| YACHTGATE -- Dallas ISD's just-ended July 2008 technology fraud trial is the latest leg in a long voyage throught public ed for Ruben Bohuchot & William Coleman Stops along the way included San Francisco USD, Detroit Public Schools, Key West, the Gulf of Mexico By Peyton Wolcott Saturday, July 12, 2008 - Updated Sunday, July 13, 2008 - 1:08 p.m. |
| P E Y T O N W O L C O T T |
| H o w w e t a k e b a c k o u r c h i l d r e n ' s e d u c a t i o n -- o n e p e r s o n , o n e q u e s t i o n , o n e s c h o o l a t a t i m e . |
| Conservative Commentary - Technology |
How we take back our children's education: one person, one question, one school at a time. |
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Speaking of technology vendors, here's a second look at Katy ISD's software developer Xpediant Then-Katy ISD supe Leonard Merrell's choice of technology consultants was Xpediant, LLC, which had to change its name after it was reported on this website on April 17, 2006 that "according to sources within the Texas Secretary of State's office this morning, Xpediant, LLC, 'in our world here doesn't have an active entity status' and has been in a state of forfeiture since February 13, 2003 because 'they didn't do their state franchise taxes,' with the result that Xpediant 'has no entity status and no liability shield.' Xpediant's 2003 return has not yet been received, making it almost three years overdue." Alas. When Xpediant's owners went to fix things in Austin, they discovered their no-longer- viable company's name had been taken by someone else, so they had to find a new name. |
Armand Fusco's '13 Guiding Principles' 1. Assume that fraud, theft, and embezzlement are occurring—look for it. 2. Assume that mismanagement exists— look for it. 3. Assume that there is waste in the system— look for it. 4. Assume that financial management controls are inadequate—constantly review and tighten the process. 5. Assume that staff has not been properly trained and educated in budget management—provide on- going training particularly for key personnel. 6. Assume that there are employees who know where there is fraud, waste, and mismanagement —encourage, reward, and resolutely protect “whistle-blowers.” 7. Assume that any report or information dealing with financial matters does not provide sufficient details—seek more details. 8. Assume that board policies are not being implemented properly— ask for progress reports. 9. Assume that audits do not uncover fraud—insist onforensic auditing. 10. Accept the fact that board members lack the skills and knowledge required to effectively monitor the budget—provide them with information and training. 11. Accept the fact that vigilance must be constant —good enough is never good enough. 12. Accept the fact that board members must have easy access to detailed information and data that are used to develop financial reports and monitor progress—seek to develop meaningful reporting systems. 13. Accept the fact that decisions made by the board will be scrutinized by the staff and the public to see if their financial rhetoric to protect school dollars from fraud, waste and mismanagement is matched against its actions—weigh every discretionary decision carefully for consistency and common-sense. --From "School Corruption: Betrayal of Children and the Public Trust" by Armand A. Fusco |
| Redbuds blooming Texas Capitol Austin |
| NEC CORPORATION OF AMERICA BEGINSOPERATION S AS A NEWLY INTEGRATEDCOMPA NY Greater Synergies Produced Across IT and Network Solution Offerings IRVING, Texas, July 3, 2006 NEC Corporation of America, a leading technology provider of IT, network and visual display solutions, today marks its first official day of operations in the North American marketplace. With headquarters located in Irving, and more than $1 billion in revenue, NEC Corporation of America is positioned to gain an even stronger foothold among enterprise, carrier and SMB customers by delivering the industries' most robust and innovative product, service and solution suites. NEC Corporation of America will offer one of the broadest and richest portfolios of technology and professional services ranging from server and storage solutions, IP voice and data solutions, digital presentation and visual display systems to biometric identification, optical network and radio communications solutions. "NEC Corporation of America is a company poised for solid growth, fueled by the talent of hundreds of skilled employees, as well as value-added partners, dealers, and resellers," said Tadao Kondo, president and CEO. "But even more important are the added benefits now available to our customers through this strategic integration. I am proud to lead this new company, and am confident of our success." NEC Corporation of America was established from the combined resources and assets of NEC USA, Inc., NEC America, Inc. and NEC Solutions (America), Inc. The company's newly elected officers include: |
Had SFUSD not intervened: "The vendors associated with the two applications, including NEC/BNS, would have received a total of $59,363,155.40 According to the funding applications, these funds would have been used to create an incomplete computer network that would, by itself, have been inoperable. Some combination of 151 schools in the district would have been saddled with equipment that would have been useless. There would have been a phone system with no phones, and there would have been a computer system with no computer work stations. (USAC does not fund those pieces of equipment.) There would not have even been servers, as USAC rejected that portion of McQuoid’s applications. All the USAC award would have paid for was cabling, routers and switches, and a phone switch to reroute phone lines in 46 of the 151 schools." (EXCERPTED FROM SAN FRANCISCO CITY ATTORNEY PRESS RELEASE) |
KEEPING UP WITH RUBEN BOHUCHOT: RUBEN'S VENDOR RELATIONS: DALLAS ISD: Micro Systems Enterprises DETROIT PS: Information Solutions Group Services SFUSD:S NEC Business Network Solutions, Inc. |
| More here about the relationships, vendors and school districts involved: www.peytonwolcott.com/Modern_Edu Monopoly.html |
| "About Ruben" By Allen Gwinn July 29, 2005 www.Dallas.org I want to open by saying this is probably one of the hardest columns I've had to write. Some of you who know me know that I consider Ruben Bohuchot, the DISD Technology Chief Technology Officer now the subject of controversy, a friend. I have known Ruben now for several years, and to this day believe him to be motivated by love for our kids in DISD. I have always believed Ruben to be honest at his core, and still continue to believe so today. So, you see, the allegations of wrongdoing seem foreign to me. Because this just isn't the Ruben I know. The Ruben I know was a volunteer as much as an employee. His pet project, for instance, was the Technology Outreach Program. My wife and I had the pleasure of volunteering and helping out one Saturday an endless line of cars drove through to claim the computer the family would have been unable to own, had it not been for Ruben and his staff's endless volunteer hours. There was always pride in a job well done. But not just for Ruben. Today, virtually everyone in DISD Technology feels a higher sense of purpose. I watched a technolo- gy staff change philosophical focus from "it's just a paycheck" to "our mission is to gradu- ate students." At the risk of sounding like a Colgate Palmolive commer- cial: 4 out of 5 tech- nology employees will agree that Ruben had some- thing to do with it. The Ruben I know is an avid sports- man and golfer-- with whom I would never try and match skills! The Ruben I know wanted to cut costs in a school district where citizens are already over-taxed. So you see, this whole affair is somewhat foreign to me, because the Dallas Morning News is talking about another guy. I have received a phone call from a tearful employee in DISD Technology wondering what's going to happen next. So I'm going to answer. I don't know. Either he broke the law or he didn't. Either he betrayed our trust or he didn't. I want to say, right now, that I don't believe Ruben would line his pockets with the blood money of Dallas taxpayers. Frankie Wong (Micro Systems Enterprises' chairman) may well be a fine person. Ruben, as a public executive, at least should know his boundaries. My money, as a taxpay- er, is on the table and I expect Ruben to be thinking of all of us in everything he does. I've been thinking alot about this over the last few days. So here, my friends, is what I think. Ruben: you're a great person, and a friend. You've brought order to chaos in DISD's Technology pro- gram, and there are kids that owe you a great deal for the advantages you've given them and their families. There are many employ- ees under you who are better for the role you've played in their lives and careers. You have earned my trust and respect. But, assuming the Dallas Morning News is correct, you shouldn't have done what you did. I don't care about the details. You're an employee of the taxpayer, and the gifts were grand and excessive. The relationship, regardless of the details, was inap- propriate. If you were in my shoes, you'd say the same thing. And (here comes the hardest part), you need to resign. You need to lead by example, as you've done many times in the past, and take the high road. And to the Board: you need to disqualify Frankie and Micro Systems Enterprises from future business with the District. Harsh? Yes. But to both you and Frankie: the nickel you guys traded wasn't yours. It was mine. Please do the right thing. |
