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Phone Logs Link "Politics" To School Takeover

Records show FCMAT officials made repeated calls to city's leaders before Chaconas' ouster

By Robert Gammon
Oakland Tribune
August 18, 2003

Before the state takeover of Oakland schools, top officials from a Bakersfield agency with power over the district kept in close contact with two high-profile East Bay politicians and the future boss of the city's schools, public records show.

Critics say office and cell phone records obtained by the Oakland Tribune provide evidence the takeover, and the resulting loss of local control of Oakland's schools, was politically orchestrated.

The records show top officials from the Bakersfield-based County Fiscal Crisis and Management Assistance Team (FCMAT) called Oakland Mayor Jerry Brown, the office of state Sen. Don Perata, D-Oakland, and then-Compton schools chief Randy Ward at least 40 times each in the months before the takeover.

Brown and Perata at differing times in the past year voiced support for the takeover, which took effect in June and placed Ward and FCMAT in charge of the school district.

By contrast, FCMAT officials made no calls to the Oakland school leaders they were appointed to advise on how to solve the district's financial problems.

Records show top FCMAT officials did not call then-schools Superintendent Dennis Chaconas or school board President Greg Hodge in the six months before the takeover. On June 2, Chaconas was fired and the school board stripped of its power.

"FCMAT (pronounced fickmat) was supposed to be our fiscal advisers," said Hodge, who along with Chaconas, said FCMAT officials did not return his calls for months. "They were supposed to be helping us. But instead they turned this into a political campaign to take over the district."

Brown and FCMAT Chief Executive Officer Tom Henry flatly denied they worked behind the scenes to engineer the state takeover. Henry called such an assertion "a little silly," saying FCMAT, which also is playing a significant role in Hayward schools, did "its level best" to help Oakland avoid bankruptcy. He said he did not need to phone Chaconas and Hodge because he met with them in person.

The mayor said he didn't talk to Henry 40 times, because he said many of the calls were messages. But he acknowledged speaking to Henry often, saying he wanted "to know what was going on in Oakland schools." Ward said his phone conversations with Henry focused on Compton schools where he and FCMAT had worked together for years.

However, FCMAT's phone records show Henry made no phone calls to Ward in the five months before early December when it started to become clear Oakland's financial woes could result in a takeover.

Brown in recent months has expressed unabashed approval of the takeover, calling it in a recent interview a "total win" for Oakland.

"We got $100 million," Brown said of the state loan that accompanied the takeover. "And we got rid of the people who got us into this mess," he said of the firing of Chaconas and the school board losing its power.

Neither Perata nor Chris Lehman, one of his aides who talked often with FCMAT officials, returned two phone calls seeking comment.

Mayor's involvement

Copies of phone records obtained as part of a state Public Records Act request show many of FCMAT's calls to Brown, Perata and Ward clustered around pivotal events leading up to the takeover and the largest school bailout in California history.

Earlier this year, the question of whether Oakland could avoid the takeover hinged mainly on the district's planned use of $33.7 million in state construction funds.

Chaconas, Hodge and most school board members wanted to spend the funds on lowering the district's estimated $70 million deficit. A big loan would saddle Oakland with debt for years and would virtually guarantee a takeover.

The board said it preferred not to spend construction money on a debt caused predominantly by having more employees than the district could afford. But the board felt it was on firm footing after it commissioned an opinion from a highly respected bond counsel, who essentially said the district's plans for the $33.7 million violated no existing law.

Henry, however, immediately opposed the district's plans. Both he and Alameda County Superintendent of Schools Sheila Jordan, who assigned FCMAT to Oakland in October, acknowledged in recent days that Henry advised Jordan in mid-February to order Oakland to set aside the funds. Henry questioned whether Oakland's plans were legal, despite the bond counsel's opinion.

At the same time, Brown developed a keen interest in the construction bond issue. The mayor, who had been criticized for not doing more to help the school district during his tenure, e-mailed a set of questions on Feb. 15 to the State Allocation Board (SAB), which oversees the construction funds.

Records show in the days before Brown's e-mail and after the SAB responded on Feb. 18, FCMAT (mostly Henry) called Brown 12 times, SAB four times and Perata's office or his aides five times.

Both Henry and Brown said they discussed the legality of SAB funds and Brown said he asked for Henry's advice on his e-mail questions. During this time, Henry sometimes called Brown on weekends and evenings.

In early March, the SAB said it had no regulations and it knew of no laws restricting the use of the funds, but it decided to ask the Attorney General's Office for advice because of the intense scrutiny.

On March 14, Henry placed a 66-minute phone call to Catherine Van Aken, a top deputy to Attorney General Bill Lockyer, records show.

Van Aken said she could not recall whether Henry phoned her or was returning her call. She refused to disclose what they talked about, but she acknowledged the author of the attorney general's subsequent letter to the SAB worked directly under her.

