Calif. Department Probed on Tie to Chief s Wife's Firm

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The U.S. Education Department is examining the relationship between the California Department of Education and a nonprofit consulting firm run by the wife of Superintendent of Public Instruction Bill Honig, state and federal officials said last week.

The office of the inspector general within the federal department is conducting an audit to determine if federal funds allocated to California have been spent properly in connection with the Quality Education Project, a private parent-involvement program of which Nancy Honig serves as president, the officials said.

A spokesman for the inspector general last month would confirm only that the federal agency is conducting an audit within the California education department. He declined to give any details of the audit, and noted that such audits of state education departments often are conducted routinely and without any suspicion of wrongdoing.

Another official in the inspector general's office said, however, that the agency regards the soon-to-be-completed audit as "very sensitive."

Meanwhile, a separate examination of the relationship between Mr. Honig and the Q.E.P. is being conducted by State Attorney General Daniel E. Lungren, a Republican.

Mr. Honig, a Democrat, has been vocal in recent months in alleging that he has been targeted for attack by a network of his political opponents, in particular members of the state board of education appointed by the former Republican governor, George Deukmejian.

State and federal officials indicate that the Quality Education Project itself is not being audited or investigated. Ms. Honig noted in a interview last week that the attorney general's office had conducted a routine audit of her corporation last winter, and "we passed it, and we did not have any problems."

Audits 'Not Unusual'

Mr. Honig declined last week to comment on the federal audit.

"Mr. Honig prefers to wait until the audit is final. None of us is going to comment until the audit is completed," said L. Susan Lange, director of public relations for the California education department.

"Auditing is not at all unusual for a state department of education," Ms. Lange said, adding that other programs within the education department have routinely been audited without any findings or suspicion of wrongdoing.

Mr. Honig also has declined comment on the state attorney general's examination, Ms. Lange said.

Sefton Boyars, the U.S. Education Department's regional inspector general for audits, said his agency generally keeps those being audited well-informed of its activities. It does not publicly announce its findings until those being audited have been given ample time to respond.

"I respect the U.S. Education Department for being as cautious as they are," Ms. Lange said. "Clearly, there is a lot of politics around this."

Last spring, Mr. Honig sent a letter to the California Board of Education rebutting local newspaper reports that, he said, suggested he may have violated conflict-of-interest laws by allegedly telling department staff to steer clients toward Q.E.P. and by granting school districts "seed money"' that later was spent for Q.E.P. services. (See Education Week, March 6, 1991 .)

In the letter, Mr. Honig denied steering business toward the Q.E.P. and said no state money has ever been used directly for Q.E.P. services.

Districts that used the Q.E .P. while receiving state money were not charged by the firm for its services, he said.

"We have never gotten any money from the state department," Ms. Honig said in an interview at that time. "That's why I feel there is not a conflict of interest."

The Q.E.P. "is not a for-profit company," said Ms. Honig, whose salary as president of the firm last year was $108,000. "It would be different if it was a for-profit company, and we had retained earnings."

Both Mr. and Ms. Honig acknowledged last spring that they may have been politically naive in allowing the Q.E.P. to Operate from their home. They pointed out, however, that the $18,000 paid to them by the program to lease space for the program's 15 employees was less than market value, and went for remodeling bedrooms into offices.

The Q.E.P., which seeks to involve parents, teachers, school administrators, and community members in partnerships aiding student achievement, has operated in more than 300 schools, mostly in California.

'Organized' Conspiracy Alleged

Mr. Honig's letter last spring came at a time when members of the state board of education were publicly questioning the relationship between the department and the Q.E.P. The board held a hearing on the issue, at which Ms. Honig testified.

In an interview then, Mr. Honig said the board's interest in the issue stemmed from his ongoing battle with the board's president, Joseph D. Carrabino.

Mr. Carrabino, an appointee of former Governor Deukmejian, has engaged in a number of fierce personal and political disputes with Mr. Honig, for example over Mr. Carrabino's contention that the board should have more oversight powers over spending by the department.

Mr. Carrabino has denied any connection with the current audit.

Mr. Honig asserted that "every agency around" that possibly could investigate him had been contacted as part of an "organized" conspiracy to put him out of office mounted by conservative Republican legislators, creationists angered over his stand on the teaching of evolution, and the Sacramento Union, which has published several articles discussing the Q.E.P. issue.

Education Week has received repeated calls in recent months from sources urging it to publicize allegations against Mr. Honig. Those making the allegations refused to be identified, however.

The spokesman for the inspector general's office last month declined to say why the federal agency had begun its audit of the California education department.

He noted that such audits can be triggered by a variety of events, including hot-line calls, letters from the public, or routine requests within the Education Department to examine the efficacy of certain programs.

Vol. 11, Issue 05, Page 21

Published in Print: October 2, 1991, as Calif. Department Probed on Tie to Chief s Wife's Firm
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