Monday, June 06, 2011

The Empire Strikes Back (or at least Lord Vader)

Update:  The Times' editorial board weighed in today on this subject.   They are shocked! and appalled! to find this kind of thing happening. 

Well, it may have happened under MGJ but some of the stock players are still there. 

They end with this:

The school district is developing a grim reputation for sloppy stewardship of tax dollars. A legacy with consequences.

No kidding.

It appears that Ron English, the interim General Counsel, is peeved over the Seattle Times' article about the sale of the MLK, Jr. building to First AME church.

He is asking the Times for a retraction and a copy of the audiotape of the interview with him.

I'm going to print the letter he wrote in full but I will note a couple of things upfront.  One, Ron's a lawyer and he's no dummy.   As someone who follows facilities and capital issues, I have my doubts about him but he definitely has a full grasp of the issues.  Two, he's also a wily and resourceful guy.  That his name keeps coming up in these scandals, well, he is a lawyer for the district but it seems like it happens an awful lot of the time.

Writing to one reporter he says this:

Ms.Kelleher,

Your article of June 6 is misleading and contains several factual mistakes about the process used to evaluate proposals for the sale of the Martin Luther King School.


First, you state that I could not remember why Bush did not get the building. That is not true. I specifically told you in your interview of me on May 16 that I recommended as Property Manager that The Bush School be sold the building, as it made the highest offer. However, as I also told you, the School Board policy allowed consideration of benefit to youth education and the Selection Committee's review included extensive analysis of that factor and concluded that the First AME proposal provided more than twice as much support as the CCC@MLK proposal. This is contained in the August 24, 2010 analysis by the Selection Committee and was provided to you on May 16.

As I told you, it was consistent with the Board policy for the former Superintendent to not take my recommendation and to recommend the award to someone else. The staff recommendation (as stated in the Board memorandum provided to you on May 16) was:

"The Superintendent recommends award of the contract to First AME Church because the value of keeping the building available for support of youth education and social services creates an intangible benefit to the community which outweighs the financial gain offered by the higher priced proposal."
Second, your article states that I held the CCC proposal to different standards: "Yet, English challenged the CCC proposal and held it to different standards. For example, he questioned the group about some youth programs it planned to offer - and disqualified one that included helping adults." As I told you during our interview on May 16, the School Board adopted a Policy that requires consideration for support of youth education. Help to adults is specifically excluded by School Board policy. I carried out the School Board's Policy.

In fact, the two proposals were compared side by side to the same standards. The powerpoint presentation to the School Board (which I also provided to you on May 16) specifically compared the First AME and CCC@MLK and noted that both organizations provide roughly the same degree of youth education and family use, but that CCC@MLK charges significantly higher rental rates. See page 8 of the August 24, 2010 Analysis, also provided to you, which quantifies the difference, showing that the First AME proposal provided over twice the benefit to youth education.

Third, you state that I "failed to check key components of the First AME proposal." The same day as our interview I forwarded you a detailed 8 page report I prepared on August 24, 2010, detailing the Selection Committee's evaluation of the proposals. Your article contains none of the information from that analysis, which critsized a number of aspects of the First AME proposal.

Fourth, you state the Times did check the First AME proposal, stating: "But The Times did. For one: The church claimed in its bid that it had a "verbal agreement" with Seattle's parks and recreation department for "youth activities." In fact this point was covered by my evaluation. The review I wrote on August 24 specifically rejected this claim. The August 24 review states: "FAME also takes credit for assumed rental by Parks of rooms 136 and 137, totaling about 1,800 SF. Since these are classrooms, it is not apparent why Parks would rent them. Also see room 131, which they claim will be for an unspecified youth activity." The report goes on to conclude "The total square footage of the rooms with questionable support for youth activities is over 4,500 SF, which could reduce the support amount by over $27,000."

In conclusion, you state that "The district staff changed the way it handled and evaluated offers for the building, which pushed the church's proposal to the head of the pack." that we "held the two groups to different standards" However, both of the examples you give are invalid. A review of the August 24 analysis proves the same standards were applided throughout. Both offers were evaluated on the same basis, in accordance with School Board policy, and the results were presented to the School Board for decision. I provided you with the actual documents presented to the School Board.

