Kentucky Education Commissioner Terry Holliday says international trips paid for by an education foundation did not lead to the decision to contract with its business arm.
The New York Times reported several states entered into agreements with Pearson after taking trips on its foundation’s dime and this raises ethical questions, said Times reporter Mike Winerip.
Pearson’s bid in Kentucky was $2 million more than the lowest bidder, but KDE officials said the decision to contract with Pearson was based on its value, not on its price. Winerip contacted tax experts to help explain the relationship between a business and its foundation.
“I then started calling tax people to get them to explain to me where the line was, where the wall had to be between a foundation and the for-profit arm of Pearson and Pearson Foundation,” he said.
The foundation’s tax forms omitted payments for travel and entertainment expenses to any government officials and the non-profit could be in violation of federal tax-code if it pushes any business interests, said Winerip.