FBI seizes LAUSD records related to troubled iPad program
“No one has spoken to me. I have no comment as I do not know anything about this.” - John Deasy, former Los Angeles school district superintendent.
By Howard Blume, Victoria Kim, James Rainey | LA Times | http://lat.ms/12n9Rop
Muhammad Nassar Jr. takes a picture of himself as Karen Finkel's class explores the possibilities with their LAUSD-provided iPads at Broadacres Elementary in Carson. (Bob Chamberlin / Los Angeles Times)
DEc 3, 2014 :: Fallout over the Los Angeles school district's $1.3-billion plan to provide iPads to every student intensified Tuesday with the revelation that the FBI is conducting a criminal investigation into the failed effort.
FBI agents seized 20 boxes of records related to the iPad program Monday, and court documents reviewed by The Times show a federal grand jury is examining the matter.
Federal investigators declined to name the target of the probe. But the FBI's actions have brought a renewed focus on the program nine months after the Los Angeles County district attorney's office closed its own review without filing charges.
The subpoena demanded that the district produce a wide array of documents related to deals with Apple, maker of the iPad, and curriculuum provider Pearson, the companies that won a lucrative, multiyear contract.
"No one has spoken to me," he said. "I have no comment as I do not know anything about this."
Supt. Ramon C. Cortines said Tuesday that he would suspend any additional purchases under the contract for iPads, which was approved in June 2013.
The bidding process for that contract had been plagued by "too many innuendoes [and] rumors," Cortines said, adding that he had reached that conclusion before the FBI took the documents.
Cortines' action echoed an August announcement by Deasy, who also said he had suspended further purchases under the iPad contract. But later, other senior officials said the contract would be used to buy additional iPads.
The iPad effort dates from at least 2012, when Deasy said in a speech that he wanted to provide a tablet to all 600,000 L.A. Unified students. Teachers and campus administrators also were to receive the devices. Deasy said technology was key to closing the learning gap between the district's mostly poor and urban students and their peers in wealthier communities.
But the iPad rollout quickly foundered, amid claims of inadequate training and security breaches by high school students who deleted security filters so they could freely browse the Internet. Critics also raised concerns about a close relationship that Deasy and a top assistant had with executives from Apple and Pearson.
Improprieties in the bidding process could rise to the level of a federal crime if federal funds were involved, or if the actions amounted to "honest services fraud" of taxpayers by public officials, said Marc Harris, a white-collar defense attorney and former deputy chief of the public corruption and government fraud unit at the U.S. attorney's office in Los Angeles.
But the line between an ethical violation and a crime isn't always clear-cut, making it a challenging call for prosecutors to determine what constitutes a criminal act, Harris said. "Prosecutors should tread carefully in converting any ethical violations into alleged criminal violations," he said.
Harris cited the 2009 trial of Matthias Vheru, an L.A. Unified administrator who faced federal charges of wire fraud and misappropriation of federal funds. He had allegedly arranged for the district to purchase copies of an algebra textbook he wrote, earning him nearly $1 million. The case ended in a mistrial after the jury hung 11 to 1 in favor of acquittal.
Based on the subpoena they served on the district Nov. 21, the federal officials appeared to be taking a broad look at the school district's June 2013 technology contract. The subpoena said the documents were part of "an official criminal investigation."
The subpoena demanded documents related to other projects, including some that predated the bidding process. It called for records related to both Apple and Pearson and other bidders. It did not name any school district employees.
The documents sought included all "score sheets; complete notepads, notebooks and binders; reports; contracts; agreements; consent forms; files; notices; agenda; meetings notes and minutes; instructions; accounting records" and much more.
Patricia A. Donahue, an assistant U.S. attorney in the Public Corruption and Civil Rights Section, signed the subpoena. L.A. Unified General Counsel David Holmquist said the district was "fully cooperating."