During our interview, you stated that you had information that First AME's actual use was different than represented to the District. I asked what it was, and made it clear that if this were the case, the District would seek to apply the penalty clause of our contract. You declined to tell me either your source or the information you had. The statement in your article that I said "it would not have made a difference" is deliberately misleading. I stated that while the sale is final and cannot be reversed, but there are protections included in the contract for the public and I asked you to provide me your information. You did not do so.

Finally, you called me to fact check the article while I was on vacation and after receiving my response, you sent me an email that you would call me the following Tuesday (May 30). Yet you did not call that day, even though you had both my business phone and personal cell phone numbers.

I request a retraction and correction, with equal prominence, in the next newspaper edition. Please also provide me a copy of the tape of our interview of May 16.

Ron English



So, we learn that:
  • it was likely MGJ and Fred Stephens pushing this hard.  
  • the decision can be overturned if First AME misrepresented its case to the Board/district (but would the State Auditor make this decision?) as there is a penalty clause
  • Tsk, tsk to the Times - gotta do those fact checks (if indeed, they did not)
  • why did the Board go along with this mess? 

37 comments:

Still worried said...

English has a long history of playing favorites. He has been the bagman for BEX for a long time. Eventually we need the Auditors to examine construction contracting practices and the changes he has introduced there that are not in the publics best interest.

WenD said...

RE: English, from the Times:

"The sales agreement requires the owner to use half the property to support youth education for 40 years or risk financial penalties. English said the district does not keep tabs on property owners, such as First AME, to see if they use the buildings as promised."

Why not?

FAME's 2nd bid was made to order. They copy and include the best points from the CCC bid after refusing to join forces for a co-bid. They win and never have to show good faith.

Adrienne Bailey of CCC was the one who originally lobbied for the first million. Mel, is there a chance FAME might be forced to give the building back?

Melissa Westbrook said...

WenD, I'm no lawyer but there is a penalty clause and if First AME violated terms of the contract, yes, the contract could likely be undone. (It depends on what the contract says. My memory is that it could be undone, rather than a financial penalty leveled.)

Anonymous said...

"why did the Board go along with this mess?"

Because that is exactly what the Board does on a fairly regular basis.

-- Dan Dempsey

mirmac1 said...

Still worried,

You are correct to worry. English's fingerprints are all over the December Superintendent Staff Procurement Procedures that, rather than correct deficiencies cited in the (weinie) SAO Performance Audit, actually made district practices even worse!

The guy is an arrogant slimeball. But he's dodged the bullet many times. Noel Treat needs to clean house.

Anonymous said...

Something that has long bugged me. The University Heights building was sold just days before it was announced that the McDonald school would be reopened.

University Heights was closed long ago but it is located right in the middle of the elementary school dead zone in the North end. It is a HUGE building that could easily had solved a lot of capacity issues. In other words, UHeights would have held as many students as McDonald and Sandpoint put together.

On the other hand, McDonald is a small building, that is located just a few blocks from both John Stanford and Greenlake. The boundaries for the McDonald school are just crazy as the families that live near McDonald can walk to any of the three schools but the families that live near UHeights are now bussed to McDonald.

The sale of the building was fast tracked so that it would be done before the NSAP was announced because if UHeights was still in inventory or on the books, folks would have clamored to have UHeights as a school rather than McDonald.

I doubt that this is the first bad deal for the district but just the one that is finally getting some attention. I also suspect that the Queen Anne High School sale had an equal number of issues on the fast track sale.

- University mom

Ed Doc said...

It appears that Mr. English is now attempting to salvage his job with the district; he has repeatedly dodged the bullet and probably cost the district millions of more dollars over the years, this should be the last straw and allow headquarters to reduce by at least one the number of opportunists taking up space.

It also appears as though the Times provided opponents to all incumbent members of the Board of Directors priceless campaign material. Could it be our daily paper will truly begin to address and focus on headquarters mismanagement?

Anonymous said...

The plot thickens... Not that the Times is perfect in any way, but I find it hard to imagine they'd have gotten quite that much wrong as Mr. English seems to be asserting - maybe so - but its intriguing - to be continued....

