Nevada schools’ billion-dollar blind spot

All across America, elected officials are required to file personal financial disclosure reports and ethics-acknowledgment statements. Both are intended to promote public integrity.

The financial disclosure reports, usually annual, remind officials of their financial interests and help them avoid conflicts of interest. The ethics-acknowledgment statements — forms stating he or she has read and understands the state's ethics standards and recognizes his or her obligation to keep abreast of any new amendments — are intended to also discourage ethical violations. 

Thus, it would probably come as no surprise to learn that Nevada law, too, requires such filings for every elected official in the state.

Moreover, since many powerful public officers are appointed, not elected, to office, it would probably also come as no surprise to learn that Nevada's ethics laws also require appointed public officers to file these same documents with the ethics commission. Examples of appointed public officers are Clark County Manager Virginia Valentine, Henderson City Manager Mark Calhoun and Las Vegas City Manager Betsy Fretwell.

So, then, would it now come as a surprise to learn that Clark County School District Superintendent Walt Rulffes — who oversees an empire of employees over twice that of Valentine, Calhoun and Fretwell combined — has never filed an ethics acknowledgement or financial disclosure during his entire five-year tenure as superintendent?

In fact, no CCSD superintendent has, and the state ethics commission doesn't know whether they should.

Yet the Clark County School District, at last count, was receiving some 62.7 percent of the state's entire K-12 general-fund spending — about $1.625 billion of the monies appropriated by the state for that purpose for the 2009-11 biennium, according to the district's amended final budget[2] for fiscal year 2009-10 (July 1, 2009 – June 30, 2010). 

How can it be that a person responsible for the administration of such a large amount of the state's tax revenue is not subject to Nevada's ethics-in-government laws?

Nevada Commission on Ethics Executive Director Caren Jenkins says she doesn't know.

"I was unable to find a single ethics acknowledgment in our file," she told NPRI in a letter. "However, on a moment's contemplation, I realized that local superintendents may not be deemed to be public officers who are required to file acknowledgments at all.

"Considering the statute authorizing the board of trustees of a school district to employ a superintendent and the range of authority and duties the trustees may choose to assign an individual, I am not satisfied that all such superintendents would qualify as ‘public officers' required to complete and submit the NRS 281A.500 acknowledgement," wrote Jenkins.

"Nevada Ethics in Government Law," she went on to explain, "defines ‘public officer' in NRS 281A.160 to include those individuals whose duties (a) involve a substantial and material exercise of administrative discretion in the formulation of public policy; (b) include the expenditure of public money; and (c) involve administering laws and rules of the State, a county or city. Under the statute, a School Board may define the powers and duties of its Superintendent, taking the position out of the realm of a ‘public officer.'"

So … is Rulffes involved "in a substantial and material exercise of administrative discretion in the formulation of public policy"?

According to explicit governance policies adopted by the Clark County Board of School Trustees — the statutorily created corporate body over CCSD — it appears so.

Although CCSD has more than 30,000 employees, the school board has only one, Superintendent Rulffes — and he is the board's only official connection to school district operations.

"The Board's sole official connection to the operational organization, its achievements and conduct will be through a Chief Executive Officer, titled Superintendent," says board governance policy BS/L-1. 

And while the board retains final approval, the superintendent is explicitly authorized to set policies directing the district operations. So long as those policies constitute reasonable interpretations of the board's very general direction to him, the "Superintendent is authorized to establish all further policies, make all decisions, take all actions, establish all practices, and develop all activities."

Do Rulffes' duties include the expenditure of public money?

As the sole employee of the school board hired specifically to administer and oversee day-to-day operations of the school district — funded entirely by public money — it would definitely appear so.

Indeed, not only is Rulffes responsible for 62.7 percent of the state's K-12 general-fund budget, but CCSD's total budgeting level for fiscal year 2009-10 was a reported $6.9 billion — a sum including not only state and local but also federal dollars.

Is Rulffes involved in administering laws and rules of the state, a county or city?

The answer, obviously, is yes. 

After all, the Clark County School District is a State of Nevada political subdivision, established to implement and administer the state's system of public education — itself a construct of state laws and regulations. And Rulffes' entire function, he being the sole employee hired to administer and oversee the day-to-day operations of the district, is to carry out state laws and regulations regarding public education for Clark County.

However, even were the commission to conclude that these or other facts show Rulffes is a public officer as defined in NRS 281A.160(1)(b)(1),(2), and (3), the superintendent may still not be a public officer as defined by Nevada government ethics law, says Yvonne Nevarez-Goodson, legal counsel to the commission.

In any case involving a school district superintendent, a more relevant question may be how that position is or was created, she says. The term "public officer" refers to a position created by the Nevada Constitution, state statute or a charter or ordinance of a city, county or political subdivision, Nevarez-Goodson contends. 

While it is true that the Clark County School District is a political subdivision of the state, says Nevarez-Goodson, it may be more significant that Nevada law merely authorizes a school board to hire a superintendent, but doesn't actually create the position. Thus, because Rulffes' position was technically created through school board governance policies and not a charter or ordinance, the issue arguably becomes a question of unprecedented law. Researchers may have to delve deeply into legislative intent: Did the legislature intend to include positions created by political subdivisions governed under government structures other than the Nevada Constitution, state statute or a charter or ordinance?

So … was it the Nevada Legislature's intent to exclude 17 appointed school superintendents, notwithstanding their massive economic and political power, from the Nevada ethics-in-government laws?

Unfortunately, Nevadans may never know. 

According to Nevarez-Goodson, the ethics commission is only authorized to give an opinion in two circumstances. One, if a public official seeks a commission opinion for clarification. And two, if someone — anyone — files an ethics complaint against an officer.

In this instance, there's a very low probability that Rulffes will be seeking a commission opinion any time soon. Not because he is due to leave office in less than six months, but because when NPRI, some months back, asked the school district for copies of Rulffes' filings — or clarification as to why Rulffes hasn't filed any ethics acknowledgment and financial disclosure reports — CCSD public information officer David Roddy sent this official reply: "[B]e advised that the law does not apply to superintendents of schools. As a result, there are no records responsive to your request."

So, if we are ever to know if one of the most powerful government functionaries in the state of Nevada is a "public officer" subject to the state ethics-in-government law, someone — anyone — will need to file an ethics complaint. 

Meanwhile, be advised that Nevada ethics law does not apply to school superintendents, no matter how massive the public budgets under their control … and that there are no records.

Karen Gray is an education researcher at the Nevada Policy Research Institute. For more visit http://npri.org/.