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LAUSD ramps up conflict-of-interest inquiry at Ref Rodriguez's former charter school

Ref Rodriguez at a July 2015 LAUSD board meeting. Maya Sugarman/KPCC

The conflict-of-interest allegations against Los Angeles Unified School Board member Ref Rodriguez continue to cause problems for the network of charter schools he helped start.

Last week, L.A. Unified School District officials sent a second letter accusing leaders of the charter network — Partnerships to Uplift Communities, or "PUC Schools" — of providing inaccurate or incomplete answers to district questions connected to Rodriguez, according to a copy of the letter obtained by KPCC.

PUC Schools insists it has not intentionally misled the school district — and that it has handed over some of the information that L.A. Unified says it has withheld.

Senior PUC Schools officials came forward in October with a conflict of interest complaint against Rodriguez, saying he may have been using charter school funds for his personal benefit.

Leaders of the charter network found more than a dozen checks Rodriguez signed in 2014 — while he was serving as PUC Schools’ interim chief financial officer — paying out more than $285,000 in school funds to two outside firms to which Rodriguez also had personal ties: a nonprofit called Partners for Developing Futures, and a for-profit firm called Better For You Fundraising.

Rodriguez, through an attorney, has denied any wrongdoing.

L.A. Unified officials are now trying to re-trace the steps PUC Schools took to unearth the Rodriguez evidence — and district staff say officials at the charter school network are not making that process easy, according to the formal "Notice to Cure" letter sent to PUC Schools last week.

"There is concern," the Dec. 7 letter reads, "about the pattern of PUC neglecting to provide comprehensive responses and accurate information" to L.A. Unified officials.

In theory, the district’s school board has the power to request these schools be shut down — though the district’s Dec. 7 letter doesn’t mention that possibility. Sanctions short of closing the schools are possible, including demanding the resignations of top charter school officials. (That happened at El Camino Real Charter High School last year.)

In their letter, however, district officials don’t mention any punishment for the school; they only note that if PUC doesn’t provide satisfactory answers to L.A. Unified's questions, that "may constitute grounds for appropriate action."

PUC Schools spokeswoman Naush Boghossian responded that the charter network "has been forthcoming with every request made by the school district, and will continue to work with LAUSD to resolve any outstanding matters."

But PUC Schools officials have also said L.A. Unified officials are asking questions of the wrong people.

"Only Dr. Rodriguez can shed light on the documentation PUC Schools has uncovered," they wrote in a November letter responding to an Oct. 23 "Notice to Cure" letter, "and by speaking out about where this money went, he can clear PUC Schools, the CSD [the district’s Charter Schools Division] and himself."

The district’s latest letter does not shed much new light on Rodriguez’s transactions with either Partners for Developing Futures or Better For You Fundraising.

However, L.A. Unified officials say in the five-page letter that PUC Schools leaders have not handed over — or only handed over parts of — six sets of documents the district requested in October. Among the documents the district says are outstanding: "All contracts between PUC and Better For You Fundraising."

But Boghossian said no contracts exist between the charter school network and Better For You Fundraising, which simply sold chocolate for schools to re-sell as a fundraiser.

She added that charter school leaders had already submitted several of the documents L.A. Unified officials said were missing, including all independent audits performed on "PUC National," the organization that handles every PUC campus’s back-office operations.

The district’s Dec. 7 letter also said PUC’s November letter "misstated" when PUC co-founders Rodriguez and Jacqueline Elliot served on the network’s governing boards. Boghossian said the district's characterization of PUC's letter is not accurate.

But beyond the back-and-forth about documents, Robert Perry, a top official in L.A. Unified's Charter Schools Division, highlighted portions of the Dec. 7 letter that repeat the district's contention that PUC Schools leaders should have been investigating Rodriguez's transactions with the two outside firms far earlier.

District officials said they have raised concerns for years that PUC Schools' governance structure created many possibilities for conflicts of interest: the 17-school charter network is actually comprised of five distinct nonprofit organizations, including one that operates the PUC campus in Rochester, N.Y.

In 2015, district officials also said they raised questions with PUC Schools officials about several checks, including a handful that were part of transactions between the charter network and Partners for Developing Futures — but the district's Dec. 7 letter said PUC Schools officials did not follow up.

"The checks that we called into question quite a while ago should have raised a flag up the pole for them, in our view," said Perry, administrative coordinator of the Charter Schools Division. "They should’ve done further work, as is indicated in our letter."

PUC Schools officials contend they're not solely responsible for policing themselves. L.A. Unified's Charter Schools Division is responsible for overseeing more than 200 of the district's charter schools, which are publicly-funded but mostly run by non-profit organizations — and that if officials in that division had seen those checks as a big deal in 2015, it could have asked for more information then.

"LAUSD did not catch this and neither did PUC Schools," leaders of the charter network wrote in November. "Yet we are both committed to transparency and integrity."

Perry noted the charter still has time to, as he put it, fully respond to the district's inquiry.

"[PUC Schools officials] did respond to us once and then followed up with some more things," Perry said, "and promised to follow up with still more things. So we’re hopeful that they’ll give us what we need this time."

Rodriguez has also pleaded not guilty to separate criminal charges stemming from the financing of his 2015 campaign for the school board. Another court date in that case has been set for Wednesday.

Correction: The original version of this post misspelled Robert Perry's name. KPCC regrets the error.