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Sole source contractors helped finance Oklahoma Education Department 'slush fund'

More than $100,000 that went into what auditors have dubbed as Oklahoma Education Department slush funds were solicited by state education officials from 31 companies that had no-bid contracts with that agency, records reveal.
by Randy Ellis Published: April 1, 2012
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Gardenhire said Barresi has tried to be as transparent as possible about how conferences have been financed. In the future, the Oklahoma State Board of Education will be asked to approve all sponsorships, which should make transactions even more transparent, he said.

Garrett says staff members handled fundraising for the conferences in a professional manner and insists taxpayers were the beneficiaries.

“This was taxpayers' money saved,” Garrett said.

Since the money came from donations, state funds didn't have to be used to pay for the conferences, she said.

Disputing ‘slush fund'

Garrett said she made a point of not meeting personally with contractors and could only remember one such meeting — when she became involved in discussions with a contractor that had failed to perform properly.

Garrett objected strongly to the auditor's use of the term “slush fund.”

“There was nothing hidden about those accounts,” she said. “No one ever accused us of using the money for personal purposes. When the term ‘slush fund' is used, I think people think you're talking about stolen money or money used for personal purposes. That did not happen.”

What did happen was high-ranking officials in Garrett's administration solicited donations to the conference accounts from contractors who did a lot of business with her agency.

Representatives of several donor companies were interviewed by The Oklahoman and said they had no concerns about being solicited for donations.

“Vendors donating money for conferences and donating money for other things happens all the time, everywhere. That's how things run,” said Dean Hupp, chief executive officer of Illinois-base Hupp Information Technologies. “We do business in many states and that's very common. ... I don't know about the accounting side of things, but if they asked us to help, we're always going to help, just like most vendors would.”

Hupps' company installed and maintains a teacher credentialing system used to identify and track highly qualified teachers. The information is reported to federal education officials in connection with the No Child Left Behind law. Hupp said his company obtained its first contract through competitive bidding.

Since then, it has received nearly $900,000 in no-bid contracts. Hupp said it would be more expensive to rebid the contract each year because a new system would have to be installed and officials trained to use it if another company won the contract.

“The reality is if they didn't ask vendors to help out, then they would have to use taxpayers' money to do it, but people don't ever think about it like that,” Hupp said.

“I personally think vendors should help out on stuff like that. ... They let you buy a booth and advertise, so you are getting something for your contribution.”

Hupp said his company didn't increase the amount it charged the state in order to donate to the conference.

“That never happened in our case,” he said. “I can't speak for other vendors. ... It's not like they're asking for a ton of money. If they were asking for $50,000, then you've got to recover it somehow. It's just not what it looks like. ... Our hourly rates have been the same the whole time. ... In years and years and years, we've never changed them and they're very low to begin with.”

by Randy Ellis
Investigative Reporter
For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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