| (L) Ruben Bohuchot (PHOTO/Dallas Morning News (R) William F. Coleman (PHOTO/Detroit FreePress) |
| The nation's 1st & only daily conservative public education commentary |
H O M E
| PRESS RELEASE Office of the San Francisco City Attorney |
Tadao Kondo -
President and CEO
Jun Yoshida -
Executive Vice
President
Charles Langdon-
Senior Vice President
Larry Sheffield - Senior
Vice President
Masaaki Nakajima -
Senior Vice President
Pierre Richer - Senior
Vice President
Koichi Nakayama -
Senior Vice President
Soichiro Matsuyama -
Senior Vice President,
CFO and Treasurer
Jason Whitehair -
Senior Vice President
Gerald Kenney - Senior
Vice President, General
Counsel, Secretary
Darrell Kennemer - Vice
President and Corporate
Compliance Officer
Peter DiCorti - Assistant
Treasurer
Deon Retemeyer -
Assistant Secretary
Jeremy Kashian -
Assistant Secretary
President and CEO
Jun Yoshida -
Executive Vice
President
Charles Langdon-
Senior Vice President
Larry Sheffield - Senior
Vice President
Masaaki Nakajima -
Senior Vice President
Pierre Richer - Senior
Vice President
Koichi Nakayama -
Senior Vice President
Soichiro Matsuyama -
Senior Vice President,
CFO and Treasurer
Jason Whitehair -
Senior Vice President
Gerald Kenney - Senior
Vice President, General
Counsel, Secretary
Darrell Kennemer - Vice
President and Corporate
Compliance Officer
Peter DiCorti - Assistant
Treasurer
Deon Retemeyer -
Assistant Secretary
Jeremy Kashian -
Assistant Secretary
| The strategic timing of NEC Corporation of America's integration comes in parallel to the rapid expansion of IT, Internet services and next generation networks, which have fueled the growing convergence of IT and communications in North America and internationally. "We will optimize our technology and solutions portfolio to generate new growth opportunities, particularly in key vertical markets," stated Jun Yoshida, executive vice president. "We are eager to explore and develop new product and service offerings, including high-powered, high speed multi-service networks, integrated IT platform systems and converged voice and data solutions." Direct subsidiaries of NEC Corporation of America include: NEC Unified Solutions; Niteo Partners; NEC Laboratories America; NEC FiberOptech; NEC Financial Services; and NEC Capital. |
| PRESS RELEASE NEC Business Network Solutions Inc., a subsidiary of Irving, Texas-based NEC Corporation |
| City Whistleblower Suit Nets $3.3 Million for S.F. Schools, Nationwide Investigation Into E-Rate Scam SAN FRANCISCO (May 27, 2004)—City Attorney Dennis Herrera today joined San Francisco Unified School District Superintendent Arlene Ackerman and San Francisco Unified School District General Counsel Louise H. Renne in announcing a major settlement in a false claims action Herrera filed under seal two years ago—as a "qui tam" whistleblower action—against numerous technology vendors and consul- tants for conspiring to defraud a federal government program of millions of dollars intended for the purchase of computer equipment for public schools. Under terms of the partial settlement announced today, NEC Business Network Solutions Inc., a subsidiary of Irving, Texas-based NEC Corporation, will pay a total of $15,985,263 in cash and services to the federal government to settle the lawsuit’s civil claims. As the "qui tam" whistleblower in the case, the San Francisco Unified School District will receive 21 percent of the settlement—or $3,356,905. In addition, the company will plead guilty to felony counts of wire fraud and conspiring to violate federal antitrust laws, and will pay a criminal fine of $4.6 million. "Today’s settlement with NEC Business Network Solutions represents an excellent outcome for San Francisco public schools and a |
| San Francisco USD |
| Detroit Public Schools |
| Detroit Schools Dump 3 Tech Deals: Coleman Back in Running Despite Role in Controversy Friday, December 15, 2006 By Chastity Pratt/Detroit Free Press In a political flip-flop that stirred emotions Thursday night, the Detroit school board voted to rescind three of four controversial technology contracts and agreed to give [interim] superintendent William F. Coleman III -- who was at the center of the storm over the $58 million deal -- an interview for his own position . . . . The technology issue cost Coleman the confidence of some board members this fall when it was found he had recommended that a technology company consult with a friend who was under FBI scrutiny. Companies' experience limited A Free Press investigation showed the companies had limited experience or resources and did not have the Detroit offices they claimed and, in Detroit firm VisionIT's case, questions arose about the legitimacy of out-of-state offices. But the board kept VisionIT as a contractor . . . . Coleman came under scrutiny after it was found that he had referred a local technology company that wanted to bid for work with DPS to consult with Ruben Bohuchot. Bohuchot, Coleman's friend and former colleague, is under investi- gation for allegedly taking gifts from a technology vendor while he was an administrator for Dallas schools. Information Solutions The company Coleman referred to Bohuchot, Information Solutions Group Services, became part of the bid from GVC Networks LLC that won a 5-year telecommunications contract worth $726,000 per year. The board voted Thursday to rescind GVC's contract as well as the 5-year contract awarded to Management Systems Consultants, Inc., worth $510,000 a year. Universal Sales was supposed to receive $647,000 a year for audiovisual services, but the owner instead will be rehired as a district employee. VisionIT will get $9.8 million a year to handle most of the district's technology needs. Strategic Staffing Solutions, another Detroit firm, will get about $1 million a year for data warehouse and telecommunications services. Compuware Corp. had provided technology services to the district, but its contract expired in April. After losing in the bid process, it appealed and asked the board to reconsider, calling the bid process tainted. The board hired attorneys to investigate. Board President Jimmy Womack said he believed the review showed nothing "illegal, immoral or unethical." The new deals with VisionIt and Strategic Staffing are more efficient, he said. The FBI interviewed Coleman this fall about his relationship with Bohuchot, and on Wednesday agents were at DPS headquarters to interview Womack about the technology deals. Womack said only that the conversation related to an "ongoing investigation." |
| According to this account, his involvement with Ruben Bohuchot appears to have cost William Coleman a shot at the permanent Detroit PS superintendency: |
| Although the com- bination of players changed from San Francisco to Dallas to Detroit, two people were involved in tech deals in all three school districts: administrators Ruben Bohuchot and William F. Coleman, III. The following, three years old, is the most positive look at Mr. Bohuchot I can find; below that is a piece by Mr. Coleman published (also in 2005) by the conservative think tank, Mackinaw Center for Public Policy : |
| New flap for DISD ex-official Technology contract for Detroit schools raises questions of favoritism Monday, October 9, 2006 By KENT FISCHER and PETE SLOVER/The Dallas Morning News Ruben Bohuchot, a former Dallas school district technology chief whose relationships with vendors sparked an FBI investiga- tion last year, is involved in another controversial technology deal, this time in Detroit. Two Michigan companies told The Dallas Morning News that Mr. Bohuchot and an associate, Julius Bender, touted their connections to Detroit [interim] superintendent William Coleman as they vied for an $11.6 million piece of the deal. Mr. Coleman was a DISD deputy superintendent until 2000; two years later he became Detroit's chief operating officer. Mr. Cole- man and Mr. Bohuchot worked in the San Francis- co school district, and they moved into the same Dallas neighborhood when then-superintendent Bill Rojas hired them to work here. |
