Maybe it all begins at a dinner table in Beaverton, Oregon. It’s the late 1980s, at the height of the spotted owl controversy—a pitched battle between loggers and conservationists over whether preserving a bird’s habitat is more critical than saving jobs. A nine-year-old girl, her brother, and her parents are all engaged in debating both sides of the issue. What would be the fairest solution?

Or in Yokohama, Japan. In March 2003, a 22-year-old teaching English at a local junior high school is watching television with other staff members when news breaks that the United States has declared war on Iraq. For the Japanese in the room, it’s a sobering reminder of how war, and its aftermath, can affect a country and its people for decades. For the American, it indicates a clear need for political change. When her two-year commitment in Japan is complete, she moves to Washington, DC, to work on political campaigns that promise a different approach to foreign and domestic policy.

As formative as those experiences were in establishing her sense of justice and political engagement, however, the linchpin is probably a very well-timed sandwich.

On a cold January night, a worker campaigning in and around Scranton during the 2006 congressional race, weary of fast food, spots a promising storefront. They’re closing, but she makes it in with five minutes to spare.

Here is how the story goes, in her words: “A very handsome young man made me the most delicious Tuscan chicken sandwich and gave me a ton of free chocolate. And now I am married to that man.”

It sounds like the plot of a rom-com—and there are plenty of the standard detours along the way too—but that, in the words of Paige Gebhardt Cognetti (MBA 2014), is how she found a new home in Scranton, Pennsylvania. And it’s her dedication to a sense of what is just and fair that explains why she now finds herself in the trenches of local politics, fighting to shift a culture of patronage and mismanagement that has been decades in the making.

Located in Lackawanna County, Scranton, with a population of about 77,000, has a long-standing tradition of being one of the state’s few Democratic pockets outside Pittsburgh and Philadelphia, with a history of labor unrest and unionization dating back to the 19th and early 20th centuries. That energy carried workers along for decades, until iron production relocated, coal fell out of favor, and manufacturing dried up. At a certain point, jobs in local government and services became the gold standard for security, benefits, and compensation—which is when the pendulum swung toward corruption.

“Patronage, taking care of your family—it’s about jobs,” says Scranton Times-Tribune editor and columnist Chris Kelly. “We often joke that if there’s ever a nuclear war, you want to be in Scranton because it takes 25 years for anything to get here. It’s still very much the old pay-to-play political model.” One example is the conviction in 2011 of two Lackawanna county commissioners on multiple charges of bribery, conspiracy, racketeering, and tax fraud.

More recently, there’s the Scranton School Board. In October 2017, a scathing 107-page report from the state auditor general for July 2012 to June 2016 uncovered multiple examples of wasteful spending and financial mismanagement, the ultimate result being a $40 million deficit. The district had already been placed on financial watch, with the very real possibility of a state takeover looming.

Cognetti had been reading about the school district’s woes in the local paper. She’d also been getting to know people in her newly adopted community, talking to everyone who came into Caravia Fresh Foods, the specialty grocery and deli owned by Ryan Cognetti—maker of that fateful chicken sandwich—and his family. Having served on multiple political campaigns, she loved talking to people. And she’d been thinking about how to get more involved in Scranton, a city just over two hours away from New York with the potential to outgrow its punch-line status and draw millennials looking for affordable housing and a higher quality of life. Then, over lunch at Caravia, a friend she’d met on Hillary Clinton’s campaign asked: Had she seen that a member of the school board had resigned his seat, with two years left on a four-year term? “I looked at the position and realized this was probably the opportunity to start contributing,” she says. Without a solvent, high-performing school system, Scranton’s hope for change would remain a hope.

So last December, speaking in a crowded, harshly lit room typical of government offices the world over, Cognetti put herself forward as one of 10 candidates to vie for a seat on the Scranton School Board. As part of her personal statement, she described her family’s move from Eugene to Portland, Oregon, when she was six years old, and her parents’ anxious search for a home in the best possible school district, which led to a full-tuition scholarship at the University of Oregon. Noting that the option to choose one’s neighborhood is not possible for many Scranton residents, she highlighted the imperative to improve school quality and its key importance to the health of a regional economy. She also cited her work in the US Treasury during the financial crisis: “I witnessed that it’s possible to address enormous problems if stakeholders come to the table and work together, and if government officials are transparent.

