Don Mullinax

No job is easy atop the Los Angeles Unified School District. But few are as tough--or politically sensitive--as the one now held by Don L. Mullinax, its first director of internal audit and special investigations.

Hired in January, Mullinax, 41, comes to the job with an impressive pedigree. He has probed purchases in the Defense Department and looked into airline safety and Medicare fraud for two congressional committees. His work led to prosecution of contractors who charged $11 million in nonexistent rain delays at the Tennessee-Tombigbee Waterway project, and found Medicare paid $6 million to a sham company with an address on an airport runway. For the last two years, Mullinax was chief investigator for the Senate Permanent Subcommittee on Investigations.

Now, as the internal watchdog for the nation’s second-largest school system, he’s breaking in a new, $103,917-a-year job that goes beyond the traditional auditing duties of counting dollars in cafeteria funds to finding or preventing waste anywhere in a sprawling $7-billion bureaucracy. For that alone, Mullinax, who reports to the elected Board of Education, is being watched closely by reform-minded outsiders, as well as turf-conscious insiders.

Then there’s Belmont. Mullinax was thrown into the roiling scandal when the board asked him to look into allegations of mismanagement and wrongdoing surrounding the $200-million downtown high-school project. He says his goal is to produce a series of definitive reports examining everything from alleged conflicts of interest to worries over toxic dirt.

Meanwhile, he’s strengthening his hand. His proposed five-year plan would more than double his staff while targeting operations, such as bus contracts, overlooked by past auditors. His debut report rankled some by criticizing the facilities staff for ignoring state law by splitting contracts for school window security grates. Most important, he’s persuaded the board to support pending legislation giving him subpoena power. He testified on this before a state legislative committee on Wednesday.

The director sat down for a conversation recently in his third-floor office at the Wells Fargo Center on Bunker Hill, where he spoke in an often intense, rapid-fire manner about his new job. His wife, Wynne, will soon join him from Washington, where she worked for a senator, and he has a 20-year-old daughter from a previous marriage.

Mullinax, a Georgia native, has pushed through these changes with an easy smile and quick wit that make him an entertaining public speaker. Lest anyone get the wrong idea, however, the one-time college All-American pitcher displays a knickknack on his desk that he says reflects his philosophy of life. It is the image of a baseball, carved from rock. “Sometimes,” the inscription reads, “you just have to play hard ball.”

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Question: What has been your biggest surprise in your six months on the job at Los Angeles Unified?

Answer: The size and amount of resources of the school district. I read about it before I came here, but I really didn’t envision it. I mean, 910 schools and education centers. That’s probably more than some states have. The budget. I’ve worked with large budgets, but the district has a variety of functions that’s very unique. It has its own school police department. It has its own television station. It has some very unique functions that you don’t find in other corporate or public entities.

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Q: How big is your staff in relation to the school district itself?

A: Well, the school district has about a $6.5 billion annual budget. It has around 70,000 employees, 700,000 students, 910 schools and educational centers, and I currently have in my office about 35 people on the payroll, because I have 11 vacancies. A typical-sized federal organization of $6.5 billion would probably have anywhere from 85 to 90 auditors and investigators providing oversight. We’re about half the size of what we probably need to do the job at hand.

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Q: In your speeches to district employees, you’ve discussed the institutional tendency to “deny, deflect and defend.” Can you explain to what extent this exists in the school district?

A: When I was on Capitol Hill, we would see that in some federal agencies, when we would try to bring a problem to their attention and try to get corrective action, you would have some people in the culture . . . deny the problem exists, defend the status quo and deflect the criticism with some type of public-relations spin.

Sometimes you can see that in the school district. You can see, sometimes, how known problems and known deficiencies and weaknesses have just kind of laid around for a long period of time. So that’s a big challenge of my office, going to these managers and saying there is a problem here, there is a weakness, there is a concern, and convincing them to agree so they would take the corrective action.

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Q: Can you describe your investigation of the Belmont Learning Center?

A: The board passed a motion that directed my office to look into a broad range of topics: land acquisition, environmental assessment and remediation at the Belmont Learning Complex. Also, they wanted me to look at outside consultants and attorneys--how much they’ve billed the district. Look at alleged conflicts of interest. They also wanted me to review the accounts and practices of [the] Office of Planning and Development. The last item was to look into the contract development, negotiation and award of the construction of the Belmont Learning Complex.

So it is a very large agenda, a very sensitive investigation. I didn’t have all the people here that I needed internally, so I decided to go outside. I came up with a team that I put together which is comprised of a few people internally in my office, a law firm that has expertise on environmental law, and then I found a group of former FBI agents with experience in organized crime, white-collar crime and environmental crime, along with a few hazardous-material experts.

So I have about 20 people who are working on this project, but not full time.

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Q: How much of a toll has Belmont taken on the district?

