Gov. Kevin Stitt vetoed legislation that would have required cabinet members to file public reports to disclose their finances.
If Stitt had signed the bill last month, Oklahomans would learn that Secretary of Education Ryan Walters makes at least $120,000 a year as executive director of a nonprofit organization that keeps its donors secret. Walters is also paid about $40,000 a year by the state, according to state payroll data.
The nonprofit, Every Kid Counts Oklahoma, has refused to disclose its largest donors.
But a joint investigation by The Frontier and Oklahoma Watch has found that much of the organization’s funds come from national school privatization and charter school expansion advocates, including the Walton Family Foundation and an education group founded by billionaire industrialist Charles Koch.
As Secretary of Education, Walters serves as Stitt’s top advisor on public education policy and is the governor’s liaison for dozens of state boards and programs.
Walters’ outside employment with a nonprofit funded by advocacy groups could be a conflict of interest, said Delaney Marsco, senior attorney for ethics at the Campaign Legal Center, a nonprofit group that focuses on government transparency and accountability.
“If you are responsible for making decisions in a certain area of the government and you are being paid by an outside organization that has an interest in that, that absolutely can be a conflict of interest,” Marsco said. “If you are a public servant, your duty is to the public, and anything that kind of calls that into question, even raises the appearance of a conflict of interest, is a problem.”
Under Walters’ leadership, Every Kid Counts Oklahoma was the public face of Stitt’s program that distributed $1,500 grants to families in 2020 funded with $8 million in federal coronavirus relief money. The money was intended to buy tutoring and educational supplies. But a lack of safeguards allowed parents to use some of the funds to buy TVs, gaming consoles and home appliances, an investigation by Oklahoma Watch and The Frontier found. Emails and other records show that Walters helped secure the no-bid contract with a Florida company to distribute the money. The U.S. Department of Education’s Office of Inspector General has opened an audit into how the state used those funds.
Walters, who declined multiple interview requests, is now running for state superintendent, an elected position overseeing the state Department of Education and a budget of over $3 billion. Unlike in federal elections, candidates for state office in Oklahoma are not required to fill out financial disclosures until after they are elected.
At the federal level, executive branch appointees are required to file publicly available financial disclosures and rules limit how much some federal workers can earn from outside sources.
Stitt’s spokeswoman Carly Atchison said it’s not uncommon for cabinet secretaries to have outside employment. Walters accepted the appointment on the conditions that he could continue to teach classes and work for Every Kid Counts Oklahoma, she said. Walters receives no compensation for teaching.
“We have no concerns regarding any potential conflict,” Atchison said. “Secretary Walters serves Oklahoma students first and Governor Stitt is thrilled to have him serving on his cabinet to advocate for putting parents in charge of their child’s education and funding students.
State ethics rules allow state officers to hold outside employment, but emphasize the notion that “state officers and employees represent the state and any outside employment must not be a result of, or enhanced by, the individual’s status as a state officer or employee.”
The Walton Family Foundation, and big funders like it, donate to educational groups that align with their own interests: expanding charter schools and, in some cases, broadening voucher programs and tax credit scholarships for private school tuition, said Leslie Finger, an assistant professor of political science at the University of North Texas, whose research has focused on special interest groups and education reform.
Walters’ organization, Every Kid Counts Oklahoma, aligns with those interests.
“It seems clear that his organization is an education advocacy group that pushes for more market-oriented policies,” Finger said. “And, as superintendent, I wouldn’t be surprised if he continued to advocate for those policies. That clearly aligns with his beliefs.”
From the classroom to the state Capitol
You won’t find Walters “going woke,” as he puts it.
Since Stitt named him Secretary of Education in September 2020, Walters has posted frequent videos on social media — many shot from the driver’s seat of his car — railing against President Joe Biden’s “woke agenda,” transgender students and critical race theory.
“We’re always going to stand with parents,” Walters said in a video he posted to Twitter in April. “We want parents to have choices in their children’s education. So we support public charter schools, we support parents being able to choose the public school their children go to, we support private school options for kids. We support parents in the state of Oklahoma. Joe Biden and his woke agenda will not take education away from Oklahoma parents.”
