Tuesday, January 08, 2013

UPDATED: Arraignments of fifteen defendants connected with South Bay schools

See all posts regarding South Bay school indictments.



1) Civil lawsuit against the district
Jeff McDonald of the Union-Tribune reports on Jan. 15, 2013: "An $18 million lawsuit against the San Ysidro School District has been pushed back by at least three months because a key witness — Superintendent Manuel Paul — is facing criminal corruption charges.

Judge Steven Denton agreed to the delay after the district’s lawyer said Paul planned to invoke his constitutional right against self-incrimination and refuse to answer any more questions in depositions.

“Mr. Paul has been indicted, and I am informed and believe that the superintendent will be asserting the Fifth Amendment on every question posed,” attorney Arthur Palkowitz wrote in a motion to the judge...

2) San Ysidro school board decisions:
B San Ysidro School District parents forced the school board on Jan. 16, 2013 to reject a plan to pay $100,000 each for Manuel Paul's and Yolanda Hernandez' criminal legal defense. (Of course, Stutz Artiano Shinoff & Holtz is still being paid to work with Mr. Paul regarding the civil case mentioned above.) The board also reversed its Jan. 8, 2013 decision NOT to put Mr. Paul on administrative leave.


I was surprised to see ubiquitous school attorney Gil Abed at the criminal court yesterday for the arraignment of fifteen individuals connected with three South Bay school districts.

Lawyers from Mr. Abed's law firm, Stutz Artiano Shinoff & Holtz, generally restrict themselves to the civil courthouse one block west.

Apparently San Ysidro taxpayers were paying Mr. Abed to sit next to San Ysidro Schools Superintendent Manuel Paul, providing moral support. Mr. Paul didn't have to testify, so he didn't need his lawyer to prepare him for testifying. In fact, Mr. Abed is Mr. Paul's civil attorney and wasn't directly involved with the arraignment proceedings.

Channel 10 News reports that the San Ysidro school board has shown remarkable generosity to Mr. Paul recently. Shortly after it was revealed that he'd accepted $2,500 cash from a contractor, they gave him a $10,000 raise! I trust that this isn't hush money. The day after his arraignment, the trustees announced that Mr. Paul's job is safe--for now, at least. Board member Yolanda Hernandez, a fellow defendant of Manuel Paul, was not at the January 8, 2013 board meeting.

The highlight of the event
for me was watching the arraignment
of former CVESD board member, and current Sweetwater Union High School District trustee, Bertha Lopez.
Bertha has provided a continuous stream
of fodder for my blogs for many years. Bertha and her fellow CVESD board members channeled a large number of dollars to Dan Shinoff of Stutz Artiano Shinoff & Holtz for civil court legal work when she was a CVESD board member.

I think that the type of corruption being dealt with in these indictments is penny-ante stuff.  There are much bigger problems that should be dealt with.

The real corruption is not so obvious. It's dressed up in legal language. Judges and juries often let the education establishment get away with running a corrupt system because no one likes to pick on schools.

The things that go on at San Diego County Office of Education are shocking, but no one except Jerry Rindone ever complains about it. SDCOE even approves indemnification of their lawyers, a rare policy that was much criticized when Otay Water District indemnified Jaime Bonilla.


San Ysidro Schools employee Jimmy Delgado provided some drama after the hearing by aggressively pointing his finger in the face of Alex Anguiano, president of Sweetwater Education Association, and threatening to sue him if he said anything untrue about Delgado. Apparently Mr. Delgado was angry that Mr. Anguiano (and the large group of Sweetwater teachers accompanying Mr. Anguiano) were NOT supporting Pearl Quinones. The teachers were quite miffed with the arraigned board members and with former superintendent Jesus Gandara, another defendant.

UPDATE: The San Diego Reader has a video of the last few seconds of the encounter. The Reader reports that Jimmy Delgado heads the Latino Political Action Committee of San Diego, which contributed $1000 to Pearl Quiñones in the last election. Ironically, just a few months ago Jimmy Delgado was in court testifying on behalf of Sweetwater board member John McCann's unsuccessful effort to get a restraining order against parent Stewart Payne. Ed Brand says the taxpayers paid about $2,400 for that effort, but others estimate that the cost was over three times that amount. (See the short account of the TRO hearing at the bottom of this post.) Delgado testified that Payne “...aggressively pointed his finger in McCann’s face.” McCann thought this behavior warranted a restraining order, but the judge did not agree.

Indictments Rain Down Across South Bay
By Wendy Fry
Jan 7, 2013

More defendants have been snagged in the District Attorney's corruption probe into South Bay school construction projects.

