by Christian Piatt
(Originally published in PULP)
It seemed, while Cesar Chavez and its affiliates remained in the stratosphere with remarkable results on standardized tests, the administration was untouchable. Though criticized for such unorthodox practices as offering gift cards to new students, and as rumors of test tampering and misogynist treatment of staff bubbled to the surface, it was hard nonetheless to argue with the results Dr. Lawrence Hernandez and company were yielding.
It seems the power went to his head, though.
In a recent press release from the Colorado Department of Education’s communications office, Commissioner of Education Dwight D. Jones “expressed deep concern about the network’s egregious financial practices and dubious leadership” after a formal review of the Cesar Chavez School Network’s organizational and financial systems.
“The report makes clear that the leadership of the network prioritized its needs over the students and disregarded both basic business practices and common sense,” says Jones. “The leaders of Cesar Chavez School Network squandered taxpayer money, ignored basic legal requirements, over-compensated senior staff, engaged in nepotism and failed to provide accountability over the resources entrusted to them. The results demand swift action.”
“I fully encourage Pueblo City Schools to use this analysis in any way it sees fit to hold Cesar Chavez School Network accountable,” says Jones. “Taxpayers, teachers and parents across Colorado will find that reading the report is a deeply troubling experience on many levels. I anticipate that Pueblo City Schools, the authorizers of the original charters, will be even more disturbed.”
Pueblo City Schools’ own news release echoed the scathing criticism from the CDE, detailing “nearly 40 separate findings of fact that support misappropriation and mismanagement of funds and resources at CCA schools primarily by the three principal staff members: Lawrence Hernandez, CEO; his wife Annette Hernandez, COO; and Jason Guerrero, CFO. It also finds that some of the Board of Directors at CCA and DHPH were complicit in conflicts of interest that directly benefited them financially.”
“’The apparent magnitude of egregious misappropriation and mismanagement of the public’s money is shocking,” said Stephanie Garcia, president of the board for Pueblo City Schools, per the release. “’This pervasive and perpetuated abuse of taxpayer funding at the hands of the founders of the CCA schools, explains their years of aggressive and antagonistic efforts to keep Pueblo City Schools and other authorizing agencies from actually seeing what was going on.
“’As the authorizer of the charters for these schools, we take the suggestions of Commissioner Dwight Jones very seriously and will be looking at our options very closely. We will be examining all legal remedies at our disposal to address the inappropriate actions of those responsible for this obscene abuse of tax payer monies.’”
Is the district pressing any charges against CCA/DHPH staff? If so, who and what charges? And if not, why?
The district does not have the authority to press charges against CCA/DHPH. We have however contacted the local district attorney, the Internal Revenue Service and the Attorney General’s office. They are the entities that will determine if charges are in order.
Have any civil suits been considered, and again, if so, against who, for how much and on what grounds?
CCA/DHPH has 11 current civil suits pending. They are being sued by former CEO Lawrence Hernandez. I understand the suits are about alleged wrongful termination and acts of discrimination.
How, if at all, do you feel this experience has changed the district’s outlook on Charter schools?
The district has been very pleased with our relationship with our other Charter Schools. YAFA and PSAS have always responded to the district’s requests for information regarding governance, finances and instruction. I believe the audit results clearly uncovered the real reasons why CCA and DHPH continually challenged our request for this information.
I do believe that the Board of Education will have clear qualifications and standards written into future contracts with any new charter and also when we renew existing charters. I believe this will affect charter contracts for all schools across Colorado, if not the Country. There has also been new legislation presented this year that would also tighten controls over Charter conduct.
What do you expect will change about CCA/DHPH governance moving forward?
Clearly, governance will have to change and accountability will need to be in place. That being said, we are still not certain if the two schools are recognized as being nonprofit entities. They were not able to produce their 2008 or 2009 990 (IRS revenue document) or other evidence that they are still recognized by the IRS. Also, given the audit results, if they have not already lost their nonprofit status, they may.
Beyond the over 15 million dollars in bond debt and lack of reserve as required by the State, tax payers may also be owed repayment of other State and federal funds that were clearly misspent. The Board is still meeting with local State and Federal law enforcement entities and representatives with the Colorado Department of Education.
At this point, we do not know if the situation is beyond repair regardless of new leadership.
Finally, I asked District Attorney Bill Thiebaut if they were considering any charges of their own, especially considering the District’s hands were effectively tied with regard pressing legal charges.
“In addition to receiving a copy of the final report (audit) presented to the Colorado Department of Education by MGT of America, Inc.,” says Thiebaut, “over several months we have received voluminous information from a variety of citizens regarding the operation of the Cesar Chavez School Network. Our office has been in communication with, among others, the Attorney General’s Office as well as School District 60 officials (Pueblo City Schools) regarding this information.
“Our staff is reviewing this information,” continues Thiebaut. “For now, that is all I am at liberty to say.”