Former Chicago Public Schools CEO Barbara Byrd-Bennett was charged criminally today with funneling $23 million in contracts to her former employers, including the now-infamous no-bid professional development contract that went to SUPES Academy. In exchange, prosecutors say, she was promised hundreds of thousands of dollars in future kickbacks.
Byrd-Bennett, 66, is cooperating with authorities and will plead guilty to all 20 charges, her attorney says.
“As part of accepting full responsibility for her conduct, she will continue to cooperate with the government, including testifying truthfully if called upon to do so,” attorney Michael Scudder wrote in a statement.
Zachary Fardon, the top federal prosecutor for the Chicago area, said that Byrd-Bennett and the owners of SUPES and a related company, Synesi Associates, “entered a scheme to secretly profit at the expense of schools” and then “worked to hide and conceal their graft.”
According to the indictment, the kickbacks to Byrd-Bennett would have been disguised as a “signing bonus” when she returned to SUPES as a consultant with “lucrative compensation” after leaving CPS. The kickbacks were supposed to total 10 percent of the contracts she pushed toward the company and would have been deposited into “college fund” accounts in the names of two relatives — apparently her two young grandsons, who live in the Cleveland area.
“If you only join for the day, you will be the highest paid person on the planet for that day,” one of SUPES’ co-owners, Gary Solomon, wrote to Byrd-Bennett in an email in 2012.
During a press conference Thursday, prosecutors noted that the indictment doesn’t say she actually received any of the money — just the promise of a future payment.
Details on indictment
The federal corruption investigation came in the wake of a Catalyst investigation published in July 2013 that detailed Byrd-Bennett’s connection with the for-profit, Wilmette-based SUPES Academy, which received a $20 million no-bid contract from CPS that June.
James Sullivan, the CPS inspector general at the time, began investigating Byrd-Bennett and the controversial SUPES contract soon after the initial report by Catalyst. His office eventually passed the case to federal authorities.
During the press conference, Fardon credited former Catalyst deputy editor Sarah Karp’s reporting for sparking the investigation. Karp, who is now with the Better Government Association, penned anessay on the indictment on Thursday.
In all, Byrd-Bennett was charged with 15 counts of mail fraud and five counts of wire fraud. Each count is punishable by up to 20 years in prison, in addition to hundreds of thousands of dollars in fines.
SUPES’ co-owners, Solomon and Tom Vranas, also were named in the indictment. Solomon’s lawyer suggested his client would plead guilty to the charges, while Vranas’ lawyer declined to comment on the case, according to the Sun-Times.
Byrd-Bennett, a former educator and principal who’d previously held leadership positions in the New York City, Cleveland and Detroit school districts, had worked as a trainer for SUPES beginning in the summer of 2011. She was hired in Chicago in 2012, quickly ascending from her role as a consultant to chief education officer and eventually CEO in that same year. She earned $250,000 as CEO.
SUPES was already in CPS when Byrd-Bennett arrived, as the privately funded Chicago Public Education Fund had given the group a contract to run a leadership development program for network chiefs and their deputies. The Fund quietly ended the contract in 2012, but CPS soon picked up the tab.
As CEO, Byrd-Bennett pushed first for a $2 million contract for SUPES in 2012 and eventually the $20 million no-bid contract. She made it “clear that she wanted those sole-source contracts to go to SUPES,” Fardon said during Thursday’s press conference.
The federal prosecutor says Byrd-Bennett misled CPS officials about the contracts and failed to disclose her relationship to the companies on an ethics form.
The indictment shows that Byrd-Bennett and her two co-defendants emailed regularly — and in some detail — about the alleged kickbacks.
“I think those emails reflect greed,” Fardon told reporters. “I think they reflect a public official who compromised her integrity and the integrity of her professional responsibility by looking to line her own pockets.”
Authorities say the investigation is ongoing and would not comment on whether any other CPS employees or the superintendents of other school districts also are suspected of taking bribes in connection to the principal-training company.
Early on, Catalyst had found a number of situations in which superintendents worked as coaches and or trainers for SUPES, while their school districts simultaneously had contracts with the company.