A: I think [the district] has taken some pretty strong hits from various politicians. They’ve had some hearings and a lot of media stories have run. . . . Belmont’s going to cause the district some real serious challenges as we go on to build 51 new schools. People are always going to bring up Belmont. And that’s why it’s very important that we get to the bottom of what happened at Belmont, not only in case there was anything that was done improper, but also to plan and do the future schools in the best way.

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Q: Why is legislation giving you subpoena power important, and why has there been so much resistance to it?

A: One reason it’s important is because the district does a lot of business with outside entities. And when you get into allegations of waste, fraud and abuse concerning an outside entity, they may not always cooperate in providing the documents you need or the people to testify or give you a statement on that investigation.

I can see where it could be a scary situation if you have an individual issuing subpoenas right and left, every day, that weren’t really justified. It could do more harm than good. My experience has been you don’t have to issue that many. You issue a selected few to the right groups of people, and the word gets out.

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Q: Can you discuss what you found concerning nepotism in your office?

A: I got concerned when I first got here. Just by accident, I found out some of my employees had relatives working in a certain function that we were going to be reviewing. So I decided to ask my employees to provide me in writing all their relatives, or close relatives, or cohabitants, so I could better protect myself from allegations.

That was an eye-opener. As I went through the feedback from my employees, I found there’s about 40% of my staff that have close relatives working somewhere in the school district. Which is, I guess, a pretty large number, when you think about it.

We’re not saying my employees have violated the rules. . . . What concerns me is we need to somehow know where the nepotism could occur so we can prevent it.

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Q: What areas of the school district will your office be investigating?

A: Previously, this office has only looked into student-body funds, cafeteria accounts, enrollment and attendance and payroll. Basically about five areas.

So we’ve identified about 50 functions in the school district that have never have been audited. Functions such as capital projects. The school district right now spends about $342 million a year to build capital projects. It spends about $100 million a year on grounds and maintenance at the various schools. Never been audited. We have a school police department, 380 people, about $26 million a year. They’ve never been audited.

You have transportation, bus services. We have $63 million a year we’re spending on buses to transport children to and from school. . . . We have educational materials, textbooks, facilities that the kids go to school in. Air-conditioning, the environment in which they are trained in. We need to look at those business functions to make sure that they’re controlled properly, money’s accounted for, etc.

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Q: Why hasn’t the district looked at those major functions before?

A: I think the reason we haven’t is in the past that this office, which was only the . . . internal audit branch, fell under the chief financial officer, who, very simply, controls the money of the district. Basically, he could control whatever went on in this office. Now, we’re independent, we report to the board. Our charter allows us to audit and investigate any and all functions within the school district. So this is the first time, and it’s going to be an exciting time, because we’re going to be able to go out there and look for, look at, functions and programs that have never been looked at before.

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Q: What about what goes on in the classroom? Any plans to analyze that?

A: That’s one thing we’re trying to study right now: Do we need to be more involved in the instruction, curriculum area of the school district? In the past, I’ve done some work on evaluating programs and instruction, classroom lesson plans, those types of things. We’ve never done that here. That would really be a new era if we jump into that.

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Q: Do you mean you’d go into a classroom to see how a teacher operates?

A: How do they spend their day teaching the kids and do they do it in an efficient and cost-effective manner? I don’t think anyone’s ever done that. People may say that’s the principal’s job, we’re trying to micromanage. We’re not trying to manage anything. We’re trying to be an asset, to tell them maybe there’s a better way to do something.

What I’d like to do is take my auditors out to a school and say, “Why can’t you do what you need to do?” And listen to the people. And maybe because it’s a requirement in some bulletin or some law that doesn’t make sense anymore. And maybe we need to change it to free up their time, so they can spend more time doing what they really need to do.

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Q: How much fraud, corruption and abuse do you believe is going on here?

A: I know people would like to be able to reach out and grab a certain number. I can’t do that right now, but what we hope to do in this office on an annual basis is report statistics that we compile through the end of the year, through our audits and investigations. We’re going to be able to tell you, a year from now, how many cases we referred to the district attorney’s office, how many cases we referred to the FBI, what were the status and outcome of those cases, were people prosecuted or put on probation. We’re going to present data to kind of give people an idea of the magnitude of waste, fraud and abuse, but right now I couldn’t give you a read.

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Q: You’re coming in from the outside with new powers to be an agent of change. That’s a big job. What are your thoughts about that?

A: I don’t want to come in and try to be very radical, and, just overnight, have people believe that everything’s going to be great. There are going to be some growing pains here. . . . There’s going to be a lot more auditors and investigators out there, looking around, putting checks and balances in place. A lot of people, I’m sure, if I was in their shoes, I’d be concerned. The IRS typically doesn’t call you up and say you’ve filled out your taxes correctly. When they call you, you’ve done something probably wrong.

But I don’t want them to be afraid in the sense don’t call me because you’re scared of me, call me because you need me to come help you. But I also want to serve as a deterrent. I want people to know that if we find wrongdoing out there that’s potentially criminal, I will send it to the district attorney’s office.