School District Probes Project Billing

The Los Angeles Unified School District has begun an investigation into whether a project management firm involved in its $2.4-billion school construction effort has illegally billed the district for employees working on other projects.

Steve Soboroff, chairman of the Proposition BB oversight committee, called for the probe after being contacted Monday by an investor in the management firm. The joint venture partner forwarded a letter from an employee who resigned from the firm rather than go along with the alleged scheme.

“How serious are these allegations? On a scale of one to 10, they are a 10--anyone who illegally takes money for repairing schools is stealing from children,” Soboroff said. “If the allegations are true, the people involved should not only not be building schools, they should be looking out from behind bars.”

Don Mullinax, the district’s director of internal audits and special investigations, confirmed that his staff is looking into the allegations, which he called “very serious.”

Neither Soboroff nor Mullinax would identify the management firm under investigation. But sources close to the investigation said it was Construction Management and Technical Services Inc.

CMTS came under a federal grand jury investigation in 1995 in connection with questionable costs and possible overruns at Denver International Airport. The company, which was never indicted, provided inspectors for that project.

Company officials could not be reached for comment Tuesday.

This is the second major probe into allegations of corruption connected with Proposition BB funds, which are earmarked for 13,300 school construction and remodeling projects. About 3,000 of those projects have been completed.

Earlier this year, the Los Angeles district attorney charged a district employee, a retiree and two painting contractors with bribery in connection with an alleged kickback scheme.

Soboroff said the new probe will focus on charges that the firm, which is one of 10 managers in charge of Proposition BB projects, has been padding its payroll by charging the district for employees who are working on non-Los Angeles Unified construction jobs.

Soboroff said he learned of the allegations when one of the partners in the targeted firm complained about financial irregularities. The partner, he said, handed over a letter describing the July 13 resignation of an employee in the firm’s contract division.

That letter, Soboroff said, cited several reasons for the resignation, including the employee’s “being asked to perform non-LAUSD Bond BB tasks.”

Sources close to the case acknowledged that the allegations were leveled by a partner that has been entangled in an internal feud with CMTS.

Nonetheless, Soboroff said he shared the information with Mullinax and the head of the school district’s facilities division, Lynn Roberts.

Soboroff described his visitor as “a person who has intimate knowledge of one of the project managers” which allegedly has “people on its payroll that are working on non-BB projects.”

He said there is “only one company under investigation, so far. Hopefully, it will be the only one.”

He said he wanted to go public with the bare details to show that “we have to have a zero tolerance for this stuff.”