--interested--

Charlie Mas said...

I think the Times loves this story so long as it is about corruption in the Goodloe-Johnson administration, but as soon as it became about the Board's failure (in the online reader comments instead of the print edition) the story started fading fast. Now it is hard to find and isn't listed among local education stories.

Inside as well said...

"The guy is an arrogant slimeball. But he's dodged the bullet many times. Noel Treat needs to clean house."

While I do my best not to malign individuals here, by far the worst mistake of this new, young administration has been to allow English to still be employed at SSD.

His "demands" are sillyness. He is a public figure that the media has every right to question in any manner available.

My take is that English (*and Ikeda) are products of the generation that either missed or ignored the ethics training that became part of law school education following the Watergate fiasco.

"Protect the client" was the ethos of the lawyers who lied or covered up Nixon's White House. It appears the same axiom was at work in English and Ikeda when the "clients" were Potter, Stephens, Kennedy and MGJ.

Why is this guy still here?

mirmac1 said...

Interestingly though, Charlie, the Times has posted letters to the editor regarding the story.

Paul said...

One of the important facts here is that SSD had a fully functioning division handling District real estate for many years called "Property Management". It was run by an honorable man by the name of John Richmond and saw this community through lots of tough times with assets such as these.

When Don Neilsen (see Peter Maier's PDC contributors lists) and the Alliance effected a change to letting the guys like English run things, all further transactions went "underground" and now (ten or more years later) we begin "discovering" these kind of issues.

Wonder what John Richmond is doing now?

I agree with "Inside", why is English still here?

Noam said...

Paul

I would begin, by asking Don Neilsen's protege Dick Lily to write a puff piece on Crosscut about how its all the anti-reform folks' fault.

Lily can't wash the stink off his hands by just sitting on the sidelines either.

suep. said...

Charlie,

FWIW, the AME/MLK story was front page news of the print edition, with a pretty big headline across the front of the paper.

But yes, by yesterday afternoon, the online version of the story seemed to have been almost buried on the site.

someone said...

It's also been picked up by other local news outlets beyond ST - however, it's not that unusual for the online high profile stories to disappear into harder to find places, so I'm not sure I'd read all that much into this.

Kathy said...

"The school district is developing a grim reputation for sloppy stewardship of tax dollars. A legacy with consequences."

Absolutely. We need a board that will hold the district accountable for operations and finances.

Anyone willing to run against Peter Maier? Anyone from Wedgewood? Filing takes place THIS week.

Jan said...

I think Charlie has a good point on the Times' relative distaste for criticism of the Board (as opposed to specific District employees, especially if they can tie them back to the now-departed MGJ. From the few times when I have had "inside knowledge" of REAL events -- and then watched the news report them, I have no problem believing that the ST can get any number of facts wrong, and can draw seriously inappropriate and misguided conclusions.

I am no Ron English fan. And I am one (of many) who questioned the propriety and "bona fides" of the MLK deal from day one -- I would rather have seen it go to EITHER of the other bidders, but Bush in particular, because of the money issue.

That said -- we know Mr. English DID try to flag issues in Pottergate, only to be told that Fred Stephens was his "ceiling" and he had no further recourse upwards. I was intrigued by the post that suggested English's original recommendation had been Bush's bid. While nothing permits an employee to hide behind ethical lapses, once your "boss" has told you that the real quest is to get to position X, it is not unreasonable for an employee to try to see if there is not a reasonable way, within the boundaries of the law, to get to position X. Ron is not the decision maker. He is the decision implementer.

I don't know the guy. I am inclined NOT to think highly of him, just because he keeps popping up in compromised deals. But I can't hang him based on the ST story -- because I think ST is also compromised here. Mr. English may be a snake (and I suspect there are people who REALLY know -- and know the answer to this, but I am not one), or he may be one more body thrown under the bus by the REAL manipulators at the District, who run the contracts and deals for the benefit of THEIR friends, rather than for the benefit of taxpayers and Seattle's children. Should he have quit in protest? Maybe so, but his ethical responsibilities to his "client" -- the SSD would have made it impossible for him to rat out his employer in any case -- and we never would have known any more than we do now.

