A little sunshine on the clever folks at the San Diego County Office of Education

I have a question for Doug Perkins and Rick Shea, candidates for San Diego County Office of Education District 5

Will you work to make sure that top administrators Diane Crosier and Dan Puplava of SDCOE report ALL the gifts they receive from companies doing business with SDCOE--and require them to explain who paid for their cross-county trips to be wined-and-dined by those companies?

Voice of San Diego education reporter Emily Alpert reported in 2010:

In response to questions from voiceofsandiego.org, the County Office wrote in an email that it believed Crosier had followed the gift rules. But despite repeated questions, it would not specifically explain why the trips could be legally left off the forms. In an email, Crosier said only that the trips were not included “due to discussion with legal counsel.”

I have personal experience with one of the companies visited by Crosier and Puplava, as recounted in the above article by Emily Alpert. The company was Life Insurance of the Southwest. I was signed up for an insurance policy with this company against my will. The name of the company was written in below, after I crossed it out. I was told the agent did not have an extra form so I would have to use the form you can see HERE. Note the scribbles. The agent also took $12,000 of my money and put it into an account where it would be locked in for years. I was fortunate enough to figure out the ruse before the lock-in date.

I expect that county officials--and union officials--get sweet deals from financial institutions in return for access to employees. The San Diego Union-Tribune reported, "Incredibly, Superintendent Randolph Ward himself bought an annuity from Puplava shortly after Ward began work in 2006."

And how about the teachers unions? Are they any better? Dan Puplava used to work for teachers unions, as he told Forbes magazine.

Who is more shameless in taking advantage of teachers, the school officials or the teachers unions? That's a hard question. I haven't figured out the answer yet.


FROM THE FRYING PAN INTO THE FIRE?

Convicted trustees out; SDCOE trustees in

SDCOE administrators and board members have assumed positions at Sweetwater: left to right in photo: SDCOE administrator Lora Duzyk, SDCOE Superintendent Randy War, SDCOE board members Susan Hartley, Mark Anderson, Sharon Jones, Lyn Neylon, Gregg Robinson. For some reason Sweetwater board member John McCann has been replaced, although he was NOT charged or convicted of crimes as his four colleagues were.

Bizarrely, the four convicted trustees of Sweetwater Union High School District--as well as trustee John McCann and Sweetwater administrators--had their seats taken over at the most recent board meeting by the five members of the current SDCOE board and top administrators at SDCOE. SDCOE got permission from the Superior Court to implement the takeover.

NOTE ON DOUG PERKINS AND RICK SHEA

Both of these candidates are insiders at SDCOE.

Before retiring, Rick Shea was Special Assistant to the County Superintendent of Schools.

Del Mar School District trustee Doug Perkins was involved in this shameful case. I attended the trial. The judge was amazed that the district thought it could play politics instead of fulfilling legal obligations. Perkins had been on the board since 2008. He supported and worked with SDCOE JPA attorney Dan Shinoff.

CANDIDATES ALICIA MUNOZ AND KATIE DEXTER ARE ALSO SILENT ON SECRECY AT SDCOE


I'd also like candidates Alicia Munoz and Katie Dexter (District 3) to answer the question at the top of this post.

UPDATE AND CORRECTION May 24, 2014:

I apologize to the La Mesa/Mt Helix Patch. It did NOT censor my comments.


Patch news websites

I now believe that the reason my comments seemed to disappear from a story by Helen and Jack Ofield was that Katie Dexter supporters decided to distract attention from the La Mesa Patch story and direct attention to the Lemon Grove Patch version of the same story. In fact, Tom Clabby erased his own comment from the La Mesa Patch and posted it on the Lemon Grove Patch. He apparently preferred to have his comment appear in better company.

It makes me wonder if perhaps some of Katie Dexter's supporters are opposed to seeing, hearing or speaking about problems at SDCOE.

When I wrote my comments I had no preference for either candidate in the Katie Dexter/Alicia Munoz race for SDCOE board. I didn't think that either one of them would be able to do anything about the secrecy and financial shenanigans at SDCOE. And I still don't have any preference.

Here's what made me reverse my unfair criticism of the La Mesa Patch: I just found a link to the article in the Town Square column on the home page.

ORIGINAL POST MAY 24,2014:

I made comments the other day on this La Mesa/Mt Helix Patch story about the race for a seat on the San Diego County Office of Education.

Then I discovered that the original La Mesa Patch story can not be found in the Patch archives and seems to have been erased from the Patch Facebook page. Google search results don't include the story.

But clearly the plan wasn't to get rid of the story itself. The exact same article has been published by the Lemon Grove Patch (without my comments, of course). Google readily produces a link to the Lemon Grove Patch article. It turns out that the La Mesa Patch story still exists; the link on my blog still works.

So I'm doing an experiment. I posted some new comments on the Lemon Grove Patch this morning, and we'll see what happens. Here are my new comments:

[Comments by] Maura Larkins May 24, 2014:

...The entire story seems to have disappeared, along with two comments I made regarding San Diego County Office of Education. This reminds me of the local Clear Channel billboards that were taken down after two days because they correctly stated that Carla Keehn is the only candidate for Judge of the Superior Court Office 20 who has not been convicted of a crime. Of course, I didn't pay $14,000 to publish my statements.

Maura Larkins May 24, 2014 at 09:27 am
CORRECTION AND APOLOGY TO THE PATCH: I believe that the La Mesa/Mt Helix Patch did NOT try to censor my comments. Instead, I think that Katie Dexter supporters worked to remove attention from the La Mesa Patch story that carried my comments and direct attention to the Lemon Grove Patch version of the same story. In fact, Tom Clabby erased his own comment from the La Mesa Patch and posted it on the Lemon Grove Patch. He apparently preferred to have his comment appear in better company. It makes me wonder if perhaps some of Katie Dexter's supporters are opposed to seeing, hearing or speaking about problems at SDCOE. When I wrote my comments I had no preference for either candidate in the Katie Dexter/Alicia Munoz race for SDCOE board. I didn't think that either one of them would be able to do anything about the secrecy and financial shenanigans at SDCOE. And I still don't have any preference.

The most common problem in public entities is not blatant corruption such as the outrageous salaries ($560,000 for the assistant City Manager) of officials in Bell, California, but the money that gets channeled behind the scenes. Millions of dollars get moved around, and the public doesn't know about the connections and motivations that are guiding the transfers. Voice of San Diego reporter Emily Alpert was investigating SDCOE when she suddenly went silent, and then got fired. SDCOE exempts Diane Crosier (the director of Risk Management; also, Dan Puplava's boss) from having to disclose the gifts she receives. Why don't we have transparency in government at SDCOE?


SDCOE Risk Management Director Diane Crosier and her close associate Dan Puplava work with AIG

SDCOE has silenced its critics.

When Scott Dauenhauer revealed that SDCOE fringe benefits manager Dan Puplava [who is still employed by SDCOE] was getting at least $355,000 in commissions from AIG while working for the taxpayers, Dauenhauer was sued by Diane Crosier and Dan Puplava.

I went down to the courthouse and read the pleadings in the case.

The SDCOE managers claimed that Dauenhauer didn't know that what he said was true. I'm not kidding. They didn't claim he said something false. They claimed that he didn't actually know that what he said was true. Since he couldn't afford to keep paying an attorney to fight the case, he settled. SDCOE has also tried very hard to silence me. SDCOE lawyers had more success with Grossmont student representative Rick Walker, who obligingly shut down his website.

My other comment was about the MiraCosta College scandal, in which SDCOE's favorite law firm got paid $1.3 million to investigate $305 of water stolen and used to water palm trees. (After investing all that taxpayer money, MiraCosta let the palm trees die. It was never about water or palm trees. It was all about power and politics.) Sounds a little bit like Bell, California, doesn't it? And if our media silences discussions about things like this, how can the taxpayers protect themselves?