| SAN FRANCISCO SCHOOLS BLOG The San Francisco USD - Dallas ISD connection: Ruben Bohuchot He came to the Dallas Independent School District as chief technology officer in September 1999, following his former San Francisco boss, Waldemar "Bill" Rojas, who had taken over in Dallas as the highest-paid superintendent in America. When Mr. Rojas was fired less than a year later, Mr. Bohuchot stayed on with a mandate to manage the district's complicated information systems and bring classrooms into the 21st century technologically. Mr. Bohuchot has since overseen hundreds of millions of dollars worth of technology deals, including an estimated $125 million agreement under the federal E-rate funding program for fiscal 2003. The deal ranked DISD as the top E- rate applicant in the country based on per-student dollars secured through the program. Along the way, Mr. Bohuchot has been accused by anonymous whistleblowers of taking kickbacks in return for influencing district contract awards. Mr. Bohuchot denies the allegations . . . . The SFUSD Board of Ed bought a PeopleSoft computer system without knowing that they couldn’t get it working without spending additional megabucks on a PeopleSoft-connected consultant such as Carrera. (This apparently wasn’t a unique situation, as this 9/21/04 report in the Toledo, Ohio, Blade indicates.) Some eyebrows were raised when SFUSD then hired Bohuchot away from Carrera. Less than two years later, Rojas whisked Bohuchot away to Dallas with him. DISD fired Rojas in less than a year. www.sfschools.org/2005/07/dallas- scandal-has-sfusd-ties.html |
| Ruben Bohuchot & William F. Coleman III |
| DALLAS: Jury finds Bohuchot & Wong guilty, must ante up $1.2mil; Coleman had pleaded guilty in May By Peyton Wolcott - Sunday, July 13, 2008/1:08 p.m. |
| A federal jury found defendants Ruben Bohuchot and Frankie Wong guilty last Tuesday, then spent Wednesday and Thursday agreeing on how much money the men would have to forfeit. [Coleman's guilty plea is 3 scrolls down.] The final amount, $1.2 million, was "about half of the $2.1 million the government had sought." (SOURCE--Kent Fischer/Dallas Morning News) "The jury found Mr. Bohuchot, the Dallas school district's former tech- nology boss, and Mr. Wong, whose Micro System Enterprises was one of the district's largest suppliers, guilty of multiple counts – 13 for Mr. Bohuchot and 10 for Mr. Wong -- that |
| Frankie Wong (R) outside Dallas courthouse; below, the Sir VezaII now renamed The Rehab |
| included charges of conspiracy, bribery and money laundering. After that verdict, U.S. District Judge Sam Lindsay ordered the jury to make a decision on the asset forfeiture." (Ibid.) |
| The lead-up Before the trial and the verdict, there were indictments. And before the indictments, there was insider talk away from prying Dallas ISD eyes in Key West, Florida. |
| A lucrative business relationship that resulted in the indictment Tuesday of two former Dallas school administrators and a Houston computer vendor began five years ago on a tropical island known best for its white-sand beaches and laid-back lifestyle. As the wives took in the sights of Key West, Fla., the DISD officials and the computer vendor talked shop, according to the |
| indictment. Among their discussions was the district's desire to upgrade its technology through a computer deal that would allow DISD to lease the machines while the vendor oversaw their upkeep and maintenance. The Dallas Independent School District's desire for such a deal, called a "seat management" contract, was not yet public, according to a federal indict- ment unsealed Tuesday. That meant the informal talk gave the vendor, Houston-based Micro System Enterprises, a leg up on the competition. Fast forward nearly six years, and the three men who took that trip to Key West stand accused of engineering a $2.4 million fraud against DISD, the proceeds of which paid for a 49-foot sport-fishing yacht, credit card payments, more trips to Key West and tens of thousands of dollars in bribes made via wire transfers, checks and "envelopes filled with cash," the indictment alleges. Indicted were Ruben Bohuchot, a former DISD associate superintendent for technology; William Coleman, a former DISD deputy superintendent who later became interim superintendent of schools in Detroit; and Frankie Wong, president of Micro System. They were charged with bribery, conspiracy and money laundering. (Ibid.) |
| TOUR THE YACHT you've been reading about, the Sir Veza II/Rehab--you know, the one Frankie Wong got for Ruben Bohuchot. Don't be shy--your federal taxes paid for it; the feds have been holding it safe for us through the trial. |
Living Room
Kitchen
Master Bedroom
Guest Bedroom
You're the pilot!
Washer & Dryer
| eRate |
| The second investigation, last year, was conducted by federal employees in charge of monitoring the E-rate program. At the time, DISD spokesman Donald Claxton said the investigation was prompted by allegations directed towards someone in the technology department, and not for the first time. Mr. Claxton did not name the individual, but said: "Somebody doesn't like him, and they've been trying to smear him for years. It certainly seems they have their facts in error." At the time, Mr. Claxton said representatives of the National Exchange Carrier Association, which changed its name to NECA Services Inc., spent two days in Dallas examining the bidding process used to hire vendors who did telecommunications work in DISD. The district said investigators found no merit in the complaint alleging misuse of funds. "It's nice when outside organizations come in and give us a clean bill of health," Mr. Claxton said. Last week, the spokesman said E-rate investigators never submitted written findings to the district. That sidebar didn’t mention the history of Bohuchot’s hiring in SFUSD. To make a long story (SF Weekly, 11/22/00) short, the SFUSD Board of Ed bought a PeopleSoft computer system without knowing that they couldn’t get it working without spending additional megabucks on a PeopleSoft-connected consultant such as Carrera. (This apparently wasn’t a unique situation, as this 9/21/04 report in the Toledo, Ohio, Blade indicates.) Some eyebrows were raised when SFUSD then hired Bohuchot away from Carrera. Less than two years later, Rojas whisked Bohuchot away to Dallas with him. DISD fired Rojas in less than a year. Meanwhile, for those who need a refresher in SFUSD’s own Rojas-crony-implemented E-rate scandal, here are some excerpts from a 5/27/04 press release from the San Francisco City Attorney’s Office: The E-Rate false claims case arose out of an investigation into the actions of SFUSD Custodial Supervisor Desmond McQuoid. Without proper authorization from SFUSD, McQuoid applied to the E-Rate program in January 2000 for funding to construct a computer network with video conferencing capabilities for SFUSD. In these efforts, McQuoid was supervised by Tim Tronson, former director of operations management and one time interim director of the Facilities Development and Management Division, who was indicted by the San Francisco District Attorney’s Office on unrelated charges. As a result of two funding applications made by Desmond McQuoid to USAC during the 2000-01 Fiscal Year, USAC [E-rate program administrator Universal Service Administrative Co.] agreed to pay vendors associated with McQuoid a total of $49,129,206.37. SFUSD was supposed to contribute an additional $10,233,949.03 in matching funds for the work outlined in these two applications despite having never budgeted any matching funds—because McQuoid never notified the budget office or any other relevant district official (other than Tronson) of his activities. The vendors associated with the two applications, including NEC/BNS, would have received a total of $59,363,155.40. According to the funding applications, these funds would have been used to create an incomplete computer network that would, by itself, have been inoperable. Some combination of 151 schools in the district would have been saddled with equipment that would have been useless. There would have been a phone system with no phones, and there would have been a computer system with no computer work stations. (USAC does not fund those pieces of equipment.) There would not have even been servers, as USAC rejected that portion of McQuoid’s applications. All the USAC award would have paid for was cabling, routers and switches, and a phone switch to reroute phone lines in 46 of the 151 schools. When McQuoid’s E-Rate applications came to the attention of Superintendent Arlene Ackerman, who had recently come into office, she declined to accept the awarded monies due to her suspicions about the bidding and application process. She then asked the San Francisco City Attorney’s Office to