Philly schools on the hook for Arlene Ackerman's buyout after private donors back out

The effort to raise $405,000 in private donations to help buy out former Superintendent Arlene C. Ackerman's contract has unraveled, leaving the Philadelphia School District on the hook for nearly $1 million.

"The public concerns about the use of anonymous private donations led almost all donors to withdraw their pledges," the School Reform Commission said in a statement released Wednesday night.

Ackerman got a buyout of $905,000 - $405,000 of which was to come from donations to a nonprofit with ties to the district. She also received about $83,000 for unused personal and vacation days.

School District lawyers had been weighing whether to withhold the payout because Ackerman had publicly criticized a top district official. Her separation agreement prohibits her from making disparaging remarks or disclosing confidential information.

But the district decided to make the payment and keep the agreement intact, the School Reform Commission announced in a six-paragraph statement. Wednesday was the deadline for the district to pay Ackerman under the agreement approved by the commission on Aug. 24.

"We . . . believe that it is a better use of the School District's resources to focus our time and energy on ensuring that this school year is as successful as possible," the SRC statement said.

Officials declined to be specific on how much in donations was raised or who had contributed.

They blamed the plan's failure on public pressure against keeping the donors anonymous. State Auditor General Jack Wagner notified the district by letter last week that his office was auditing the buyout agreement. Among the objectives was to uncover the identities of the donors.

There was widespread speculation last week that one or more of the donors had backed out due to public scrutiny and pressure to uncover their identities. A local attorney had written to the IRS asking for an investigation of the private donations to the nonprofit.

The district has asked the Philadelphia's Children First Fund, a nonprofit that was collecting the donations, to return the money that was collected.

The developments drew criticism from community activists.

"It's a train wreck," said Sen. Anthony Hardy Williams, a supporter of Ackerman. "This has been poorly managed from beginning to end."

The SRC had extended Ackerman's contract and then within a matter of months chose to negotiate a buyout with her, he noted.

Zack Stalberg, chief executive of the political-watchdog group Committee of Seventy, said the news was "both good and bad. It's good that the public doesn't have to worry about who donated the money and why, but obviously the public is going to end up paying for this, and that might have been avoidable."

Stalberg said that if Mayor Nutter and the SRC had not attempted a secret deal, donors might have come forward publicly to cover part of the buyout.

"The decision to do it as a secret is what made this thing stink," Stalberg said.

Phil Goldsmith, a former interim district CEO and Ackerman critic, faulted the SRC for the failed plan. "The public gets caught holding the bag," he said. "In the Ackerman saga, I guess that's about par for the course."

Nutter spokesman Mark McDonald called the loss of private donations "unfortunate."

"The mayor pushed very hard to keep public funds as low as they could be in this matter," McDonald said, noting that Nutter had set a limit of $500,000 and himself had made some calls to potential donors.

"Unfortunately, controversy arose. The donors have withdrawn, and unfortunately the School Reform Commission is now obliged to pay in public dollars," McDonald said.

On the same day as the payout, the district announced the layoff of 27 assistant principals. The job cuts are in addition to the layoff of about 2,700 in June in an attempt to close a $629 million budget gap.

The buyout brings to an end the just over three-year controversial tenure of Ackerman, who came to the district from an education post at Columbia University and after superintendent jobs in San Francisco and Washington.

Ackerman's attorney offered little comment.

"The settlement has occurred. The checks have been deposited," said Dean Weitzman through a spokesman.

Activist Helen Gym, a founder of Parents United for Public Education, called the buyout "a stunningly bad deal from start to finish. It's incredible to imagine that the School Reform Commission could commit to something like this. It's reckless and irresponsible."

Gym said she was not surprised the donors backed out, and said the payout "challenges the idea of what it means to be a public servant these days."

After her resignation, Ackerman went on a media blitz, offering interviews to a radio station, television station, and national education publication. In an interview with WURD-AM (900), she ripped chief financial officer Michael Masch over the district's budget shortfall. She said she had asked him to resign.

Ackerman's separation agreement says she may not make public comments "or disseminate any private or confidential information" about the School Reform Commission or senior members of the district's administration that are "malicious, wanton, or reckless," or that are "reasonably foreseeable to injure their reputations."