[Comment by} Helen Ofield May 24, 2014 at 12:22 PM

Maura - I was hunting around for the coverage and thought it was "just me" when I couldn't find a comment I'd sent to you. I think the Clabbys had a little difficulty posting and, like them, I wouldn't know how to erase something if I tried. Really, there is no conspiracy here, just well-meaning people trying to navigate the Internet.

Maura Larkins May 24, 2014 at 04:30 pm

Hi Helen,
If you look at the line below your post you will see the words "Recommend...Reply...Delete". Just click on the word "delete". It looks like Tom Clabby found it. I got an automatic notice telling me about his new comment soon after I posted my comments. Then I got another automatic notice saying his comment was a blank.

I wonder what Katie Dexter and Alicia Munoz think of all the Dan Puplava shenanigans as well as the other SDCOE cases and the secrecy surrounding gifts to Diane Crosier. It seems that all we get from either candidate is political posturing and platitudes. Wouldn't this be a good time for one or both of them to address problems inside SDCOE?

Who's replacing the four corrupt Sweetwater trustees who were forced to resign? Four people who have controlled the legal shenanigans of Sweetwater for years

UPDATE: Add Gregg Robinson to the list of SDCOE trustees who are taking over the Sweetwater board. Even though he wasn't charged or convicted of a crime, Sweetwater trustee John McCannn is also pushed out. SDCOE administrators also took the place of Sweetwater administrators at the most recent board meeting.


SDCOE board members Mark Anderson, Susan Hartley, Lyn Neylong,
Gregg Robinson and Sharon Jones

All of the above except Robinson will take over the Sweetwater
Union High School District board. (See all posts on South Bay Indictments.)
These individuals have maintained secrecy about gifts to Diane Crosier,
the director of Risk Management. Also, they have kept Crosier's pal Dan Puplava
in his position despite revelations of enormous amounts of money
he received from financial institutions connected to SDCOE.

Troubled Sweetwater school district served with temporary trustees
KUSI News
May 19, 2014

SAN DIEGO (CNS) - Four members of the San Diego County Board of Education will serve as temporary trustees for the troubled Sweetwater Union High School District, the county Office of Education announced Monday.

The appointees will fill the seats of Sweetwater board members who were suspended or ousted after pleading guilty to various corruption charges.

The selections were made today by county school board President Susan Hartley, three days after Superior Court Judge Judith Hayes granted a request by the district to allow Hartley to fill the leadership posts.

"This decision allows the San Diego County Board of Education and the San Diego County Office of Education to provide whatever services to the district that may be necessary to ensure the smooth operation of its programs," Hartley said. "We have always been focused on supporting the district in educating students."

The appointees are Mark Anderson, who represents inland North County and rural East County; Sharon Jones, who represents most of the southeastern portion of the county; Lyn Neylon, who represents the southwestern part of the county; and Hartley herself, who represents the North County coast.

Last month, board President Jim Cartmill and Trustee Bertha Lopez pleaded guilty to a misdemeanor accepting gifts charge, and then-Trustee Pearl Quinones was sentenced to three months of house arrest after her admission to a felony conspiracy count and a misdemeanor of accepting gifts above the state limit.

Former trustees Arlie Ricasa and Greg Sandoval, ex-Superintendent Jesus Gandara and a construction company executive, Henry Amigable, previously pleaded guilty in the case.

Remembering the San Diego Union-Tribune expose of Dan Puplava

Current SDCOE board members Mark Anderson, Susan Hartley, Lyn Neylong, Gregg Robinson and Sharon Jones still don't require that Diane Crosier, executive director of SDCOE's Risk Management Department, report the gifts she receives.

Remember this story? Here's how the San Diego County Office of Education's Dan Puplava scandal started four-and-a-half years ago. SDCOE Superintendent Randolph Ward and the SDCOE board allowed Diane Crosier and Dan Puplava to silence whistle-blowers and anyone else in their way.

“He's getting paid a salary by the taxpayers to manage the registered representatives, not to be a registered representative..."

Benefits manager’s work questioned
County employee also acted as a broker
By Jeff McDonald
San Diego Union-Tribune
March 17, 2009

A San Diego County Office of Education employee tasked with managing a retirement program for thousands of teachers and administrators supplemented his salary for years with commissions on outside investments he sold to those same clients.

Daniel Puplava makes $100,000 to $108,000 a year as the deferred compensation manager for a consortium that serves public educators in three counties. At the same time, Puplava has been allowed to pursue those clients for his private broker business.

In 2006, Puplava collected at least $355,000 in commissions as a broker for AIG Financial Advisors Inc., according to documents obtained by The San Diego Union-Tribune. He was named to the 2008 Achiever's Council, an honor reserved for agents of AIG Financial Advisors whose commissions and fees exceed $250,000 a year.

His attorney said Puplava shared that money with other brokers.

[Maura Larkins comment in 2013: Diane Crosier and Dan Puplava never produced any evidence that Puplava "shared that money with other brokers." Their lawsuits seem to have been intended to intimidate their critics into settlement rather than to have their day in court to prove their innocence.]

Officials at the county schools office said they knew about Puplava's broker business and saw no conflict of interest because he has done the work on his own time.

“It's not unheard of for public employees to have a business on the side,” spokesman James Esterbrooks said.

The arrangement does not appear to violate federal securities laws, but it tests the limits of the state education code and has become one of the main sticking points in litigation involving the office.

Puplava's work as a broker also appears to have been done at county offices. Client statements obtained by the Union-Tribune list Puplava's phone number at the county schools office as his primary contact.

“It certainly strikes me as an apparent conflict of interest,” said Ronald F. Duska, director of the Mitchell Center for Ethical Leadership at The American College in Bryn Mawr, Pa. “It just sets up incredible temptations for the guy who's supposed to be acting as a manager.”

Puplava, who is 47 and lives in Escondido, declined to be interviewed. His attorney, Randall Winet, responded to questions with a March 6 letter to the newspaper stating that Puplava has divested himself of his personal clients and received only a portion of the commissions cited in documents.

“The funds from financial services companies were paid directly to him, which he then was required to distribute to a number of brokers working for him,” the letter says.

Winet also said Puplava had “a significant, thriving practice prior to ever joining the County Office of Education.”

Puplava is a registered broker for SagePoint Financial Inc. in Phoenix, which until recently was called AIG Financial Advisors.

His full-time job is to manage the deferred compensation retirement program for the Fringe Benefits Consortium, which provides access to health insurance, annuities and other services for school employees across San Diego, Riverside and Imperial counties.

The consortium was created in 1982 to help school employees negotiate better deals on health insurance by pooling resources.

Twelve districts representing 2,500 or so teachers initially joined the self-insurance partnership, but the client roster grew to 72,000 as the consortium attracted more districts and expanded its services.

When the Office of Education hired Puplava in 1997, he was permitted to keep his “book of business,” or private clients, county schools officials said.

Puplava also was allowed to grow his client base by soliciting teachers he met through his county job.

Four years after his hiring, the county schools office was among the first agencies in the country to organize an umbrella retirement program for teachers, who as public employees receive government pensions but often supplement those benefits by setting up individual investment accounts.

The idea was to give teachers the opportunity to buy investment products without paying the high fees and commissions normally associated with individual transactions.

Puplava was put in charge of the deferred compensation program. He contracted with outside financial advisers to promote the services, and together they hosted hundreds of informational seminars outlining the various products and services.

About 6,000 teachers and administrators have bought supplemental investment products offered through the deferred compensation program.

Consortium director Diane Crosier said that after a new superintendent was hired in 2006, a decision was made to allow Puplava to keep existing clients but restrict him from accepting new teachers and educators as customers. But by then, even incoming Superintendent Randolph Ward had bought an annuity from Puplava.

[Maura Larkins comment: Did your employee give you a good deal, Randy?]

