INDIANAPOLIS — State Sen. Eddie Melton, D-Gary, is demanding the state immediately remove the emergency management firm working to restore the financial solvency of the Gary Community School Corp. because a Republican former state official is associated with its parent company.
In a statement issued Thursday, Melton said he was "greatly disturbed" to discover that Tony Bennett, the state superintendent of public instruction between 2009 and 2013, has a connection to MGT Consulting Group, whose subsidiary Gary Schools Recovery LLC is operating the cash-strapped district in lieu of locally elected school trustees.
"Many of the reasons why GCSC is facing such financial issues are because of the anti-public schools policies put in place by the state's former superintendent and Republican legislative supermajorities," Melton said.
Documents show that Bennett, who lost his 2012 re-election bid amid school accountability and school choice controversies, now is a partner at the Florida-based Strategos Group, which comprises half of MGT of America LLC, along with MGT of America Consulting LLC.
They all operate under the MGT Consulting Group banner, providing management consulting services to school districts and local governments across the country.
Melton did not suggest that Bennett, who lives near the Indiana-Kentucky border and could not be reached for comment, is in any way directly influencing daily operations at the emergency management firm selected by the Indiana Distressed Unit Appeals Board.
Indeed, MGT spokeswoman Amy Marsh said Bennett “is not and has never been a member of the emergency manager team in Gary.”
“He has not and does not engage in the decision-making process for any Gary emergency management decisions,” she said.
The DUAB chose MGT after the General Assembly last year took over the Gary school district, following decades of sharply declining enrollment, financial mismanagement and the accumulation of more than $100 million in debt.
Nevertheless, Melton said the fact that he and others did not know about Bennett's connection to MGT should prompt Republican Gov. Eric Holcomb and DUAB to immediately terminate the emergency management contract and to find another company to run the Gary school district.
"The governor's administration has oversight of DUAB, and their lack of transparency has me questioning critical decisions made about Indiana schools and their students," Melton said.
"These matters must be corrected through a fully transparent process with the goal to reinstate the trust and confidence of those whom we all hope to better represent and whose precious tax dollars deserve to be better managed."
Courtney Schaafsma, a former DUAB member and its current non-voting executive director, said she was aware of Bennett's Strategos Group position when MGT was among seven companies competing for her vote to operate the Gary school district.
DUAB unanimously selected MGT for the role on July 31, 2017, in part because the company hired Peggy Hinckley, a Gary native and nationally renowned former teacher, administrator and education consultant, to personally manage the district and work to bring spending in line with revenue.
Hinkley is retiring next month. MGT has hired former Griffith Public Schools Superintendent Peter Morikis, another Gary native, to be its on-site district leader going forward.
"Dr. Bennett did not play a role in the decision to hire MGT," Schaafsma said.
"The primary reason for the selection was that MGT was the only responsive bidder to propose that a superintendent fill the lead emergency manager role."
It's not clear why Melton, who served as DUAB legislative adviser during the emergency manager selection process, did not research the principals at each firm, particularly because Melton was a lead sponsor of Senate Enrolled Act 567, the 2017 law that stripped control of Gary's school district from the local board and put it under the authority of a DUAB-appointed emergency manager.
According to DUAB, since Gary Schools Recovery began operating the district on Aug. 1, 2017, triple-digit annual enrollment declines have stopped, the budget deficit has been cut by one-third, the district's debt now is under $100 million, a new middle school was opened, new student textbooks have been purchased, and employee pay and benefits no longer are in doubt.
The company is poised to earn $11.4 million, including incentives, under its three-year contract to run Gary schools.
That cost is being paid by the state.