Tag Archives: foxc6audit

Critchlow was Reckless, But Prosecutors Feckless

19 Jan

Once again, an area prosecutor has declined to bring charges against disgraced former Fox C-6 superintendent Dianne Critchlow for her use of taxpayer funds as her personal piggy bank. This time it was St. Charles County prosecutor Tim Lohmar, who took over the case from JeffCo Prosecutor Wafflin’ (Forrest) Wegge, who first looked at the case, but then later decided to recuse himself.

Though none of us believe our justice system is perfect, we like to think, in the case of egregious offenses against the public trust, that people will be held accountable, and that those in powerful positions will be held to a higher standard. We trust that the many checks and balances that exist in our system will not let someone who commits public offenses get away with it.

But the system has failed here.

“The review of the investigation is now concluded,” Lohmar said in a statement, “with a finding that there were no violations of the criminal laws of the State of Missouri, and consequently, no criminal charges will be filed.”

Well hell’s bells. What does a superintendent have to do to get some jail time? Lohmar could not find any law that Critchlow had broken? I refuse to believe that our legal code is so inadequate that a prosecutor, who, as the saying goes, could indict a ham sandwich, could not find reason to charge Critchlow with anything. Back in June I, admittedly not a lawyer, perused the statutes and found several infractions that I think apply to Critchlow:

  • Felony stealing (B felony if over $25,000 stolen – multiple counts possible here)
  • Official misconduct (misdemeanor)
  • Fraudulent use of a credit device (felony if over $500 stolen within 30 days)
  • Fraudulent use of facsimile signature or seal (felony, 2-10 years jail). I’m not sure if this applies. We know she made unauthorized use of facsimile signatures on her contracts, but did she do so on “a public security or an instrument of payment?”
  • Tampering with physical evidence – felony in this case. Fox CFO John Brazeal said that several district employees destroyed electronic records and that former CFO Mark McCutchen shredded documents. Did Dianne do this or order others to do so?
  • Probably something securities related, having to do with the misuse of bond proceeeds that Brazeal reported in August 2014. While it noted the district’s failures in bond issuance, the auditor’s report did not mention anything about how bond proceeds were used.

A Review of the Audit

Let me pull a few of the more damning findings out of the state audit report on the Fox school district, via the Post-Dispatch, to see what kind of actions that Lohmar found to be not worthy of charges:

  • She manipulated her own salary without board approval, the audit states, by drawing up contract adjustments and signing them with the board’s electronic signature to net about $20,000 over two years beyond what the school board had agreed to pay her. Her husband received about $89,000 in compensation that was never approved and wrongly paid.
  • Over two years ending in 2014, she racked up about $100,000 in questionable expenses on three school district credit cards for things such as iTunes gift cards, shampoo, watches, wedding gifts and a garlic press.
  • Critchlow’s two sons were awarded about $7,000 collectively in scholarship money through three district scholarship programs that she personally oversaw.
  • Logging equipment was purchased on Amazon and sent to Critchlow’s home. She and her husband were trying to start a land and timber improvement/sales company.

But hey, nothing to see here. Carry on. No laws were broken. The former superintendent at St. Joseph, Dan Colgan, has to wonder why he ended up in jail for his theft. Maybe they just have better prosecutors over on that side of the state.

State Auditor Nicole Galloway stands by her office’s audit findings:

My office stands by the facts included in the independent audit report. The former superintendent used taxpayer dollars to personally benefit herself and a select few individuals close to her at the expense of the students, families and staff of the Fox School District. Whether those facts rise to the level of a criminal prosecution is at the sole discretion of the prosecuting attorney.

Too bad we can’t rely on our prosecutors.

Critchlow to Sue?

Critchlow’s lawyer, Brandy Barth, said they’re now going to sue:

Barth said Critchlow plans to file a lawsuit. Critchlow is no longer working “because of the defamation,” Barth said. “She couldn’t get hired to do anything.”

(Note: she was working for international education conglomerate Pearson before this blog made that news public.)

Now, normally I would laugh at this. Filing a lawsuit would open up Critchlow to discovery. She would have to answer questions under oath about her actions as superintendent. She would not want to do that, and as such, a lawsuit would be too risky.

However, such a lawsuit would be filed against Fox school district. The board there has not given us any indication they would want to fight this. I have little doubt that they would roll over and quickly agree to a settlement with Critchlow to make this go away. I predict such a settlement would be in the $50-100,000 range.

Any More Hope?

The only possible avenue remaining for justice here is the state attorney general. I’m not sure if the AG can act in this situation; if not, then Critchlow is free to spend her ill-gotten gains as she sees fit with no fear of legal repercussions. If that is the case, it is indeed a sad day in Missouri.