Running an outside business is legal for full-time county Office of Education employees. But according to the California Department of Justice, a deferred compensation program manager is supposed to be a neutral party – not someone who profits from marketing financial products.

“The statute prohibits school employees from acting as sales agents for 403(b) vendors in return for commissions,” according to an August opinion from the Attorney General's Office analyzing the state's education code.

Section 403(b) of the Internal Revenue Service doe allows public and nonprofit employees to pay into tax-deferred supplemental accounts to boost their retirement nest eggs, much like 401(k) programs in the private sector. Former employees and independent advisers say the U.S. Securities and Exchange Commission investigated Puplava's dealings. Crosier said the SEC has looked into Puplava, but that was more than a year ago and nothing has happened.

The San Diego County District Attorney's Office requested copies of related civil case files but closed its investigation in July after finding no evidence of criminal conduct.

The SEC and the District Attorney’s Office declined to discuss the situation, as did Ward.

In August, the consortium terminated the contracts of six brokers who had been enrolling and serving clients for years. Three weeks later, the schools office sued those brokers, claiming they had stolen clients and business from the consortium.

The brokers fought back, filing a 26-page cross-complaint last month that lodged numerous allegations against Puplava, Crosier and county schools office officials.

Among other things, the cross-complaint says Puplava opened a partnership with three of the fired advisers – Barry Allred, Christopher Dougherty and Michael Zeiger – that operated as FBC Insurance Services.

The partners shared tens of thousands of dollars in fees and commissions paid by FBC clients, the cross-complaint alleges.

Court papers also say Puplava negotiated a deal with Aviva Life and Annuity Co. that paid him 30 percent of all commissions the partnership received from Aviva. In 2006, Puplava personally collected more than $26,000 in Aviva commissions from February to October, the cross-suit says.

Citing the ongoing litigation, Crosier declined to address specific allegations, including why Puplava was permitted to sell his clients financial products not available under the consortium when the fired brokers were sued for the same activity.

“There are huge inaccuracies in that lawsuit,” Crosier said. Kris Kertzman, who worked as a consortium broker from 2002 to 2007 but is not part of the pending litigation, said Puplava's clients think he “has their best interests in mind because he works for the county.”

“He's getting paid a salary by the taxpayers to manage the registered representatives, not to be a registered representative,” Kertzman said.

Diane Crosier is still at San Diego County Office of Education--and so is the infamous Dan Puplava

Diane Crosier still works at SDCOE.

Update Sept. 3, 2013 8:52 a.m.:

Wow, I really messed up on this story. My information about Diane Crosier and Dan Puplava leaving SDCOE was incorrect. But I'll tell you exactly how the misunderstanding took place, and what I have learned about Crosier and Puplava.

1. I suggested that an acquaintance call Diane Crosier to get some information. The acquaintance told me "dcrosier@sdcoe.net doesn't work anymore." I thought someone at SDCOE told her that Diane Crosier at SDCOE didn't work anymore. Instead, it was the email address that didn't work anymore. My bad. I sincerely apologize.

2. Did SDCOE give false information when it said last year that Puplava was no longer in a supervisory position?

Office of Ed manager was fined, suspended [by FINRA]
FINRA found issues with his side business
By Jeff McDonald
SDUT
May 18, 2012

The official in charge of a $270 million public investment fund for 6,400 educators in the region was fined $7,000 last year and had his broker’s license suspended for three months. He retained his official post.

Daniel Puplava, 50, manages the deferred compensation program for the San Diego County Office of Education. He has simultaneously worked for private brokerage firms, one of which was fined $300,000 in January for failing to supervise him and guard against conflicts of interest.

The fines were issued by the Financial Industry Regulatory Authority, the nonprofit regulatory agency that was reviewing the matter when the U-T wrote about Puplava’s dual roles in 2009.

At the time, Puplava worked for AIG Financial Advisors of Phoenix. He now works for his brother’s company, Puplava Financial Services of San Diego.

...“Mr. Puplava is no longer in a supervisory position and this behavior is not acceptable to SDCOE under SDCOE policy or practice,” the office said in a statement.

Puplava’s pay remained the same when he was removed from a supervisory position, the office said....

I talked to a couple of people at SDCOE this morning, and they insisted that Mr. Puplava is a manager with staff that he supervises. I suspect that when SDCOE claimed that Puplava wasn't in a supervisory position, they meant that he was no longer illegally having subordinates sign financial documents. But I believe his staff continued to do exactly what he wanted.



from Dan Puplava's website

3. I visited Dan Puplava's website and it does not look like the website of an administrator whose intent is to help public school teachers arrange retirement benefits through a public agency. Why is Mr. Puplava posing with his motorcycles on the street and on top of mountains? And while the folks at SDCOE tell me that Mr. Puplava only gives trainings to SDCOE staff, his website says otherwise.

The website seems to be trying to bring in business:

Seminars and Workshops

All of these achievements are impressive in and of themselves, but what Dan is really known for are his educational workshops. He has spent years delivering and fine-tuning these financial workshops, in San Diego, Riverside, and Imperial County. They include his Comprehensive Financial Planning workshop as well as seminars and workshops focusing specifically on the current economy.

His most recent workshop, focusing on current economic trends, is called “The Coming Federal and California Debt Time Bomb.” The workshop has proven well received among those who have participated in it. For example, Dr. Ed Brand, current Sweetwater Union High School District Superintendent, says “Mr. Puplava’s economic foresight has helped many.”

ORIGINAL POST: Diane Crosier is no longer at SDCOE

[There are two errors in the following post: Crosier and Puplava are still at SDCOE. But all the rest of the information is correct, and begs the question: Why are Crosier and Puplava still at SDCOE?]


Strangely, Diane Crosier is still listed on this page as Executive Director of the Risk Management Department as of September 2, 2013. I assume she retired, but I wonder why Randy Ward didn't announce it, and announce Crosier's replacement. Perhaps there are power struggles going on over on Linda Vista Road.

I should have suspected that Diane Crosier was gone from SDCOE when I found out this morning that Randall Winet's law firm is handling the MUNSHOWER VS. GROSSMONT UNION HIGH SCHOOL and JAN BRANNEN case.

Stutz Artiano Shinoff & Holtz can't be happy about this. It really looked like Dan Shinoff and Diane Crosier were going to continue to rule the roost at SDCOE, even after Emily Alpert and Rodger Hartnett exposed the lopsided system at SDCOE-JPA for assigning cases to lawyers.

Crosier and her two Dans (Shinoff and Puplava) seemed able to kick all opponents to the curb. SDCOE decided Ms. Crosier wasn't required to report her gifts. Crosier and Shinoff and Puplava punished and silenced Scott Dauenhauer for revealing that Puplava received $355,000 in one year from finanical institutions while he was a public employee. And in October 2007 Crosier and Shinoff worked together on a defamation suit against this blogger (Maura Larkins) that is still going on.


SDCOE board: Mark Anderson, Susan Hartley, Lyn Neylong, Gregg Robinson and Sharon Jones

For years Susan Hartley, Sharon Jones and Mark Anderson have been supporting Diane Crosier's and Dan Puplav's shenanigans. Neylong and Robinson are newer on the job.

Did the SDCOE board suddenly become concerned about ethics? More likely it was the glare of publicity that concerned them.

After all, it wasn't until FINRA suspended Dan Puplava's broker license that SDCOE suddenly discovered some long-lost "SDCOE policy and practice" that forbade Puplava's actions. They supported Crosier and Puplava during a defamation suit against whistleblower Scott Dauenhauer that argued that Dauenhauer didn't know that what he was saying was true! Puplava claimed in the press that he shared the $355,000 with other brokers, but he never produced any such evidence in court.

