The Morning Report
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School board member John de Beck was outraged.
Weeks ago, he was frozen out of a closed school board meeting. Nobody had told him the meeting was happening at all. And then the school district attorney said he’d been kept out of the loop because he had a potential conflict of interest.
The school board was talking about the co-op that provides its employees medical benefits, the Southern California Schools Voluntary Employees Benefits Association. For almost four years, de Beck has sat on the health trust board. At the same time, he has voted on and discussed issues relating to the health trust as a San Diego Unified school board member.
De Beck said the idea that he has a conflict is ridiculous. He gets no money for serving. The health trust board is supposed to include a school board member.
His role hasn’t been publicly questioned before. But in the last few weeks, de Beck has been criticized for his dual roles. Other school board members and the school district attorney have questioned whether de Beck can be loyal to both boards at once. If something is good for the school district and not for the trust — or vice versa — they worry de Beck could be torn.
“I’m not sure how objective you could be,” said school board member John Lee Evans.
The issue exploded after the school district started exploring whether it should split from the trust altogether. De Beck has been firmly opposed to leaving the trust.
He said excluding him from the meeting was illegal. And he argued that because the trust is a nonprofit cooperative, not a private company, it poses no conflict for him to serve on its board.
“I serve as a volunteer,” de Beck said. “How can I have a conflict of interest?”
The health trust works with medical insurance carriers to provide benefits for employees in school districts across San Diego County and the state. By pooling the resources of dozens of school districts, it argues, it is able to get better deals than if districts go it alone. De Beck has touted those as reasons to stay with the trust.
Because it is a partnership between labor unions and school district management, its board includes labor leaders and school district superintendents. De Beck is one of two elected officials on the board, representing the County School Boards Association.
Although the group is a nonprofit, there is a lot of money involved. San Diego Unified is budgeted to pay the trust almost $157 million this year for health benefits and overhead. The trust spent more than $5.3 million on management and general expenses last year, according to its tax returns.
Scott Barnett, who is running against de Beck for school board, argues that sitting on the health trust board is no different than if de Beck sat on the board of a textbook publishing company.
“This is a major vendor of the school district,” Barnett said. He believes de Beck should have recused himself from any talks about the health trust. “If it isn’t illegal, it should be.”
Health trust board members get iPads on loan to view meeting materials. Barnett argues they amount to a gift. As de Beck vies for re-election, he has also gotten $750 in campaign contributions from George McGregor, who administers the health trust.
The school board recently hired attorneys to analyze whether de Beck has a legal conflict of interest. School board members said they couldn’t share the attorneys’ conclusions because they met with them in closed session this week.
Ethics experts said the arrangement could pose ethical problems when disputes divide the district and the trust. For instance, San Diego Unified paid $2.6 million to the trust last year to settle a payment dispute.
De Beck was absent the day the school board approved the settlement. He said he stepped out of health trust meetings about the issue. But on the health trust board, de Beck ultimately made the motion to approve the settlement with the school district. And he readily says that he talked to the school board about the dispute in closed session before the settlement was struck.
He has also voted on health trust issues on the school board, albeit less sensitive ones, such as adding another health plan for retirees and automating billing.
That raises a red flag for Paul Root Wolpe, director of the Center for Ethics at Emory University. He said de Beck shouldn’t vote on the health trust or participate actively in discussions about it because its interests could conflict with those of the school board.
The questions about de Beck’s roles erupted after a private insurance company, Keenan & Associates, courted San Diego Unified this year. School board members say Keenan argued the district would save money if it separated from the health trust and bought benefits through them. The school board decided to let Keenan get information to evaluate whether it would save money.
Labor unions were wary. San Diego Unified had just signed union agreements for the next three years that included the health trust. Labor leaders were suspicious the district would try to duck those agreements.
De Beck alleged that the school district had improperly given Keenan sensitive information about employees’ health. Keenan denies that; San Diego Unified says it is investigating whether or not that happened and issued an agreement to protect employees if it did.
De Beck also accused school board member Shelia Jackson, who raised the idea of separating from the trust, of trying to help Keenan and bypass the unions to do it. In an email to Keenan employees, Keenan consultant Jim Madaffer, a former city councilman, dubbed Jackson their “steadfast and staunch ally.” He also said he’d told Jackson they should give the business directly to Keenan without bidding it out.
Jackson said she was just trying to explore their options and had not guaranteed Keenan business.
Nonetheless, the school board was upset by the emails and decided to stop sharing information with Keenan. That stopped Keenan from analyzing whether splitting away from the health trust would save money — but it didn’t stop the debate over whether de Beck could keep juggling two boards.