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Grandview Needs to Take Next Step in Response to Scandal

23 Dec

The Leader has reported that the Grandview R-2 school district has put business manager Angela Huskey on unpaid administrative leave after finding that “internal fiscal control procedures were not properly followed.” This was found as a result of a special audit ordered by the district on October 20 after initial suspicions arose. The district will spend up to $80,000 for the audit.

However, the school board needs to take the next step and ask for an audit from the state auditor. Such an audit would be comprehensive, unbiased, professional, and transparent to taxpayers. Will the current special audit, being performed by longtime auditor of the Fox district Dan Jones and Associates, even be released to the public? The discussion between Jones and the Grandview board that took place on December 15 was conducted in a closed session. Taxpayers need to be sure that whatever wrongdoing took place at Grandview is aired publicly, not concealed in closed session. The audit will serve as the basis for any potential criminal prosecution (even if the county prosecutor slow rolls such prosecution). A state audit will tell us how well the district is managing taxpayer dollars and recommend improved procedures. One person cannot steal or misappropriate large sums of money from a school district (if that’s what happened here) without other people failing to exercise the required checks and balances. Who else is culpable? I do not believe that “we are already doing an audit” is a valid excuse not to get a state audit, because they are not the same.

You may recall that, back when the Fox scandal broke, the school board initially resisted calls by myself, Rich Simpson, and others for a state audit. They said, nah, let’s give Fox CFO John Brazeal a chance to investigate.” But soon, Brazeal said a state audit was needed, and the Fox board asked the state auditor to investigate, which he agreed to do. This is from the intro to the final audit report:

The Fox C-6 School District was selected for an audit in part due to a written audit request by the Fox C-6 Board of Education (Board), in addition to phone calls received outlining concerns, and news articles detailing questionable practices by former Superintendent Dr. Dianne Critchlow.

Because the auditor accepted the audit request from Fox, the district did not have to pay for the audit, so cost cannot be used as an excuse not to do this.

Call to Action

This is where the people of the Grandview district come in. Contact your school board members and the state auditor and ask for a state audit. Ask your school board members if they will represent the taxpayers or cover for the administration. Forward the articles from the Leader to the state auditor. Let’s make sure that we get to the bottom of what has happened at Grandview.

State Auditor contact info:
(800) 347-8597
moaudit@auditor.mo.gov

Grandview school board member contact info can be found at this link.

Unpaid Leave

Do you think that Rep. Rob Vescovo’s Critchlow Law is to thank for the fact that Huskey is on unpaid leave instead of paid leave? Perhaps it is, but she’s also a lowly business manager. Paid leave is often reserved for senior administrators.

Strike Two for Critchlow Justice, But Hope Remains

10 Nov

The news came out today (right before a holiday weekend) that the US Attorney’s Office for the Eastern District of Missouri was not going to press federal charges against disgraced former superintendent Dianne Critchlow after a four-month investigation into her theft from the Fox school district, much to the anger of Arnold residents. This investigation took place after JeffCo prosecutor Forrest Wegge punted the case to the feds. Despite the adage that you can indict a ham sandwich, apparently you can’t indict a corrupt school administrator. I think perhaps the distinction, but not one that the US Attorney explicitly made, was that they could not find sufficient federal laws to prosecute her under.

But it’s not over quite yet. The JeffCo and St. Charles County prosecutor’s offices confirm that the St. Charles County prosecutor is going to review the case. An additional investigation is not taking place; prosecutor Tim Lohmar will take a look at what information has already been uncovered.

While I was initially told that the US Attorney appointed Lohmar, this was incorrect. It is most likely, but nobody could confirm this, that it was Wegge who passed this on to St. Charles County. But why? The most common reason for such a move is a conflict of interest. And on this note, I heard from a few people who believe that there is some sort of acquaintance/friendship between Wegge and Critchlow. This would be a reason for recusal, but Wegge did not pass on the initial investigation. He looked into the state audit results for 6 weeks before giving the case to the feds.

Is he trying to get a second opinion on what, if anything, to charge her with? (Here’s my list of suggestions). In any case, we have one last bit of hope that some legal repercussions will hit Critchlow. If not, this nauseating statement from her lawyer will stand:

“We are very pleased with the outcome of the federal investigation, clearing Dr. Critchlow of any wrongdoing,” [Brandy] Barth said in the statement.

“While she has allowed this investigation to run its course, she has always trusted in the system and believed that a fair and impartial investigation would clear her name. She is ecstatic that this day has finally arrived.”