I went to the courthouse and read the case file. I was shocked to see that Crosier and Puplava tacitly admitted the truth of what Dauenhaur was saying--but they insisted that Dauenhhaur could not have figured it out, even though he had a lot of documentation. In other words, they claimed that even though he hit on the truth, he didn't really KNOW it was true. They refused to admit that he was smarter than they wanted him to be. I believe Scott Dauenhaur would have prevailed, but he couldn't continue to pay a lawyer for the drawn-out legal battle, so he settled.

Why didn't the SDCOE board act sooner on "SDCOE policy and practice"? Because it has long been SDCOE's "policy and practice" to conceal the truth about wrongdoing in schools and at SDCOE itself. In fact, I don't see any evidence that Puplava was punished in any way by SDCOE.


Crosier's sidekick Dan Puplava is also gone, apparently since fall 2012. A search for "puplava" turned up only one result on the SDCOE website, and it seemed to be an old page.

Things were starting to go south for Mr. Puplava in May of 2012:

Office of Ed manager was fined, suspended
FINRA found issues with his side business
By Jeff McDonald
SDUT
May 18, 2012

...“Mr. Puplava is no longer in a supervisory position and this behavior is not acceptable to SDCOE under SDCOE policy or practice,” the office said in a statement.

Puplava’s pay remained the same when he was removed from a supervisory position, the office said....


SAN DIEGO UNION-TRIBUNE EDITORIAL
Feckless, hapless, clueless
Handling of county schools conflict of interest is unacceptable

March 29, 2009

In the grand scheme of things, the San Diego County Office of Education is something of an obscure bit player. It provides administrative support to local school districts and runs continuation schools for students with disciplinary problems. This fringe status, however, does not excuse it from having to meet basic standards of good government.

That absolutely hasn't happened in the case of Daniel Puplava, who manages the office's retirement program while also working as a private broker who sells investments to administrators and teachers served by the program. This is prohibited, according to a 2008 opinion from the state Attorney General's Office.

But even with such an opinion, it is obvious that this is an unacceptable conflict of interest. While a full-time school office employee, Puplava lined up fellow government employees for his private brokerage and used his government phone as his primary contact number. Incredibly, Superintendent Randolph Ward himself bought an annuity from Puplava shortly after Ward began work in 2006.

Now Ward is refusing to answer questions on the matter. Board trustees John Witt and Mark Anderson also are stonewalling. Trustee Sharon Hartley says it's much ado about nothing, evidently concluding that the county schools office is not answerable to Attorney General Jerry Brown. Board President Sharon Jones pretends she's not allowed to comment on the matter because of “personnel” rules. Only trustee Jerry Rindone shows the appropriate level of dismay.

A respected high school principal and Chula Vista councilman before being elected to the county schools board, Rindone understands this isn't how government is supposed to work.

That doesn't hold for Ward, Witt, Anderson, Hartley and Jones. Their “what, me worry?” approach is an embarrassment.

[Maura Larkins comment: Jerry Rindone was the only SDCOE board member who wanted to look into these matters, and he's long gone. The other board members, as well as Superintendent Randy Ward and Asst. Supt. Lora Duzyk have fully supported all the goings-on in the Business Department... I'll try to find out what happened.]


...APPARENTLY RANDALL WINET'S NEW LAW FIRM WILL BE GETTING MORE WORK

His new firm is called Winet, Patrick, Gayer, Creighton & Hanes (formerly Winet, Patrick, Weaver).


The attorney in the Munshower case is Jennifer Creighton, who attended Cal Western.

Case Number: 37-2013-00054530-CU-OE-CTL
Case Location: San Diego
Case Type: Civil
Date Filed: 06/21/2013

South Bay Diners' Club: Is SDCOE any less corrupt than indicted board members?

I suggest that the Reader be more vigilant about nasty personal comments. And I agree with the commenters who say, "Welcome back, Susan Luzzaro!"

See comments below with my notes attached.

Documents hint at Sweetwater board’s diners’ club
High school student investigated 10 years ago
By Susan Luzzaro
San Diego Reader
Jan. 11, 2013

The latest round of indictments handed down by San Diego’s criminal grand jury is so extensive, people wonder if corruption is just another name for South Bay. Fifteen defendants from three separate South Bay school districts, a construction company CEO, and a bond financier face 256 charges.

In the case of the Sweetwater Union High School District board, four current trustees — James Cartmill, Bertha Lopez, Pearl Quiñones, Arlie Ricasa, and former trustee Gregorio Sandoval — will be arraigned on charges on January 30. The district’s former superintendent Jesus Gandara will also be arraigned on that day.

By now many people have read about the lavish meals South Bay trustees and school administrators enjoyed at the contractor’s expense. Given what we know about Sweetwater in particular, maybe it’s time to ask if dining out is endemic to the district culture.

Document--Ed Brand’s calendar, January 29, 2001–February 2, 2002
Document--Ed Brand’s district credit-card receipts, July 2000–October 2003

Well before he was indicted, the U-T was reporting on former superintendent Gandara’s dining habits. According to a May 2011 article, Gandara, before having his district credit card yanked, “had charged more than 300 meals to taxpayers over three years, even though his contract paid him $800 a month for expenses.”

The same article tells us: “Some $12,560 was charged to Gandara's district credit card for 366 meals from November 2007 to March 16, when he stopped using it.

“The most common meal partners for Gandara were members of the school board, who took part in 238 of the meals.

“Trustee Arlie Ricasa dined with the superintendent 92 times, followed by trustee Pearl Quiñones at 49 times. Former trustee Greg Sandoval met with Gandara 41 times, according to the records, while trustee Jim Cartmill met with him 38 times and Bertha Lopez met with him 11 times.

“Newly appointed board member John McCann appears seven times, including once as a Chula Vista councilman before his job on the school board.”

Gandara justified his use of the credit card by saying that without it “community members would have to come to the district office for coffee or water instead of being treated to restaurants.”

Many people in the South Bay wonder why taxpayers pay for administrative offices that are not the setting for business meetings — whether with trustees or contractors.

But Gandara did not invent the fine art of dining out.

In 2002, a Sweetwater student began investigating the district. Gordon Siu was a reporter for his Bonita Vista High School paper. In a January 9 interview, Siu, a 2010 Yale graduate, said he began to get a sense that the district administration “was doing things the wrong way.” It appeared to Siu that “the trend was that these officials were more concerned with making themselves look good than they were with education.”

Before Siu graduated from Bonita Vista in ’06, he put in two public record requests: one for then-superintendent Ed Brand’s calendar and the other for Brand’s credit card receipts spanning 2000–2003. (Brand was superintendent of Sweetwater from 1995–2005. He returned to Sweetwater on the heels of Gandara’s buyout in June 2011.)

When he received the record, Siu was taken aback when he saw that Brand ate out almost every day and sometimes twice a day. Siu wondered: “When did he have time for students and teachers?”

Looking at the South Bay scandal today, Siu commented, “I tried to tell everyone years ago what was going on.”

[Maura Larkins comment: I hear you, Gordon. I tried, too.]


COMMENTS

...oskidoll Jan. 11, 2013 @ 3 p.m.

Perhaps NOW the County Board/Office of Education might pay attention? 15 indictments, including at least 3 for extortion, should certainly bring the South County education establishment messes to the attention of the body that is supposed to oversee operations, especially fiscal matters, of the school districts in their jurisdiction. The next meeting of the [SD]COE will feature the seating of the new representative from District 2, Lyn Nealon. It will be Wednesday, January 23 at 6 p.m. Perhaps she will be more responsive to matters in South County than the prior representative.

By the way, I see an interesting entry in Brand's old calendar: a meeting with Sandoval and Rudy Castruita, the former CEO of the CBOE [also known as SDCOE]. Castruita now pulls down a handsome STRS pension in his retirement, perhaps the highest in the entire county. Seems that Dr. Granger Ward [correction: Randolph Ward], his successor, should be doing something for his pay.

