Business leaders solicited for Ackerman buyout donations

In recent weeks, high-ranking business leaders in the region have received calls asking them to donate to a charitable education organization that would then contribute funds to help buy out Philadelphia School Superintendent Arlene C. Ackerman's contract, sources said.

According to the sources, the money would be funneled through the Philadelphia's Children First Fund, a charitable nonprofit set up in 2003 to support the School District. Ackerman is listed on the fund's website as a board member, as is Robert L. Archie Jr., the chairman of the School Reform Commission.

A senior executive at a major Philadelphia corporation described how he and three other business leaders compared notes on the calls. He said his colleagues mentioned the fund and emphasized that donations would be anonymous and tax-deductible. He requested anonymity because some of those soliciting the donations were friends.

Under Ackerman's contract, which runs through 2014, she could be entitled to a minimum of $1.5 million. Ackerman emphasized yesterday that there was no deal for a buyout and that there were no negotiations "right now."

Archie did not return calls for comment.

Just how much money the fund-raisers were trying to collect or how it would be given to Ackerman was unclear. One source said that the charitable contributions would account for only a portion of the proposed buyout, which would be substantially less than her contract.

The senior business executive said his call came from a board member from another nonprofit education group who was seeking at the time to raise up to $1 million. But the caller did not name the Children's First Fund, he said.

"That's about as far as he got before I bit his head off," the senior executive said.

"I think this is fundamentally flawed on a whole series of levels, and I'm certainly not going to be a part of it," the executive said. "She has created nothing but chaos."

Robert Louis, an attorney for the Children First Fund, said he was told to direct media calls to Erin Davis, chief of staff for the School Reform Commission. Davis was out of the office and unavailable for comment.

The fund's chairman, Sheldon M. Bonovitz, chairman emeritus of the Duane Morris L.L.P. law firm, also did not return calls for comment. Bonovitz's law-firm biography also lists him as a trustee of the Christian R. and Mary F. Lindback Foundation, which distributes awards for distinguished teaching.

Archie is a partner at the same firm.

Talk of an Ackerman buyout has been swirling for weeks as her relations with the School Reform Commission and Mayor Nutter appear to be on the rocks.

Some have complained about a potential buyout at a time when the district is trying to close a budget shortfall of more than $650 million.

State Education Department spokesman Tim Eller said there was no mechanism for the education secretary to abrogate Ackerman's contract.

But the School Reform Commission, set up in 2001 after the district was taken over by the state, could cancel her contract or renegotiate it for economic reasons under the Public School Code, Eller said.

"The SRC has many powers, including the power granted to a Special Board of Control under Section 693 of the Public School Code," Eller said. He cited the commission's power to "cancel or renegotiate any contract other than teachers' contracts . . . if such cancellation or renegotiation will affect needed economies in the operation of the district's schools."

Legal experts said such a provision may not hold up if a court perceives that its usage is really for other reasons than economic. Unless the district is in Bankruptcy Court, the SRC may be hard-pressed to make that argument.

According to the public tax filing for the Children First Fund, it spent about $1,600,000 in fiscal 2010, and raised only about $600,000. Even so, it ended that fiscal year in June 2010 with $1.4 million in assets, according to the filing, the most recent available.

Most of its spending came in the form of grants it gave to other organizations. The group's website reports that it helped fund arts education and a pilot effort to make sure students at two high schools are covered by health insurance.

It paid its executive director, Anne L. Edmunds, $26,000. She has since left the organization.

Also on its board is Leroy Nunery II, the district's deputy superintendent. Nunery said Wednesday that he was not aware of the donations being sought for the fund to contribute to Ackerman's buyout.

"Even though I'm on the board, I represent the School District, so they may have gone to other folks," he said.

He said he was focused on getting ready for the opening of schools.

"I'm doing what a good deputy superintendent is supposed to do," he said.