News analysis: Broken Arrow scandal erupts, criminal probe begins, turmoil ensues

By Patrick B. McGuigan

Published: 28-Aug-2010

After simmering for years, the Broken Arrow public school scandal erupted into full scale news coverage in Tulsa and Oklahoma City late this week. But even the information now widely available in the public square may understate the extent of the situation. 

Attorney General Drew Edmondson has directed that a new, criminal investigative audit of the troubled district commence immediately. A draft version of the original state audit, resulting from a process which began in spring 2009, is circulating, while the official version is scheduled for release on Thursday, September 2. The auditor’s office told CapitolBeatOK the new criminal audit will not delay release of the final version of the first audit. In a statement, the auditor has condemned circulation of the draft audit.

The district has faced a springtime of turmoil as the auditor’s report neared completion and other events unfolded.

At this point, most reporting on the district has not touched upon the controversial Rosenstein, Fist & Ringold law firm, which many local “watchdog” groups have closely scrutinized for large legal fees, interference in school decisions and other issues. 

Ronda Vuillemont-Smith, a Broken Arrow parent-activist who has monitored the burgeoning scandal for the last few years, sought two weeks ago to attend the state auditor’s briefings for school board members, but was told the summary would not be open to the public.

She challenged the inclusion of the district’s legal counsel, the Rosenstein firm, whose work has, itself, been subjected to intense criticism and scrutiny in recent months. In exchanges with district officials, she noted that in the six previous audits of the school system, attorneys were not present when audit findings were unveiled. 

She told CapitolBeatOK, “I am a Broken Arrow resident and parent of three BA students in high school as well as a concerned citizen. I became involved with the Broken Arrow school system following the allegations of improper bidding procedures and misuse of funds a couple of years ago. It frustrated me that those involved seemed determined to try to cover up and impede the investigation.”

Vuillemont-Smith said that after “a mysterious fire destroyed important paperwork” touching the recent investigation, it seemed to her “apparent that something fishy was going on. .. Last year I fought to defeat the Broken Arrow bond issue as I felt that it was too much money at the wrong time. … I’m a firm believer in transparency, fiscal responsibility and accountability.” 

Sources in Broken Arrow have told CapitolBeatOK that an attorney for the school district said, in wake of the audit “exit interview” presentation on August 18, that the district would “hire the largest PR firm in Oklahoma” to combat negative publicity.

Vuillemont-Smith said she wanted to know who is going to pay for the services of the largest PR firm in the state. In an exchange with the local superintendent on August 18, she asked who would be responsible for that expense. Superintendent Jarod Mendenhall said he did not know anything about the statement.

One of Superintedent Mendenhall’s first steps when he assumed the district’s top job this summer was to reverse a decision his predecessor, Gerber, had made to charge premium rates for an open records request by another district parent. 

School district records were reportedly seized earlier this spring, in connection with either state or federal investigations. Two weeks ago, the audit process itself was the subject of a stormy confrontation between Burrage and state Rep. Mike Reynolds.

In the freshest developments, Radio station KTOK is among news organizations with major reports in the last 48 hours. Ashli Sims of Tulsa’s newson6 has prepared a series of reports that have also been carried on Oklahoma City’s news9.

KTOK’s Jerry Bohnen summarized the 70-page draft audit as “a stunning list of dozens of allegations of violations of public competitive bidding laws, split bidding by the Broken Arrow school district, the awarding of bids of millions in contracts with a Broken Arrow air conditioning firm named Air Assurance, the installation of used air and heating equipmen at the Broken Arrow schools and a violation of the State’s open meeting act by the board of education.”

The Tulsa World is reporting that Broken Arrow public school officials skirted around competitive bidding laws to direct $3.2 million to Air Assurance.

Roots of the audit emerged from the work of former Superintendent Jim Sisney, who had pressed for a broad examination of spending patterns that troubled him during his tenure at helm of the district. However, after the Broken Arrow school board dismissed Sisney with a still-contentious 3-2 vote, the board requested a narrower and more focused audit.

The process of that audit has led to questions about decisions by Sisney’s successor, Gary Gerber, to avoid competitive bidding provisions and to cover up law violations.

As Clifton Adcock reports in today’s Tulsa World, the draft audit report “details instances where city officials intervened in police and fire investigations involving the school. Since 2009, allegations of wrongdoing have been examined by the Oklahoma Attorney General’s Office, Broken Arrow police and the Oklahoma State Bureau of Investigation, which said it had forwarded the case to the FBI. No charges have been filed in the case.” 

Trey Davis, Burrage’s spokesman, told Adcock the new audit the attorney general ordered could begin within a week. A letter to Burrage from Tom Gruber, Edmond’s first assistant, says: 

“Our office has received a complaint concerning possible improper procurement practices and possible illegal conduct during the period of July 1, 2006 through March 31, 2009 at the Broken Arrow Public Schools. We have received the complaint and conducted an interview, and have concluded that an investigative audit for criminal and other types of misconduct should be conducted. Please consider this letter an official request of the Attorney General, pursuant to 74 O.S. 2001 [sec.] 18f, to perform this audit. Because this involves an investigation which could result in criminal charges being filed, this audit and its results are to be kept confidential until the investigation has been completed.”

