The state Ethics Commission found probable cause that Polk County School Board member Lori Cunningham violated standards when a company she owns sold mandated school uniforms at two charter schools within the Lake Wales Charter Schools system.
The commission also found there was no probable cause that her company sold uniforms to a district school, a Jan. 31 press release from the commission stated.
Cunningham, who has served on the School Board for about 20 years, owns and runs a company founded in 2011 called Applied Images Inc. It sews logos onto uniforms and other apparel for a variety of organizations, commission documents show.
Her attorney, Robin Gibson, who is also general counsel for Lake Wales Charter Schools and a Lake Wales city commissioner, called the case against Cunningham an “unintentional mistake,” in an prepared statement sent via email to a Ledger reporter.
“Charter schools are not well understood by a lot of folks and I believe the Order finding probable cause is an unintentional mistake,” Gibson said.
“The Order does not find that Lori violated the ethics statute,” he added. “It’s only the view that there is a probable cause of a violation and the question should go elsewhere for a decision.”
But Gibson’s brief statement at the Jan. 26 ethics commission hearing did not sway the panel, including a least two of the commission members who spoke before the panel found probable cause, a recording of the proceeding shows.
In the recording, he said funds for the uniforms passing through the schools were “private” and raised through donations.
“There were no funds from the agency over which she had jurisdiction or control,” he said.
‘There’s more than enough evidence’
Still, the panel did not go along with Gibson’s explanation.
“There’s more than enough evidence [for a probable cause finding] … The paper don’t lie. And the checks don’t lie,” said Wengay Newton, a commission member.
Newton was referring to a ledger from Lake Wales High School that showed checks written to Applied Images.
According to an investigation report, the charter school chief financial officer turned over records showing “that from January 5, 2018 to present day, LWHS has paid a total of $16,886.58 to Applied Images.”
Newton was joined by commission member William P. Cervone, who added, “To me, the problem is that she’s gaining entree through her position as a School Board member. I don’t care who’s paying for it.”
According to the report, Gibson had told Cunningham and commission investigators that there was nothing wrong with his client selling uniforms to Lake Wales Charter School families.
He told investigators that LWCS is a nonprofit organization operating charter schools with its own board of directors and Cunningham is not a member of that board. Also, the charter system receives the same per-student allotment from the Florida Education Finance Program that Polk County Public Schools gets.
But the Polk public school district does not control the LWCS budgets, how it spends funds nor its contracts, he said. He added that federal funds go directly to the charter system and no longer come through the public school district.
Gibson also advised Cunningham and others in a 2012 email about her business relationship with LWCS and told her it would be a conflict of interest, the report shows in correspondence contained as part of the investigation.
“The bottom line is that our schools should not use school money to purchase anything from a company in which a school board member has an interest. This applies to the Polk School Board as well as our own Board of Trustees.”
He added, “Even if the price we get is at or below market and the service is above competition, the appearance of buying favor from a public official still exists.”
Gibson had provided Cunningham with his opinion about a year after a 2011 memorandum of understanding, which also was an exhibit in the report, showing Applied Images and another vendor as being able to sell uniforms to parents.
A percentage of the funds generated by the sales were to go back to the charter schools, and the vendors were to assist families in dire need of uniforms, which are mandatory at LWCS.
More recently, Gibson had re-evaluated the business relationship, he told investigators.
“In my opinion, you would have a conflict of interest if you did business with the agency that you serve as a public officer,” Gibson wrote in a letter attached to the report. “You do not have a conflict of interest while doing business with an agency that you do not serve as a public officer.”
Further, he wrote, the individuals buying the uniforms have the freedom to buy them wherever they decide under rights guaranteed in the Florida Constitution. He did advise Cunningham to avoid sales with district schools, but even those potential customers have individual rights to decide where they want to buy uniforms.
In the 51-page report, the investigators also interviewed the superintendents of both PCPS and LWCS as well as the district’s School Board attorney. Others interviewed included principals at the schools identified in the complaint.
The commission investigators reported to the panel that initially the principals said they had not been purchasing uniforms from Applied Images, but later changed their story once they saw the ledger.
Exhibits within the report included marketing materials showing Applied Images as a vendor for uniforms that would have been viewed by friends of the Lake Wales High School Facebook page and also marketing on the charter high school’s website.
The exhibits show invoices from Cunningham’s business to LWCS and the ledger showing payments to her business.
The final say on the matter is expected during a public hearing later this year before a judge with the Florida Division of Administrative Hearings.
‘There is no hint of misunderstanding’
The process started after the Florida Commission on Ethics in Tallahassee received a complaint on Jan. 5, 2023, from former School Board member Billy Townsend. He had asked the state for clarification on possible violations of the Code of Ethics for Public Officers and Employees.
The complaint shows that the commission investigated sales of school uniforms at three schools, including Dundee Elementary Academy Magnet School, a district public school; and Bok Middle Academy and Lake Wales High School, which are part of the Lake Wales public charter school system.
During the investigation, probable cause was not found when they looked into possible sales of Applied Images uniforms directly to Dundee Elementary. But parents could have purchased uniforms on their own.
The executive director of the commission had initiated an investigation into allegations of unethical behavior after receiving the complaint.
The ethics commission has an advocate and uses investigators with the State Attorney’s Office. The investigators provide the advocate with its findings after looking into an ethics complaint and the advocate presents the report of investigation to the panel.
During a phone interview on Monday, Townsend disagreed with the position Cunningham’s attorney took with the commission that they misunderstood how charters operate.
“There is no hint of misunderstanding here,” Townsend said. “She did precisely what Mr. Gibson himself advised her not to do way back in 2012.
“Now the state can decide if that is ethical or not,” he said. “I just want clarity on behalf of citizens and people forced to buy school uniforms from a School Board member.”
In a press release issued Jan. 31, the Ethics Commission said Cunningham was investigated for “a conflicting contractual relationship that created a continuing or frequently recurring conflict between her private interests and the performance of her public duties when a company she owns sold uniforms to Lake Wales Charter Schools.”
As a Polk County School Board member, Cunningham did vote to renew the charters for several of the Lake Wales Charter Schools, according to minutes on the district website and broadcasts of the meetings.
A settlement or hearing?
Since the Jan. 26 hearing, Cunningham had 14 days to request a hearing or reach a stipulated agreement that is usually decided and reviewed by the commission at its next meeting. It was unclear Friday whether she had done so.
Within the past year, only two cases went to a hearing before a judge with the Florida Division of Administrative Hearings.
Most cases before the commission end up with a stipulated agreement, meaning a potential fine or penalty for the party involved. Last year, there were 13 agreements reached with the commission’s advocate – an employee of the Attorney General’s Office. The Governor’s Office enforces agreements involving school board members.