McCain’s Education Adviser Was Accused Of Mismanaging Money

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Lisa Graham Keegan, one of Sen. John McCain’s top education advisers, is a forceful proponent of school vouchers and other market-based education policies.

But when it comes to managing money herself, she doesn’t have a great track record.

Keegan was among four education advisers the McCain camp trotted out yesterday in a conference call with reporters to explain McCain’s new education policy.

Nobody on the call asked her about her stint as CEO of the Education Leaders Council, a conservative non-profit, school-reform group that she led from 2001 to 2004.

With Keegan at the helm, the group began to prosper with money from Bush’s No Child Left Behind law. The ELC raked in about $23.4 million in federal money, part of which it was later accused of mismanaging. An audit report(pdf) from the Department of Education’s Inspector General ultimately recommended that the group give back about $500,000 in taxpayer dollars.

A large chunk of the earmarks and federal grants the group received were for a program to help schools with technological upgrades and getting curriculum in line with Bush’s No Child Left Behind law.

Money management under Keegan became a source of tension when an internal audit in 2003 found Keegan was being paid a $235,000-a-year consulting fee and one of her aides from Arizona was paid $200,000 under a similar contract, according to an April 4, 2004 report in the Arizona Republic.

At least four board members out of 18 resigned shortly after the internal audit, according to the newspaper.

The Department of Education eventually got involved and concluded that the groups books were a mess with “weak or non-existent internal controls” that led to money spent on things not legally covered by the grant.

According to the audit (pdf):

Also, included in the questioned amounts were costs for alcoholic beverages, advertising, fundraising, and interest that are specifically unallowable under applicable cost principles.

A spokesman for McCain did not respond to a request for comment.