Follow the Money

Don't let accusations of overtime fraud by low-level employees distract you. The real money disappears from the Dallas Independent School District through sleazy contracts awarded by top administrators.

It would be easy to overlook the plain, black-and-white fliers stuffed haphazardly onto a display shelf at the headquarters of the Dallas Independent School District. "Are you aware of any wrongdoing?" the handbill asks. If so, tipsters are invited to call the superintendent's hot line, which will gladly accept anonymous reports of fraud or malfeasance by school district employees.

The solicitation is part of a campaign by new DISD superintendent Yvonne Gonzalez to root out improprieties, launched even as allegations of overtime fraud have engulfed the district and invited the attention of federal investigators.

Shortly after taking over the superintendent's job, Gonzalez instructed district auditors to check out rumors that some employees were padding their time sheets to earn extra overtime pay. That internal probe continues, but it has already produced unsettling news reports that the district--and taxpayers--may have been cheated out of millions of dollars through bogus overtime claims. Gonzalez has told auditors to review all employee time cards, starting with those of maintenance and custodial workers.

The revelations have in turn prompted U.S. Attorney Paul Coggins to launch his own investigation into any possible criminal misuse of the $60 million in federal funds that DISD receives each year.

In the few weeks since it was set up, the superintendent's tipster hot line has logged some 200 calls alleging all manner of abuses. So far, callers have reported allegations ranging from contractor kickbacks and expense account padding to rampant nepotism. Nearly every department in the district--which has 18,494 employees--has been fingered at least once.

Gonzalez has gone so far as to hire an outside attorney, Marcos Ronquillo, whom the district is paying to investigate the fraud tips. (Because of the racial strife that has torn DISD apart, and aware that many of the employees investigated may be black, Gonzalez says she wanted an outsider in charge of the probe. "I did not want people to accuse me of being on a witch hunt against African-Americans," Gonzalez says.)

"This is a big school district. It runs the gamut," Ronquillo says of the tips received so far. "We've heard just about everything, from a PTA president with her hand in the cookie jar to teachers abusing students."

So far, the horror stories that Gonzalez has dutifully announced to the media seem to focus on low-level workers--janitors and the like--who might be skimming money. Gonzalez is publicly positioning herself as a crusading reformer, bent on rooting out fraud and corruption throughout the district.

But however noble Gonzalez's endeavor, DISD's biggest problems aren't going to be addressed by unearthing petty crimes within the ranks of district workers.

If the district really wants to crack down on sleazy business practices--and restore some measure of public faith in the way it conducts its business--administrators would do well to start looking in their own offices.

And they could start with the tens of millions of dollars in taxpayer money parceled out through contracts. The alleged overtime fraud looks like chump change compared to the money that is paid to the district's various vendors and contractors. And with a $993 million annual operating budget, DISD offers a tempting pool of cash for those chasing after business deals with the district.

An examination by the Dallas Observer of just some of the big-money deals at DISD indicates that the district routinely tolerates dubious expenditures and enters into questionable business arrangements that flunk the smell test.

There is, for instance, Gonzalez's predecessor as superintendent, Chad Woolery. The former superintendent spent his last months on the district payroll, at $162,000 a year, cultivating a relationship with a private company, Voyager Expanded Learning Inc. Woolery--who hired Gonzalez into the administration--then abruptly quit DISD and took a job at Voyager. This spring, Gonzalez awarded Woolery's new employer a $500,000 contract. No one else was invited to bid for the job.

Or consider the money DISD pays an outside law firm to perform legal work for the district. A few years ago, DISD agreed to increase the amount of money it pays the law firm of Schwartz & Eichelbaum by about $8,000 a month. The firm said it would use the money to hire an additional attorney to perform DISD-related work. The district is paying the $8,000, and the law firm did hire another attorney. But she spends much of her time working on matters for another school district.

And you might wonder why DISD has gotten into the business of collecting cellular phone bills for Southwestern Bell. A little more than a year ago, Robby Collins, the special assistant to the superintendent, negotiated a sweetheart deal with Bell for teachers and employees. DISD workers can sign up for personal Bell cellular service at discounted rates. The district makes it easy by deducting the phone bills from employee paychecks. DISD is now Bell's collection agency. It's a sweet deal for teachers, but may violate a state constitutional provision.

And then, of course, there is the messy battle that has erupted over which company will get to sell the district a new batch of social studies textbooks. School board member Yvonne Ewell tried to steer part of the lucrative book contract to McMillan/McGraw Hill. It probably didn't hurt that the wife of Ewell's former campaign manager is a consultant for the company. Another publisher has sued, and the district now has to wait for a court to address questions of propriety before students can get new social studies books.

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