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It is with tremendous sadness that we must convey the news that Steve Gilliard, editor and publisher of The News Blog, passed away June 2, 2007. He was 42.

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Conflicts abound

Schools Official Deflects Query About Stocks

Published: February 9, 2007

Chris Cerf, the deputy schools chancellor who is a former president of Edison Schools Inc., the commercial public school operator, said yesterday that he held an equity stake in the company until Wednesday, the day before a citywide parents’ group planned to question him about his ties to Edison.

Mr. Cerf, who was named a deputy chancellor in December after working as a consultant to the city’s Education Department for about a year, had owned Edison shares that could have been worth as much as $6.7 million by 2008, according to company filings with the Securities and Exchange Commission. Mr. Cerf described that figure yesterday in an interview as “1,000 percent speculative.”

Mr. Cerf, one of a number of consultants enlisted by Schools Chancellor Joel I. Klein in recent years to help redesign the nation’s largest school system, did not disclose to parents that he had given up his shares less than 24 hours previously when he appeared yesterday before their group, the Chancellor’s Parent Advisory Council.

Asked by Tim Johnson, the group’s chairman, to describe his financial interest in Edison Schools, he replied, “I’d be delighted to do that,” adding: “I have no financial interest in Edison of any kind. Zero.”

When Mr. Johnson persisted, asking, “Can we ask when you divested yourself of Edison stock?” Mr. Cerf said he would be “delighted” to give Mr. Johnson a copy of financial disclosure forms he said he was required to file as a public employee. “That will answer all of your questions, and that’s what I’m prepared to say today,” he added.

Mr. Klein, who spoke at the meeting after Mr. Cerf, said simply that “he is divested.”

In a telephone interview hours later, Mr. Cerf said that he had let the stock go only on Wednesday. Mr. Cerf and Michael Best, the Education Department’s top lawyer said in the interview that before being named deputy chancellor, Mr. Cerf had sought a waiver from the city’s Conflicts of Interest Board allowing him to keep the shares, but changed his mind this week.

“I concluded that this had the potential to be a distraction,” Mr. Cerf said. “It felt like there was going to be kind of a buzz about this.”

Mr. Best and Mr. Cerf said that he had recused himself from any dealings with Edison. While Edison is best known for running schools, its business dealings with the New York City Education Department include a contract under which one of its subsidiaries, Newton Learning, provides tutoring for students in failing schools as mandated by the federal No Child Left Behind law. Under that contract, the company was paid more than $9.6 million in the 2005-6 school year.

Mr. Best said he also believed that it held a contract to provide tutoring during the summer to struggling third graders, but that he did not think the department had spent any money yet under that contract.

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