Deasy's bold technology initiative had problems from nearly the start, beginning with the high cost. Along with Pearson's software and modifications to make campuses Internet-ready, school officials said the project would cost $1.3 billion.
Deasy wanted to use voter-approved school construction bonds, which prompted objections from members of an advisory committee. It was concerned about using long-term financing for devices that would last just a few years, among other issues.
Within months of last year's troubled rollout, the Board of Education decided to move more slowly, while also trying out other devices and curricula.
Critics of the expensive initiative argued that Deasy and then-Deputy Supt. Jaime Aquino had been early champions of the Apple devices and software from the British company Pearson, without fully exploring alternatives.
Records showed that Deasy had meetings with top Apple and Pearson executives before the bidding process. The draft of a five-year district technology plan mentioned only those companies and no other vendors. Similarly, a pilot program at 13 campuses was designed to include only the iPad.
Aquino worked for a Pearson affiliate before joining the district, but he has insisted that he obtained clearance from district legal staff before participating in discussions with his former employer.
The school district's inspector general previously investigated the bidding process — and turned his findings over to the D.A.'s office — but opened a second, broader review after disclosures of the Deasy/Aquino contacts. That inquiry is continuing.
Deasy and Aquino have denied any wrongdoing. They said that the contacts with the corporate executives were legal and appropriate, that they happened before the bidding process and that they had no influence over the evaluation of bidders.
Aquino left the district at the end of 2013, citing a hostile work environment and micromanagement from the Board of Education. When Deasy resigned, the school board issued a statement asserting that it "does not believe that the Superintendent engaged in any ethical violations or unlawful acts." The statement added that "the Board anticipates that the Inspector General's report will confirm" that Deasy acted appropriately.
Aquino could not be reached Tuesday. Apple did not respond to inquiries. A Pearson representative said the company had no comment on the federal investigation.
The district's inspector general also conducted an unrelated audit into a different technology project that marred Deasy's final months. That review looked at a malfunctioning student records system and found widespread and serious mistakes by senior management.
The published audit, however, makes no mention of Deasy's role and the auditors never interviewed him. Some board members, however, criticized Deasy for not taking a more aggressive role in resolving problems for students, who had difficulties getting courses required for graduation and college eligibility.
LAUSD iPad program target of federal criminal probe
By Thomas Himes, Los Angeles Daily News | http://bit.ly/12nadLW
LAUSD Superintendent Ramon Cortines is scuttling the district’s iPad curriculum contract with Pearson in the wake of an FBI probe of the deal. (File photo by Michael Owen Baker/Los Angeles Daily News
Posted: 12/02/14, 1:29 PM PST | Updated: 12/03 7AM :: A federal grand jury will weigh information pertaining to Los Angeles Unified’s plan to buy $1.3 billion in iPads as part of a criminal investigation being conducted by the Federal Bureau of Investigation, according to documents released Tuesday.
The federal probe — which dispatched FBI agents to collect 20 boxes of records from LAUSD’s headquarters Monday afternoon — along with a report from LAUSD’s inspector general prompted Superintendent Ramon Cortines to ditch the controversial deal with Apple and Pearson, a popular supplier of educational material for U.S. schools.
“I thought about it and I just feel certainly with the FBI investigation, as it relates to procedures, I’m not going to use or continue a contract that might be questioned later,” Cortines said Tuesday. “I don’t know what the FBI is interested in, so I’ve got to protect the district and protect the schools.”
The U.S. Attorney’s Office subpoenaed emails, notes, financial records, videos and other records pertaining to the process that picked Apple to supply iPads loaded with curriculum from Pearson, according to a Nov. 21 letter from the U.S. Attorney’s Office.
According to the subpoena and letter, the grand jury wanted the records no later than Dec. 5 at 9:30 a.m.
The district’s top lawyer, Dave Holmquist, said it’s the first federal probe of an LAUSD contract deal.
“We’ve certainly never seen it at the district,” Holmquist said.