But is it also possible that the ST has decided that they will just make him the scapegoat -- drawing attention away from the Board's role? This whole thing had such an air of unreality -- of decisions detatched from facts, of forces at work that weren't being acknowledged -- at the time of the vote. It was/is the Board's job to vet this stuff, to look closer, to invite further debate. There was NO timeline on this. NO reason not to shelve it for 3 to 6 months, if they needed to, to sort out the influences, to give the CCC a chance to push back on what they claimed was an unfair process. Kay and Harium were right to vote no. Why can we never get four "thinking brains" on the Board to act at any one time?

Jan said...

Melissa: your point on the contract is correct. Ordinarily, recission (undoing the deal) is NOT a contract remedy -- damages is the normal remedy. The wronged party is entitled to be compensated for the damage suffered by reason of the breach. But if the contract specifically spells out recission as a possible remedy, it may be available. And, there are specific cases (including fraud, mutual mistake, etc.) that permit recission as a common law remedy. In addition, there may be statutory, constitutional, or other considerations where, as here, public assets may have been disposed of at less than fair market value.

I think the SSD should pursue the failure by FAME to use the building as contracted. I also think the parties most damaged here may have been Bush and the CCC, and it would be great if they would pursue the contracting/bid irregularities, etc. They were entitled to a fair and legal process.

Dorothy Neville said...

If the ST doesn't want new board members, why the timing of this article? The SAO investigation has not been completed, the ST does not have access to it. So much of what is written is still speculation, not necessarily aligned with what the SAO will conclude. So the only reason I can think for the timing of this right now is to spur new candidates to file. Otherwise it is old news. We blog readers have known since the beginning that they accepted a low bid, that Stephens was involved in the church and that the money came from taxpayers. Also the Mad Valley CC folks made it clear at board testimony that they had done due diligence into the FAME claims to seriously question what FAME would do for the property (ie, they did not intend services, just office space and bingo, they were correct).

Recall that based on a Hotline complaint from Chris Jackins, the SAO did investigate the sale of Queen Anne High and determined that it violated state law. But recall also that the SAO has no enforcement authority. It reports, we act. Most contracts cannot be broken simply because one side violated the law. If this one does have some recourse, then we might have some leverage.

How well will the SAO conclusions match the ST? That remains to be seen.

mirmac1 said...

Portion of draft agreement:

3.
Value Sharing Payment Calculation. In the event that Grantor or its successor-in-interest operates or develops the Property contrary to any of the Assumed Conditions during the term of the Agreement, then Grantee shall be entitled to receive the following annual payment (the “Value-Sharing Payment”) from Grantor (or its successor) calculated as a dollar amount equal to:
(i) with respect to the gym space: the difference between the number of hours of actual rent free availability and the assumed hours of youth education and social services use in paragraph 2(b), times $20 per hour, adjusted for changes to the consumer price index for Seattle, from December 31, 2010 to the date of determination;
(ii) with respect to the auditorium space: the difference between the number of hours of actual rent free availability and the assumed hours of youth education and social services use in paragraph 2(b), times $10 per hour, adjusted for changes to the consumer price index for Seattle, from December 31, 2010 to the date of determination;

(cont.)

mirmac1 said...

(cont.)

(iii) with respect to the five classrooms, the difference between the number of classrooms actually available for rent to youth and social service organizations and the five classrooms assumed, times the difference between the actual net rent charged for those spaces and one half the market rent, as determined above, adjusted appropriately for changes in market rental rates and conditions from December 31, 2010 to the date of determination; the parties agree that, as of December 31, 2010, the market rent for such classrooms was $12 per square foot per year, triple net.

The date of determination shall be December 31 each year. The Value-Sharing Payment shall be due and payable to Grantee (plus interest from the date of the determination in paragraph 3.b. above to the date of payment at a rate equal to the 10 year U.S. Treasury Bill) annually for any year that the Assumed Conditions are not satisfied.

mirmac1 said...