[Maura Larkins note: SDCOE has some issues of its own. Rodger Hartnett's lawsuit included information about the SDCOE Diners Club at the Rancho Bernardo Inn. Many people are alarmed by the actions of Dan Puplava and Diane Crosier. Randy Ward and the SDCOE board allow Crosier to conceal the gifts she receives.]


timtim Jan. 11, 2013 @ 5:49 p.m.

Wow Bertha Lopez indited on 19 counts and Susan writes about Ed Brands lunch schedule from 10 years ago? I smell a Pulitzer for this Hack


angrybirds Jan. 14, 2013 @ 10:25 a.m.

...Hey wow, I think this timtim sounds like McCann or Grossman two Republicans pouting because they didn't get their way in the elections.

[Maura Larkins note: Many Democrats disapprove of corruption on the part of Democrats. I have said for years that Bertha Lopez is corrupt, but I believe that the small-time skimming of these defendants is not the worst kind of corruption in our schools. I would have voted for Lopez if I lived in her district because I think she was the lesser evil.

As for serious corruption, I believe that SDCOE corrupted Lopez (and almost all board members in the county) more than any contractor did.

Guess who helped direct Bertha Lopez' actions when she first became a board member of CVESD?

None other than former and current SUHSD Superintendent ED BRAND!!!

He was on SDCOE's Legal Services Council and was also a regional chair of ACSA, so he is doubly responsible for travesties like the Mary Ann Weegar case in Sweetwater and is also partially responsible for my case at CVESD. I was fired, in part, for filing grievances and a lawsuit. The other part was that I refused to come to work until an investigation was done. Here's how my case started. The "investigation" was never completed.

Why not, Bertha Lopez?

For some reason, the teachers union doesn't like to talk about my case, and, perhaps as a result of that, the Reader won't write about it. The teachers union clearly didn't want an investigation in my case because it would have exposed crimes by Robin Donlan, a friend of CVE President Gina Boyd.

SDCOE's JPA sent instructions to school boards through representatives. One of the instructions is "Deny all claims." Patrick Judd was SDCOE's representative at CVESD when Bertha arrived. Judd, Larry Cunningham and Pamela Smith had control of the board, and Bertha went along with them. Also, CVESD Superintendent Lowell Billings was on the Superintendents' committee that directed how lawsuits would be handled.

White Chalk Crime is the term coined by Karen Horwitz for what is going on in many schools and county boards of education. It seems to be thriving here in Enron by the Sea.]


COMMENTERS ATTACK YOUNG PERSON

[Maura Larkins note: Why does the Reader publish comments attacking a person's height and weight and calling names??? Is anyone at the Reader actually reading the comments?

I am not happy to see teachers and other adults ridiculing a student (timtim) and commenting on his chances of academic success. Why not say something to reach out to him and offer a bit of information that he can absorb with his current mind set? That's what a good teacher would do.

I am appalled that an adult would make fun of a person's size and a teacher would resort to name-calling of students. Appalled, but not at all surprised. It's what I heard in the teachers lounge for decades. Often, these same teachers punish children for bullying behavior. But students report that this bullying by teachers takes place inside classrooms, too. What are kids supposed to take away from such mixed messages?]

Here is a separate Reader article in which supporters of teacher/board member Bertha Lopez verbally attack a young person who wants to be a teacher.

Some of the comments are included here:

timtim Jan. 11, 2013 @ 5:52 p.m.

It was pretty simple....sorry it sailed over your head,and no I am not a learning center packet checker wanna be teacher like the rest of you


Visduh Jan. 11, 2013 @ 9:05 p.m.

Eastlaker, I was waiting for someone to take timtim to task for his poor spelling, poor grammar, lack of punctuation, and generally not knowing the conventions of typing, such as a space after the comma and . . . In a couple previous go-rounds our pal anniej would do that, but you've done it well. If I can get past all the language challenges, timtim seems to be saying...

And, timtim, I'm not a wanna-be teacher (note punctuation), I am a teacher with a heck of a lot better language skills than you will ever have, even it you live a century.


eastlaker Jan. 11, 2013 @ 10:36 p.m. [In the comments in the "Diners Club" article at the top of this post, eastlaker also makes fun of Ed Brand's former girth.]

I guess we will have to add unfamiliarity with the correct use of tense. As in present, past, future, etc.

Pretty sure timtim wouldn't be able to pass the high school exit exam if this is all s/he is capable of.


Visduh Jan. 13, 2013 @ 9:01 p.m.

If timtim doesn't want to take hits for grammar, spelling, punctuation, syntax and a host of other language skills, then he should clean up his act and make his message clear. It isn't just his sloppy typing that misses the mark, it is that his comments seem all but incomprehensible.


jibaro Jan. 14, 2013 @ 4:10 a.m.

Visduh, I think you were my 10th grade English teacher ! :} :} :}

[Visduh has indeed mentioned being a teacher. Jibaro seems to be a subtle, humorous person.]


anniej Jan. 11, 2013 @ 10:24 p.m.

Tim Tim: according to one of your high school teachers you were a puts as a teenager, and have grown up to be an older, even though not bigger putts. Could it be that the net has not been pulled all of the way in? Might there be more fish? Hmmmmmmmmm

[Maura Larkins note: I think it's spelled "putz". I'm not a stickler for precise spelling, but I thought you'd like to know. It's Yiddish.]


jibaro Jan. 12, 2013 @ 4:39 a.m.

Sorry to see Tim Tim taking hits for grammar, spell, etc. Open season for his positions. That having been said, I will note that Dr. Brand does what the majority of the Board allows him to do. Three votes, they all understand three votes on a five member board.


COMMENTERS GLAD THAT SUSAN LUZZARO IS WRITING AGAIN



anniej Jan. 11, 2013 @ 4:20 p.m.

Ms. LUZZARRO: When the South Bay thinks of reporting the news The Reader and you are what we think of. Not sure where you went, hopefully you were having fun, but hip hip hooray YOU ARE BACK!!!!!!!


Visduh Jan. 11, 2013 @ 4:01 p.m.

Susan, we have missed you. When one round of new indictments was announced, I expected a report and there was none. Then the following day five more were indicted, and I was sure you would report. Hope you are back and on the job doing what you do so well, keeping us up to date on this ongoing scandal.


VigilantinCV Jan. 12, 2013 @ 11:28 a.m.

OMG! So glad you are back, Susan Luzzaro. Your voice in the South Bay is invaluable to those of us who want to know the hard facts. Thank you, Susan and The READER.


dbdriver Jan. 11, 2013 @ 8 p.m.

By the way, thank you Susan, for once again bringing such information to light.


erupting Jan. 11, 2013 @ 2:51 p.m.

Out of the mouth of babes as the saying goes. Here is a past student that was aware of the culture of Sweetwater way before any of us. Wow this article is a real eye opener. Brand was feeding at the trough long before Gandara came and longer. Someone told me that he also bought his rental car that we supplied him for the time he was with us at a generous discount. Does anyone know about this? Glad to hear from you Susan Luzzaro.


jibaro Jan. 11, 2013 @ 4:15 p.m.

Susan, great to have you back!


anniej Jan. 11, 2013 @ 4:30 p.m.

Jlbaro: Off topic, but in Ms. Luzzaro's absence I was trolling thru some of her old articles and found I had missed a reply you made to me regarding one of the board members. PLEASE KNOW, my comments were not aimed at you. I was speaking of someone else.


susan Jan. 12, 2013 @ 12:57 p.m.

Gordon Siu, we must admit, was a remarkable student and journalist and continues to contribute to the community. He has his own website which contains other pieces of journalism related to the school district which may interest those who follow the subject. Thanks for your work, Gordon.

Dan Puplava fined, broker's license suspended, but SDCOE still loves him

Dan Puplava and Diane Crosier had their pal Dan Shinoff sue for defamation when Puplava's dealings were exposed by Jeff McDonald of the San Diego Union-Tribune in 2009. Their target settled because he didn't have enough money to pay lawyers to carry on the lawsuit. I assume that was the plan all along, since I doubt that Puplava and Crosier wanted a trial where the whole truth might come out.

