Non-Profits As Union-Busting Shock Troops

Bay Area Community Resources (BACR), a San Rafael-based non-profit, was implicated in the San Francisco Unified School District payment scandal, in which Associate Superintendent Trish Bascom funneled $100,000 from the organization into her pockets and those of a few cronies. Now, according to a report by the Bay Citizen, former BACR treasurer Ruth Rubalcava is accusing the organization of keeping SFUSD administrators on its payroll and allowed them to control millions of dollars of grant money held by the agency.

This is scandalous, of course. However, what is even more scandalous is why school districts must rely on agencies like BACR in the first place. The simple answer is that it is cheaper—it saves them money. But the reason why it is cheaper is not trivial. They are non-unionized and rely heavily on volunteer “slave” labor. (BACR has 250 employees and 6,000 volunteers). These same services, if covered by school districts, would not only be done by employees who would have to be paid, but they would be unionized district employees earning union wages.

Many volunteer and non-profit enterprises serve a similar function in society. They provide a needed service that consumers or taxpayers are unwilling to subsidize. Good-hearted people wanting to help make the world a better place volunteer their time and labor. However, by doing this work free of charge they are complicit in degrading the value of this work and in perpetuating the social dysfunction that creates the demand for the work in the first place.

Consider soup kitchens. In a wealthy society like ours, there should be no need for soup kitchens in the first place. We allow the richest members of society to possess the overwhelming majority of the wealth while denying a living income to millions. Of course this is the reality we live in and we cannot allow people to starve. But why not simply give money, food or food vouchers to everyone in need in a quantity necessary to survive, instead of creating an unpaid labor force to cook, serve and clean up after the indigent, or at least pay this labor force a living wage so we aren’t perpetuating their poverty?

Arlene Ackerman: Serial Golden Paratrooper

If memory serves, Arlene Ackerman was chased out of San Francisco Unified with her tail between her legs, but also with a hefty golden parachute. Now Philly is set to do the same. This week the Philadelphia School Reform Commission unanimously approved a buyout for former Superintendent Arlene C. Ackerman worth nearly $1 million, according to Philly.com.

In order to get rid of their excess baggage, Philadelphia will have to pay Ackerman $500,000 in district funds. She will also get health and life insurance through June 2013 and a check for her unused sick and vacation time. The value of the insurance and unpaid leave has not been disclosed. However, she will also receive $405,000 in private, anonymous donations funneled through a nonprofit with ties to the Philadelphia School District. The Kansas City Star reported this week that Pennsylvania State Auditor General Jack Wagner plans to investigate the unusual arrangement. Could Ackerman have a secret admirer in the Billionaire Boys Club?

Her supporters are calling her ousting a “lynching,” blaming it on racism because she gave a large district contract to a black vendor, or because she did not “kiss the right political behinds.” However, not kissing the right political behinds is the usual reason for ousting an administrator, regardless of race. It is in the job description’s extra fine print. And the problem with her deal with the black vendor was not race, but the fact that the vendor, IBS Communications, got a $7.5 million no-bid contract despite previous work with the district that involved cost overruns 12 times what they had originally estimated. 

Ackerman’s tenure in Philadelphia was a virtual replay of her stint in San Francisco, with similar incompetence and corruption, but a much more lucrative exit plan. As superintendent of SFUSD, she scored herself a $250,000 salary, plus a $2,000-a-month housing allowance and $375,000 severance package, payable even if she quit. As superintendent, she pretended to clean up SFUSD’s muddy books and the scandals of the Bill Rojas years, yet somehow missed Trish Bascom’s embezzlement scheme, probably because of her obsession with quashing dissent. She spent $400,000 a year on a PR firm to put a positive spin on her autocratic and unpopular leadership.

Your Tax Dollars at Work (For the Private Gain of District Administrators)

Recent court documents reveal that the embezzlement scandal at San Francisco Unified was far deeper than the district had initially acknowledged, the Bay Citizen reported today. According to the documents, the SFUSD department in charge of after-school programs falsified “most if not all” financial records and improperly transferred hundreds of thousands of dollars to community organizations (CBOs) and into their own pockets.

Former Associate Superintendant Trish Bascom, who headed the Student Support Services Department, had several CBOs redirect district funds to herself and some of her employees, calling them “bonuses.” Lilian Capuli, a former district analyst, alleged that Bascom ordered her to falsify grant reports. She also accused Linda Lovelace (another analyst) and Meyla Ruwin (executive director of the department) of instructing her to falsify reports for their programs. Capuli and Lovelace were both fired last year after the district determined that they received unauthorized payments of more than $100,000 between 2006 and 2010. Capuli and Lovelace both argued that they complied with Bascom only because they feared for their jobs and that they accepted the “bonuses” in good faith, believing they were entitled to them.