The San Diego Superior Court docket for Monday lists a 2 p.m. appearance date for 15 defendants in the criminal probe. The corruption investigation has expanded in recent days to include new defendants from those originally charged with criminal complaints last year.

The defendants are current and former school officials, elected trustees, and contractors who did work at San Ysidro schools, the Sweetwater school district and Southwestern College. Many have already entered "not guilty" pleas on prior and identical complaints, including Gandara, Sandoval, Ricasa and Quiñones.

The Grand Jury began meeting in early November in a major "pay-to-play" public corruption case that now stretches across three South Bay school districts.

Prosecutors say the school officials traded their votes on multi-million dollar construction contracts for gifts and other favors.

Those who are scheduled to appear in court to be arraigned on indictments include:

Financier Gary Cabello, 53, who did work at both Southwestern College and Sweetwater. Cabello's home and former offices were raided in May 2012. As an underwriter, Cabello was tasked with calculating the size of the bond measure and the tax rate needed to finance the Sweetwater school district's wish list of building projects. His company, Alta Vista contributed $25,000 to the campaign to get the Sweetwater bond measure approved by voters, and then won a contract underwriting the bond. Cabello later worked for Cabrera Capital Markets, LLC., which had a contract with Southwestern College for financing on Proposition R bond funds. He could not be reached for comment, but his attorney said on Dec. 28 that she had not received any documentation that her client had been indicted by the Grand Jury.

Current Sweetwater trustee Jim Cartmill, the CEO of a nutritional supplement company. Cartmill received a $20,000 campaign contribution from a company doing work with the Sweetwater school district. The donation was allegedly procured by then-Superintendent Dr. Jesus Gandara while Cartmill and Gandara were on a trip to Mexico with others, according to court documents. Current Superintendent Dr. Ed Brand was an investor in Cartmill's company, according to bankruptcy documents with the Securities Exchange Commission. Messages left on Cartmill's voicemail since Dec. 28 have not been returned.

Jeff Flores, the president of Seville Construction Services, a construction firm that won a $2.7 million contract to do work under Southwestern College's Proposition R. Court records show Flores had an inside track working with Southwestern College officials on the project before it was officially bid. Some emails in the court affidavits indicate the contractor was allegedly involved in writing the request for proposals, or bidding documents for the college official. The court records also show he wrote the interview questions for the screening process. Flores' company has released repeated statements about the situation, including: "We believe SCS has operated and acted in good faith throughout our relationship with the (Southwestern College) district, including the termination of an employee a year ago for inappropriate actions that included violation of our corporate code of conduct. We believe the independent actions of individuals previously involved in the program are negatively affecting both organizations and the community.”

Former Sweetwater Superintendent Dr. Jesus Gandara. In 2006, Sweetwater trustees Jim Cartmill and Arlie Ricasa flew to Texas to interview Gandara for a position at the recommendation of the head-hunting firm Hazard, Young and Attea & Associates. His rocky tenure included borrowing bond money to pay off daily general fund expenses; inviting contractors to a "money tree" event for his daughter's bridal shower; hiding PR expenses from the board and a controversial exit strategy under investigation by state pension regulators. Prosecutors say he and several other board members spent night after night at expensive meals, sporting events, and trips, funded by contractors seeking work with the district. He has pleaded not guilty.

Current San Ysidro board member Yolanda Hernandez. Hernandez was the alleged recipient of a $2,500 cash drop-off made by a contractor to the San Ysidro Superintendent Manuel Paul in a restaurant parking lot. She also pays the majority of her campaign funds to a company she owns, according to state documents. She has declined repeated requests for comment.

Sweetwater trustee Bertha Lopez whose home was raided December 2011. Lopez was an early whistleblower, alerting officials to the corruption in the South County school districts. She was re-elected in November to her seat.

San Ysidro Superintendent Manuel Paul is listed in court documents accepting meals from contractors and dining with Sweetwater Superintendent Gandara. He also admitted in a June deposition to accepting thousands in cash from a contractor in a Chula Vista restaurant parking lot.

Sweetwater trustee Pearl Quiñones, 59, was an educator in the San Ysidro School District. Quiñones was also re-elected to her seat in November with strong support from Mayor Bob Filner. The long-time National City resident is listed in court documents for dining at expensive meals and allegedly soliciting a paid position on a state commission in 2006 from a contractor working for the district. She has entered a "not guilty" plea.

Sweetwater trustee Arlie Ricasa, 48, works as an administrator at Southwestern College. Court papers show Ricasa contacted a Sweetwater construction contractor with her college email account to arrange a $3,900 campaign contribution for a state Assembly bid. The contractor, Rene Flores, pleaded "no contest" in April 2012 to a misdemeanor of aiding in the commission of a misdemeanor. Ricasa also asked Flores to fund her daughter's $1,800 trip to the National Young Leaders State Conference, and did not disclose the gift on state-mandated forms, the court records show. She has pleaded not guilty.