Walters has also aligned with advocacy groups that support school vouchers and charter school expansion, including ExcelinEd, a national nonprofit chaired by former Florida Gov. Jeb Bush. Walters spoke at a December 2020 ExcelinEd virtual conference. Bush made an appearance in Oklahoma City this month at a private fundraiser for Walters’ superintendent campaign.
In the span of a few years, Walters’ star rose from public school teacher and coach in southeast Oklahoma to one of the state’s top education officials, courting wealthy donors and multi-billion dollar philanthropic organizations.
Walters, who graduated from McAlester High School, returned after college to teach in his hometown. In 2016, he was a finalist for Oklahoma Teacher of the Year.
Back then, he was “Coach Walters” to his students at McAlester High School, where he taught AP U.S. history and was known for wearing skinny ties paired with skinny slacks.
Walters’ first board appointment was in 2018 by former Gov. Mary Fallin to the Oklahoma Community Service Commission. The next year, Stitt appointed him to the Commission for Educational Quality and Accountability, a board that oversees teacher certification and accreditation for educator training programs.
In the summer of 2019, Walters resigned from McAlester Public Schools to become executive director of Oklahoma Achieves, an education initiative backed by the Oklahoma State Chamber of Commerce that received $500,000 in direct donations from the Walton Family Foundation between 2017 and 2020.
The Walton Family Foundation, established by the late founder of Walmart Sam Walton and now controlled by his children, has poured billions of dollars to push charter school expansion and voucher programs over the last three decades.
The Waltons embrace charter schools as a way to help underprivileged students in poor communities. They believe in a market-based system: when faced with competition, some schools will improve and those that don’t will close. A foundation director explained the organization’s philosophy in a New York Times article.
“The Walton Family Foundation has been deeply committed to a theory of change, which is that we have a moral obligation to provide families with high quality choices,” Marc Sternberg said. “We believe that in providing choices we are also compelling the other schools in an ecosystem to raise their game.”
By the end of March 2020, Oklahoma Achieves transitioned from an arm of The State Chamber to its own independent nonprofit organization — Every Kid Counts Oklahoma.
In May 2020, the board of Every Kid Counts Oklahoma offered Walters a $100,000-a-year employment contract beginning July 1, 2020, with an option for a minimum $20,000 raise after the first year, according to records obtained by The Frontier and Oklahoma Watch. The contract also required Walters’ salary to be at least 20% higher than the nonprofit’s second-highest employee.
Every Kid Counts Oklahoma has since signed on to petitions and open letters from national groups pushing for educational privatization and charter school expansion, and helped promote school funding legislation opposed by many public school advocates.
Under Walters’ leadership, the nonprofit also advocated for passage of school choice and voucher bills during the 2022 legislative session. The organization also helps direct parents, teachers and business leaders to education resources and networks with those individuals to improve education outcomes, according to its website.
For over a month, Every Kid Counts Oklahoma refused to release its annual tax forms to reporters from The Frontier and Oklahoma Watch.
Under IRS rules, nonprofits are required to let the public inspect their annual tax forms. Nonprofits must give the public immediate access to tax information in person, or within 30 days for written requests.
Tax forms Every Kid Counts Oklahoma eventually provided in April show the group raised $138,068 from three separate donations between March 30 and June 30, 2020. The donors are not named, but some nonprofits are allowed to shield donor information from the public under IRS rules.
Laura Hendrix, spokeswoman for Every Kid Counts Oklahoma, refused to say who the group’s largest donors were.
“Every Kid Counts Oklahoma, like any non-profit, is funded through a variety of sources,” Hendrix said. “Our partners include private donors, businesses, grants and foundations who support the operational efforts of Every Kid Counts Oklahoma to help students, teachers and parents.
The largest donation, $108,068, was from the Walton Family Foundation, the organization confirmed through a spokeswoman.
Another $10,000 came from a national organization called Yes. Every Kid, a school privatization advocacy group funded by billionaire industrialist Charles Koch. Yes Every Kid reported the donation on a 2020 IRS tax form. Koch is a major funder for conservative and libertarian think tanks and nonprofit organizations including Americans for Prosperity, and the State Policy Network, which includes the Oklahoma Council of Public Affairs.
Atchison, Stitt’s spokeswoman, said the governor’s office worked closely with school privatization and charter school expansion groups to rapidly distribute federal relief money when many students moved to remote learning during the early days of the pandemic.
