Detroit schools to get stopgap aid, more corruption alleged

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Posted: Mar 29, 2016 7:04 PM
Detroit schools to get stopgap aid, more corruption alleged

DETROIT (AP) — Gov. Rick Snyder signed into law $48.7 million in emergency funding to keep the Detroit Public Schools open through the end of the school year on Tuesday, the same day that more than a dozen current and former district officials were charged with crimes stemming from a federal corruption investigation.

The state's largest school district was in danger of starting to run out of money in April. The stopgap spending legislation shows the district's challenges "aren't just Detroit's problem, they are concerns for all of Michigan," Snyder said. The Republican governor is also pressing the GOP-controlled Legislature to enact a $720 million restructuring plan to split the district in two and pay off operating debt over a decade.

The Detroit district is under state oversight and has battled corruption for the past several years under a number of state-appointed emergency managers.

Another round of federal charges was announced Tuesday after a two-year investigation: allegations of bribery and other crimes against a long-time vendor, an assistant superintendent and a dozen current and former principals. Fraudulent invoices were submitted for chairs, paper and other supplies. Some supplies were never delivered; in other cases, the quantity of supplies delivered was less than what was ordered.

The vendor, Allstate Sales, received $2.7 million from the district, while the school officials, who apparently didn't know others were involved in the scheme, received kickbacks of more than $900,000 in cash, gift cards and checks.

"Public corruption never comes at a good time," said U.S. Attorney Barbara McQuade, alluding to efforts in Lansing to financially help the district. "This case is not about the Detroit Public Schools. It's not about emergency managers. It's about these individuals.

"A case like this is a real punch in the gut for people trying to make a difference," she added.

Allstate Sales owner Norman Shy, 74, and Clara Flowers, 61, an assistant superintendent in the Office of Specialized Student Services, are charged with conspiracy to commit bribery and tax evasion.

The dozen current and former principals also are charged with conspiracy to commit bribery. Five resigned before the federal investigation or due to the investigation, officials said. The Associated Press left a message seeking comment from Shy. No listing was found for Flowers.

One of the principals, Ronald Alexander, appeared on "The Ellen DeGeneres Show" in an episode that aired last month to accept a $500,000 donation from Lowes for Spain Elementary. The charges aren't related to the home improvement store's donation, which was to go toward renovations, computers and other needs at the school.

The district has placed the current employees, including Alexander, on unpaid leave; suspended business with Shy and his companies; and suspended all purchases by individual schools. Reviews also will be conducted of all purchases made by the administrators charged and all school-based vendor contracts.

"I cannot overstate the outrage that I feel about the conduct that these DPS employees engaged in that led to these charges," said Steven Rhodes, the district's state-appointed transition manager and retired federal judge who handled the city of Detroit's bankruptcy.

The investigation started after federal officials received information from the state, which was performing an audit on the Education Achievement Authority, a spinoff system of low-performing Detroit schools. Kenyetta Wilbourn-Snapp, a principal at two high schools, was charged late last year with taking bribes to hire a company to perform tutoring services.

"By going down that path, we reached the doorstep of Mr. Shy," McQuade said.

A former high-ranking Detroit schools official, Barbara Byrd-Bennett, faces sentencing in Chicago after pleading guilty to helping steer $23 million in no-bid contracts to education firms for $2.3 million in kickbacks and bribes while at Chicago Public Schools. Byrd-Bennett served as the Detroit district's chief academic and accountability auditor, and her responsibilities included conducting academic audits and review of district programs, school-based programs and front offices.

Also Tuesday, Snyder signed a bill that would have a largely state-appointed commission review Detroit Public Schools' finances once the district is no longer under state financial management. If Snyder's broader bailout is approved, the state will no longer run the district starting this summer.