Honig Booked; Lungren Tells Details of Case

Appearing calm and relaxed, state schools chief Bill Honig surrendered Friday afternoon at a Sacramento sheriff’s office for booking on felony conflict-of-interest charges.

A short time later, state Atty. Gen. Dan Lungren broke a three-day silence about the indictment, which was returned by a Sacramento County Grand Jury late Tuesday, and said Honig used public money to pay consultants employed by an enterprise that was run by Honig’s wife, Nancy.

This violated conflict-of-interest provisions of the state government code, Lungren said, because Nancy Honig was serving as president of the Quality Education Project (QEP), a private, nonprofit company, and was receiving a salary that eventually reached $108,000 a year. In addition, QEP paid the Honigs at least $30,000 to rent office space in their San Francisco home.

Honig was released on his own recognizance and is expected to be arraigned next week. If Honig is found guilty of the charges in the four-count indictment, he could be sentenced to up to three years in prison and would be disqualified from holding public office. Honig’s current term as superintendent of public instruction expires at the end of 1994.

Lungren, a Republican, denied that the indictment was the work of a right-wing “cabal” trying to drive Honig, a Democrat, from office, as the state schools chief has said.

Honig’s accusation “demeans the system,” the attorney general said. “It is unfair to the grand jury and the judge (Sacramento Superior Court Judge Peter Mering) who supervises the grand jury.”

Shortly after 2 p.m. Friday, Honig, accompanied by his lawyer, Hugh Levine of San Francisco, slipped through a back door of the Sacramento County sheriff’s downtown office to be formally booked, photographed and fingerprinted. He emerged 45 minutes later and was immediately surrounded by reporters and televisions cameras.

Questioned about the booking procedure and how it felt to be fingerprinted, he said wryly, “There are other things I’d rather have done on this Friday afternoon.”

Honig again told reporters that he was the victim of a political vendetta being conducted by Lungren to appease the extreme right wing of the Republican Party.

“They (the right wing) don’t want educational leadership,” Honig told reporters after the booking. “They’re against strong public education and he’s basically paying them off and trying to advance his career.”

Lungren insisted that “there was nothing out of the ordinary about what we did” and that “we’ve acted absolutely correctly about this.”

He stressed that the indictment was returned by a regular Sacramento County Grand Jury after hearing from 34 witnesses.

Lungren said the investigation of the Honig-QEP ties lasted several months and was directed by Dennis Ormerod, whom he described as “one of our finest agents with an exceptional record in working on cases dealing with allegations of so-called white-collar crimes.”

Lungren said he “extended a courtesy” to Honig by allowing him to surrender in Sacramento on Friday, instead of being arrested soon after the indictment was issued.

Lungren offered few details of the indictment. But the direction of the investigation was described in an affidavit--released Friday--that Ormerod filed in October, when he requested a search warrant for the QEP offices in the Honigs’ home.

After describing the complicated process through which federal money for high-risk youngsters found its way through the state Department of Education and finally to QEP, Ormerod’s affidavit states, “Bill Honig directed public monies be allocated for the hiring of private consultants for a private entity identified as (QEP), which is an organization currently controlled by his wife, Nancy.”

The money was paid to four consultants “while they were engaged in developing, implementing and marketing the QEP program,” the document states. “Developing the QEP program did not benefit the Department of Education or the school districts which were administering the consultants’ salaries.

“The activity of selling and marketing the QEP program produced a monetary gain to Bill and Nancy Honig. This monetary gain appeared in the form of salary paid to Nancy Honig.”

This appears to be the heart of the case against Honig.

Federal auditors, who also have been examining the Honig-QEP relationship, found that Nancy Honig, founder and president of the parental involvement project, received almost $400,000 in salary and benefits between 1985 and 1990.

They also found that QEP paid the Honigs $30,000 to rent office space in their home in the Pacific Heights section of San Francisco in 1989 and 1990.

The federal auditors have recommended that Honig or the State Board of Education be asked to repay the federal government $222,590, a recommendation that is being considered by U.S. Department of Education officials.

Lungren said he considered seeking an indictment for misuse of public funds, as well as for conflict of interest, but “after a long and careful discussion” within his office, decided to limit the charges to conflict of interest.

The state law that Honig is accused of breaking says that “members of the Legislature, state, county, district, judicial district and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.”

Honig insisted Friday, as he has for several months, that none of the contracts in question resulted in payments to him, his wife or QEP. The money was used, he said, to pay the salaries of people who were developing QEP programs in Chula Vista, Fremont and Pasadena.

“There is no crime here,” Honig said. “There’s no violation. I didn’t do anything wrong. I did something right. And the question I have is what is this doing in the court system?”

Asked if he might have used bad judgment in awarding the contracts, or in allowing his wife to run the educational program out of the family residence, the superintendent snapped, “I’m not being charged with (bad) judgment. I’m being charged with committing a crime.”

The search warrant affidavit states that the Department of Education, under Honig’s direction, began making payments to local school district employees for working on QEP matters in 1984 and that the practice continued at least until last fall.

Nancy Honig resigned as QEP president in January.