Sorry ladies, but it’s still embezzlement and you were still knowingly complicit in it. Suck it up and accept the consequences.

SF Schools Rogues Gallery

Superintendent of San Francisco Schools, Carlos Garcia, has vowed to reform his administration and make accounting more transparent, in an attempt to clean up the image of SFUSD in the wake of the Trish Bascom embezzlement scandal. (Didn’t Arlene Ackerman do this already?) Garcia plans to tighten district accounting practices, hire an internal auditor and require competitive bids for future contracts with organizations running after school programs.

Bascom and four others in the Student Support Services Department are accused of diverting tens of thousands of dollars to their own personal bank accounts. Garcia continues to play dumb and to deflect all blame onto rogue elements in the district. “We were pretty shocked…” he said. “Our systems were good, but they could never ensure that our system could control someone doing something stupid.”

SFUSD has a long history of corruption and scandal reaching up to its highest echelons. Garcia should not only have been aware of this history, but actively working to destroy its remaining vestiges. Bascom, for example, had been an administrator since the Bill Rojas days. Considering how corrupt Rojas was, it would not be surprising to find out that Bascom picked up a few of her tricks from the expert himself. At the very least, Garcia had a responsibility to be aware of and to rectify the organizational defects that allowed Bascom to manage a department with a $20 million budget with nearly complete autonomy and virtually no oversight.

San Francisco’s Rogues Gallery

Of course Bascom’s scams are small potatoes compared to Rojas’. Under Rojas, millions of dollars of SFUSD funds were misspent, mismanaged or given away to cronies. Up to $68 million disappeared into the hands of nonteaching staff, including several who were indicted. He ultimately fled to Dallas, bringing with him several of his loyal criminal cronies, where he managed to continue his incompetence and corruption while evading the long arm of the law. William Coleman, who was Rojas’ No. 2 guy in SFUSD and continued in Rojas’ new administration in Dallas, pled guilty to charges of attempting to influence a grand jury. Coleman also agreed to testify against another former SFUSD administrator, Ruben Bohuchot, on multiple felony charges over Dallas dealings.

In contrast, SFUSD’s next superintendent, Arlene Ackerman, committed legal acts of corruption. Her first act was to finagle a sweet heart contract with SFUSD: $250,000 salary, plus a $2,000-a-month housing allowance and $375,000 severance package, payable even if she quit. She then pretended to clean up SFUSD, (obviously overlooking Bascom’s personal fiefdom), focusing more on stifling dissent and ruling with an iron fist. She spent $400,000 a year on a PR firm to put a positive spin on her autocratic and unpopular leadership. Then, when driven out of SFUSD by its progressive school board, she continued similar behavior in Philadelphia, where she gave a $7.5 million no bid contract to IBS Communications, a minority-owned company that had previously worked for the school district with cost overruns 12 times what they had originally estimated.

SF Superintendent and Board Complicit in Embezzlement Scheme?

Artwork Borrowed from Fred Klonsky's Blo

S.F. school officials, including Superintendent Carlos Garcia, received warnings that senior administrators in charge of after school programs might be mishandling millions of dollars in district money. The warnings started as early as five years ago, calling into question whether the scandal could have been averted, as well as the possibility that the superintendent and school board were complicit.

Former Deputy Superintendent, Trish Bascom, had been in charge of the Student Support Services Department, and is the main suspect in the scandal. Her department was responsible for contracting with Community Based Organizations (CBOs) that provide after school support for students and had an annual budget of $20 million. She is accused of diverting money earmarked for CBOs to her cronies. For example, money that had been allocated to the YMCA was reallocated to a front group, Bay Area Community Resources, which made thousands of dollars in payments to S.F. Unified administrators. The San Francisco District Attorney has opened a criminal investigation.

Deputy Superintendent Richard Carranza said that the district acted immediately upon hearing of the allegations. However, executives of several CBOs that contract with the district say they had complained for years about never receiving federal and state money they were owed by the district and that they were suspicious of corruption in Bascom’s department. Bascom’s attorney, Stuart Hanlon, holds Superintendent Garcia and the school board responsible for giving Bascom too much autonomy and looking the other way because they liked Bascom’s ability to secure grants and fund her programs without dipping into the general fund.

Garcia and School Board have tried to deflect blame entirely on Bascom and her accomplices. However, Bascom should have been investigated five years ago, when rumors of her corruption first surfaced. In times of economic hardship, administrators should look first at their own bloated bureaucracies for corruption, mismanagement and waste, before slashing programs and firing teachers. Ultimately, the boss (in this case, the superintendent and board) is responsible for everything that happens in an organization and they were clearly asleep at the wheel.