Critchlow Update

25 Sep

Here’s what’s up in Critchlow land:

-You may recall that in mid-July, JeffCo prosecutor Forrest Wegge punted the Dianne Critchlow case to the US Attorney for possible federal charges after a 6-week investigation. That was 10 weeks ago – still no word from the feds.

-The Critchlow home in Arnold is still for sale – the price has plummeted 5.6% since being listed in June to $462,000. Maybe the Fox district could buy the house, and the four families on Chemin de la Vallee and Glenn Drive in Barnhart that are embroiled in a Dunklin-Fox boundary dispute could all take up residence. Or maybe Dunklin should buy it, since they’ve been getting the tax dollars from these families all these years without having to educate their kids.

-Jamie Critchlow has a trial date on October 28 for his challenge to the Dept. of Revenue’s revocation of his drivers license for failure to consent to a breathalyzer test. This relates to his May 30 arrest for DWI and leaving the scene of an accident, which is separately winding its way through the JeffCo court system. The judge for the DOR trial is Travis Partney, who is running for a full term to finish the term as judge on the November ballot. He was appointed to the position by Governor Nixon back in March. Before that, he worked for the JeffCo prosecutor’s office.

Wegge in the Spotlight Over Critchlow Crimes

11 Jun

Update: How about federal wire fraud charges for submitting fraudulent income data to the state retirement system over the internet, as the former St. Joseph superintendent was charged with?

Jefferson County Prosecutor Forrest Wegge has three Critchlow cases on his plate right now. Everyone knows about the Fox scandal (currently under review by Wegge’s office) and Jamie Critchlow’s latest DWI (case in progress, being handled by assistant prosecutor Thomas Hollingsworth), but Wegge’s office will also be defending the state Department of Revenue in Jamie’s petition to have his drivers license revocation overturned.

Wegge, a Democrat, was first elected as JeffCo Prosecuting Attorney in 2006. He won re-election unopposed in 2010 and 2014. He is two years away from having to face voters again, should he choose to run for another term. Given the Republican shift in the county, one would think a challenger will emerge in 2018.

The Critchlow Fox case may be the biggest one of Wegge’s tenure. Public interest and anger here are very high. You might say, oh, murder is a bigger deal than this, but murder is a black-and-white thing – somebody was killed or they weren’t – and most murderers around here are rather easy to identify (Amanda Jones case notwithstanding, though the culprit seems clear). In this case, the number of charges, the type of charges, and the number of people charged are open questions that are up to prosecutor discretion. Disgraced former Fox C-6 school district superintendent Dianne Critchlow could be charged with a number of offenses. Here are the potential broken laws that I can find, based on my reading of the law and the facts of the case (note: I am not a lawyer):

  • Felony stealing (B felony if over $25,000 stolen – multiple counts possible here)
  • Official misconduct (misdemeanor)
  • Fraudulent use of a credit device (felony if over $500 stolen within 30 days)
  • Fraudulent use of facsimile signature or seal (felony, 2-10 years jail). I’m not sure if this applies. We know she made unauthorized use of facsimile signatures on her contracts, but did she do so on “a public security or an instrument of payment?”
  • Tampering with physical evidence – felony in this case. Fox CFO John Brazeal said that several district employees destroyed electronic records and that former CFO Mark McCutchen shredded documents. Did Dianne do this or order others to do so?
  • Probably something securities related, having to do with the misuse of bond proceeeds that Brazeal reported in August 2014. While it noted the district’s failures in bond issuance, the auditor’s report did not mention anything about how bond proceeds were used.
  • Possibly something related to tax fraud due to unreported income, but I think this is mostly the district’s problem (this is related primarily to Critchlow’s vehicle mileage).

Let me know if you have other ideas for charges against Dianne.

Watch for how many counts Dianne gets charged with (assuming she gets charged – if not, it may be tar and feathers time). Also, McCutchen should get charged for at least tampering for his paper shredding. His role in all this has not been fully explored, and only at trial will this happen. Perhaps McCutchen will take a deal and testify against Dianne.

Jamie Critchlow could be charged with receiving stolen property, a felony; he surely knew what was going on. Could anyone else be charged? Several board members and administrators received scholarships for their kids or jobs for their relatives. Was there any quid pro quo? Other assistant superintendents made questionable credit card charges. What about former CFO James Berblinger? The district points fingers at him in the audit response, but Fox seems to allege incompetence, not malice.

A plea deal for Dianne is a possibility, but I think this needs to go to trial. Let’s hear all the details about what went on at Fox. Let’s see what defense she puts on. Her lawyer’s few media statements have been along the lines of “the board approved everything she did.” Do any former administrators or board members testify on her behalf? Or against her? I assume Dianne won’t testify, but you never know.

