The Oregon Government Ethics Commission has found that the former director of Logos Charter School violated state ethics laws 22 times over a lucrative consulting contract with the school.
Joseph VonDoloski was found in violation of using or attempting to use his position as Logos executive director for personal financial gain 11 times and of failing to disclose those conflicts of interest 11 times while he was serving as Logos executive director, according to state investigators.
State investigators found insufficient evidence that VonDoloski played a significant role in the final authorization of the five-year, $1.5-million contract between Logos and his firm Western Collegiate Consulting.
The contract was terminated by Logos in October. (Corrected from the previous version)
The commission voted Friday to make preliminary findings of the 22 violations, prompting a period during which VonDoloski may appeal the findings to an administrative law judge.
According to Oregon Ethics Public Official Guide, VonDoloski could negotiate a settlement of his case. Sanctions range from letters of reprimand to civil penalties of up to $5,000 for each violation, according to the guide.
Reached by phone Monday, VonDoloski declined to comment on the commission’s decision to pursue the violations. He called aspects of the report “misleading” and the findings “one-sided,” and said he will take steps to appeal the decision.
The investigation also reveals that the school had been taking financial advice and analysis produced by a retired banker, who is not a certified accountant and was actively aiding VonDoloski and his company.
Logos School Board published a press release Friday night following the commission’s decision and declined to answer further questions about the case. The press release focused on the determination that VonDoloski had not played a significant role in final authorization of the contract. It addressed in one sentence the allegations that were substantiated against VonDoloski, without noting the number of violations.
“Logos Public Charter School cooperated fully and transparently with the (Oregon Government Ethics Commission),” the press release reads. “... The commission’s decision was not a directive against Logos Public Charter School.”
Medford School District, which is the district sponsor of Logos, first became alarmed with the contract between Logos Public Charter School and VonDoloski’s for-profit management firm in August 2017, according to the investigation.
It filed a complaint in September, the Mail Tribune previously reported, as the district raised questions about VonDoloski’s potential involvement in the process and the district’s cost analysis showing the savings associated with outsourcing administrative services.
VonDoloski co-founded Logos with his brother, John VonDoloski, in 2010 with 200 students. The school reached its capacity of 1,000 students in 2017 with the highest graduation rate in the county at 91 percent in 2014-15 and 90.7 percent in 2015-16. The school employs 75 full time positions, including teachers and staff — with a budget of roughly $6.45 million. Students are primarily home-schooled, but take some courses and receive assistance from the school staff.
According to the meeting minutes and the investigation, Logos School Board started to discuss hiring a management firm in 2014. The investigation reveals the effort was abandoned after staff found out that the option would not allow the school to opt out from Oregon Public Employee Retirement System.
In early 2017, VonDoloski — using his Logos email — began to solicit information from various sources of how to opt out of PERS and procure funding for a new Logos facility, as he was simultaneously exploring the option to set up the management company, according to the investigation.
According to business registry documents, Western Collegiate was dissolved in 2016 for failure to file an annual report. It was reinstated by VonDoloski in April 2017, as he started ordering business cards and setting up a Western Collegiate website in the following days, according to emails obtained by state investigators.
VonDoloski was also in communication with Dave Carey, who was referred by Logos attorney as an “experienced CPA.” State investigators found that Carey is a retired banker and an acquaintance of VonDoloski. According to emails and interviews with state investigators, Carey helped VonDoloski and the school’s business manager in preparing financial documents related to Logos’ new building.
In May 2017, VonDoloski used his Logos email to begin advertising his private business, the report reads.
On May 2, VonDoloski reached out the Logos School Board Vice Chair Mark VonHolle, pitching the idea for Logos to enter a contract with a management firm to “get out from under PERS” and “get out from (Oregon Educators Benefit Board).”
As he disclosed his company would submit a bid, VonDoloski also asked if VonHolle “would be willing to spearhead that,” adding that he had “(two) or three people would sit on the evaluation committee.” He also proposed a timeline in his email.
The investigation noted that the only written record of VonDoloski noting a conflict of interest was in his communication with VonHolle.
“Ironically,” the report notes, “instead of asking the Vice-Chair to dispose of his conflict of interest, Mr. Vondoloski asked the Vice-Chair to spearhead the project.”
At a school board meeting on May 8, VonDoloski used his position as executive director to recommend that the board contract with a management firm. Investigators found no evidence of VonDoloski disclosing his ownership of Western Collegiate — a business “which was planning to vie for that contract.”
After the board agreed to move ahead with soliciting proposals from management companies at its May 8 meeting, VonDoloski continued to reached out to different schools to pitch his company with his Logos email.
VonDoloski remained as Logos executive director, before resigning on June 26, 2017. Western Collegiate submitted its bid the following day, June 27, and ultimately got the contract with Logos in July.
According to meeting minutes, VonDoloski was not present at meetings in which the board discussed hiring a management firm or the hiring process.
An email shows that VonDoloski used his Logos email on June 28 to conduct business for his private company.
According to the investigation, “every time that (VonDoloski) took an official action, made a decision, or made a recommendation in his capacity as Logos executive director that would or could have financially affected him or his business, WCC, he was met with a conflict of interest.” The report found 11 incidents of that nature.
The board voted in October to order Logos end its contract with Western Collegiate. According to the report, Logos made a payment of $50,000 to Western Collegiate.
In its statement published on Friday, Logos said it currently has no intention to outsource its employment management. It added that the investigation has no effect on the school’s relationship with Medford School District.
The district spokeswoman declined to comment on the case.
Correction: The previous version of the story stated Oregon Ethics Commission ordered Logos School Board to end its contract with Western Collegiate Consulting. Logos voted to terminate the contract on its own.
Reach reporter Tran Nguyen at 541-776-4485 or firstname.lastname@example.org. Follow her on twitter @nguyenntrann.