Regulators also imposed a $300,000 fine on Puplava’s broker-dealer, AIG Financial Advisors, now known as SagePoint Financial Inc.

See all Dan Puplava posts.

Office of Ed manager was fined, suspended
FINRA found issues with his side business
By Jeff McDonald
UTSD
May 18, 2012

The official in charge of a $270 million public investment fund for 6,400 educators in the region was fined $7,000 last year and had his broker’s license suspended for three months. He retained his official post.

Daniel Puplava, 50, manages the deferred compensation program for the San Diego County Office of Education. He has simultaneously worked for private brokerage firms, one of which was fined $300,000 in January for failing to supervise him and guard against conflicts of interest.

The fines were issued by the Financial Industry Regulatory Authority, the nonprofit regulatory agency that was reviewing the matter when the U-T wrote about Puplava’s dual roles in 2009.

At the time, Puplava worked for AIG Financial Advisors of Phoenix. He now works for his brother’s company, Puplava Financial Services of San Diego.

In his county schools job, Puplava meets hundreds of potential investors while hosting retirement workshops aimed at growing the deferred compensation program. He said in written responses to questions that he does not refer participants in the county program to his brother’s firm.

“I do not speak of or mention Puplava Financial Services at my presentations,” he wrote. “In addition, the (county schools office) has policy rules and practices that have been put into place that must be followed. If I violate the rules there would be consequences.”

Puplava is paid $108,696 a year by the schools office to run the deferred compensation program, which offers securities, annuities and other investments to educators seeking to boost their retirement beyond government pensions.

The Office of Education said it was aware of the investigation findings and penalties but could not discuss the case in any detail due to confidentiality requirements for agency personnel.

“Mr. Puplava is no longer in a supervisory position and this behavior is not acceptable to SDCOE under SDCOE policy or practice,” the office said in a statement.

Puplava’s pay remained the same when he was removed from a supervisory position, the office said.

Puplava’s dual positions were first reported by the U-T in 2009. The newspaper obtained client statements listing Puplava’s county telephone number as his primary contact for his private investment sales.

The paper documented that Puplava earned $355,000 in commissions in 2006 and was named to the 2008 Achiever’s Council, an honor reserved for agents of AIG Financial Advisors whose commissions and fees exceed $250,000 a year.

County schools officials defended their decision to permit Puplava to run his outside business, saying it was a viable company when Puplava agreed to run the deferred compensation program and there was NO need for him to give up that business.

Still, the Financial Industry Regulatory Authority looked into the matter.

Puplava was not penalized for having conflicts of interest between his public-sector job and his personal brokerage business.

Instead, FINRA said Puplava failed to properly supervise a signature stamp that was being used by an assistant. He also kept blank forms signed by his clients, which is not permitted.

“Puplava had customers sign blank securities business-related forms and retained these blank securities business-related forms in his customer files,” FINRA said. “Puplava was aware of his member firm’s prohibition against this practice.”

Puplava said he would have prevailed in the case but admitted the allegations to minimize his legal expenses.

“I was informed by my attorney that I had an excellent chance of defeating any FINRA claims, but the cost would be prohibitive,” Puplava wrote. “Therefore, I settled with FINRA.”

Puplava, who said he shared his commissions with other brokers, accepted the $7,000 fine and two suspensions late last year — one for 20 days and one for three months. The longer suspension was satisfied in January.

The full-time county schools job requires Puplava to hold a broker’s license. Office of Education spokesman James Esterbrooks said Puplava avoided duties that required a license during his suspensions.

“He was in the office doing paperwork,” Esterbrooks said.

Regulators also imposed a $300,000 fine on Puplava’s broker-dealer, AIG Financial Advisors, now known as SagePoint Financial Inc.

“The firm failed to implement a supervisory system reasonably designed to address any conflicts of interest,” investigators from FINRA wrote in their published findings.

In response to questions from The Watchdog, a spokeswoman for the company said, “The protection of our clients’ assets is paramount to SagePoint Financial. Mr. Puplava has not been affiliated with SagePoint Financial since January 2010.”

Diane Crosier and Dan Puplava cozied up to Life Insurance of the Southwest, among others

See all Diane Crosier posts.
See all Daniel Puplava posts.

Diane Crosier and Dan Puplava recently cozied up to Life Insurance of the Southwest, a company whose agents, Anthony Pavia and James Sanford, altered a document that I signed in 1999. The falsified document, approved by Chula Vista Elementary School administrator Lowell Billings, can be seen at the bottom of this page.


Hotel Stays, Flights and a $400 Bottle of Wine
December 26, 2010
by Emily Alpert
December 26, 2010

When San Diego County Office of Education employees flew to Boston to learn more about a company they were considering doing business with, they didn't need to worry about the bill.

The company paid for their flight to Boston. It also paid for their hotel stay. And when of the employees, Dan Puplava, picked out a bottle of wine from Napa Valley over dinner, he wasn't really sure who paid, but believes it was either the company or its marketing company. He thought the bottle cost $400.

"Here the bottle of wine would be, like, 150 bucks," Puplava later testified. "Out there it was outrageous."

Puplava manages a program that helps school district and charter school employees invest for their retirements. Four years ago, he and supervisor Diane Crosier made the visit to Aviva, a company they were weighing whether to do business with, to learn more about its investment products.

It wasn't their only trip. Between 2006 and 2008, the employees repeatedly took trips to visit companies the program worked with or was considering working with, paid for by those same companies.

Crosier is supposed to publicly report gifts she gets from companies or people related to her work. Yet the trips aren't listed on her economic disclosure reports. Ethicists say the free trips are also problematic because workers could be improperly swayed by gifts from companies they negotiate with.

"It smells bad," said Jessica Levinson, director of political reform for the Center for Governmental Studies in Los Angeles. "They're clearly trying to influence them."

The County Office argues that the free trips did not compromise its integrity and helped spare resources. Trips to visit companies are indeed common among other investment programs run by government agencies, a way to keep up with vendors and the services they offer. But several other government programs surveyed by voiceofsandiego.org don't let companies pick up the tab.

"We don't want to be beholden to anyone," San Diego County Treasurer-Tax Collector Dan McAllister said. His office runs a similar program for county employees and pays for its own trips to see vendors. "We will turn down offers like that because we never want to leave the impression that there is a conflict."

Boston wasn't their only destination. They took several other trips on the tab of companies they were visiting: In Philadelphia, Crosier and Puplava met with Lincoln Financial, a company they were considering to manage their brokers. In Ohio they stopped in to see both Meeder Financial, which helps school employees manage their money, and Nationwide, their investment platform.

In Dallas they visited Life Insurance of the Southwest, a company that provided a special kind of investment plan for the program. In Utah they visited the company that administers the program, National Benefit Services. And they repeatedly visited Aviva's marketing company in Santa Barbara...

California also sets dollar limits on gifts to public employees, which bar them from taking more than $420 worth of gifts from each source each year. The rules are supposed to reduce the sway of money in government and allow the public to keep an eye on how public officials could be influenced.

In response to questions from voiceofsandiego.org, the County Office wrote in an email that it believed Crosier had followed the gift rules. But despite repeated questions, it would not specifically explain why the trips could be legally left off the forms. In an email, Crosier said only that the trips were not included "due to discussion with legal counsel."...

The investment program that Puplava manages is offered by a consortium of dozens of school districts and charter schools, which have joined together to get employee benefits at a lower cost. That pact, known as the Fringe Benefits Consortium, is run by the County Office of Education. The program has more than $210 million in assets and more than 6,500 participants.

The program says it offers a less expensive investment option to public school teachers. Attorney [XX], who fielded questions on behalf of Crosier and Puplava, said the agency had hired good, honest people.