“Public officials have got to be accountable to taxpayers when it comes to budget decisions, contracts,” Cognetti continued. “Officials must be able to show their work. That’s what we all learned in math class as children. ...We have to be able to show a return for every decision. I don’t have to tell anyone here that we face an uphill battle in Scranton, but I have seen that with a collaborative effort, public officials can accomplish extraordinary things. It can’t happen overnight, and officials must be given the space and the time to problem solve and reach compromises. But it can happen.”   

In a unanimous decision made shortly after her concluding remarks, the school board appointed Cognetti to its vacant seat.

Headlines the next day put Cognetti’s Harvard MBA front and center—a fact she embraces for the example it offers local students looking ahead to their own academic goals. “I wrote my admission essay about my time at the Treasury, and the need for people who speak the languages of public service and finance,” she says. “I wanted to have credibility and background in both government and business so that I could bring the two together and truly help get us—whether as a school district, county, state, country—where we need to be.”

At Treasury, Cognetti staffed meetings between high-level officials and European foreign ministers. Coming into HBS, she wasn’t afraid to speak her mind. But the case method honed her thinking and speaking skills in a way that was particularly useful when the difficult work of addressing the school district’s financial mismanagement began. “Those cold calls—there’s nothing better to prepare you for sitting on a school board stage,” she says.

Immediately pressing—its own financial crisis, on a local scale—was the need to pass a budget for the 2018–2019 school year, technically due just a few weeks after Cognetti was sworn in as a director. Given the district’s financial watch status, however, the state allowed a three-month extension to March 31. As the newly named head of budget and finance, Cognetti worked with committee members to examine every expenditure, from staff cell phones to printing costs to health care concessions. Trimming was necessary but not enough; unthinkable as it seemed, all librarian positions in the district would need to be eliminated, a move already made by neighboring districts. Teacher layoffs were also on the table: The number, initially set at 89, was whittled down to 51; after months of debate and conflict with local teacher unions (there are two in Scranton), 16 teachers would be furloughed in August. Maintenance staff, administrative employees, and service providers also faced reductions in jobs and pay. Another piece of the puzzle was the Scranton taxpayer, with a proposed 3.8 percent millage rate increase in property taxes. Even so, the district would need to borrow $4.1 million to make ends meet.

Cognetti pulled everything together in two clear, easy-to-read pie charts—one dedicated to human capital and professional services, the other to programs, supplies, and vendor services. Nothing remarkable. But they demonstrated a level of rigor and detail that had been missing from the school board’s deliberations for years. “If I can get people familiar with charts that are dynamic and show progress...that can help us circumvent any infighting and keep moving forward,” she says. Those innocuous pie charts were a flag planted on a hill—a statement that “business as usual” was about to look a little different.

“I hate the phrase, but Paige has been an absolute game changer,” says Kelly of the Times-Tribune. “To have someone who is committed to transparency—I’ve been covering the school district for 25 years, and just finding a way in has been almost impossible.

“She’s the know-it-all from Harvard,” he adds. “And people don’t mean that in the most positive sense, needless to say. What’s really funny is that all she’s doing is demanding due diligence.”    

For example, Cognetti was surprised to find out that the district rarely followed state or federal procurement law when purchasing goods and services. Its busing contract hadn’t been put out to bid since 1991. A 2006 addendum—that no one on the school board, past or present, can recall signing, much less discussing—gave a local transportation company a 4 percent annual fuel surcharge that has cost taxpayers an astonishing $4 million, according to the state auditor general’s 2017 investigation. Existing contract paperwork has been difficult to verify; the addendum appears to have been hastily cobbled together and signed by a former board member who, when asked, denied doing so—and who, in any case, did not have the necessary authority of the school board president. (Reporters later discovered that the signature page had been cribbed from an earlier contract extension.)

In September, Pennsylvania’s Attorney General announced multiple felony charges against the district’s former fleet manager and mechanic, who was found to have overbilled the district for repairs, in addition to billing for repairs to the personal vehicles of district employees, for a total of $785,195 from 2005 to 2017. The mechanic and his wife—neither employees of the district—also received full health benefits from 2006 to 2017 at a taxpayer cost of at least $290,730. That expenditure was not criminal, said Deputy Attorney General Erik Olsen; however, “the question of whether that was a wise decision is a separate issue.”