Holmquist said he spoke to a prosecutor in the U.S. Attorney’s Office last week, but she declined to provide information about the investigation.
No one has been called to testify in front of the grand jury, Holmquist said.
The federal investigation into criminal wrongdoing comes as the district’s inspector general finishes up his second inquiry of LAUSD’s dealings.
Holmquist said he doesn’t anticipate that probe to be concluded until after the new year.
Cortines said he discovered flaws in the contracting process while reviewing documents and the inspector general’s report over the holiday weekend.
Earlier this month, Cortines announced he would move forward with the iPad deal, purchasing devices loaded with Pearson curriculum for up to 27 schools.
Cortines’ predecessor, ex-Superintendent John Deasy, announced he would stop buying the devices earlier this year. Deasy refrained amid renewed scrutiny and questions of favoritism in the contracting process. Those questions emerged with emails, documents and conversations between Pearson representatives and high-level district officials.
The emails and district records indicate Pearson representatives made pitches that district officials later made part of bidding requirements — a practice that can eliminate competition.
Deasy, who resigned in October but continues collecting his superintendent’s salary while on “special assignment” for the district, did not return calls for comment. School board members have said they did not expect the inspector general’s probe would uncover criminal or ethical wrongdoing on Deasy’s part.
The Los Angeles County District Attorney’s Office earlier this year declined to file charges alleging violations of state law.
FBI spokeswoman Laura Eimiller and U.S. Attorney’s spokesman Thom Mrozek declined to comment.
Federal grand juries can decide whether criminal charges for violations of federal law should be filed.
“As board president, I want to express my full support for Superintendent Cortines’ stated position regarding the FBI investigation,” board President Richard Vladovic said. “Speaking on behalf of the entire board, we pledge our full and complete support to federal authorities as they conduct the investigation.”
United Teachers Los Angeles President Alex Caputo-Pearl welcomed the federal probe.
“The former superintendent cannot escape the tough questions about the ill-fated iPad project. He cannot simply resign and leave a mess for others to clean up,” Caputo-Pearl said in a written statement. “If this rises to the level of criminality, the former superintendent must be held accountable for his actions.”
Cortines said he has not been asked to testify in front of the grand jury. He was not working for the district when officials made the deal with Apple.
“I’m doing everything to put things in order in this district, and because there’s an investigation doesn’t mean something is necessarily wrong,” Cortines said. “We are going to cooperate, as long as I’m here, with any kind of investigation.”
The deal through which LAUSD was purchasing iPads with Pearson curriculum will be put back out to bid, Cortines said.
While Cortines had hoped students at 27 schools in the next phase would have the devices this school year, they will now have to wait until fall 2015.
LAUSD, however, will continue purchasing iPads for testing through a different contract with Apple. Those devices are needed for students to take new standardized testing in the spring. Cortines said it’s imperative that students and educators have the devices ahead of time to practice. The contract under which those purchases would be made is not in question, Cortines said.
On Nov. 20, the district’s bond advisory committee agreed to spend $13 million on testing devices under plans to spend $22 million on iPads and laptops for students to take new Smarter Balanced tests in the spring.
LAUSD iPad purchases subject of federal criminal probe
File: Tablet devices for dozens of schools across Los Angeles Unified School District will be delayed following the FBI's seizure of documents related to the district's iPad program. Benjamin Brayfield/KPCC
Audio from this story 3:49 Listen
3 Dec 2014 | 5AM :: A federal grand jury will meet Friday to review evidence regarding the Los Angeles Unified School District's handling of its $1.3 billion iPad program, documents show.
In a sweeping subpoena issued Nov. 21, the U.S. Attorney's public corruption office sought dozens of records from the school district, naming documents specifically tied to computer giant Apple and Pearson, the publisher of the software loaded onto each device.
The investigation came as a surprise to district officials and will delay the rollout of iPads to more students in the district.