Swift reactions
Byrd-Bennett stepped down from her CEO post soon after authorities began subpoenaing district records in connection to the case in April. Even so, the indictment is a blow to the beleaguered school district and to Mayor Rahm Emanuel, who tapped her for CEO after his first appointee, Jean Claude Brizard, resigned in the wake of the 2012 teachers strike.
In a brief statement, Emanuel said he was “disappointed to learn about the criminal activity that led to today’s indictment” and that Chicago’s families, teachers and principals “deserve better.”
Forrest Claypool — who took over as CPS CEO in July after a brief stint by Board Member Jesse Ruiz — told Catalyst he could not comment on the indictment but said that CPS has and will continue to cooperate with federal authorities in the ongoing investigation.
Asked how the district can prevent another SUPES debacle, Claypool said that “any good organization needs good controls, and obviously we’re working hard to make sure that we’re running the best and most effective management operation possible… But you know, there’s no magic bullet for integrity.”
Since the federal investigation came to light in April, CPS ordered an independent review of single-source contracting and has begun publishing these contracts online to improve transparency. More changes are still expected.
Questions early on
The timing of the School Board’s vote on the $20 million contract raised some eyebrows early on. As Catalyst noted at the time, it was the largest no-bid contract that CPS had awarded in recent history — and it came barely a month after the controversial decision to shutter 50 schools.
Former School Board member Carlos Azcoitia, who was out of the country when his colleagues voted unanimously for the SUPES deal, says he was shocked to learn such an “exorbitant” amount was given to a company few people in Chicago had ever heard of so soon after the historic closures.
“I never suspected that someone with that level of experience in different school districts would just take a personal benefit out of all of this at a time that was so difficult for Chicago… when we should have been putting our limited resources into neighborhood schools,” said Azcoitia, a former administrator and principal.
The contract was also troublesome for leaders of local universities who questioned why they did not have the opportunity to bid on the contract.
But the biggest criticism came from principals who were required to sit through training they felt was subpar and led by administrators from other districts who knew nothing about the problems principals face in Chicago.
During a roundtable discussion with Catalyst last year, Blaine Elementary Principal Troy LaRaviere said the trainings were a waste of time. At the sole session that went well, LaRaviere says, the trainer admitted he went “off script.”
“I realized the reason it went so well was he decided to stop and not do the SUPES curriculum and actually just let us talk to each other,” LaRaviere said. “CPS didn’t have to pay SUPES $20 million to put principals in a room together and let us talk to each other.”
Emails cited in the indictment painted the training in a much more positive light. In one email sent in April 2012, Solomon told Byrd-Bennett that when “this stint at CPS is done and you are ready retire, we have your spot waiting for you…. In the meantime, if we can figure a way to do deep principal PD at CPS, I can find a good home for [friends] and others, and make sure principals in CPS get kick-ass training with-kick ass coaching.”
Last year CPS leaders began allowing principals to opt out of the training, although they insisted that they were still responsible for the knowledge provided during them.
Systemic problem
The district finally cancelled the SUPES contract in April of this year, after details of the federal investigation surfaced. The company received $12 million of the no-bid contract. Federal authorities are seeking restitution from Solomon, Vranas and the two companies; prosecutors would not discuss Byrd-Bennett’s possible plea agreement.
Over the summer, Atlantic Research Partners bought SUPES Academy — which has been rebranded as the National Superintendents Academy. Joseph Wise, one of its new owners, formerly worked for SUPES and recently sought to open eight privately run alternative programs for dropouts in CPS, the Sun-Times has reported. The district said it wouldn’t open new programs this year, citing the budget crisis.
Wendy Katten of the parent group Raise Your Hand, says the SUPES scandal illustrates a systemic problem as CPS increasingly privatizes services previously done by the district itself. The district has, for example, privatized janitorial services and the management of nursing services while expanding the number of privately run charter schools.
“We’ve seen tons of money being shifted from the public good — from public schools — to privately run schools and to private vendors like ed tech,” says Katten, whose group has tallied up about $1 billion in private contracts given out by the district per year. “When that happens we lose the oversight… and [it] makes the system ripe for fraud and abuse.”
Catalyst reporting intern Stephanie Choporis contributed to this report.