investigate. — Caroline Labels: SFUSD Politics posted by caroline @ 9:12 PM comment 8 Comments: At Sun Jul 24, 09:44:00 PM, Caroline said... Here's the Dallas News story about Bill Rojas associate Ruben Bohuchot. The link will die in a few days. Here it is for those who want to give it a try: http://tinyurl.com/d2yzq Something fishy: DISD official, vendor share yacht Exclusive: DISD official, vendor went fishing, yacht-buying together 11:11 PM CDT on Saturday, July 23, 2005 By PETE SLOVER and JESSICA LEEDER / The Dallas Morning News EXCLUSIVE: Dallas schools' chief technology boss has for years accepted the free, regular use of luxurious sport-fishing yachts owned by a top provider of computer hardware to DISD, records and interviews show. Ruben Bohuchot, a Dallas Independent School District associate superintendent, told The Dallas Morning News that the sea voyages grew out of his relationship with Frankie Wong, president of Houston-based Micro System Enterprises. Micro System has secured federally funded Dallas school district contracts potentially worth hundreds of millions of dollars since 2003. He and Mr. Wong both said that Mr. Bohuchot's use of the 59-foot Sir Veza II – purchased for $789,000 – and a predecessor vessel in no way influenced the contracting process. They also said Mr. Bohuchot did not help Micro System win district business even though he wrote the specifications for jobs and negotiated the final terms of contracts after they were awarded. "I have not been involved on a procurement decision on these contracts," Mr. Bohuchet said. Said Mr. Wong: "I don't think it's wrong, but I know a lot of people would think it's wrong. ... At one point we became friends. I can't control that." On Friday, a day after The News raised questions, DISD officials said they had opened an investigation of Mr. Bohuchot, 56, who earns $143,492 in addition to a $4,000 annual car allowance. District policies prohibit employees from taking gifts or favors from vendors other than novelties such as key chains and coffee mugs. There are a number of state and federal laws prohibiting the exchange of benefits between public officials and vendors. Mr. Wong is one of three Micro System executives who are principals in a Delaware corporation that purchased the Houston- based boats Sir Veza and Sir Veza II. He said his seagoing with Mr. Bohuchot is strictly social, though he acknowledged his friendship arose from their professional contact. "When Ruben comes down, he's my friend; we don't ever talk business," Mr. Wong said. "When you work with someone 10 hours a day over three to four years, you kind of develop that relationship. I know it's probably not right, but we always separate the business side from the personal side." Said Mr. Bohuchot: "He'd call me and say, look, if you want to use the boat to go fishing, help yourself." Relationship with Wong In an interview with The News on Thursday that was attended by his boss and a district press officer, Mr. Bohuchot initially described his relationship with Mr. Wong as "a beer and lunch occasionally." But, when pressed, Mr. Bohuchot confirmed: •Since Mr. Wong first purchased a 46-foot boat in October 2002, Mr. Bohuchot has used the vessels "every five or six weeks," including an outing with his family this month to Key West, Fla. •He has taken the boat on voyages with no Micro System executives present, and he has been consulted by the yacht's skipper on operational questions, such as whether to ride out Hurricane Dennis during the recent trip. •He and a Micro System vice president entered and won third place in the four-day Key West Marlin Tournament last year. The entry fees, paid by Mr. Wong, were at least $1,500. •Mr. Wong or his company provided Mr. Bohuchot some meals and covered all expenses of the boats' operation, including wharf fees, purchase payments, insurance, fuel, repairs, and a full-time skipper and part-time crew. •He helped choose the name Sir Veza for the two boats. Mr. Bohuchot said he recommended the name after it was suggested by "a friend of mine." Mr. Wong said the two decided the name together, drawing their selection from 10 finalists placed in a hat. •He accompanied Mr. Wong to Fort Lauderdale, Fla., last year to help select the 59-foot Viking yacht that would be purchased and rechristened Sir Veza II. Mr. Wong said he paid expenses other than airfare for the trip; Mr. Bohuchot said he got his ticket through a frequent-flyer award. Mr. Wong said he wanted to buy a bigger boat to replace the original but didn't know much about such matters. Mr. Bohuchot stepped up. "He volunteered," Mr. Wong said. "He said, 'I know a lot about boats.' " Mr. Bohuchot said Mr. Wong appreciated his expertise in things maritime. "I was involved in boating for years. I've got friends that own boats in Hawaii, the Bay Area, Michigan and in Florida." Mr. Bohuchot said he paid his own travel and lodging expenses during the yacht trips, mainly along the Texas Gulf Coast, but he didn't respond to requests that he provide documentation of those payments. Consortium Since 2003, Micro System has been designated as the recipient of more than 96 percent of all funding DISD has applied for – $369 million in all – through the federal E-rate program for school technology. The E-rate program has been beset by allegations of waste, fraud and bid-rigging nationwide. District officials said the company is the lead partner in a consortium of vendors who split E-rate funding. Spokesman Donald Claxton said Friday that the consortium is "paid as a whole, and we are not aware of the percentage breakdown." Mr. Bohuchot said Micro System won its E-rate contracts and other deals with DISD without his influence, based on low price and good service. He also noted that vendors on all computer contracts over $50,000 are chosen by a committee and that he has no contact with or influence over the committee. He said his role in the process included: •Preparing the bid specifications. •Making initial contact with potential vendors. •And negotiating final contract terms. Documents show Mr. Bohuchot also signed the forms submitted by the Dallas district to secure E-rate dollars. Before the subject of boat use and travel came up in his interview with The News, Mr. Bohuchot volunteered that in 2003 he had been anonymously and wrongfully accused of taking gifts and trips, including "a cruise" from vendors. Later, he said, he was cleared. In November 2003, Superintendent Mike Moses disclosed the accusations to DISD trustees in a memo without giving specifics. Dr. Moses said both he and Larry Groppel, the deputy superintendent who would serve as interim superintendent after Dr. Moses' departure last year, met with Mr. Bohuchot "several times ... about the allegations." "Obviously, I believe these allegations are false, or the individual would bring them forward by name, rather than do so anonymously," Dr. Moses wrote. Both Dr. Moses and Dr. Groppel declined interview requests through DISD Friday. By all accounts, Mr. Bohuchot volunteered for an audit of his personal finances by outside consultants from KPMG. He said he provided auditors access to his bank and credit card records, income tax papers and anything else they wanted. The auditors, who were paid $50,000, told the district in about March 2004 that they had found no support for the anonymous whistleblower's charges, Mr. Bohuchot and school district officials said. They declined to release the written results from that audit, saying they concerned a private personnel matter. DISD trustee Ron Price said he talked by phone to Mr. Bohuchot Friday morning. "He told me he hasn't violated any rules or policies," Mr. Price said. "He's been thoroughly investigated just a year ago. The guy came out squeaky clean." Records suggest that the trips on Micro System's yachts were well in progress by the time of DISD's internal questioning and the KPMG audit; according to Coast Guard documents, Sir Veza was named in March 2003, a rechristening in which Mr. Bohuchot said he participated. History Mr. Bohuchot, who joined DISD in September 1999, said Micro System began doing business with the district after a sales representative's cold call in about 2000. In October 2002, Statewide Marketing LLC, a company whose management is confidential under Delaware corporation laws, purchased the 47-foot fishing yacht Shadana, which was renamed Sir Veza. Mr. Wong signed a $260,000 promissory note for the boat, listing himself as the company's managing member. About three months later, DISD notified federal E-rate officials they were seeking funds for deals with Micro System totaling more than $157 million. In late March 2004, federal officials authorized expenditures of up to $125 million of that amount. Of that, DISD's responsibility under the E-rate deal is estimated to be more than $15 