Tennessee lawmakers cite 'huge conflict' in $8 million reading initiative contract

Staff photo by Erin O. Smith / Tennessee Education Commissioner Penny Schwinn

Tennessee Education Commissioner Penny Schwinn signed a multi-million-dollar deal in March with a New York-based company as part of the state's reading initiative, a move lawmakers say creates a potential conflict of interest because her husband works for the vendor.

As part of the state's plan to help students rebound from the COVID-19 pandemic, Schwinn inked the $8.06 million contract with TNTP Inc. on March 1 for pre-kindergarten through fourth grade foundational reading skills educator training, according to a document obtained by Tennessee Lookout.

The contract took effect March 12 and is to run for the current budget year, which ends June 30, and the next one. Even though there are only four months in the current budget year, the contract is set to cost $4.032 million for each budget year.

Schwinn obtained approval from the state's Central Procurement Office, promising to distance herself from the agreement, according to a letter to the department's legal counsel from Michael Perry, chief procurement officer. Perry approved the matter based on Schwinn's proposal dealing with conflicts to ensure she and her husband, Paul, didn't get involved in the work.

During a special session early this year, the Legislature approved four programs costing about $160 million to bolster education amid the COVID-19 pandemic, mainly to help children catch up from time out of school and possible learning loss from online courses rather than classroom teaching. Summer reading programs are to be a foundation of the program, and teachers are to undergo training for those courses.

TNTP Chief Executive Officer Daniel Weisberg signed the contract for the teacher training program.

The education commissioner's husband is a leadership coach with PhillyPlus TNTP, according to his Zoom page. He was previously chief academic officer at STEM Prep Academy in Nashville.

In a separate letter Commissioner Schwinn wrote regarding a potential conflict of interest on the bidding process for the contract, she disclosed that her husband works for TNTP Inc. as a contractor for school systems.

Schwinn stated in the letter that her husband discloses projects to make sure they don't concern work in Tennessee. She also said he is not part of any solicitation with the state and that under the terms of his contract he is not to perform any work in Tennessee.

The commissioner assured the procurement office she would not be involved in evaluating solicitations for the contract, delegating final approval to a deputy commissioner or engaging in discussions with her husband relating to the contract.

The Department of Education responded to questions Monday evening and said the department and commissioner adhered to all laws governing procurement. Schwinn filed a conflict of interest report with the Central Procurement Office "out of an abundance of caution," the department said.

The department noted Perry's letter indicated Schwinn's "mitigation plan" addresses any conflict of interest or potential conflicts. The state received two bids and TNTP's was the lowest.

Still, some lawmakers remain unsatisfied.

"It just so happens they get the contract and [we're] writing a family a check. That sounds like a huge conflict to me," said state Rep. Bo Mitchell, a Nashville Democrat and frequent critic of Gov. Bill Lee's administration. "I've been warning of this for some time, and it's coming to fruition if it hadn't been going on from day one."

If lawmakers call Schwinn on the carpet, it wouldn't be the first time. The General Assembly passed legislation in 2020 removing the education commissioner as a voting member of the Tennessee Textbook and Instructional Materials Quality Commission and took away the commissioner's ability to grant waivers for school districts seeking to use unapproved books and materials.

Sen. Mike Bell, chairman of the Senate Judiciary Committee and a Senate Education Committee member, grew interested in the matter after hearing from principals that Schwinn was too involved in the textbook adoption process, which is to be independent of the Education Department.

Bell, who has a copy of the contract, said Monday that Schwinn's husband's role in the company "appears to be a conflict of interest." He plans to investigate the matter to determine Paul Schwinn's role with the company, how the contract was procured and whether it uses federal or state money.

In March 2020, Bell raised questions about whether the Department of Education could have a potential conflict with a private vendor. Lawmakers put a hold on the early childhood reading initiative in 2020 because of concerns certain portions of the work would be steered to a certain vendor.

"I was assured at that time the commissioner's husband didn't work for any of the companies that would be potentially getting contracts from the state," Bell said. "I absolutely plan on looking into it."

This isn't the first time the Schwinns have run into a possible conflict of interest. According to a report by Exceptional Delaware, Penny Schwinn took a post as chief of accountability and performance officer with the Delaware Department of Education around 2014. Shortly after that, the Delaware Leadership Project hired her husband as director of leadership development. The group was funded by the Delaware Department of Education, Rodel Foundation of Delaware and The Vision Network, according to the report.

Schwinn was selected by Gov. Bill Lee to run the Education Department in early 2019 even though a Texas audit found she failed to follow rules for a no-bid $4.4 million contract on special education.

Since then, she caught the ire of Democratic and Republican lawmakers for approving a $2.5 million no-bid contract with Florida-based ClassWallet, using Career Ladder funds, to run the Education Savings Account program. That voucher program, Lee's first major education initiative, was found unconstitutional and remains tied up in court.

Read more at TennesseeLookout.com.