School System Corruption Sparks Probe

Charges of bribery, kickbacks and the misuse of funds have plagued the New Orleans school district for years.

In 2002 came the news that the father of the then-superintendent had earned $70,000 a year as a high school janitor. In February, the district’s insurance risk manager admitted taking kickbacks from construction contractors hired to repair school property. And now investigators are trying to trace millions of dollars paid to former school employees after they quit, were fired or died.

Faced with a widening circle of school system corruption, federal, state and local authorities this week formed a joint task force to help clean up the mess.

“When checks are regularly sent to dead people, and they’re cashed, you know you have a major problem,” said school board member Jimmy Farenholtz. “But now we’re all focused and working together. Before it was like a pack of dogs trying to grab a piece of something.”

The anticorruption squad consists of investigators from six agencies -- the FBI, the U.S. attorney’s office, the New Orleans district attorney’s office, the U.S. Department of Education, the New Orleans Police Department and the Louisiana legislative auditor’s office.

Authorities would not provide details, but said their investigation would include a look at the “suspicious business activities” of school employees and the work of district contractors.

One goal is to identify corrupt individuals and persuade them to name their accomplices, Louis Reigel, head of the New Orleans FBI office, said during a news conference Monday. Reigel said he wants the group to work quickly, perhaps finishing the investigation within 90 days. Some of the district’s problems are not criminal, he added, but are the result of “gross negligence.”

Public corruption is not unfamiliar territory in Louisiana -- former Gov. Edwin Edwards is currently serving time for his role in an extortion scheme -- but the idea of cheating 70,000 schoolchildren has a hit a nerve.

“For decades, the abuse and systematic corruption was so ingrained in the psyche of this community that people thought nothing could be done about it,” said Rafael Goyeneche, head of the Metropolitan Crime Commission, a local New Orleans watchdog group. “But the public is really being fueled by some of the disclosures about officials. It’s no longer enough to shake your head in disgust. Now you report it.”

The anticorruption squad was formed at the request of school officials and superintendent Tony Amato, who was hired last year from Connecticut to overhaul the troubled system.

The team will operate separately from a group of FBI agents already investigating the alleged misuse of federal education funds. That probe led to the arrest of former school administrator Carl Coleman. In a plea deal, he admitted taking $300,000 in kickbacks for awarding lucrative repair work to a contractor. Coleman and the contractor, Jeffrey Pollitt, pleaded guilty to bribery, conspiracy and tax evasion charges. They are to be sentenced in August.

Another bribery scam allegedly involves Lillian Smith, a former insurance agent for the school district and an aunt of former New Orleans Mayor Marc Morial. As part of a plea agreement, Smith is expected to tell prosecutors about deals in which she and others paid kickbacks to a school official, the New Orleans Times-Picayune reported this month.

Such back-room machinations will someday be history, Farenholtz said. “It may not be fast, but things are changing now. We have new leaders who aren’t crooks. We’re not going to have the good old boys club running things anymore.”

“Before, corruption in Louisiana was accepted as a natural part of life. People made fun of it, made jokes about it. When the crooks realized that was the situation, they stole some more. It was shameful,” he said. “Think of all money that went to all the people who had a piece of a contract. Who knows how much we lost?”