million. The money is to cover technology upgrades, such as Internet cables and other equipment, at dozens of Dallas schools. Within 12 weeks of the federal approval, Mr. Wong and Mr. Bohuchot had picked out a new boat. On June 11, Statewide Marketing traded in the Sir Veza to a Galveston yacht broker. Two weeks after that, the company spent $789,000 on the 59-foot Viking yacht, Therapy. "They were in a hurry," said Tony Dinos, the Fort Lauderdale yacht broker who handled the sale, about a month before the Key West Marlin Tournament. "They wanted to do that tournament." On July 21, 2004, Therapy was rechristened Sir Veza II, just in time for the opening day of the fishing contest. Over three days, Mr. Bohuchot and Micro System executive Bill Froechtenicht each caught a sailfish, netting the $5,000 third-place prize among 76 boats. Last December, Micro System got the first of nearly $30 million in federal funds it has collected so far through E-rate, according to Funds for Learning, a for-profit consulting firm that collects data on the program and advises vendors and districts seeking federal funds. Mr. Wong said he didn't know how much his company has earned on Dallas school contracts, even in ballpark figures, or what percentage of the E-rate consortium funds go to his firm. He also couldn't say if DISD is the biggest customer for Micro System, which does business with school districts in eight states. The company Web page says the firm earns about $150 million a year, but it's unclear if that represents profits or total sales. E-mail pslover@dallasnews.com and jleeder@dallasnews.com CONTRACTS IN QUESTION The Dallas Morning News asked DISD nearly two weeks ago for a complete list of contracts with Micro System Enterprises, but the district has not responded. However, The News was able to compile a partial list of contracts between DISD and the company through public documents obtained from the agency that administers the federal E-rate technology grant program and from Funds for Learning, a for- profit consulting firm that gathers data on E-rate grants. The documents show that: • In 2003, DISD's application for E-rate funding helped Micro System secure a $110 million federal funding commitment. The company has until Sept. 30, 2005, to draw down on this commitment. Under E-rate policy, DISD is subject to paying Micro System an estimated additional $15.2 million. DISD officials said Micro System is the lead partner in a consortium of vendors who split E-rate funding, but they did not respond to requests for details about that split. • In 2004, DISD applied for $161 million in E-rate funds for Micro System. The application was denied because of administrative reasons involving a missed deadline. • This year, DISD applied for $57.7 million in E-rate funds for Micro System. The application is pending. If approved in full, DISD will be required to pay the company an estimated additional $10.2 million. • From 2003 to 2005, more than 96 percent of all E-rate funding applied for by DISD – more than $369 million in all – was to be spent with Micro System. SOURCES: Universal Service Administrative Co.; Funds for Learning At Sun Jul 24, 11:35:00 PM, Vera said... I think all contracting at SFUSD has been suspicious. School bond construction contracts need investigating too. Take that asbestos "removal" contract in my kids' SF elementary school some years ago, where the asbestos floor tile wasn't removed, it was just painted over with clear polymer instead. Oh yes, and that district-wide heater contract going on for years, where boilers exploded and my kids were burning-up with the heat running full- blast on the hottest of days in their classrooms. I wonder, how is shoddy work like this tolerated without correction, why don't or why haven't our district officials demanded proper and decent work from contractors? Are they bribed? At Tue Jul 26, 08:29:00 AM, Caroline said... Dallas Morning News editorial 7/26/05 Adrift at DISD: Official's use of yacht doesn't look good 12:12 AM CDT on Tuesday, July 26, 2005 With authority comes responsibility. Ruben Bohuchot has figured out the authority part. It's the responsibility part that seems to be a bit of a struggle for him. As disclosed in The Dallas Morning News on Sunday, the Dallas Independent School District's information technology chief received substantial gifts, including regular use of a yacht, from the president of a Houston-based company. The problem? The company, Micro System Enterprises, has potentially hundreds of millions of dollars in contracts with the district through the E-rate program, a federal plan to help libraries and schools pay for improving Internet and other technology connections. Mr. Bohuchot told News reporters that he's done nothing wrong and didn't steer contracts to Micro System. He and Micro System president Frankie Wong are just good friends whose friendship grew out of their close professional working relationship, says Mr. Bohuchot. Maybe so, but Mr. Bohuchot also prepared the bid specifications, made initial contact with vendors and negotiated the final terms. Other E-rate programs across the country face scrutiny for waste, fraud and bid-rigging; Mr. Bohuchot has previously faced allegations of improper dealings with a vendor. And he's wondering why folks are asking questions about his dealings with Micro System? We'll let the proper authorities figure out whether the particulars in this case warrant action by state, federal or school district officials – action that could include Mr. Bohuchot losing his job, receiving a hefty fine or doing jail time. We already know this much: The Dallas schools and most government agencies restrict the value and nature of gifts to avoid real or perceived conflicts of interest. The idea is to make sure that employees act legally in the public interest, not for personal gain. Mr. Bohuchot apparently doesn't get the fact that appearances matter. Or, worse, he doesn't care. At Thu Jul 28, 07:47:00 AM, Anonymous said... Houston ISD is also experiencing unethical behavior and corruption on the part of school officials and school board members. The company MSE is involved, as well. I think a Federal investigation of e-rate abuse is in order, but by the time the feds get down here, things are covered up. At Thu Jul 28, 01:22:00 PM, Anonymous said... Thanks for All That, whew finally retired as a top clerical. Any questions? Not in my retirement! At Fri Jul 29, 10:00:00 AM, Anonymous said... Here is a Dallas Morning News editorial. With this concrete evidence of Associate Superintendent Bohuchot receiving gratuities (bribes) that go all the way back to a DISD award of a multi-million dollar e-rate contract in 2002 with HP and Micro System Enterprises, WHERE IS LAW ENFORCEMENT???? WHAT INVESTIGATIONS ARE UNDERWAY IN TEXAS? FEDS? Where is the FBI? Who can trust the efficacy of the DISD's internal investigation? This Bohuchot was investigated by DISD's internal audit and KPMG auditors for e-rate fraud back in 2001 ....and 2003 and supposedly turned up nothing (and are hiding even that from the press) Only professional law enforcement with their specialized resources .. can crack this nut. Whitewashed internal investigations will only allow this gross public corruption to continue. Something's Fishy in DISD: Ties with vendor raising big questions 12:06 AM CDT on Thursday, July 28, 2005 So Ruben Bohuchot says the boat a Dallas school district vendor regularly allowed him to use was not a yacht, just a 59-foot, $789,0000 sport fishing vessel. Now that makes things better, doesn't it? To us, it's like driving a Maserati under questionable circumstances and then taking offense because your neighbors thought it was a Ferrari. District taxpayers should be irked and deserve more credible answers than they are receiving about curious connections between associate superintendent Bohuchot, school trustee Ron Price and Frankie Wong, the president of Houston-based Micro System Enterprises. The ties surfaced after Dallas Morning News reporters began probing the circumstances surrounding a high- dollar district contract. Mr. Bohuchot told News reporters that he never steered business to the company. Nonetheless, he prepared the bid specifications, made initial contact with vendors and negotiated the final terms of a contract that could yield the company several hundred million dollars. Likewise, Mr. Price told News reporters that he didn't have final say over contract awards. And although he chaired the committee that considers technology contracts, he told News reporters that he doesn't remember whether the committee discussed Micro System. Oh, yes, his campaign account last year received $25,000 in contributions from Mr. Wong and two of Mr. Wong's business associates. Are we really to believe that out of the blue Mr. Price received substantial campaign contributions from Mr. Wong, a person he said he didn't know at the time, and from two other people he says he doesn't know now? And who recommended the Micro System agreement and why? School district officials aren't helpful, either. Although they put Mr. Bohuchot on administrative leave yesterday, they haven't released written results of an audit of his work that they commissioned, and they insist there's no written report of a federal investigation that Mr. Bohuchot says clears him. For the sake of fact-finding, we urge the district to release its audit and do what it takes to get the federal findings into the public record. And there's enough smoke for them to ask some probing questions of Mr. Price. Somewhere in all this is the truth. Unfortunately, all we're getting is a boatload of excuses. |