Cognetti has been called a “micromanager,” a “bulldog,” and worse by board members and the district superintendent, but she doesn’t seem to take it too personally. In February, her suggestion that the district’s solicitor and financial consultant waive fees for refinancing debt from 2014 was rebuffed as agenda-driven by a 20-year veteran of the board. Cognetti’s response: “My agenda is to get us through this crisis and stop any possible abuse of taxpayers’ funds.” The culture pervading the school board and other local institutions is the product of decades of nepotism and poor practices, she says—it can’t be pinned on a few bad actors. Any criminal activity will continue to be investigated and handled by law enforcement. Her goal is to influence the board’s culture. It’s an HBS change management case: “How do you try to understand the experiences and motivations of your colleagues and then pull everyone, together, onto a more sustainable path?”

Previously in the minority when it came to proposing reforms, school board member Mark McAndrew says the scale tipped with Cognetti’s arrival. “We’ve accomplished more in the past 10 months with Paige on the board than we did in the past four years. Her heart is in it—her biggest concern is the safety and welfare of the students. Paige is a force and in a good way.”

Looking back on her tenure to date, Cognetti says, “I’m much tougher than I ever knew I was, and it’s much easier to do than I ever expected, because I have 10,000 students in the district who need the money to go to them instead of vendors and contractors. They make it easy to stand up to the mismanagement of the past and attempts to continue any malfeasance that are already taking place.”

On a Monday evening in early May, the South Scranton Intermediate School’s auditorium echoes with the voices of students, teachers, and parents, all wedged into uncomfortable wooden seats etched with decades of middle-school angst. There’s plenty of emotion aired in the public comment portion of the meeting too. One after another, librarians, parents, and teachers get up to make more or less the same plea: Don’t make these cuts. We’re already suffering.

Having been a teacher herself, Cognetti finds this to be the most painful aspect of her work. But ignoring fiscal reality is one reason the district is in such dire straits. When former Pennsylvania Governor Tom Corbett took office in 2011, he cut statewide education funding by $1 billion, which meant a $5 million reduction for Scranton. While other districts in the state responded with layoffs, Scranton moved ahead with new hires, even as pension and health care costs continued to rise. Cognetti says the teachers facing furloughs in Scranton have nothing to do with the financial mismanagement of previous years, which is what makes the layoffs particularly difficult. She just hopes to show, with the help of those pie charts, that every aspect of the budget is facing cuts—and that every effort is being made to right the ship for the future.

After the public comment, the nine-member board turns to an agenda of items that runs from the renewal of a food service contract to a resolution that would allow billboards on district properties. (Both pass.) Motion by motion, the wheels of government turn as the clock ticks later and later into the evening. A motion for a local swim team to rent the high school pool. A motion itemizing salaries and bills that have been approved and paid. A motion from Director Cognetti that the board will follow state and federal procurement laws to bid out for ongoing and as-needed services, with target dates to send out requests for proposal. It passes after some pushback and probing—a small, victorious step in the introduction of best practices.

When the meeting adjourns at 11:25 p.m., the auditorium is nearly empty. This stage is a far cry from the one Cognetti inhabited at Treasury, serving as senior advisor to Under Secretary for International Affairs Lael Brainard. From 2009 to 2012, Cognetti was part of a team working to stabilize the US and European economies—work that sometimes meant traveling to as many as four European capitals in two days. For Cognetti, however, all public service is created equal. Her role on the school board connects with two of her key values: first, everyone should have a fair shot at success; and second, the real and pressing need in today’s world to shore up waning public trust in government institutions through transparency and good financial stewardship.

Christopher Smart worked alongside Cognetti in Treasury, serving as deputy assistant secretary of Europe and Eurasia. He recalls her adeptness when it came to navigating a range of personalities and egos to ensure “the right information was in the right place, at the right time, for decisions to be made.

“Paige has a real commitment to public service, whether it’s global financial policy or making schools better,” Smart continues. “And she understands that there are no easy solutions to most of these questions. I think her particular skill is the intelligence to understand the issue, the creativity to glimpse a solution or a path forward, and the personal skills to herd everybody in the right direction.”

