Public funds meant to educate Inglewood students were instead used to benefit a board member’s re-election campaign, court testimony and interviews show. The expenditures came as the school district began digging itself into a financial hole that ended with a state takeover.
Glenn Brown, the co-founder of a private investigation firm, admitted in court testimony in Los Angeles Superior Court that he billed the school district at least $4,700 for time spent in 2009 distributing fliers to discredit a school board candidate running against then-board member Arnold Butler.
The fliers urged Inglewood residents not to vote for a challenger to Butler’s campaign, characterizing her as a deadbeat who “want[s] to take the students’ money.” Butler won reelection by 488 votes.
At the time, the company, Fu-Gen, had a one-year, $150,000 contract with Inglewood Unified to provide “inspector general” services such as investigations into school district fraud and wasteful spending.
The expenditure of school money came to light during a trial in Los Angeles County Superior Court in May over back wages.
According to California penal code 424, it's a crime for a public official to use public funds for personal gain or the personal gain of another person “without authority of law.” But the statute of limitations is four years. It’s been five years since the election.
At the time the fliers were distributed, the school district was running a $1 million deficit that would balloon to $12 million three years later, pushing Inglewood Unified to bankruptcy and making it only the 9th school district in California to be taken over by the state.
The campaign expenditures add to the list of questions about fiscal control and spending at the troubled district. Last year, the Los Angeles County District Attorney's office indicted Inglewood Unified School District employees alleging they participated in a school book-theft ring. At the same time, the district was investigating irregularities in its payroll department.
Brown acknowledged in court testimony that he was aware it's illegal to use school district money for a political campaign. "I knew that," he said.
Left unclear is who authorized the use of school district funds for Butler’s political campaign - and whether it was simply a mistake, as Brown claims.
Court documents show the hours Fu-Gen worker Luis Heredia spent distributing 2,000 fliers were billed to the school district as field investigation, research, and administrative tasks - duties that would not have raised any red flags.
Brown suggested in his testimony that he'd been hired by the Butler campaign separately to distribute the fliers. Nowhere did the fliers say who paid for them, but California’s Political Reform Act only requires disclosure on political material that’s mailed or broadcast.
“My recollection is that it was billed to the campaign, but I can't dispute the documents that you have,” Brown testified on May 27th. “It should have been billed to the campaign.”
Interviewed at his home in Baldwin Hills, Butler denied having hired Brown or Fu-Gen for his campaign.
“I don’t know what he’s talking about, I really don’t,” Butler said. “There’s no way that I would have him working for me.
“Fu-Gen did work for the district, the district had given them a contract to do work with our police department and our legal department,” Butler added. “That’s the extent of it, that’s all I know.”
Butler’s campaign did not report any payment to - or in-kind contributions from - Fu-Gen or Brown, according to L.A. County election records. No independent expenditures were reported for Butler’s re-election bid.
Brown repeatedly declined comment for this story.
Joice Bailey-Lewis, interim superintendent at the time of the 2009 school board election, said she didn't recall the contract at all.
“I don’t know who did what,” she said during a brief telephone call.
Political campaign ethics expert Bob Stern said the fliers, if not paid for by Butler's campaign, would clearly constitute an independent political expenditure – and should have been reported to election officials as such.
“I think it’s serious,” Stern said. “Anytime that somebody is not disclosing independent expenditures or contributions I consider that to be serious. $5,000 is not $50, it’s not $100.”
Fu-Gen Inc. and its owners are well acquainted with the Los Angeles political structure. Brown served as chair of a fraud subcommittee for Los Angeles County’s Insurance Commission. His wife, Marsha, serves on L.A.’s Central Area Planning Commission and she’s on the board of regents for Loyola Marymount University.
The couple started the company in 1985 to investigate workers compensation claims, run background checks, and carry out inspector general work, such as detecting fraud and waste by employees according to the Fu-Gen web site. The site also lists contracts with the City of Los Angeles, and METRO. Fu-Gen has also done work for large companies such as H.J. Heinz, and ConAgra Foods, according to letters of recommendation posted on the company's web page.
After the school district’s Inspector General died, the Inglewood school board hired Fu-Gen in March 2008 on a one-year, $150,000 contract to fill in, doing investigations and other work to cut down on fraud, abuse, and waste of district resources. The contract was later extended to a second year, for $100,000.
Fu-Gen distributed the fliers from March through April 6, 2009, the day before an election for three seats on the Inglewood Unified school board, according to documents submitted as evidence in a trial in L.A. County Superior Court.
A few months later, on June 29, 2009, the school board gave Fu-Gen an extra $30,000, saying the company’s billings through mid-June exceeded the contract by $29,193.93.
The fliers were introduced as evidence in a lawsuit against Fu-Gen by former employee Luis Heredia. He was asking for $350,000 in unpaid back wages and overtime. Those hours did not include the time he spent distributing the 2,000 campaign fliers, but the expenditures came in to evidence anyway. (A jury decided Heredia was owed back pay, but only $12,000.)
In the summer of 2012, the Inglewood school board requested a $55 million bailout loan from the state. California education officials took over the failing district, stripping the school board and superintendent of their powers and appointing a trustee to run the school system.
School board members could stay on as “advisors,” which Butler did until April of this year, a month before the Fu-Gen back wages trial started.
Joyce Randall, Butler’s opponent who was the subject of the campaign fliers, still lives in Inglewood and said she plans to study to get her public school administrator credential.
The fliers said her past included multiple bankruptcies, multiple home foreclosures, and failed business ventures – all of which were true, but in her mind irrelevant.
“This came out the last week of the campaign,” Randall said in a recent interview. She recalled waking up one morning to find the city papered over with them.
She said the claims that she wanted to take money from students undermined her status as a church elder and a longtime Inglewood Unified teacher. She said they pushed her into a deep depression.
“This was my community and they trashed me in my own community,” she said. “No matter where I went in my own community, people are still asking me about the school district, about the campaign.”