| Dallas scandal has SFUSD ties San Francisco Schools Blog Sunday, July 24, 2005 The Dallas Morning News reports this weekend (7/23/05) on ethical questions about Dallas schools Assistant Superintendent Ruben Bohuchot. Bohuchot has been getting frequent free use of a luxury yacht provided by a company that’s a major technology supplier to the Dallas Independent School District (DISD) — for which Bohuchot is in charge of technology. And the supplier bestowing such generosity on Bohuchot, Houston- based Micro System Enterprises, “has secured federally funded Dallas school district contracts potentially worth hundreds of millions of dollars since 2003.” That funding comes from the federal E-rate program for school technology. This is of interest in SFUSD because Bohuchot used to be our own district’s chief technology officer. In late 1997, SFUSD hired him away from Carrera Consulting Group Inc., which had worked with SFUSD on setting up a PeopleSoft computer system so problem- plagued that it landed in SFUSD’s annals of scandals. Then Bohuchot left for Dallas in September 1999 with his SFUSD boss, then-Superintendent Bill Rojas, who took a new job as DISD superintendent. And is it just coincidence that another Rojas crony here, Tim Tronson, got nailed for (among other items), a scam involving the federal E-rate program? It makes you want to refer to Rojas as “He Who Must Not Be Named” — at least if, like me, you’ve just finished the new Harry Potter. The complexities, intrigues and odd coincidences have a strangely familiar — and sinister — ring. Rojas himself, of course, has donned the Invisibility Cloak. continue reading... The link to the Dallas News story will die in a few days (sounds like a wizard’s curse). Here are some interesting excerpts, and I’m pasting the whole story into the “comments” section — click at the end of this blog post. Dallas schools' chief technology boss has for years accepted the free, regular use of luxurious sport- |
| Allen Gwinn |
| Now let's hear from William F. Coleman III via his friends at the Mackinac Center for Public Policy: |
| Are mandatory funding increases for public schools the key to student success? Yes More money promotes equal access By Mr. William F. Coleman, III, Thu., December 15, 2005 The Mackinac Center for Public Policy This academic year, the state of Michigan will pay approximately $7,300 for each Detroit Public Schools student. This money, known as a foundational allowance, is one of the lowest received by any public school system in the metro area. Of this amount, 6 percent will come from a nonhomestead tax levied on businesses and other commercial enterprises in the city. Just five miles north of the city’s northwest boundary is Birmingham, a tony community that bustles with offices, fashionable shops, chic restaurants and clubs. Birmingham’ s school district is frequently praised as one of the finest in the state, a fact that makes the city one of the most desirable zip codes in the metro Detroit area. High school graduation rates hover at close to 100 percent, as does the percentage of seniors who are college-bound. Like the other public school systems in Michigan, Birmingham automatically receives $6,700 from the state for each child it educates, but the money that pours in from the non- homestead levy pushes the per pupil allowance to more than $11,000. To be sure, several other schools in the area and throughout the state receive amounts through their non- homestead levies that significantly dwarf Detroit’s foundational allowance. But the disparities raise a larger question: should geography or fate determine how much money is doled out to furnish every child in this state with his or her birthright – a public education? Many critics are quick to lambaste educators like myself who believe that state governments throughout this land ought to move aggressively to bridge the disparities in public funding. The solution to the problems in public education, they argue, is not more money. I couldn’t agree more. But the critics miss the point. It’s true that there are no conclusive studies that agree that pumping money into the education of a child guarantees strong reading skills, graduation from high school and admission into a reputable college. But it doesn’t take a study to prove that more funds provide certain advantages. These advantages include stronger programs in fine art, music, technology, reading, science and mathematics. The advantages also include stronger extra- curricular offerings and the ability to attract talented teachers and staff. In recent years, the Detroit Public Schools’ precarious financial position has made it increasingly difficult to maintain first- rate academic programs and to recruit and retain talented teachers and administrators. If the past is anything to go by, I don’t expect that to change anytime soon. In the last half-century, the city has lost more than half its population. During that same time frame, the size of the district’s student body has shrunk by more than 50 percent. Meanwhile, many businesses continue to join the residents in fleeing for the suburbs. As the exodus continues, we are seeing a growth in the number of students from low- income backgrounds and those with special needs. For many of these students, the Detroit Public Schools is their best – and only – hope. But unless we can come up with a way to maintain the quality of academic programs we have offered for generations and unless we are able to continue to attract committed, first-rate teachers we may end up giving them very limited hope for the future. That’s why we have teamed with many other school districts in this state to call for an equity and adequacy study. Today, more than half a century after the birth of the modern civil rights movement, 21st century America still maintains what amounts to a dual education system. But unlike what has happened throughout much of the history of this country, this system is not based on race but on economics – and that is a shame. Our children deserve better. We owe it to all our children to ensure that they have equal access to the same kinds of ultra- modern facilities, highly qualified teachers and programs that both educate and enlighten their peers from affluent communities like Birmingham. A public educational system that is too heavily weighted on property taxes fails to look out for all children. This is not an isolated view. Across the state and throughout this country more and more people have been agitating for a system that provides a more reasonable way of funding the education of our children. There have been court battles in a long list of states, including Ohio, Kentucky, Maryland and New York. All over the United States, there is much talk about coming up with a more fair, more equitable way to pay for the education of our children. The evidence suggests that the momentum will only continue to build. The U.S. Constitution gives states the right to decide how to fund public education. That right gives states broad discretion. The state’s top elected officials could step in to address this issue. It would be an audacious step, but it would be in the best interests of the children. It would also be in the best interest of our state and our country. The United States cannot continue to maintain its competitive edge as the world’s wealthiest and most powerful nation as long as it maintains a two- tier public education system. As a nation’s public school system goes, so goes the nation. No modern nation has reached its apogee without a first-rate educational system. The leaders of India, the land with the world’s second fastest growing economy, realize this. For years, public education there was in a shambles, and for years it mattered little to many in the affluent and middle classes; they simply sent their children to private schools. But as India tries to enter the exclusive club of the world’s wealthy and powerful nations, its rulers recognize that they must shape up their educational system. The same lesson applies to Michigan. In order to drive more of our students toward higher education, in order to stamp out illiteracy and in order to make the state a fertile arena for industry and development, we must have a sound public education system. That will not happen until we start educating all our children equally. William F. Coleman III is CEO of the Detroit Public Schools. |