Jamie’s DWI

In addition, Jamie has been charged with aggravated DWI (a felony worth up to 7 years in jail) and misdemeanor leaving the scene of an accident (up to a year in jail) for an incident on May 30. One wonders why he was not charged with felony leaving the scene, though, since did this before (at his January 2015 Arnold DWI) and thus is eligible for a felony charge. Critchlow plead out his two recent Missouri DWIs; will he fight this one? He is already on probation, and this is his first felony, so there is a lot more at stake this time around.

As is his modus operandi, Jamie refused a breath test when arrested on the 30th, which means an automatic one year revocation of one’s drivers license (notably, Arnold police did not do blood tests at either arrest, while Iron County did perform one, revealing a 0.28 blood alcohol level in July 2014). The revocation can be challenged in court, and Critchlow is doing just that. While his suit in this matter is against the state Department of Revenue, which controls drivers licenses, state law requires the county prosecutor to appear in court on behalf of the DOR. At the hearing, the prosecutor must satisfy the court that the police had reasonable grounds to stop Critchlow and believe he was drunk in order to uphold the license revocation. Interestingly, Critchlow’s lawyer has already moved to have the assigned judge, Tony Manansala, removed from the case.

How will Wegge’s office handle these cases? The answer will determine what kind of justice gets served, and perhaps also if Wegge has any shot at re-election.

Fox Audit Response Review

6 Jun

I would like to review some of the responses that the Fox district submitted as part of the state audit of the school district. Pat Martin said in the June 2 Leader that he’s never seen an audit where “the responding entity was in such complete agreement with the criticisms offered by the auditor.” However, there were a few places where Fox disagreed or at least was not very enthusiastic with the auditor’s recommendations. And there were some deflections of blame.

  • The District believes that most of the irregularities regarding former Superintendent Dianne Critchlow’s contracts identified by the audit findings resulted primarily from acts of Dianne Critchlow and acts or omissions of persons holding the post of Chief Financial Officer, namely James Berblinger, or his successor Mark McCutchen. Fox C-6 Board of Education expects staff to properly implement all Board decisions. The Board of Education disapproves both the acts or omissions that (1) increased Critchlow’s compensation without Board action and (2) compensated Dianne Critchlow greater than provided within her approved contracts. Critchlow, Berblinger and McCutchen are no longer employed by Fox C-6 Schools. (page 14)

The disapproval language was repeated several times. Yeah, they expect staff to do their jobs, and they disapprove of the bad acts, but as we have seen, there was little oversight. The board does not acknowledge this in its response. This is despite the state auditor’s statement that “Checks and balances were not in place. There was no accountability and no oversight by the board.”

  • It is worth noting the significant resistance toward strengthening the provisions of the anti-nepotism policy. Due to active opposition to appropriate anti-nepotism practices, it required three separate progressively strengthened versions over many months to attain the current strong anti-nepotism policy. (page 26)

I suspect this was put in there by the district because the first nepotism policy change took place in June 2013 while Critchlow was still superintendent (and her husband was principal and board member David Palmer’s wife was director of nursing). This was after board member Linda Nash’s daughter-in-law was hired as food service director despite questionable qualifications. The change was declared by district critics to be watered down.

It appears that Critchlow drove the wording of this policy change. “[Then-board member Steve] Holloway said the new policy was a carefully crafted compromise by the board based on research by Superintendent Dianne Critchlow of other district’s policies. He also said the board believed barring the hiring of all relatives would be too restrictive.”

The nepotism policy was tightened further in November 2014, after two more board members were replaced, when Jim Wipke was named superintendent.

  • In reporting that the district will spend up to an extra $5.6 million in interest costs due to not having open competition for bond sales, the auditor recommended that competitive bidding in future sales. The board responded:

The District agrees with the intent of pursuing open competition in bond sale transactions; however, the District holds the opinion that it is preferable and financially advantageous when open competition is structured to take place when the bonds are sold into the financial markets versus sealed bid sales to a reselling underwriter/broker which must factor in the cost of market risk of time between the date of the bid and the eventual availability of bonds several weeks later. (page 30)

To which the auditor responded: “The in-depth analysis of GO bond sales practices conducted by the State Auditor’s Office (referenced above) provided evidence that the potential savings the district could achieve via competitive sale outweighs any timing issues.”

In a dispute such as this, I would trust the auditor ahead of the district that was doing it wrong all these years. This may be moot though, because one would think Fox voters are unlikely to trust Fox with a bond issue in the near future (but who knows).