"It's unfair to demonize people who have otherwise done great things," [XX] said in an interview earlier this year. "Public employees have saved millions because of their efforts."

But ethicists said the problem isn't whether Puplava and Crosier are good people. Taking the gifts could open Crosier and Puplava up to improper influence that public employees should try to avoid, they said.

Crosier and Puplava advise the committees that decide which companies get contracts with the program or what investments it can offer to employees.

[XX] said they don't give their opinion on companies. But La Mesa-Spring Valley School District Superintendent Brian Marshall, who sits on the executive committee, said that when vendors are up for approval, Crosier typically makes a recommendation to the committee...

The gifts came to light because the program is tangled in a lawsuit. Nearly two years ago, the consortium run by the County Office of Education sued a group of investment advisers it had terminated, accusing them of stealing trade secrets and other violations.

The advisers sued back, claiming the consortium had baselessly fired them.

After the Union-Tribune story on Puplava came out, County Office of Education employees Dan Puplava and Diane Crosier filed a defamation suit against one of the advisers, Barry Allred, and a former consultant, Scott Dauenhauer. Crosier claimed the two had given false information to a Union-Tribune reporter "to enact an unethical revenge."

Crosier's suit also argued that private emails between Allred and Dauenhauer were defamatory, including claims that did not appear in the newspaper. In one of those e-mails, Allred said Crosier and Puplava had accepted paid trips to Boston, Colorado, Utah, Ohio and Santa Barbara.

Attorneys for Allred and Dauenhauer declined comment for this article or didn't respond to phone calls by deadline. In their court filings, they attempted to counter the defamation claims by arguing that the emails about the trips were factual, quoting Puplava's testimony about his Boston trip.

The Diane Crosier/Daniel Puplava lawsuit by SDCOE has a status conference

The Diane Crosier/Daniel Puplava lawsuit by SDCOE has a status conference coming up. I think the "C: in front of Diane Crosier's name means "cross-complainant" or, more likely, "cross-defendant."

12/17/10 11:00AM Dept 62 Central
Judge Styn, Ronald L.
Status Conferen 37-2008-00090684-CU-BT-CTL
C)Diane Crosier
[represented by XXX]

It seems that Diane Crosier got a new lawyer in the case.

Tentative Rulings in SDCOE Fringe Benefits Consortium, Dan Puplava, Diane Crosier lawsuit

All tentative rulings heard on April 9, 2010 were finalized.

The judge didn't give any litigant everything he wanted without a trial. Judge Styn made the following Tentative Rulings:

1. Dan Puplava will have to answer for unfair competition, but not
conversion or interference. LINK

2. Puplava motion for summary judgment denied: "Puplava fails to cite authority providing for summary adjudication of whether a duty was breached. Absent such authority, there is no basis to summarily adjudicate the claims for breach of duty as requested by Puplava. Even if there was such authority, Puplava's separate statement fails to identify the specific breach of duty and the undisputed facts as to each breach of duty for which summary adjudication is sought.

3. Triable issues of fact remain re Puplava's damages. LINK

4. Judge Styn kept alive the Breach of Written Contract charge against the Consortium as well as Breach of Contract, Interference and Unfair Competition against Crosier. He threw out Breach of Oral/Implied Contract against the Consortium. LINK

5. Click HERE for Tentative Ruling concerning the following:
1. Breach of Contract--Defendants' motion for summary
adjudication is granted.
2. Furtahdo wins: Breach of Implied Contract--Defendants' motion for summary adjudication is granted.
3. Misappropriation of Trade Secret--Defendants' motion
for summary adjudication is denied.
4. Statutory Libel--Defendants' motion for summary
adjudication is denied.
5. Intentional Interference with Prospective Economic
Advantage
Defendants' motion for summary adjudication is denied.
6. Misappropriation of Name--Defendants' motion for
summary adjudication is denied.




The judge did not favor the big dogs as blatantly as he did in Maura Larkins' malpractice lawsuit against attorney Elizabeth Schulman. In a better world, Judge Styn would have forwarded the evidence in the Schulman case to the Bar Association. Instead, he ignored it (helping Elizabeth Schulman avoid all responsibility for her wrongful acts), and then punished Maura Larkins financially for bringing the lawsuit.

The decisions of the court in the Schulman case illustrate why Elizabeth Schulman felt confident that she could get away with violating the legal requirements for an
attorney who agrees to represent a client. Schulman possessed sworn testimony that
contradicted the testimony of the witnesses appearing for Chula Vista
Elementary School District. Why did she not present it? Judge Styn’s prejudices against in pro per litigants not only protected Schulman from any legal consequences for her wrongdoing, but caused him to dismiss with prejudice a case in which the
complaint itself contained enough evidence to prove Schulman guilty of the
causes of action against her.

See all Dan Puplava posts.
See all Diane Crosier posts.
See all Lora Duzyk posts.
See all SDCOE posts.

Tentative Rulings in SDCOE Fringe Benefits Consortium, Dan Puplava, Diane Crosier lawsuit

This page has moved to HERE.

Dan Puplava and Diane Crosier will appear in court tomorrow

See all Dan Puplava posts.

03/26/10
C-62
Judge Ronald L. Styn
Motion Hearing
37-2008-00090684-CU-BT-CTL
C)Daniel Puplava
Randall L. Winet
also Summary Judgment

SDCOE trustee Jerry Rindone is questioning the way Diane Crosier and Dan Puplava do business

We're lucky to have Jerry Rindone on the San Diego County Office of Education board.
It may not be a coincidence that the only trustee at SDCOE who sees a problem with the recently-exposed shenanigans in the Risk Management department is one of the new board members. Jerry Rindone is concerned about administrator Dan Puplava's having a side business with the same financial institutions that he manages on behalf of SDCOE. The state attorney general says this is prohibited.

Longtime board members John Witt, Sharon Jones, and Susan Hartley have been studiously looking the other way for years, ignoring my public records requests and refusing to investigate complaints about Risk Management executive director Diane Crosier.

I had hoped that Superintendent Randolph Ward would clean things up when he arrived, but it appears that he (literally!) bought into the Risk Management schemes within weeks after he was hired in 2006.

I'd like to think the other new trustee, Mark Anderson, is still contemplating the situation. Perhaps he'll have the courage to speak out against the cronyism in the SDCOE Risk Management department.





Employee-broker issue divides school trustees
Superintendent also was client
By Jeff McDonald
San Diego Union-Tribune
March 23, 2009


Background: The manager of the San Diego County Office of Education deferred compensation program ran a side business that sold investments to teachers and administrators served by the program.

One trustee of the San Diego County Board of Education [Jerry Rindone of Chula Vista] is so concerned about a manager's side business selling financial securities to educators that he requested a review of the situation by the superintendent.

...According to the state Attorney General's Office, public school employees – including those in the county education office – are prohibited from acting as commissioned sales agents for vendors of the educator retirement accounts...

County Superintendent of Schools Randolph Ward, who bought an annuity from [Dan] Puplava weeks after being hired in 2006, did not respond to requests for an interview.

At issue is the deferred-compensation program run by the Fringe Benefits Consortium...Over the years, Puplava and a group of independent financial advisers hosted hundreds of workshops to tell school employees about the program...The newspaper obtained one statement that showed Puplava earned more than $355,000 in commissions in 2006...

Board President Sharon Jones said she and her colleagues are “always concerned” about conflict-of-interest allegations but noted that there is no law against running a personal business while working for a public agency...

[Maura Larkins' note: Sharon Jones seems to be concerned about allegations, but not about wrongdoing. She wants SDCOE to keep its secrets. Jones is my representative on the board, and has ignored all my requests for help obtaining public records. The only board member who has ever been responsive to my requests was Nick Aguilar, the previous south county representative. It's interesting that Aguilar's replacement, Jerry Rindone, is the only board member currently concerned about SDCOE's relationship with insurance companies.]