SIDEBAR: WHERE WERE THESE TOP DALLAS ISD EXECUTIVES WHEN THE TALKS WERE GOING ON IN KEY WEST IN 2003? What did they know and when did they know it? And if they they didn't know, why not? Although Mike Moses (L) was Dallas ISD supe when discussions began among DISD executives Ruben Bohuchot and William Coleman and outside vendor Frankie Wong, none of the print coverage of the trial appears to have mentioned Mr. Moses in any coverage of the trial; the only mention of Larry Groppel (R), then-DISD deputy supe of business services, was in passing, that his testimony was continued to the next trial day, with no follow-up as to what was said. |
| Ex-Detroit schools leader pleads guilty to misdemeanor in Texas By Jennifer Dixon and Naomi R. Patton Detroit Free Press Staff Writers May 28, 2008 Former Detroit Public Schools Superintendent William F. Coleman III pleaded guilty today in federal court in Dallas to one misdemeanor count of attempt- ing to influence a grand jury in connection with his indictment last year for money laundering and bribery while a top Dallas school administrator nearly a decade ago. Coleman was indicted last May in a 16-count indictment along with a former Dallas Indepen- dent School District (DISD) administrator, Ruben Bohuchot, and Houston businessman Frankie Wong. Coleman was charged with six felony counts of bribery and money laundering involving millions of dollars in DISD technology contracts. He faced up to 90 years in prison and paying nearly $2 million in fines for the original charges. The grand jury charge Coleman pleaded to today is a misde- meanor. He faces a maximum sentence of six months in prison and a $5,000 fine. As part of his plea agreement, federal prose- cutors agreed to dismiss all other charges against Coleman from the May indictment. Coleman agreed to cooperate by testifying in the criminal cases against the other two defendants. Coleman’s Dallas-based attorney, David Finn, could not be reached for comment. Coleman became superinten- dent of Detroit Public Schools in July 2005 after leaving the Dallas district. His contract ended June 30, 2007. A Free Press investigation in October 2006 found Coleman tried to help Bohuchot get a consulting job with technology vendors trying to win Detroit contracts. After the investigation exposed Coleman’s connection to Bohuchot, the district tossing out bids and re-awarded the contracts. Coleman said he knew Bohuchot, the former technology chief for Dallas schools, was under investigation by the FBI since 2005 when he recommended him. "This was a way to help an old friend, who’s unemployed, to make a few dollars," Coleman told the Free Press in 2006. "In hindsight, I guess that was a stupid decision." Coleman and Bohuchot first met in San Francisco, where Coleman was school district finance chief and Bohuchot the technology chief. Coleman resigned the San Francisco post a month after the state hired auditors to examine the district’s books. “I’m surprised to hear that he has admitted to being involved in any illegal activity,” said Dr. Jimmy Womack, a member of the Detroit Board of Education. Womack said he believes outside forces, including meddling and distrust by some DPS board members, interfered with Coleman’s ability to do a better job as superintendent here. Coleman is suing DPS in Wayne County Circuit Court, alleging he was fired for blowing the whistle on corruption in the school district’s risk manage- ment program, which handles its insurance policies. Womack said he could not comment on the suit because it is pending. DPS board member Marie Thornton said that based on Coleman’s plea agreement, the school board and the Wayne County prosecutor’s office should use their subpoena powers to investigate contracts and bookkeeping practices during Coleman’s tenure in Detroit. Coleman’s background was in finance; he came to Detroit as chief operating officer in 2002, later rising to chief executive officer and superintendent. Thornton said current Superin- tendent Connie Calloway has discovered “unbudgeted accounts” used to pay employee salaries. “There were a lot of question- able transactions with contracts,” Thornton said. “It makes you wonder if we should really exercise our subpoena power and get down to the bottom of these accounts that we have, that this new superintendent alleges she knew nothing about.” Calloway could not be reached for comment this evening. As superintendent, Coleman had access to two district owned vehicles – a Ford Explorer that he used for personal business, and a Lincoln Town Car driven by his security detail for official business. The Free Press revealed the two cars in May 2007, and reported that while Coleman had been removed as superintendent in March, he was still driving the Explorer until his contract expired the following month. School board leaders said then that they had only recently become aware of the two vehicles. |
| remarkable achievement for a whistleblower action that proved decisive in uncovering and stopping a nationwide scheme to defraud underfunded school districts," Herrera said. "It vindicates Superintendent Ackerman’s decision to refuse suspect funding from the E-Rate program, and it is powerful testimony to the outstanding efforts of U.S. Attorney Kevin Ryan, SFUSD General Counsel Louise Renne and the investigators and attorneys of my office’s Public Integrity Team—particularly Investigator George Cothran. We are delighted to see justice done in a manner that will realize significant and tangible benefits for San Francisco’s schoolchildren." "This is a victory for the children and I am pleased that justice was served," said SFUSD Superintendent Arlene Ackerman. "When I became Superintendent of SFUSD, I knew I had to call in the FBI and local authorities and thankfully, it paid off in the end. To expose these widespread illegal business practices was the right thing to do because our students were being robbed of the much needed funds they deserve. I would like to express my gratitude to Louise Renne, our General Counsel, City Attorney Dennis Herrera, and U.S. Attorney Kevin Ryan, for their diligence and hard work during this three year investigation. I and my staff will continue to uphold our responsibility as stewards of the public trust on behalf of San Francisco, the community and the children of this City." "This is the first time that San Francisco Unified School District has filed a whistleblower’s lawsuit, much less in a case that has national implications," said SFUSD General Counsel Louise Renne. "Fortunately we have an excellent Superintendent who had the good judgment to call in the appropriate authorities when questionable business practices came to her attention. Thanks to the hard work of the City Attorney’s office and the federal authorities, justice is being served. This is just the latest in a series of ongoing prosecutions under Superintendent Ackerman’s administration that shows the District is in very good hands." Herrera’s lawsuit arose out of a conspiracy by several parties to defraud the federal government’s E-Rate program by submitting bogus applications for funding to purchase computer equipment, purportedly on behalf of the San Francisco Unified School District. When Superintendent Arlene Ackerman learned of the fraudulent applications in 2000, she declined to accept the funding and requested that the City Attorney’s Office investigate the matter. Following a lengthy investigation, the City Attorney’s Office filed a false claims case under seal on behalf of the school district and the People of the State of California on May 16, 2002, turning the results of its investigation over to the U.S. Department of Justice, which started a nationwide criminal and civil investigation into related conspiracies surrounding the E-Rate program. The E-Rate program provides federal funding to schools and libraries for certain types of computer and Internet related equipment and services. Administered by the Schools and Libraries Division of the Universal Service Administrative Company, a non-profit corporation, USAC grants schools and libraries a subsidy based on the poverty rate in schools associated with applications. Applying institutions have to make up the percentage of costs not covered by the subsidy from the E-Rate program. The E-Rate false claims case arose out of an investigation into the actions of SFUSD Custodial Supervisor Desmond McQuoid. Without