Superintendent Ramon Cortines said he first learned about the investigation when 20 boxes of documents were seized by FBI agents Monday afternoon.
"I’m doing everything to put things in order in this district," Cortines said Tuesday. "And because there is an investigation doesn’t mean something is necessarily wrong."
In August, KPCC published a series of emails pointing to close relationships former Superintendent John Deasy maintained with executives of Apple and Pearson. The communications before the official bidding on the iPad contract raised questions about whether the process was a fair one, as Deasy has maintained.
The targets of the criminal investigation have not been named, but the subpoena requires the district to produce documents on all employees and anyone else involved in reviewing the bids that led the district to award a $500 million contract to Apple and its subcontractor, Pearson.
Deasy was the driving force behind the program to place an iPad in the hands of every one of the district's 650,000 students, but it is not clear if he is the focus of the grand jury investigation.
Deasy could not be reached for comment, but he told the Los Angeles Times that he did not know about the investigation and had not been contacted by law enforcement agencies.
Federal crackdowns on school districts aren't unprecedented, according to UCLA law professor Adam Winkler. He said it happens most often when school districts engage in activity like corrupt contracting or civil rights violations.
"It’s generally pretty rare for the federal government to crack down on a major school district, especially on such a high profile program like the iPad purchasing program,” Wrinkler said.
On Tuesday, following the FBI records seizure, Cortines said the district would no longer purchase iPads under the Apple contract, which he called flawed. He plans to meet Wednesday with principals of 27 schools that will no longer receive iPads or Chromebooks as scheduled.
The subpoena, made available to KPCC by district General Counsel David Holmquist, require the documents be available for grand jury meeting Friday at the North Spring Street federal courthouse.
Apple spokeswoman Trudy Muller declined to comment on whether Apple had been contacted by the FBI or had been asked for documents. A spokesman for Pearson also said the company had no comment on whether it had been approached by authorities regarding LAUSD's program.
- KPCC education reporter Mary Plummer contributed to this report.
Federal probe into LA Unified procurement a first, says lawyer
Posted on December 2, 2014 5:32 pm :: LA Unified’s General Counsel, David Holmquist, told reporters this afternoon that “there’s never been an investigation into a procurement process to my knowledge” involving the district.
As a busy day wore on, details began to emerge about the FBI’s interest in the district’s iPad program, the latest episode in a case study of how a well-intentioned effort can go terribly awry.
Holmquist said a U.S. Attorney issued a subpoena on Nov. 21, informing the district that a grand jury investigation was underway, aimed at how LA Unified decided that Apple and Pearson would win the competition to supply the district digital devices.
He said the FBI yesterday picked up 20 boxes of documents, which included memoranda, requests for proposals, responses for proposals, and “all the documentation that we have related to the Common Core Technology Project.”
The official subpoena was much more explicit, demanding the district turn over, among other things, “any and all paper records, digital records, audio records, and video records; all text documents, spreadsheets, graphs, charts, lists, rough drafts, final drafts, financial records.”
“We have not gotten any additional requests, but once we get them we’ll certainly comply immediately,” he said. “But we’ve given them all the documentation that we have related to the topic so I’m not sure what else they’re going to ask for.”
Holmquist said neither the FBI nor U.S. Attorney explained what prompted the investigation. Already, the district’s Inspector General, Ken Bramlett, has examined the program and so has the LA County District Attorney. After emails showed that former superintendent John Deasy had communicated with Apple and Pearson before the bidding process began, the school board asked the Inspector General to reexamine the matter.
“We are not expecting the IG’s report this calendar year,” Holmquist said. “I know that it has not been completed as of this point,” adding that no draft versions have been distributed to district officials so far as he knows.
Many of the documents sought by the FBI were in the possession of the Inspector General, Holmquist said. “I believe there were some additional documents that our Facility Services Division had to pull together to fully comply with the request, so that was it,” he added. “It was not an overly burdensome request because of the preparation we had done in advance of the IG’s evaluation.”