“We proudly worked with pro-school choice groups who share the governor’s same goal to fund students, not government-controlled systems,” Atchison said.
Emails obtained by The Frontier and Oklahoma Watch show Every Kid Counts Oklahoma worked together with the Oklahoma-based public relations firm Saxum and the Walton Family Foundation to plan the launch of a grant program for teachers in late 2020 and early 2021 funded with some of the Oklahoma’s share of federal coronavirus relief money to support students during the pandemic.
The Innovative Educator Fund was intended to provide teachers with $10,000-grants for classroom supplies but plans were scuttled after state officials learned of a looming federal audit of Oklahoma’s share of the relief money.
Saxum helped map a plan to launch the Innovative Educator Fund through the Walton Family Foundation’s account at the public relations firm. Damon Gardenhire, program manager for the Walton Family Foundation, was also copied on emails about a publicity campaign for the grant program.
Gardenhire did not respond to phone messages seeking comment.
Debbie Schramm, CEO of Saxum, said in a statement that Saxum often works with the Walton Family Foundation to support a number of its grantees.
“Saxum received no state or federal funds to do this work,” she said.
In his role as Secretary of Education, Walters became the state’s main point of contact for a private school voucher program funded with $10 million in federal relief money. Jennifer Carter, who runs the Oklahoma chapter of Betsy Devos’s school privatization group American Federation for Children, also helped pass on inquiries from parents about the voucher program, records obtained by The Frontier and Oklahoma Watch show.
The group didn’t take any taxpayer money to assist parents with the voucher program, Carter said in a written statement.
“As the nation’s leading voice for education freedom, AFC was happy to provide assistance to families during an extraordinary time,” she said.
Stitt blocked a bill to disclose cabinet members’ finances
In April, Stitt vetoed a bill that both chambers of the Oklahoma Legislature passed unanimously to require state agency heads and cabinet appointees to file financial disclosure forms with the Oklahoma Ethics Commission.
The legislation would have required many state officials to disclose information about business interests, outside revenue and salaries for themselves and their spouses. Until 2015, governor appointees and cabinet members in Oklahoma were required to disclose finances, but those requirements were scrapped by the Oklahoma Ethics Commission, citing too much paperwork for the agency’s small staff. In 2015, 6,000 state employees and officials were required to file disclosures, compared to only 362 filers by 2017.
In a message accompanying the veto, Stitt said he rejected the bill because it did not include financial disclosure requirements for legislative appointees and officials subject to retention elections.
The bill’s main author, Sen. Casey Murdock, R-Felt, told The Oklahoman that Stitt never reached out to him to amend the bill, but that he would probably not bring the proposal back up for a veto override in the Legislature.
Murdock did not return phone messages seeking comment.
Marsco, from the Campaign Legal Center, said financial disclosures allow the public to see the forces that could influence government officials.
“Generally, the purpose of financial disclosure is to shine sunlight on possible conflicts of interest,” Marsco said. “What the public doesn’t know they can’t act on. And the public has a right to know what types of influences their public officials might be acting on, what special interests might be influencing their decision-making.”
Requiring financial disclosure from agency heads and gubernatorial appointees was “a no-brainer,” said Sen. Julia Kirt, D-Oklahoma City, one of the proposal’s co-sponsors.
Stitt’s veto only drew more attention to the issue, she said.
Kirt, who has run and worked for Oklahoma nonprofit organizations for more than 20 years, said she’s seen online advertisements from Every Kid Counts Oklahoma, pushing for the passage of education-related bills, such as open transfers and charter school expansion. The organization supported Senate Bill 1647, the “backpack funding” bill, authored by Sen. Pro Tem Greg Treat, which would have created universal school vouchers for private school tuition and other educational expenses.
Kirt said Walters’ salary from a nonprofit backed by special interest groups that lobby for education legislation in the state raises questions.
Under IRS rules, 501©(3) nonprofits like Every Kid Counts Oklahoma are prohibited from using a “substantial amount” of funds to influence legislation.
“I think my bigger concern is a conflict of interest around lobbying,” Kirt said. “....But you also have a position of trust and authority within the executive branch.”
“To me that crosses the line,” she said.