proper authorization from SFUSD, McQuoid applied to the E-Rate program in January 2000 for funding to construct a computer network with video conferencing capabilities for SFUSD. In these efforts, McQuoid was supervised by Tim Tronson, former director of operations management and one time interim director of the Facilities Development and Management Division, who was indicted by the San Francisco District Attorney’s Office on unrelated charges. As a result of two funding applications made by Desmond McQuoid to USAC during the 2000-01 Fiscal Year, USAC agreed to pay vendors associated with McQuoid a total of $49,129,206.37. SFUSD was supposed to contribute an additional $10,233,949.03 in matching funds for the work outlined in these two applications despite having never budgeted any matching funds—because McQuoid never notified the budget office or any other relevant district official (other than Tronson) of his activities. The vendors associated with the two applications, including NEC/BNS, would have received a total of $59,363,155.40. According to the funding applications, these funds would have been used to create an incomplete computer network that would, by itself, have been inoperable. Some combination of 151 schools in the district would have been saddled with equipment that would have been useless. There would have been a phone system with no phones, and there would have been a computer system with no computer work stations. (USAC does not fund those pieces of equipment.) There would not have even been servers, as USAC rejected that portion of McQuoid’s applications. All the USAC award would have paid for was cabling, routers and switches, and a phone switch to reroute phone lines in 46 of the 151 schools. When McQuoid’s E- Rate applications came to the attention of Superintendent Arlene Ackerman, who had recently come into office, she declined to accept the awarded monies due to her suspicions about the bidding and application process. She then asked the San Francisco City Attorney’ s Office to investigate. The City Attorney investigation commenced in April 2001. City Attorney Investigator George Cothran spent over a year investigating the complex scheme that had been devised to corrupt the E-Rate program. This investigation confirmed that McQuoid’s E-Rate applications had been fraudulently conceived and executed in almost every respect. Moreover, the investigation demonstrated that these unlawful practices were not confined to the SFUSD applications. E-Rate applications filed on behalf of several other school districts were also fraudulent, and the same co-conspirators were often involved in the fraud. Foremost among the documented improprieties were the following: subverting the supposedly competitive bidding process by inviting only co- conspirators to participate in E-Rate bidding, and by pre- arranging the winning bids and bidders (i.e., bid rigging); paying fees termed "marketing fees" to the supposedly neutral parties who were involved in selecting winning E- Rate bids (i.e., kickbacks); claiming and receiving E-Rate funds for goods and services that were ineligible for E-rate funding (e.g., video conferencing equipment); providing false information to the United States regarding the goods and services that were actually provided to school districts under the E- Rate program; disregarding the requirement that school districts make co- payments to match a percentage of the E- Rate funds disbursed to them; failing to deliver equipment and services promised in E- Rate applications; and inflating prices on invoices and other documents provided to the United States to conceal some or all of the fraudulent practices listed above. After the investigation uncovered these wide spread improprieties, SFUSD and the City Attorney’s Office decided to file suit against the individuals and companies who had corrupted the E-Rate process. The suit related not only to the wrongdoing that had been discovered in San Francisco, but also to the misconduct that had been uncovered in other school districts. Specifically, SFUSD filed suit under the federal and state false claims act, and the City Attorney brought an action in the name of the People of the State of California for unfair and unlawful business practices (Business and Professions Code section 17200). SFUSD later retained the firm of Phillips and Cohen to assist in the prosecution of the case as outside counsel. After filing suit, SFUSD and the City Attorney’s Office continued to assist federal and state authorities in their investigations of the E- Rate fraud. To date, those investigations have led to guilty pleas from Desmond McQuoid and a company named U.S. Machinery. Under his plea, McQuoid was sentenced to 21 months in federal prison. U.S. Machinery was ordered to pay $200,000 in restitution to SFUSD. The investigation has also led to a guilty plea from an individual who submitted a fraudulent E-Rate application on behalf of the West Fresno School District. The criminal and civil investigations are on- going, and additional indictments or settlements with other co-conspirators may be reached in the future. The case is United States ex rel San Francisco Unified School District v. Nippon Electric Company Business Network Solutions, Inc. et al, U.S. District Court for the Northern District of California Case No. C02-2398 JCS. # # # |
| DALLAS: William F. Coleman III's May 2008 guilty plea in federal court |
| fishing yachts owned by a top provider of computer hardware to DISD, records and interviews show. Ruben Bohuchot, a Dallas Independent School District associate superintendent, told The Dallas Morning News that the sea voyages grew out of his relationship with Frankie Wong, president of Houston-based Micro System Enterprises. Micro System has secured federally funded Dallas school district contracts potentially worth hundreds of millions of dollars since 2003. . . . On Friday, a day after The News raised questions, DISD officials said they had opened an investigation of Mr. Bohuchot, 56, who earns $143,492 in addition to a $4,000 annual car allowance. District policies prohibit employees from taking gifts or favors from vendors other than novelties such as key chains and coffee mugs. There are a number of state and federal laws prohibiting the exchange of benefits between public officials and vendors. . . . Since 2003, Micro System has been designated as the recipient of more than 96 percent of all funding DISD has applied for — $369 million in all — through the federal E-rate program for school technology. The E-rate program has been beset by allegations of waste, fraud and bid-rigging nationwide. And here’s the entire text of a sidebar on Bohuchot’s background: Official's faced tough questioning in past 2 inquiries in 2 years cleared Bohuchot, according to DISD 09:23 PM CDT on Saturday, July 23, 2005 By JESSICA LEEDER and PETE SLOVER The Dallas Morning News Ruben Bohuchot has endured tough questions before in his decades in information technology. In his last job, Mr. Bohuchot, 56, was at one point in charge of fixing chronic problems with PeopleSoft human resources software that the San Francisco Unified School District was struggling to adopt. He came to the Dallas Independent School District as chief technology officer in September 1999, following his former San Francisco boss, Waldemar "Bill" Rojas, who had taken over in Dallas as the highest-paid superintendent in America. When Mr. Rojas was fired less than a year later, Mr. Bohuchot stayed on with a mandate to manage the district's complicated information systems and bring classrooms into the 21st century technologically. Mr. Bohuchot has since overseen hundreds of millions of dollars worth of technology deals, including an estimated $125 million agreement under the federal E-rate funding program for fiscal 2003. The deal ranked DISD as the top E-rate applicant in the country based on per-student dollars secured through the program. Along the way, Mr. Bohuchot has been accused by anonymous whistleblowers of taking kickbacks in return for influencing district contract awards. Mr. Bohuchot denies the allegations and says he was cleared by internal and external reviews. He has been investigated twice in the past two years, the first time voluntarily by the district in an external audit he requested to clear his name. "I wasn't happy about it," Mr. Bohuchot said in an interview Thursday, adding that he agreed to allow KPMG auditors to inspect his personal bank records, income tax filings, credit card and other financial statements. "I asked for it. I wanted it done. Quite frankly, I was tired of all the allegations ... all the anonymous letters and the innuendo," he said. District officials never released the audit – or even publicly disclosed the inquiry – but officials say it cleared Mr. Bohuchot. |