An independent report (.pdf) from a private attorney hired by the Seattle School Board to investigate financial malfeasance in the Seattle Public Schools says that "hush money" was not paid to members of the African American community to silence opposition to school closures affecting their community.
The school board is set to discuss the report in executive session Tuesday and publicly Wednesday. Board President Steve Sundquist told the Seattle Times editorial board today that the board is considering firing Superintendent Maria Goodloe-Johnson in light of the report's findings that she didn't take necessary steps to curb improper spending.
The report follows an audit released by the state Auditor's Office Wednesday, which found that the district wasted $1.8 million on service contracts that did not benefit them in any way or benefited the private company of former SPS employee Silas Potter. Potter was in charge of the district's small business program, which gradually went from being a program that would help small minority businesses get skills for bidding competitively for school district projects to a $1 million annual operation.
The program took on a life of its own when Potter started awarding contracts—sometimes worth tens of thousands of dollars—to notable members of the African American community who either knowingly or unknowingly provided services to Potter's private company instead of the school district. But the district kept paying for these services, incurring huge losses that it's now trying to get back through its insurance company.
Vendors who were signing these mostly-bogus contracts to offer their services include the Urban League, former head of the state Democratic Party Charles Rolland, and former Port of Seattle administrator Elaine Ko. According to the report from private attorney Patricia Eakes, a member of the public had alleged that district Superintendent Maria Goodloe-Johnson and former Facilities Director Fred Stevens (Potter's boss)—who is now at the U.S. Department of Commerce—knew about the "hush money."
But Eakes' said that the informant could not provide enough evidence to support her allegations and that the firm's investigations did not find anything to substantiate that either other than hearsay. Both Goodloe-Johnson and Stephens denied that the program or the personal service contracts were "hush money," the report said. Additionally, the report found that neither Goodloe-Johnson nor Chief Financial and Operations Officer Don Kennedy had any role to play in the awarding of the contracts, except to the extent of Kennedy approving three of the contracts for the small business program.
The report did find however, that Stephens was aware of many of the activities of the small business, including receiving updates from Potter about the personal services contractors and Potter's plan to "transition" the program into a private company. The report goes on to detail numerous ethical breaches and red flags, including a report from independent consultants Sutor Group, who warned that contracts were being improperly awarded.
Eakes' firm, Yarmuth, Wilsdon, Calfo, interviewed a number of people, researched documents, but was unable to find Potter. The district's former General Counsel Gary Ikeda, who was in charge when Potter was there, refused to cooperate, abruptly ending a phone conversation with the law firm.
A number of people interviewed told the law firm that they had not mentioned their concerns about the small business program to Goodloe-Johnson or Don Kennedy because they feared retaliation. The report concluded that although Kennedy did not know enough about the small business program, he should have caught the early warning signs to ensure that Potter was being properly reprimanded by Stephens.
As for Goodloe-Johnson, the report said that although she had limited knowledge of the shenanigans, she should have done more to ensure that Potter's program was properly supervised in light of the deficiencies unearthed by the Sutor Group.