ PROBATED SENTENCE

That said, we still find the final disposition of this matter to be inconclusive.

Jay Aldis: Time to Wear your Wise Counsel Hat

TGS Watch understands that an attorney is both a zealous advocate and a wise counsel to his clients.  Since we aren't a party to any lawsuit with the The Galloway School, we don't have any particular insight regarding the performance of TGS attorney Jay Aldis as a zealous advocate.  That said, TGS Watch is willing to give Mr. Aldis the benefit of the doubt.  We believe Mr. Aldis has been dealt an extremely poor hand in Solt et. al. v. The Galloway School et. al., and that he is playing that poor hand as ably as he can.

But there is more to being an attorney than just zealously advocating his clients' legal position(s) in pending lawsuit(s).  A good attorney is also capable of providing wise counsel on both legal and extralegal matters.  One of Mr. Aldis' clients is The Galloway School itself.  Mr. Aldis should be representing The Galloway School in the narrow matter of the existing lawsuit as well as broader issues pertaining to The Galloway School's interests.

In the opinion of TGS Watch, the current course of events threaten The Galloway School's existence as an going concern.  In other words, there is a meaningful chance that The Galloway School may close as a result of lawsuits, management decisions, and the resulting decisions of TGS families pursuing their own interests.

Jay Aldis of Bracewell & Giuliani represents The Galloway School.  It is time (perhaps past time) for Mr. Aldis to provide the School's leadership (Board of Trustees) advice on how to navigate TGS' broader interests.  Mr. Aldis should consider it a failure if his client, The Galloway School, ceases operations and closes.  Zealously defending The Galloway School in the narrow matter of the current lawsuit (and possible future lawsuits) is absolutely necessary.  But it is not sufficient.  Mr. Aldis also needs to counsel The Galloway School as an organization on matters that affect its very survival.

Many people, the author of TGS Watch included, want The Galloway School to thrive.  In order for TGS to thrive, the current leadership needs to change its behavior in matters that extend far beyond Solt v. The Galloway School.  Sadly, we are painfully aware that the current leadership of The Galloway School is pursuing its own interests to the detriment of the school itself.  It doesn't help that Ms. Cerace has an adversarial relationship with the truth.  In fact, we wouldn't be surprised if Ms. Cerace has made untruthful statements to her attorney, Mr. Aldis.  A proper fitting of an attorney's wise counsel hat would require Mr. Aldis to address the concerns that extend beyond Solt vs. The Galloway School as well as the lawsuit itself.  Mr. Aldis, as wise counsel, must determine if he can effectively represent the interests of The Galloway School as well as the competing interests of Bonnie Cerace, Bambi Teaff and Dot Woodfin.

TGS Watch will evaluate the performance of Mr. Aldis and will continue to opine on his effectiveness on these pages.