BY GARY WALKER | THE ARGONAUT [Marina del Rey, Playa del Rey, Playa Vista, Mar Vista, Del Rey, Westchester, Venice and Santa Monica]
Thursday, April 8, 2010 -- Los Angeles Unified School District Board of Education member Steve Zimmer, who represents schools in The Argonaut coverage area, was the only member of the board to vote against a contract for a construction consultant who now stands accused of steering district contracts to construction firms he co-owns.
Bassam Raslan, a regional director of new construction at the Los Angeles Unified School District, was indicted Thursday, April 1st on nine counts of conflict of interest by a grand jury. The Public Integrity Unit of Los Angeles County District Attorney Steve Cooley’s office will prosecute the case.
Raslan, 52, is accused of illegally profiting from LAUSD contracts that he gave to employees of his own construction and management firm, TBI & Associates.
The grand jury indictment alleges that Raslan was aware of the conflict due to the fact that his business partner, Ivan Kesian, was fired from LAUSD in August 2003 for conflict of interest.
Zimmer was the lone board member to vote against awarding more contracts to Raslan in February, when the board voted in favor of awarding his company 40 additional contracts that totaled approximately $180 million.
Officials at the Teamsters Local 572 cheered the indictment but said they had repeatedly warned LAUSD about Raslan and what they say are the regional construction director’s alleged abuses.
“This indictment should come as no surprise to anyone, since the district received plenty of warnings,” Rick Middelton, the union’s secretary-treasurer, said in a statement.
Connie Oser, the business representative of the Teamsters, which represents architects and construction managers, echoed Middelton’s claims that LAUSD has known about the alleged conflicts for at least two years.
“Members of our union have been complaining that they were more qualified to do the work but were not getting the promotions and the jobs,” she said. “We noticed that the district was giving contracts to a lot of outside contractors.”
LAUSD Superintendent Ramon Cortines pledged that the district would be proactive if the ensuing investigation unearths any improprieties by Raslan.
“If we find any wrongdoing or discrepancies, we will take swift, appropriate action on the persons or companies involved,” the superintendent said in a statement.
The leadership of the school board appeared to be caught off guard when it learned of the indictment.
“I am deeply concerned and surprised to learn of this indictment,” LAUSD school board President Monica García said. “At this point, it is unclear to me the exact nature of the (conflicts of interest) violations.”
García said the school board would be examining if past legal representatives and employees at LAUSD had sufficiently reviewed the school district’s operational policies.
“The board will be asking our general counsel to brief us on this matter and we will be asking whether or not our operational procedures were adequately vetted by our then-chief facilities executive and then-general counsel, and reviewed by our inspector general,” the board president stated. “If necessary, the board will not hesitate to retain outside counsel to conduct an independent review of our policies, procedures and practices in the facilities division.”
Zimmer’s chief of staff, Sharon Delugauch, said the board member could not discuss the reasons why he did not join his colleagues in approving Raslan’s multi-million dollar contract.
“He has been advised not to discuss the case because it is now in litigation,” Delugauch explained.
Teamsters representatives scoffed at the notion that the board was unaware of the alleged ethics violations.
“They are not surprised,” Oser asserted. “I’ve addressed their board many times over the last two years, so this is not the first time that they have heard this.”
Oser says that before the February vote, she and other Teamsters officials asked Cortines why TBI & Associates was being considered despite the school board’s experience with Kesian. They claim that the LAUSD superintendent ignored their requests and recommended Raslan for the contract.
Lawrence Kalbers, a professor of accounting at Loyola Marymount University in Westchester, said the guidelines for conflicts of interest are clear when a vendor or contractor is employed by a government agency.
“A contractor employed by the city is expected to look out for the interests of the city,” Kalbers, the chair of the center for accounting ethics, governance and the public interest, told The Argonaut. “If a city contractor is an owner of a firm that might do business with the city, the contractor should not be involved in the decision to hire the firm in which he or she is an owner, and should not review and approve the work of that firm if the firm is awarded a contract.
“Those would be obvious conflicts of interest because of the potential for the city contractor to benefit from his or her position,” Kalbers continued. “The contractor has a primary duty to the city, which has hired the contractor to act in its best interest.”
Craig Fraulino, a Playa del Rey architect, was taken aback that a contractor could engage in this alleged conduct for so long without detection.
“In this day and age, I would think that it’s very hard to get away with something like this,” Fraulino said. “If a contractor is working for a government agency and wants to take his business in another direction, you should resign first and then bid on the contract.”
Kalbers said Raslan’s purported conduct is increasingly frowned upon by the public.
“I think the public perceives such conflicts as unfair and an abuse of one’s position,” the professor said. “It is our hope that public servants will act on our behalf. When they don’t, the public trust is violated and taxpayer money is squandered.”
LAUSD has had previous trouble with contractors in the past and has been accused by United Teachers of Los Angeles President A.J. Duffy for its reliance on outside firms.
In 2007, several thousand teachers were underpaid, overpaid or not paid at all over a year due to a computer glitch that plagued the district and led to teacher protests and a statewide scandal. Deloitte Consulting was hired to install the system and then given another contract to fix its system errors.
Deloitte eventually paid back $8 million and agreed to forgive $7 to $10 million in unpaid invoices in a November 2008 settlement.
Oser says she is not surprised that it took an indictment to get the school district’s attention.
“There are dozens of stories like this,” she claimed. “I think that this is just a tiny speck of what is going on with these outside contractors.”
Oser thinks the propensity to hire outside firms is part of a broader agenda by LAUSD.
“I think it’s all part of a trend to privatize school districts,” the Teamsters official asserted. “Private contractors want to get their hands on public money.”
Following Raslam’s indictment, Cortines asked City Controller Wendy Greuel to audit LAUSD’s program.
Raslam did not enter a plea after his indictment. He is scheduled to be arraigned Friday, April 16 at the Criminal Justice Center in downtown Los Angeles. His bail was set at $100,000.
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