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California School Fiscal Services

Providing comprehensive business office and consulting services to K-12 traditional schools and charters



Bidding Laws aren't that hard to follow

Posted on May 4, 2015 at 5:00 AM
If you are really wondering how often school districts get themselves in "smelly, unethical swamp waters" because they violate bidding laws, just take 10 seconds to Google the subject. You might be surprised, even dismayed to see how often this comes up.

The latest and greatest scandal comes from Chicago and it's a textbook example of how not to do your job.   You can read all of the press on this incident but in the final analysis, how can anyone justify a $20 million no bid contract....never mind that the CBO was a former employee of the company that got the work.

Here's the lesson and I think it's an important one.  In all of these cases, at the root is the same justification...relationships....

The person that breaks the law is doing it so that they can secure work for someone that they think they like, know, want to help, believe does great work, is better than everyone else, needs the work, or provides them with some sort of kick-back.   When you find yourself rooting for someone to get the job, take a step back and remember this never changing fact:  It's not your money.  

There are very simple rules about how to spend taxpayer money.  If you follow those rules, life will be simple.  If you start going down the road of playing games with those rules, you are likely living on borrowed time.  

Chicago Public School Officials Tread Water In Smelly, Unethical Swamp

While taxpayers wait to learn the outcome of the federal corruption investigation into the Chicago Public Schools' questionable $20 million no-bid contract with SUPES Academy, it's not too soon to conclude that the School Board and CPS officials continue to operate in a smelly unethical swamp, where they have been mired for many years.


Numerous news organizations recently reported that the FBI and a federal grand jury were investigating CPS CEO Barbara Byrd-Bennett and the contract with SUPES, where she worked before joining CPS.


Even if Byrd-Bennett did not commit a federal crime, news reports seem to indicate that she or her aides hid or downplayed her true relationship with the owners of SUPES, and she may have misled the board about the rationale for the no-bid contract.


If Barbara Byrd-Bennett deceived the Board of Education when she asked it to approve the SUPES contract, she violated Section VIII A of CPS' Code of Ethics. [PDF] Also, she may have ignored her fiduciary responsibility, which the ethics code says "all officials owe to the taxpayers of the City of Chicago and the State of Illinois."


Last December, the Chicago Sun-Times reported that companies partially owned by School Board member, Deborah Quazzo, received $2.9 million in CPS business in a year and a half after she was appointed to the board by Mayor Rahm Emanuel.


Two months later the Sun-Times reported that Quazzo "voted to support charter school networks that have given more than $1 million in business to companies in which Quazzo has an ownership stake."


In March, the head of the Chicago Principals and Administrators Association criticized the awarding of an $80 million school custodian contract to SodexoMAGIC, a firm owned by retired basketball great Magic Johnson, after his firm donated $250,000 to Mayor Emanuel's re-election campaign. When the Chicago Tribune asked Mayor Emanuel about the ethics of accepting the campaign contribution after his hand-picked Board of Education awarded the contract to Magic Johnson's company, the Mayor evaded the question.


In January the Chicago Sun-Times reported that in 2011 shortly after Ron Huberman resigned as CEO of Chicago Public Schools, he and a partner formed a company that now receives business worth hundreds of thousands of dollars from some of the same CPS-funded charter schools that Huberman championed when he was the head of CPS. The Sun-Times report said CPS's "ethics code does not prohibit former officials from doing business with charter operators they had dealings with while working for the district." The code has prohibitions against certain post-employment relationships but that section is not very clear and it appears to apply only to lobbying activities.


Examples of CPS's lax or corrupted ethics don't always involve contracts and conflicts of interest.


U.S. Secretary of Education Arne Duncan, when he was CEO of CPS, apparently believed it was OK to break the rules to help a rich, CPS financial contributor bypass the admission process to get his daughter admitted to Walter Payton College Prep High School on the Chicago's North Side. In 2008, well before he was elected governor of Illinois, the rich contributor, Bruce Rauner, bought a condo in Chicago to establish residency in Chicago so his daughter would be eligible. But her test scores and other factors fell short and she was rejected. No problem. Rauner, who had donated $250,000 to the school, picked up the phone and called Duncan's chief aide, who called the principal and the daughter was admitted.


In 2010, the city's two major daily newspapers reported that former school board president Michael Scott and his predecessor Rufus Williams used their CPS credit cards to decorate their offices with expensive artwork, lease private limousines, buy expensive wines and dine at upscale restaurants. Scott even charged airfare of $3,000 to fly to Copenhagen to help promote Chicago's bid for the 2016 Olympics. Scott and Williams, who both insisted that all the credit card expenditures were related to CPS business, paid back some of the money to the schools. After an investigation began, Scott was found dead on Sunday Nov. 15, 2009, with a gunshot wound to the head. The medical examiner's office ruled it a suicide.


In 1995, D. Sharon Grant, president of the Chicago Board of Education, pleaded guilty to federal and state income tax charges after the FBI investigated a no-bid multi-million dollar contract awarded to an insurance company that agreed to give business to a minority firm partially owned by Grant. The FBI began its investigation after the Better Government Association disclosed the insurance deal. The BGA also said $300,000 in school funds were used to repair a building linked to Grant's mother.


CPS board members and CEOs are not the only CPS officials who have trouble with ethics. Some officials have found ways to benefit personally when negotiating or monitoring contracts for the school district.


In 2012, the head of CPS' food services department resigned after being accused of accepting thousands of dollars in gifts from the district's two largest food vendors.


This was not related to an exposé the same month by the BGA that a politically connected business responsible for delivering milk to more than 600 schools was charging CPS 24.5 cents for a half pint of chocolate milk, which was 1.7 cents more than some suburban schools were paying. The mayor's chief administrator estimated that an additional one penny cost CPS $700,000 per year. Within a year, the company lost the contract.


In his 2013 annual report [PDF], CPS Inspector General Jim Sullivan said a technology coordinator at a Lake View High School embezzled more than $400,000 from 2001 to 2011 by issuing checks to phony vendors, forging the checks and cashing them. The tech coordinator resigned while an investigation was underway. Months later, he was found dead in a hotel in Tijuana, Mexico.


The 2014 OIG annual report [PDF], issued by a new inspector general, Nicholas Schuler, disclosed that the Cook County State's Attorney was working with his office to investigate the theft of $876,427 from two schools. The thefts involved fraudulent purchasing and reimbursement schemes by CPS employees.


Both annual reports describe numerous incidents of CPS employees lying to get their kids accepted in selective enrollment schools or included in free or reduced price lunch programs.


In the 2014 report, the inspector general said malfeasance was rampant in some CPS schools. He didn't say anything about the amount of unethical behavior at the top.




Thomas J. Gradel is a freelance writer and political researcher. He is the co-author with Dick Simpson of Corrupt Illinois: Patronage Cronyism, and Criminality, published in February, 2015, by the University of Illinois Press.

Categories: Ethics

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