  • The audit noted several concerns with the way petty cash accounts are handled throughout the district. The district responded: “In August 2014, appropriate policy and procedures were developed regarding petty cash funds…The District acknowledges that all schools did not follow the policy.” (page 40)

In fact, the auditors checked five schools (Fox High, Seckman High, Ridgewood Middle, Antonia Elementary, and Rockport Heights Elementary) in December 2014 and found that none of them were following the new procedures. This was after Critchlow had departed from the district.

  • The auditor recommended “Consider appointing an internal auditor to conduct audits of district operations and activities,” stating that the savings created by an internal auditor could exceed the cost of the position and also enhance the annual external audit. The district said merely that it would “take this under advisement.” (page 56)

Possible Fox Audit Repercussions

27 May

With this post, I will pull from the audit the possible repercussions proposed by Fox in its responses to the audit. Fox’s response was embedded in the document after each recommendation from the state auditor.

  • The Board of Education intends to consider the following actions: (1) seek recovery of the unauthorized compensation paid to Dianne Critchlow, (2) notify the Public School Retirement System (PSRS) about the unauthorized compensation to determine whether correction or forfeiture of pension benefits being paid to Dianne Critchlow is warranted, and (3) submit the record of unauthorized compensation to the Jefferson County Prosecuting Attorney’s Office to determine whether prosecution is warranted. (page 14-15)

Identical action items were proposed pertaining to Jamie Critchlow and former CFO/asst. supt. Mark McCutchen. As with all proposed actions, it is up to Fox residents to ensure that these actions are performed and not just “considered.” I urge everyone to contact the board to tell them you are watching.

I think a lawsuit might be necessary to recover the Critchlows’ ill-gotten gains. Sending letters to request repayment has not worked, although it did lead to some purchased items being returned to the district. There is the potential for restitution after a criminal conviction, but I would not count solely on that. Another possibility is to report Critchlow’s unreported earnings to the IRS and the state Department of Revenue so they can pursue collection of back taxes.

As for submitting information to the JeffCo prosecutor, I also think the state Attorney General and the feds need to be involved. I am not totally sure I trust our county legal system to get the results we need. The local legislative delegation has called on the AG to keep a close eye on the forthcoming legal proceedings.

  • The Board of Education intends to consider the following actions: (1) seek recovery of the unauthorized improper and/or questionable charges made to credit cards assigned to Dianne Critchlow and her administrative assistant, (2) submit the record of improper and/or questionable credit card charges to the Jefferson County Prosecuting Attorney’s Office to determine whether prosecution is warranted, and (3) in the event of a prosecution, notify the Public School Retirement System (PSRS), and/or the Public Educational Employees Retirement System (PEERS) about the potential need for correction or forfeiture of pension benefits. (page 26)

A law passed by the state legislature in 2014 (HB 1217) allows for the forfeiture of retirement benefits by public employees convicted of certain felonies. I don’t think this applies to the Critchlows, however, since their crimes took place before the law took effect. Crimes included in the law are felony stealing, receiving stolen property, forgery, felony counterfeiting, bribery, and acceding to corruption, if committed in connection to one’s work duties. Perhaps there are other provisions to go after the Critchlows’ pensions. They should be able to reduce the pensions, since they are now based on fraudulently inflated salaries.

  • The Board of Education intends to consider options for (1) recovery from George K Baum & Company the excessive interest costs resulting from the deficient structure of certain bond financings underwritten by George K Baum & Company and (2) submitting a complaint against George K Baum & Company to the Securities and Exchange Commission (SEC) to determine whether discipline is warranted for the underwriter’s seeming failure to adequately inform and disclose the detrimental structure of the above referenced bond issues to the Board of Education. (page 32)

This is related to bonds that were issued by the district. The bonds were issued in a way that could cost the district an extra $5.6 million in interest costs. The state auditor issued a report in 2013 condeming the non-use of competitive bids in selecting bond underwriters. The auditor found that all JeffCo school districts used “negotiated sales,” thus saddling taxpayers with unnecessary costs.

  • During September 2015, the Board of Education adopted MSBA Policy DIE titled “Audits,” which provides for a solicitation of independent audit services every three years. (page 50)

This is instead of just letting Dan Jones to the audit every year.

What About Other Administrators?

The audit notes on pages 9-10 that salaries for all district administrators were inflated during the audit period, apparently due to unauthorized additions made by McCutchen. For example:

The total additional compensation for the district’s 49 administrators ranged from $115,983 to $417,088 resulting from the base increase and administrator longevity for the 2013-2014 school year.

Should the board go after this money? Sure, (most of) the recipients were not culpable in this, but they received money that was never promised to them. I say they should all have to pay it back. The district is in tough budget times, is it not? Such a measure is not contemplated in Fox’s audit response.

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