Adcock summarized the information available thus far: “Air Assurance performed some repairs, replacement and preventative maintenance on the district’s heating and air systems that it was not legally authorized or, in some cases, asked to do, the documents indicate. The company had a master key and access codes to all school buildings in the district, the report states. State law requires that projects costing more than $25,000 be opened for bids. But the district did not request bids on its heating-and-air work and got around the law by ‘splitting’ the projects, according to the report.”

Gerber signed off on many of those jobs, Advock reported.

Adcock continued, “Despite Gerber’s telling auditors that he never oversaw day-to-day operations, the auditor found several cases where Gerber had engaged in maintenance decisions. E-mails from the school’s head of maintenance, Bill Miller, to Gerber gave total costs of planned work with cost estimates above the competitive-bidding threshold that were later split to come in under that limit, and Gerber signed purchase orders splitting the costs, the draft report states. Gerber also asked an employee to work up a quote format to make it appear the district was using proper procedures in case board members or then-Superintendent Sisney asked, according to the [draft audit] document.”

Gerber has declined comment on the allegations, Adcock reported. The World reporter also wrote, “After Sisney was suspended by the board in October, Gerber was named interim superintendent. The next day, Gerber requested that the chief financial officer give him invoices and correspondence between the school and Air Assurance, the report states, but fearing their destruction, she photocopied the documents. In November 2008, employees saw Gerber carrying out bags of shredded paper, the report states.” 

Adcock continued, “After being named interim superintendent, Gerber locked employees out of the office where heating-and-air records were stored, the report says. When they were allowed back in a few months later, they said numerous files were missing, and handwritten notes from Gerber had been added, the documents [in the draft audit] state.”

After months in which allegations of interference by district officials in an arson investigation have swirled around the case, new information provides crucial details. Adcock reported in today’s editions of the Tulsa newspaper:

“In one case, a meeting between board members and a Broken Arrow police officer investigating a complaint of malfeasance against them was canceled by a city official, according to the report. And the fire marshal deemed a February 2009 fire at a Broken Arrow storage facility suspicious in nature with no apparent source of ignition. The fire was near a unit that had been rented by Air Assurance that contained boxes labeled ‘BA Schools,’ according to reports at the time. The boxes were labeled 1 through 6, but the box that would have been labeled ‘2’ was missing, the [draft audit] report states, and police obtained a search warrant for the storage unit. A few days after the fire, the fire investigator was told by his supervisor to stop the investigation and that the Police Department would handle it, according to the auditor’s report. Officers told the auditor that the Police Department never worked the fire investigation. After receiving a second complaint against Broken Arrow Public Schools, the investigating officer opened a second case, the report said. The officer was contacted repeatedly by Broken Arrow city officials and was asked to hand over to school attorneys documents seized after a search warrant was served at the school, according to the report. He refused. “

Air Assurance executives moved on Friday (August 27) to limit rising controversy. In open letter to employees and customers, owners said:

“We write to you today to inform you some information about our company in the media is completely untrue. We still await the official audit to be released from the State Auditor’s office; however, media outlets are reporting information about our company that is inaccurate and this letter is to correct some of those issues. An alleged draft of the report is stating misinformation — specifically on the website for KTOK, an Oklahoma City-based radio station.

“In the 18 months that it took the State Auditor’s office to conduct its audit of the Broken Arrow Public Schools, we find it ironic that our company was never contacted by anyone from the auditor’s office. Had someone from the auditor’s office contacted our company we would have been able to clear up the many inaccuracies being reported in the alleged leaked draft of the auditor’s report.

“For example, it is being reported that Air Assurance is an out-of-state owned company. This is totally untrue.” The owners said they have “lived in Broken Arrow for more than 20 years.”

The letter continued, “Another allegation is that we completed work without proof of insurance or completing a bid. Both of those allegations are incorrect. We have maintained adequate and compliant insurance coverage and submitted proof to the school every year. We also have proof of submitting a bid pursuant to an RFP. We never completed any work for the school system without having a purchase order in advance.

“Additionally, the KTOK website states we had keys to the school buildings implying a violation of law or school policy. In fact, the school district issued our company access keys so we could immediately respond to any heating and air conditioning maintenance issues that occurred. During our many years of service to the district at no time was a security issue or complaint ever shared with us. This procedure allowed our company to promptly correct the problem so that it did not interfere with the school day. We are proud that in the 15 years of our company providing service to the Broken Arrow Schools there was never an issue of safety violations. We were careful and diligent to avoid carbon monoxide leaks or any other heating and air conditioning dangers that could hurt the students. We took pride in our ability to provide a safe learning environment for the children of Broken Arrow.

“We thank you for being a part of our family and standing by our company. Free speech and open media is a constitutional right which we respect and support; however, we also have the right to set the record straight.”

In a statement sent to CapitolBeatOK, state Auditor & Inspector Steve Burrage said that circulation of any draft audit document is “unprofessional and irresponsible.”

He said: “It’s unfortunate, unprofessional and possibly unlawful that someone deliberately sought to undermine the authority and integrity of the State Auditor’s office by releasing a draft of this special audit. Sadly, the highly charged atmosphere surrounding the ongoing controversy at Broken Arrow Public Schools has turned this normally routine process into a spectacle.”

The auditor’s press release concluded, “A draft version is just that – a DRAFT version.”