Ethics? This Isn’t Your Lousy Cup of Coffee Kind of Gratuity

What’s Wrong With This Picture?

With New Mexico in the center of pay-for-play allegations, it seems one can now go to school to learn more.

A group of information technology vendors who provide services to the Albuquerque Public Schools hosted about 40 technology employees to a questionable “APS Technology Appreciation Dinner” at Garduno’s on the Green May 14. A mariachi band entertained the assembled crowd.

I’m “concerned for myself and my fellow workers” about whether accepting the offered free drinks and dinner, raises ethical questions according to a concerned APS employee, who wishes to remain anonymous.

The employee received a forwarded e-mail invitation for a dinner and drinks event which included door prizes and a 12-inch laptop computer to be given away.

The source said the he didn’t think his colleagues understood why this was wrong.

Technology Integration Group Account Executive Jim Lujan wrote a May 8 e-mail to APS Director of Technology Client Services Ken Cole. Cole generated his own e-mail to over 100 APS Techs and others attaching TIG’s RSVP invitation. TIG’s electronic flier was adorned with two “APS Apple” logos. The text read, in part, that the event was open to “…all Tech Coordinators, TCS employees, Technology minded Principals and those who help make APS Technology a better and improving part of our schools!”

The TIG flier seems to violate APS policy:

Distributing or Posting Promotional Literature

Informational and Promotional Literature

The group must agree to the following:
When material is approved to be distributed through the APS inter-office mail, the group must comply with guidelines developed by the CRO and the division of Office Services. Those guidelines may change without notice depending on the CRO and Office Services division work load.

Unacceptable Materials

The following materials are unacceptable:

D. Advertisement of a product or service for sale or rent unless otherwise specified.

For Profit Organizations and Companies
Representatives of companies or individuals seeking access to staff members, students or parents for the purpose of selling or marketing any goods or services must request a letter of authorization from the Community Relations Office or from Curriculum Support for course-related materials, programs, or products. The letter does not imply an endorsement of any product/service.

The concern is that the vendors are making gifts and gratuities available to APS staffers who use and service their products, and who are required to make evaluations, recommendations and needs assessments of the equipment as a part of their official duties. Offering or taking gratuities may violate APS policy and State procurement code restrictions on taking gifts or even possibly bribing a public employee, a felony.

Technology Integration Group Account Executive Jim Lujan, who coordinated the event, was surprised to hear that someone considered what they were doing a breach of ethics. His first concern was that he wanted to know the source of the complaint. He didn’t believe anyone could think there was anything wrong with what they were doing.

“We had no decision makers present,” Lujan said in an interview.

Most attendees were tech coordinators, teachers, and educational assistants, who receive no thanks and make little to no money, Lujan said.

Lujan said the door-prizes were donated by the vendors. The top prize, a Dell laptop computer was a used demo model. It had an original retail value of $300 and was won by a teacher.

Lujan did not know exactly how many APS employees and their families attended or how much the event cost, but promised to get back with those numbers. At posting, he had not communicated those numbers.

The mariachi band was hired because one of its member's was a teacher, Lujan said.

“It only applies to the purchasing officer and has a $50 limit,” APS’ Director of the Community Relations Office and Spokesman Rigo Chavez said in an interview about the possible violation of APS' purchasing policy.

Chavez was asked to cite the section of the APS policy he claims says that there is a $50 limit only applying to procurement officers. He could not cite the section. He then misidentified the state statute section applying to the contract requirement when asked about the sections pertaining to: bribery of public officer or public employee, demanding or receiving bribe by public officer or public employee, the definition of gratuity, and how it applies to the language required in the contract. Chavez stated he was not an attorney and would only speak to APS policy.

APS’ purchasing policy directly references State Statute Chapter 13 Pamphlet 29 NMSA 1978, entitled "Public Purchases and Property." The policy requires that the state law against bribes; gratuities and kickbacks by contractors be included in every contract. The statute reads:

13-1-191. Bribes; gratuities and kickbacks; contract reference required.

All contracts and solicitations therefor shall contain reference to the criminal laws prohibiting bribes, gratuities and kickbacks.

The other pertinent statutes read:

30-24-1. Bribery of public officer or public employee.

Bribery of public officer or public employee consists of any person giving or offering to give, directly or indirectly, anything of value to any public officer or public employee, with intent to induce or influence such public officer or public employee to:
A. give or render any official opinion, judgment or decree;

B. be more favorable to one party than to the other in any cause, action, suit, election, appointment, matter or thing pending or to be brought before such person;

C. procure him to vote or withhold his vote on any question, matter or proceeding which is then or may thereafter be pending, and which may by law come or be brought before him in his public capacity;

D. execute any of the powers in him vested; or

E. perform any public duty otherwise than as required by law, or to delay in or omit to perform any public duty required of him by law.

Whoever commits bribery of public officer or public employee is guilty of a third degree felony.

13-1-59. Definition; gratuity.

"Gratuity" means a payment, loan, subscription, advance, deposit of money, service, or anything of more than nominal value, received or promised, unless consideration of substantially equal or greater value is exchanged.

The dictionary defines appreciation as gratitude. So the appreciation dinner could be considered a form of gratuity.

30-24-2. Demanding or receiving bribe by public officer or public employee.

Demanding or receiving bribe by public officer or public employee consists of any public officer or public employee soliciting or accepting, directly or indirectly, anything of value, with intent to have his decision or action on any question, matter, cause, proceeding or appointment influenced thereby, and which by law is pending or might be brought before him in his official capacity.

Whoever commits demanding or receiving bribe by public officer or public employee is guilty of a third degree felony, and upon conviction thereof such public officer or public employee shall forfeit the office then held by him.

