Contrary to popular belief, there are millions of dollars to be made in education. Charter schools, corporate take overs, non-profits, and the like are all cleaning up under the guise of reform. They have six-figure salaries, and the kids are getting squat…
It made us think about the California Administrative Services Authority pension scandal brought to us by the Sac City District administrators and board members who gave away of Sacramento High School to Kevin Johnson and St. Hope. CASA also involved the creation of a murky charter school management venture. Under the CASA umbrella, high level Sac City District officials positioned themselves into lucrative management contracts to administer the business operations of the same charter schools they helped establish.
CASA, approved in 2000, was an alternative pension system to the California Public Employee Retirement System (CalPers) that promised to pay thousands of dollars more in retirement benefits to participating District administrators and other eligible employees. The deal raised eyebrows among vigilant community members when it was revealed that this supposedly cost-neutral plan to retain District employees with the lure of a sweetened retirement package, required the issuance of bonds to guarantee its financial stability (with the District on the hook to repay the bonds if CASA couldn’t) and required participating members—including the District’s then-Superintendent, Jim Sweeney and -Chief Financial Officer, Laura Bruno, the architect of CASA*—to leave the District’s employ to officially work for CASA. While CASA officials claimed the only change involved the entity signing the participants’ paychecks, critics were quick to point out that the top District administrators no longer officially worked for the District.
The story got worse when the public learned that the school board additionally voted to spike the pensions of Sweeney, Bruno and then-District legal counsel, Martin Fine by rolling in mileage and expense allowances into their salary calculations. The board also voted to grant Sweeney an additional 10 years of service credit. When Sweeney retired, the extra years more than doubled his total service credit with the District, from nine to 19 years and nearly tripled his monthly retirement pay-out from about $3600 to $9900 a month.
CASA finally collapsed after a “community investigative team” led by education activist Reginald Fair issued its own report on the flawed legal, ethical and financial assumptions behind the plan. That report prompted an independent audit, a stinging grand jury report and official warnings from CalPers that the District faced severe legal repercussions. The whole thing has cost the school district millions of dollars in legal proceedings and settlements, while fundamentally shaking the public trust in District decision making.
*Laura Bruno was listed on the
St. Hope Schools website as a board member during the start up years (and well after her role as the CASA creator was revealed to the wider public through the various investigations). Sacramento Charter High School
For more, read the Sacramento News and Review story from July of 2003.