Bad Check, Broken Promises Are PTA’s Only Profits From $17,000 in Sales : Record Fund-Raiser Nets School Disappointment

When a PTA here sponsored a school fund-raiser last November, Shirley Jenkin walked her first-grade son from door to door in their Lomita neighborhood to peddle the group’s wares--chocolate Santas, acrylic Christmas ornaments, even winking George Washington banks.

“My son sold $65 worth,” Jenkin recalled. “He was very proud.”

The first-grader’s salesmanship was matched by many of Eshelman Avenue Elementary School’s 740 other students, who brought in more than $17,000 during the 2 1/2-week sale. It was a record fund-raiser for the Eshelman PTA.

If only the PTA had gotten its money.

“We had been just ecstatic that the students and parents did so well,” said Jenkin, Eshelman PTA president, “but now we’re devastated. We have not one cent to show for our hard work because we haven’t been paid by the company we contracted with. . . . I think it’s terrible that anyone could do this to the school and children.

“We were going to use the money to buy school supplies. We are not a rich school--a lot of the equipment here is outdated. We have a very dedicated faculty and staff, and they do the best with what they have, but we thought with the money we earned we could improve the conditions.”

No Money Received

The money raised by Eshelman students and parents--which drew a net profit of almost $8,000--was to be paid to the PTA on Dec. 21, two weeks after the fund-raising drive was over, by the company that organized the sale, Laguna Hills-based Community Fundraisers Inc.

Five months, numerous phone calls and several broken promises later, Eshelman parents and school officials say they have not received any of their money. The company did deliver the products purchased and the students’ prizes for selling them.

“We kept thinking that we’d give them another chance and they’d come through,” said Mary Taylor, PTA treasurer.

“The company presented us an unsigned check Feb. 6,” said Eshelman Principal William E. Bennett. “They said, ‘We don’t have the money right now, but we will in 30 days.’ But when March came, we were never paid. . . . Our PTA board was literally devastated by this thing. They had worked and planned and never had a sale that grossed as much as this one. It was very demoralizing for this to happen.”

In addition to the unsigned check, the PTA was given a promissory note by Community Fundraisers. Both documents, say many parents, now appear worthless.

During the PTA fund-raising drive, Community Fundraisers was run by Rick Seeberger, who served as president of the company and was the PTA’s main contact. In an interview with The Times this week, however, Seeberger said that he left the company in March, when its inability to pay bills--including Seeberger’s salary--forced him to file for personal bankruptcy.

Seeberger would not name any other officers in the company, saying the information is “nobody else’s business.” Records filed in the secretary of state’s office, dated February, 1985, list Seeberger as chief executive officer, chief financial officer, director and agent of the company. Huntington Beach resident Jenny Weddle, the only other person listed as an officer of the company, is named as secretary, but Weddle could not be reached for comment. The company phone number has been disconnected.

‘Very, Very Bad Position’

Community Fundraisers intended to pay the PTA the money it is owed, Seeberger said, but the company could not because it fell into financial trouble after the chairman of its board of directors became ill and his financial backing was withdrawn. “That put the company in a very, very bad position,” he said, adding that the company has not filed for bankruptcy and is trying to get on its feet.

Seeberger maintained that paying Eshelman Avenue school “is not a dead issue” for Community Fundraisers. “The company is trying to work out some way for them to be paid,” he said. “I don’t blame them for being upset, but at this time they are no different than other creditors.”

Seeberger said he offered to involve the school in another fund-raiser from which the company would give its share of candy sales profits to the school. School and PTA officials said they were incredulous that he would make such an offer and quickly refused it.

Community Fundraisers does not owe money to other school groups, Seeberger said.

But the money owed to Eshelman Avenue has drawn the attention of Los Angeles Unified School District officials, who say they are investigating ways to recover the funds, possibly through a lawsuit against the company. The district also is looking into filing claims against the company’s insurance policy and Seeberger’s bankruptcy action.

No Assets

However, the insurance policy was only required to cover product, automobile and property liability and bodily injuries. Also, the bankruptcy court has notified the district that Seeberger has no available assets, according to Ada Treiger, assistant legal adviser for the district.

“We want to file a lawsuit,” said School Board President John Greenwood, representative for the Lomita area. “There’s no question in my mind that we’ll do it if there is any way of doing it.”

Greenwood said he also has asked the school district’s lawyers to examine the possibility of criminal charges against the company.

“I’m very willing to, as soon as we get the details together, talk to the (Los Angeles County) district attorney about this,” he said.

Greenwood added, “On an individual level, this is a very important case. Those youngsters and their parents worked all that time for that money. This is the worst kind of misdeed: taking candy out of the hands of youngsters.”

Eshelman Avenue parents, who learned this week of the possible district lawsuit, said they would be pleased if legal action was taken. The PTA had appealed to officials from the Lomita sheriff’s station in March, but were told that the matter did not appear to warrant criminal action.

“That’s good news,” said Jenkin, the PTA president. “We put our trust in that company and it didn’t come through. Our main goal is to stop this from happening again.”

Plans for Money

With the money it raised, the PTA had planned to pay for numerous items for the school, including a color television set, two video cassette recorders, supplemental classroom materials and the $1,500 balance owed on a school copy machine. The PTA is engaged in another fund-raiser to help pay for some of those items.

But parents say they want to alert other schools and PTAs so that they are not victims of similar circumstances.

The PTA selected Community Fundraisers to spearhead its Christmas fund-raising campaign because the company offered a diverse line of products and said it would run the fund-raiser from start to finish. Under typical circumstances, vendors provide products but parents run the fund-raiser.

“It’s difficult to get parents to dedicate eight days to a candy sale, especially at Christmas time and with a great number of our mothers being working mothers,” said PTA member Sharon Broadbent. “This company said they would do the organizing, and we thought it would be OK because the school district approved them. It’s difficult for companies to be approved by the district; they can’t be fly-by-night companies and get approved.”

Indeed, Community Fundraisers had been approved by the school district in November--just before the sale--after it provided documentation of insurance policies, a sales permit, a business license and one year of experience. It had also had its products approved by a school district staff committee.

Vendors Approved

All vendors that work with school-related organizations must have such approval, officials say. About 25 companies currently have the districts’s approval, and officials say they know of no other instance where a vending company approved by the district failed to pay a school organization the money it was owed.

The problem in this instance, district officials say, was that the fund-raising company collected and held the money raised, instead of having the school district or the PTA hold the funds.

“Our point is that any money collected should never be put in a vendor’s account,” said Tom Sunada, the district’s supervisor for student body finances, who said this practice is required by district regulations. “That way the school is keeping their portion of the fund raising right then and paying the company back when the fund-raiser is over.”

But parents say they assumed that since the school district approved the company, it also approved the way in which it planned to operate the fund-raiser. They say they also thought that the company had a cash bond to ensure performance, which apparently it did not. A performance bond is not required by the school district.

“We thought the district investigated the company thoroughly and we thought all companies that were approved by the district were bonded,” Jenkin said.

‘A Misunderstanding’

“There was a misunderstanding,” said Greenwood, the school board president, who added that the district recently notified other schools about the problems at Eshelman Avenue. “The people on the local level assumed, wrongly as it turned out, that since the district approved the company it approved its plan for the fund-raiser. That wasn’t true.”

“We don’t blame the district for what happened,” Jenkin said. “We blame the company. . . . The company’s motto was, ‘We do what we say we will do.’ Anywhere along the line, if they had told us this would happen, we wouldn’t have gone along with it.”