Henry said he was returning Van Aken's call, she asked him about FCMAT, and he acknowledged he told her he believed the district's plan for the $33.7 million was illegal.

On March 26, the attorney general's advice letter to the SAB became public. It said Oakland's planned use of the $33.7 million likely would violate local and state laws governing the use construction bond funds.

Henry's opposition to Oakland's plan, his relationship with Brown, his contact with the attorney general and the mayor's sudden interest in the $33.7 million is fueling speculation FCMAT and Brown attempted to force the takeover.

Before the attorney general's letter, the $33.7 million essentially was Oakland's last hope at maintaining local control, and Brown's dislike for Chaconas was well known.

"Jerry wanted me out from Day One," Chaconas said in a recent interview. "I think Jerry knew the importance of the ($33.7 million) and he was determined to make sure it would not get in the way of getting rid of me and the school board."

Henry now maintains that even if Oakland had been allowed to use the funds there still would have been a takeover. But he added: "I can tell you with certainty" that neither Brown nor Perata "ever once tried to persuade me or my staff to move this district toward insolvency."

Brown said he talked with Henry often because he was trying to understand why FCMAT disagreed with two of his school board appointees, Harold Pendergrass and Paul Cobb, who were convinced the district's plan for the $33.7 million was legal.

"My appointees were saying we don't think there's a big problem, while FCMAT was saying there was. I wanted to know what was going on," Brown said.

But both Cobb and Pendergrass said they did not know Brown had been in close contact with Henry, and both said the mayor had not been candid with them.

Although the attorney general's letter was not an official opinion and remains unpublished, it prompted the school board on March 27 to request a $100 million state loan, virtually assuring the takeover.

To date, however, the SAB still has not decided whether it will adopt the attorney general's advice and does not plan to take up the issue until late September, said SAB spokesman Ken Hunt.

As a result, none of the other 456 school districts in California that received construction funds at the same time as Oakland or afterward have been told they cannot use that money to lower their deficits, Hunt acknowledged.

Compton connection

At 7:28 a.m. on March 28 -- the morning after the school board officially requested the $100 million -- Henry called Ward at his Long Beach home, records show.

Ward said he could not recall what they talked about, but he said he doesn't think it concerned Oakland. Henry also said he could not remember what they discussed, but added "it would not have been about" the school board's vote the night before.

Essentially, Ward and Henry said it was a coincidence many of their calls occurred on dates important for Oakland schools. For example, on Jan. 23, the day the Oakland school board first said it would need a state loan, Henry called Ward four times.

When asked why FCMAT made no calls to Ward in the five months before early December, Ward said his conversations with Henry over the years "went in phases."

Henry said he talked to Ward throughout 2002 and those conversations did not show up on his phone records because Ward had called him or they talked when he visited Compton. Both Henry and Brown also denied they ever pushed or lobbied anyone to get Ward hired in Oakland.

"I stayed away from (Oakland) like it was the plague," Ward said. "I was busy with Compton. I was not even thinking about Oakland."

Although Henry and Ward both said Ward did not want to talk about Oakland, both knew Ward's tenure in Compton was about to end and he needed a job. Brown said he knew Ward was a candidate to run Oakland schools and he said met Ward before the takeover, although he said he couldn't remember when.

Perata and FCMAT

Ward, Henry and Jordan also denied knowledge of a before-Christmas meeting in which Perata offered Chaconas a lesser position in the district -- head of academics -- should there be a takeover. In the days before that meeting, FCMAT made a series of calls to Ward, Perata's office and Jordan.

Chaconas never responded to Perata's offer. On Jan. 16, Perata said Chaconas should and would be fired and announced the takeover was inevitable. Before and after that announcement, FCMAT again made several calls to Perata's office, Ward, Brown and Jordan. Perata later apologized to Chaconas after enduring heavy criticism.

In his takeover bill, Perata handed FCMAT considerable power over Oakland schools. The district cannot regain local control until FCMAT -- which was created in 1992 to assist districts with financial and management shortcomings -- gives the school system across-the-board passing grades on standards FCMAT developed.

FCMAT, which subcontracts most of its work to private consultants under no-bid contracts, has grown rapidly in the past 10 years while managing to avoid scrutiny. FCMAT has never undergone a comprehensive audit nor has its hiring practices been thoroughly examined.

At the same time, FCMAT maintained a close relationship with the state Department of Finance, which has considerable power over the state's purse strings.

Records show FCMAT (mostly Henry) called Chuck Pillsbury, an influential Department of Finance official, 171 times in the nine months before the Oakland takeover. FCMAT officials, who are based in the Kern County Office of Education, also called Kern County's Sacramento lobbyist 160 times during that same time.

Delaine Eastin, the former state Superintendent of Public Instruction who helped create FCMAT, now says the Bakersfield agency needs close monitoring. She also called FCMAT's large role in Oakland "bad precedent."

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