Holmquist said he talked to the U.S. Attorney last week but she “declined to tell me what this was about.”
He also said he has not talked to Deasy about the FBI’s interest in the program.
Board President Richard Vladovic became the first board member to speak publicly about the FBI investigation, putting out a statement late today, saying, “As Board President, I want to express my full support for Superintendent Cortines’ stated position regarding the FBI investigation. Speaking on behalf of the entire board, we pledge our full and complete support to federal authorities as they conduct the investigation.”
FBI seizes Los Angeles schools’ iPad documents
By Associated Press from the Washington Post | http://wapo.st/12nceYp
December 2 at 11:12 PM :: LOS ANGELES — The U.S. attorney’s office subpoenaed the Los Angeles Unified School District for records pertaining to its $1 billion iPad project as part of a federal grand jury probe.
A copy of the subpoena released Tuesday requests all documents related to proposals for the district’s cornerstone technology initiative, which has been plagued with problems since its rollout last year. The requested records include proposal scoring documents, review committee files and employee information, among other materials.
LAUSD general counsel David Holmquist told The Associated Press the district was expecting federal agents to visit and retrieve documents toward the end of the week. Instead FBI agents arrived at district offices on Monday, carting away about 20 boxes worth of records.
“We turned over all documents that we think are responsive to the subpoena,” Holmquist said.
He said the district has not been provided any information on what federal authorities are investigating.
The district’s Common Core Technology Project aimed to provide 21st century learning devices to all of the district’s 650,000 students, chipping away at the technology divide that often leaves lower-income students at a disadvantage from their more affluent peers.
The program was championed by then-Superintendent John Deasy and approved unanimously by the school board in 2013.
“The idea of providing first-class learning technology to all the kids in the district, not just the kids who could afford it, is certainly a worthy educational goal,” said Charles Taylor Kerchner, a professor at Claremont Graduate University. “That worthy goal runs up against problems of organizational feasibility, and it did from the beginning.”
Hundreds of students initially given iPads last school year found ways to bypass security installations, downloading games and freely surfing the Web. Teachers complained they were not properly trained to instruct students with the new technology. And questions were raised after emails were disclosed showing Deasy had been in communication with vendors Apple and Pearson before the contracts were put to bid. He resigned under pressure, in part from the iPad troubles, in October.
While it remained unclear exactly what aspect of the iPad project — one of the biggest technological undertakings by an urban district in the U.S. — the FBI was investigating, legal experts and education observers immediately focused on Deasy’s relationship with Apple and Pearson and the use of construction bond proceeds to spend money on a short-term device purchase.
Ariel Neuman, a former federal prosecutor, said the government is likely investigating possible fraud involving the contracts.
“If someone doesn’t disclose a relationship they have with Apple,” he said, “those could be material omissions that could lead to a wire or mail fraud case.”
Interim Superintendent Ramon Cortines had planned to move forward with equipping an additional 27 schools with learning devices, but said Tuesday he was canceling the contract and starting another. Cortines said he made the decision based on “identified flaws” in the L.A. Unified inspector general’s report on device procurement.
He added that the district would continue with a different contract with Apple to provide iPads and another vendor, Arey Jones, to provide Chromebooks for a new set of exams in the spring aligned to the Common Core, the new academic benchmarks being implemented in California and other states around the nation.
“My intent is that the students attending these schools will receive devices under a new contract at the beginning of the 2015-16 school year,” Cortines said.
To date, the district has spent $70 million on the project, purchasing 90,713 devices.
News of the probe immediately drew rebuke from United Teachers Los Angeles, a frequent Deasy critic. Union president Alex Caputo-Pearl said Deasy “cannot escape the tough questions about the ill-fated iPad project. He cannot simply resign and leave a mess for others to clean up.”
Deasy did not return a request for comment.
- Associated Press writer Brian Melley contributed to this report.