School Board Hires Attorney in Orange to Recover Funds

In reaction to a multimillion-dollar bid-rigging scandal, Orange Unified School District’s school board has hired a private attorney who may file civil suits to recover misappropriated public funds, school board President William Steiner said Wednesday.

The attorney, Judy W. Seaman of Santa Monica, is an expert in recovering public money lost through fraud, Steiner said.

“The Board of Education will take every legal action available to recover any losses the Orange Unified School District has suffered,” Steiner said. He added that the school board had voted to pay Seaman up to $10,000 for her legal work.

Disclosure of the lawyer’s involvement came a day after four Orange Unified School District board members were accused of “willful misconduct” by the county grand jury, which said the four did not enforce state laws on bidding and construction, thereby allowing the alleged bid rigging to take place in the period 1981-84.

‘Elaborate Scheme’

Seaman will try to recover some of the money the grand jury said was diverted--in the form of gifts and services from contractors--to the district’s former maintenance supervisor, Steven L. Presson, and his wife, Diane Elizabeth Presson.

According to court documents, Presson and a few contractors working on school remodeling and repairs had “an elaborate scheme” to defraud the school district by means of inflated contracts. Presson, his wife and two contractors from Orange were indicted by the grand jury in April.

No dollar total has been made public as to how much the grand jury said Presson and his wife benefited from the gifts and services. Court documents, however, show that more than $3 million in contracts were involved.

Steiner said the school board had voted about two weeks ago to hire the private attorney to try recovering some of the money lost in inflated contracts.

Trustees Face Trial

But Steiner said the seven-member board hasn’t decided yet whether to pay the legal costs of four trustees accused Tuesday.

Those trustees--Joe C. Cherry, Ruth C. Evans, Robert James Elliott and Eleanore C. Pleines--face a trial in Orange County Superior Court. If that trial jury agrees with the grand jury that the four did not properly perform their elected duties, the trustees may be dismissed from office.

At Wednesday night’s regularly scheduled board meeting, neither the trustees nor any of the approximately 75 people in the audience raised the issue of the grand jury’s accusations. However, in interviews following the meeting, two trustees for the first time publicly denied any wrongdoing.

“I absolutely deny the validity of the grand jury’s accusations,” Cherry said.

“I feel good about what I’ve done and that it was appropriate. . . . I was never negligent in my duties on the school board.”

Elliott said he agreed with a statement made Tuesday by Steiner, who said it was unrealistic to hold board members responsible for the day-to-day decisions of administrators.

“The board is a policy maker, and the administrators carry out our policies,” Elliot said. “That’s all I have to say about this.”

Steiner said it may be several days before the board decides whether to pay the legal costs for the four accused trustees: “I’ve already found that the board can do this (provide legal costs) for its members under certain conditions.”

Reads From State Law

Then, reading from a state law, Steiner said: “The board has authority to provide the (legal) defense if it is determined that they (accused members) acted or failed to act in good faith without malice and in the apparent interest of the public entity.”

Steiner said it appears to him that the accused board members were acting “in good faith” and “without malice” in performing their duties. But Steiner said the board would be checking all aspects before deciding on whether to provide legal costs.

Cherry said he had not yet decided if he would hire his own lawyer. “I’ve not addressed that,” he said. “It’s been rather sudden, and none of us expected this.”

The action by the grand jury against the four board members came under an obscure, little-used state law. That law, in effect, provides for a removal of elected officials through grand juries and superior courts.

Under the law, if a grand jury decides that elected officials have been derelict in performing their jobs, the grand jury may issue an accusation of “willful misconduct” against the officials.

No Fines, Penalties

The matter would then go to a Superior Court, which would conduct a jury trial. The trial is similar to criminal proceedings, but a “willful misconduct” hearing is not a criminal action. There are no fines or penalties other than loss of public office.

In a statement he issued immediately after the grand jury’s action Tuesday, Steiner said he was “disappointed that the grand jury came to this conclusion.”

He added: “It is totally unrealistic for members of boards of education, city councils or county supervisors, for that matter, to be expected to monitor the day-to-day administrative details of a multimillion-dollar operation. This is clearly the responsibility of a school superintendent, city manager or county administrative officer and their staffs.”