“Some people might wonder why Paige is using her MBA to serve on a school board,” says Susan Ochs (MBA 2001), another former Treasury colleague who served as a senior advisor on the $700 billion Troubled Asset Relief Program, post-crisis. “But this is exactly what she should be doing. She’s using so many core HBS skills: digging in, looking at contracts, and thinking strategically about how to navigate a board of people. When you think about having impact, you can see the real change you can make at the local level. Every $100,000 that is wasted is money that isn’t there to buy a bus or fix the air-conditioning.”

No one knows this better than Cognetti. It’s what drives her, what gives deep meaning to a life that couldn’t be more different from the one she chose after graduating from HBS in 2014. Working at Goldman Sachs, living in the West Village, enjoying all that New York had to offer—she had a life coveted by many and achieved by few. But it wasn’t right, on a personal or professional level. She broke off her engagement to another man and reconnected with Ryan after a five-year hiatus, then moved to Scranton in June 2016.

Cognetti’s post on the school board is unpaid but takes up a significant amount of her time; her other main focus is working on special projects at Caravia—a store remodel that includes a new seating area, for example, or sales and marketing efforts such as branded merchandise and an increased social media presence. Caravia is a sanctuary of sorts, a space where Cognetti can recharge through connections with employees and customers, and refuel—her pre-meeting “good luck sandwich” is an Italian bahn mi on multigrain. But despite her best efforts, she knows that the school board could go into state receivership within the next year or two. And it’s clear she hasn’t been entirely successful in rallying some of the old-guard board members around a culture shift.

There are small wins, however. At September’s meeting, when the board began the process of hiring a new district lawyer, it did so under the guidelines of that resolution passed back in May—the one requiring the board to follow state and federal procurement laws. Cognetti’s motion to disqualify a firm that inaccurately stated it had not contributed to current school board members’ election campaigns—yet had incorporated two PACS donating $3,000 to the sitting school board president’s campaign—did not pass. The firm also failed to disclose its representation of a significant district vendor, and a family relationship between a partner and senior school district administrator. But the fact that the discussion happened at all, and will be debated further, was a step forward. Cognetti also cites encouraging results from a state assessment exam showing that overall, students in the Scranton School District improved or held steady in 12 out of 15 academic categories in the most recently completed academic year. “That is a real bright spot when you consider that 83 percent of students in the district have some level of economic need,” she says. In addition, Lackawanna College is launching Level Up, a program that will partner with Scranton and other local high schools to enable juniors and seniors to work toward an associate’s degree at the cost of $100 per credit. “Despite the uphill battle we still face, I do think the community sees that the district is trying to go the right way,” Cognetti says. “There’s evidence of that in partnerships like this one.”

With one year left in her term, Cognetti is evaluating the lessons she is learning and weighing options for the future. Seeing an ongoing need for increased oversight and audit functions in local governmental entities, she is contemplating where she can make her biggest impact. Positions in Washington may be sexier, but it’s the ability to make a difference at the state and local level that she finds especially exciting. Working deep in the books of the Scranton School district—just one of Pennsylvania’s 501 school districts—she says that HBS trained her well for the critical task of overseeing how taxpayer money is spent.

As she sits in the lobby of a downtown Scranton hotel—a soaring, converted train station built in grander times—Cognetti speaks in a rapid-fire stream as she describes problems that need attention at the state and local level. “Prisons, the foster system, access to healthcare—state and local leaders can have a huge impact, in a positive way, on the most vulnerable populations,” she says. “All the press is about representatives to Congress, but the real impact—that happens more locally.” The conviction in Cognetti’s voice makes it clear that she doesn’t harbor Washington ambitions, although her ideas can be big and national in scope, like changing how public schools are funded: “School districts can’t continue to pay for health care, pensions, and safety initiatives on the backs of taxpayers.” She’s looking for the sustainable, attainable path, not just in education funding but across every aspect of what will make Pennsylvania and its smaller cities like Scranton a draw for millennials and the businesses that employ them. It may take a while to get there, but Cognetti knows that; in the meantime she’ll continue asking questions, speaking up, and pushing back on business as usual.

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Editor’s note
On December 12, 2018, Cognetti announced her resignation from the Scranton School Board and her decision to accept the position of special assistant in the office of Pennsylvania Auditor General Eugene DePasquale, with a focus on school transportation costs across the state’s 500 districts. “I have been incredibly impressed with her work in Scranton as an absolute bulldog for the taxpayers,” DePasquale told local news outlets.

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