So what’s wrong with this picture?

It’s not the first scrape with the law for Promethean, an English company with its U.S. base in Atlanta. Promethean makes what they call interactive whiteboards, above. Their products replace blackboards with a computer based classroom system.

Promethean played a critical role in a major procurement code violation scandal earlier this year in the Tucson Unified School District. TSUD settled with the Arizona Attorney General.

At least three high-level school officials, including the Chief Operations Officer, Curriculum Director, and the Chief Technology Officer were placed on leave for procurement code violations according to the Tucson Citizen. Their names are no longer listed on the TSUD staff webpage.

The local office of TIG is lead vendor for other suppliers of high tech equipment that have joined Promethean in throwing the party. The other vendors are: Dell, Axiom Memory, Xiotech, Xerox, and Absolute Software.

Some of the same vendors have held similar events before. Last year there was another “APS Technology Appreciation Dinner” Dec 16, 2008, at The Samurai restaurant. “It’s been going on for at least two years,” the source said, once last December and again the year before that; also in December. The employee, who refuses to attend such events, said that over 100 APS technology employees were sent the e-mail and he expected the event to be packed.

Lujan said he has been an APS vendor for four years and communicates with Cole on a daily basis.

“I did not know about that,” Lujan said, when asked if he had received a letter required by APS policy for “When material is approved to be distributed through the APS inter-office mail…”

When asked about the use of the APS Apple logo, he said that he downloaded off the APS website and did not know it might violate APS policy.

Because Lujan had not received the required letter of authorization from the Community Relations Office or from Curriculum Support, he was unaware “The letter will clearly state that APS is not endorsing the services, products, or programs….”

Distributing or Posting Promotional Literature

Informational and Promotional Literature

The group must agree to the following:
When material is approved to be distributed through the APS inter-office mail, the group must comply with guidelines developed by the CRO and the division of Office Services. Those guidelines may change without notice depending on the CRO and Office Services division work load.

Unacceptable Materials

The following materials are unacceptable:

D. Advertisement of a product or service for sale or rent unless otherwise specified. (See Fund Raisers and Advertising/Promotional Material).

For Profit Organizations and Companies

Representatives of companies or individuals seeking access to staff members, students or parents for the purpose of selling or marketing any goods or services must request a letter of authorization from the Community Relations Office or from Curriculum Support for course-related materials, programs, or products. The letter does not imply an endorsement of any product/service.

The company/organization representatives must submit copies of all materials to be submitted to the schools with their request for a letter of authorization. The letter will clearly state that APS is not endorsing the services, products, or programs unless the materials are part of a district textbook adoption. The organization will be directed to contact the principal or designee before contacting staff members.

No direct access to school employees will be granted during school hours. The principal may, but is not obligated to, allow representatives the opportunity to contact staff members after school hours on school property. In such cases, the normal facility rental fees will apply.

When read the state law of demanding or receiving bribe by public officer or public employee, accepting, directly or indirectly, anything of value, Lujan said that is why they don’t even send Christmas cards. Though he reiterated that no decision makers were present, he emphasized those in attendance, use our equipment and ”call us for support.”

At least one vendor has run afoul of the law. The Anti Trust Unit of the Office of the Attorney General, State of Arizona, implicated Promethean, along with other vendors in a report released Jan. 13, 2009, entitled, “Investigative Report Regarding the Procurement Practices of the Tucson Unified School District.”

The investigation revealed:

Two vendors conspired with each other, and the District employees. To ensure each obtained a District contract, harming competition and violating State antitrust laws, the school procurement code and District policies and the USAC’s E-Rate Program.

District personnel, including District leaders and key decision makers, accepted gifts and gratuities from current and prospective vendors, including gift cards, meals and lodging at a Tucson area resort.

Promethean provided more than $2 million worth of equipment to TUSD and gave gifts, gratuities, food, drink, entertainment, and accommodations to school employees, in addition to waiving fees at two seminars for which the school district provided one school location without a lease or insurance.

The AG’s report found:

Promethean’s gifts and gratuities to the district and its employees create a conflict of interest.

In the TUSD’s settlement with the Arizona Attorney General, Promethean was not specifically named.

Additional questions forwarded to the Arizona Attorney General's Press Secretary Anne Hilby have not been answered at the time of this posting.

Some APS Board members have publicly taken such gratuities themselves, most recently when a quorum of the board attended a vendor sponsored “Administrative Conference on Education” training event at the Inn of the Mountain Gods. Not only is it a procurement code violation, but it also violated the open meetings act.

My Take

I agree with the anonymous APS technical employee that his fellow workers have no idea why their acceptance of the invitation to the “Appreciation Dinner” is not only an ethical breach, but a violation of APS’ Policy and the State Law by accepting “…directly or indirectly… anything of value...”

The invitation itself has two problems: the APS Apple logo appears twice and there is no statement that “APS is not endorsing the services, products, or programs.”

Rigo Chavez, right, was unprepared to answer questions pertaining to policy or law. Instead of saying he needed to do further research or even consult with the legal adviser, he went into defensive spin mode.

TIG’s Lujan should have known the requirements of contracting; it’s called due diligence.

However, more importantly, the APS employees that Lujan contacted and have the responsibility to implement the vendors contracts have as much responsibility to follow the policies and assure that the vendor’s do not stray into prohibited areas.

It’s pretty clear that no one is reading the rules and maybe some “rules” are being made up as they go along.

With he federal stimulus money coming, technology items like whiteboards are surely to be considered. The end user and support persons who were invited to the TIG event may play a critical role is recommending purchase decisions.