Former Sweetwater trustee Greg Sandoval, 58, also worked at Southwestern College as an administrator. He served on the Sweetwater school board for 16 years until 2010. According to court records Sandoval allegedly asked a business development executive working for a Sweetwater district contractor to pay $500 to enter Sandoval's daughter in a Miss South County pageant. The prosecutor's affidavit used to obtain a search warrant at Sandoval's home states Sandoval “had his hand out asking for gifts or donations so often, even employees from SGI remarked that he ‘has no shame.’” He has entered a "not guilty" plea.

Former Southwestern college official Nicholas Alioto, 47, resigned in 2011 amid controversy after the UT San Diego reported on a Napa Valley trip with a construction contractor who weeks later won $4 million work with the district. When the search warrants were served in December 2011, Alioto was found living in the guest house of the Poway home of that contractor. Alioto has entered a "not guilty" plea.

Former Southwestern Superintendent Raj Chopra was brought to Southwestern College in 2007 by the same head-hunting firm that found Gandara for the Sweetwater district. In the wake of state budget woes, Chopra enraged the South Bay community college employees with deep budget cuts. He also presided over the passing of Proposition R, a $389 million bond measure for school construction. There are only scarce mentions of Chopra in the D.A.'s affidavits served in 2011. However, an internal college probe found commingling of funds between the bond campaign and the college's general funds.

Former Southwestern trustee Jorge Dominguez. Dominguez said on Dec. 28 he was unaware he had been indicted by the Grand Jury. He added he declined an invitation to provide testimony during the Grand Jury proceedings, after advice of an attorney.

Former Southwestern trustee Yolanda Salcido. Salcido was a political rival of Dominguez. Her romantic involvement with Southwestern official John Wilson was the subject of a citizen's Grand Jury report several years ago.

Southwestern official John Wilson recommended Seville Construction Services receive the $2.7 million construction management contract in 2009, and then went to work for the company a couple months later.

Last year, three contractors who did work at Southwestern and Sweetwater pleaded to lesser misdemeanor charges and agreed to cooperate with investigators. They were: business development executive Henry Amigable; contractor Rene Flores, and an architect Paul Bunton.

One year ago:

When the Trouble Started for Sweetwater Schools
Rob Davis
Voice of San Diego
January 23, 2012

...investigators have searched the home of Bertha Lopez, a Sweetwater trustee whose husband, Jose, is the Otay Water District's president. They've also searched the homes of two former Southwestern College officials, Nicholas Alioto and John Wilson.

Investigators have interviewed the mayors of Chula Vista and National City, county supervisors and a San Diego city councilman. Jaime Bonilla, another Otay Water District board member, is also mentioned in search warrants; Bertha Lopez and Seville employees had an appointment to dine at his house...

Concerned parents routinely went to board meetings throughout 2009 and 2010, criticizing the board for its oversight of construction spending and for accepting campaign donations from companies working for the district. One parent, Stewart Payne, said he thought the board's behavior was strange enough that he went to the FBI in early 2011. Then he and other parents went to the district attorney.

"I just said: Something's wrong here, I don't know what it is, but something's not making sense," Payne said. "Something was just wrong."

Sweetwater Activist Cleared of Allegations Made by Boardmember
By Susan Luzzaro
San Diego Reader
May 10, 2012

...Jimmy Delgado, an employee of the San Ysidro Elementary School District, provided a witness statement for McCann. According to Delgado, [Stewart] Payne “...aggressively pointed his finger in McCann’s face.” Delgado's description of Payne's gestures agree with Payne’s formal response.

Payne says he backed away from McCann’s advances that night: “I had retreated so far that I could feel other people on my heels…. At this point I became concerned that Mr. [John] McCann was becoming irrational and intending to do me harm. It is at this point that I extended my hand pointing my finger to establish my personal boundary and told him not to come closer or I would protect myself.”

Payne, who defended himself during the May 9 proceedings, said, “Have you ever seen anyone who was going to hit someone with their finger?”

McCann was represented by an attorney at the hearing. According to a May 10 U-T report, “Sweetwater superintendent Ed Brand approved the legal expense. He said the affair may cost the school district around $2,400 in attorney’s fees for McCann.”...

[Maura Larkins note: I've heard other estimates of the amount of money Sweetwater spent to intimidate Mr. Payne in the $8000 to $9000 range. Ed Brand has a habit of spending outrageous sums on lawyers. See articles on Sweetwater lawyer Bonny Garcia] (who appears in documents supporting board member indictments).]

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