Trustee John Witt declined to discuss the issue;





Trustee Mark Anderson did not return two messages left at his home.





Trustee Susan Hartley said the county schools office looked into Puplava's dealings and found nothing amiss.

[Maura Larkins' note: Maybe you should have someone from the outside investigate, Ms. Hartley.]

Tom Curtis, a retired university administrator from La Mesa with no ties to the county Board of Education...was so angry after reading the newspaper report that he called the headquarters to complain...

[The SDUT first broke this story last week; Voice of San Diego recently wrote about SDCOE lawyer Daniel Shinoff and his relationship with the folks in SDCOE's Risk Management department.]

Why are Diane Crosier and Dan Puplava and the San Diego County Schools Fringe Benefits Consortium suing the brokers they hired?

See all Dan Puplava posts; all Diane Crosier posts.

I understand that public entities sometimes sue people, but I don't understand why Diane Crosier and Dan Puplava, two highly paid employees of San Diego County Office of Education, are also plaintiffs in the San Diego County Schools Fringe Benefits Consortium's suit against brokers it hired.

The obvious question is this: were these two public employees getting--or expecting to get--kickbacks AS INDIVIDUALS from the public entity's sales? I simply don't see how the brokers could have damaged Diane Crosier and Dan Puplava as individuals UNLESS Crosier and Puplava were expecting more money for themselves.

Over the years I've asked a lot of questions about SDCOE
(San Diego County Office of Education)
and Diane Crosier. Yesterday I asked on this blog,
"What exactly is the relationship between AIG and SDCOE?"

I was delighted to wake up this morning and find that my question had been answered, at least in part, by the San Diego Union Tribune:

County employee also acted as a broker
By Jeff McDonald
San Diego Union-Tribune
March 17, 2009

A San Diego County Office of Education employee tasked with managing a retirement program for thousands of teachers and administrators supplemented his salary for years with commissions on outside investments he sold to those same clients.

Daniel Puplava makes $100,000 to $108,000 a year as the deferred compensation manager for a consortium that serves public educators in three counties. At the same time, Puplava has been allowed to pursue those clients for his private broker business.

In 2006, Puplava collected at least $355,000 in commissions as a broker for AIG Financial Advisors Inc., according to documents obtained by The San Diego Union-Tribune. He was named to the 2008 Achiever's Council, an honor reserved for agents of AIG Financial Advisors whose commissions and fees exceed $250,000 a year.

His attorney said Puplava shared that money with other brokers.

Officials at the county schools office said they knew about Puplava's broker business and saw no conflict of interest because he has done the work on his own time.

“It's not unheard of for public employees to have a business on the side,” spokesman James Esterbrooks said.

The arrangement does not appear to violate federal securities laws, but it tests the limits of the state education code and has become one of the main sticking points in litigation involving the office.

Puplava's work as a broker also appears to have been done at county offices. Client statements obtained by the Union-Tribune list Puplava's phone number at the county schools office as his primary contact.

“It certainly strikes me as an apparent conflict of interest,” said Ronald F. Duska, director of the Mitchell Center for Ethical Leadership at The American College in Bryn Mawr, Pa. “It just sets up incredible temptations for the guy who's supposed to be acting as a manager.”

Puplava, who is 47 and lives in Escondido, declined to be interviewed. His attorney, Randall Winet, responded to questions with a March 6 letter to the newspaper stating that Puplava has divested himself of his personal clients and received only a portion of the commissions cited in documents.

“The funds from financial services companies were paid directly to him, which he then was required to distribute to a number of brokers working for him,” the letter says.

Winet also said Puplava had “a significant, thriving practice prior to ever joining the County Office of Education.”

Puplava is a registered broker for SagePoint Financial Inc. in Phoenix, which until recently was called AIG Financial Advisors.

His full-time job is to manage the deferred compensation retirement program for the Fringe Benefits Consortium, which provides access to health insurance, annuities and other services for school employees across San Diego, Riverside and Imperial counties.

The consortium was created in 1982 to help school employees negotiate better deals on health insurance by pooling resources.

Twelve districts representing 2,500 or so teachers initially joined the self-insurance partnership, but the client roster grew to 72,000 as the consortium attracted more districts and expanded its services.

When the Office of Education hired Puplava in 1997, he was permitted to keep his “book of business,” or private clients, county schools officials said.

Puplava also was allowed to grow his client base by soliciting teachers he met through his county job.

Four years after his hiring, the county schools office was among the first agencies in the country to organize an umbrella retirement program for teachers, who as public employees receive government pensions but often supplement those benefits by setting up individual investment accounts.

The idea was to give teachers the opportunity to buy investment products without paying the high fees and commissions normally associated with individual transactions.

[Maura Larkins' note: I was one teacher who was almost fleeced by the consultants who were allowed to come into classrooms in Chula Vista Elementary School District to push their products. Anthony Pavia and James Sanford tricked me, but I got most of my money back. Current CVESD Superintendent Lowell Billings tried to cover-up the hoax.]

Puplava was put in charge of the deferred compensation program. He contracted with outside financial advisers to promote the services, and together they hosted hundreds of informational seminars outlining the various products and services.

About 6,000 teachers and administrators have bought supplemental investment products offered through the deferred compensation program.

Consortium director Diane Crosier said that after a new superintendent was hired in 2006, a decision was made to allow Puplava to keep existing clients but restrict him from accepting new teachers and educators as customers. But by then, even incoming Superintendent Randolph Ward had bought an annuity from Puplava.

Running an outside business is legal for full-time county Office of Education employees. But according to the California Department of Justice, a deferred compensation program manager is supposed to be a neutral party – not someone who profits from marketing financial products.


“The statute prohibits school employees from acting as sales agents for 403(b) vendors in return for commissions,” according to an August opinion from the Attorney General's Office analyzing the state's education code.

...Former employees and independent advisers say the U.S. Securities and Exchange Commission investigated Puplava's dealings. Crosier said the SEC has looked into Puplava, but that was more than a year ago and nothing has happened.

The San Diego County District Attorney's Office requested copies of related civil case files but closed its investigation in July after finding no evidence of criminal conduct.

[Maura Larkins' note: Now that's a real shocker! Bonnie Dumanis didn't find anything wrong with SDCOE lawyer Dan Shinoff's actions at MiraCosta College, either.]


...In August, the consortium terminated the contracts of six brokers who had been enrolling and serving clients for years. Three weeks later, the schools office sued those brokers, claiming they had stolen clients and business from the consortium.

[Maura Larkins' note: Wait a minute. If SDCOE was truly helping teachers avoid "high fees and commissions," then how could private brokers steal clients? They must have given them a better deal! It sounds like SDCOE was overcharging teachers. Where did all the extra money go, Diane Crosier?]

The brokers fought back, filing a 26-page cross-complaint last month that lodged numerous allegations against Puplava, Crosier and county schools office officials.

Among other things, the cross-complaint says Puplava opened a partnership with three of the fired advisers – Barry Allred, Christopher Dougherty and Michael Zeiger – that operated as FBC Insurance Services.

The partners shared tens of thousands of dollars in fees and commissions paid by FBC clients, the cross-complaint alleges.

Court papers also say Puplava negotiated a deal with Aviva Life and Annuity Co. that paid him 30 percent of all commissions the partnership received from Aviva. In 2006, Puplava personally collected more than $26,000 in Aviva commissions from February to October, the cross-suit says.

Citing the ongoing litigation, Crosier declined to address specific allegations, including why Puplava was permitted to sell his clients financial products not available under the consortium when the fired brokers were sued for the same activity.

...Kris Kertzman, who worked as a consortium broker from 2002 to 2007 but is not part of the pending litigation, said Puplava's clients think he “has their best interests in mind because he works for the county.”

“He's getting paid a salary by the taxpayers to manage the registered representatives, not to be a registered representative,” Kertzman said.