6. Term of Agreement, Release and Termination.
6.1 This Agreement shall commence and become effective upon the date hereof and shall terminate on the earlier to occur of (a) the fortieth (40th) anniversary of this Agreement, at which time this Agreement shall automatically expire; or (b) the recording of an instrument executed by the Superintendent of Grantee expressly terminating this Agreement; provided, however, that the execution and delivery of such instrument shall not be necessary for or a prerequisite to the termination of this Agreement in accordance with its terms.

mirmac1 said...

The question is, did Ron English as Property lawyer, enforce the provision for penalty payments due from FAME for not complying with the agreement on December 31, 2010?

Doubt it. That is a gift of public funds.

WV: blech

Jan said...

Thanks for the information mirmac. Obviously, you can't post the entire contract in little bites (well, theoretically, maybe you could :>)) but it is interesting to note that none of the quoted sections give any indication that recission is available as a remedy. If not, we'd best get busy enforcing those penalties!

And the CCC, which pretty clearly has standing as a damaged entity in the bid process, should continue to press for recission.

mirmac1 said...

Yep, Jan, that was the language I was looking for but didn't see it in so many words. Interestingly, the link to the board agenda is broken but you can find the draft agreement here

More background info is here

Jan said...

And here is another question: if we really want a policy that says we can leave millions on the table, as long as we are selling to someone who will use more than 50% of the building for educational purposes, why doesn't the policy require (or at least encourage) lease-to-own arrangements, where we first LEASE the building, with purchase options, to these do-gooders who come beguiling with promises of the great things they will do. Give them a year, maybe two years, to get their programs up and running. Then audit the operations to confirm that they had the means, and the desire, to carry out the plan.

THEN put in all the language that Mr. English included -- so that if they don't continue to maintain those uses for X years, at X levels, they pay a penalty.

We lease buildings left and right. Why not this building under these circumstances -- with millions of dollars at risk if the buyer didn't perform?

mirmac1 said...

There is provision for penalty. Let's start tallying the number of hours that FAME failed to live up to its agreement, times the rate per hour in the provisions, and send them a bill. Here we are, nearly six months of $$$ to collect next December 31, 2011.

FAME may want to consider assigning the agreement back to Grantee (SPS, or the public, per se)

Anonymous said...

There are some interesting neighbor comments that speak to what's happening with the facility right now over on the Central District News Blog.

--a reader---

mirmac1 said...

Central District blog posts

Kathy Best, Seattle Times managing editor said...

Thanks, Save Seattle Schools blog, for your interest in our story on the sale of the Martin Luther King Elementary school.

We received Ron English's email, which appears on your site, on June 6. Editors and reporters have carefully reviewed all the points of his complaint. We did not find factual errors and we disagree with his assertions.

All the points made by Mr. English can be refuted by documents we obtained from the Seattle School District and through a recorded interview with him on May 16.

In response to Mr. English's assertion that our reporter failed to call him back for further response, our reporter, Susan Kelleher, made a concerted effort to reach him at least a half-dozen times before publication to go over the story. Unfortunately, the two were unable to connect. We understand Mr. English was on vacation; however, we were diligent in our attempts.

On Monday, we informed Mr. English that we are more than happy to meet with him and go over each of these points next week. We will also have the recorded interview on hand for playback.

Moreover, we would be happy to meet with the Seattle superintendent and school board members to discuss the story.

Sincerely,
Kathy Best
Managing Editor

Anonymous said...

Good for you Kathy Best and ST: hold your ground and look for the truth here -- not the District spin!

Braessae

Melissa Westbrook said...

Well, yay for the Times being able to stand up and say we stand by our story. (I mean they are saying this to a clever lawyer so they must believe what they wrote to be factual.)

And yay, to Jan for her really astute comments. Yes, I do have to wonder if Mr. English is the fall guy on this one (determined though he is NOT to be). You'll note almost no mention of the Board. It is election season.

To note, the State Auditor has NO ability to undo a contract or punish anyone. They are NOT an enforcement agency but are an agency that does regular audits and follows up on citizen input/complaints. They investigate and report their findings but it is up to others to do the enforcement.

Linh-Co said...

Anyone heard of John Cummings? He is running against Peter Maier.

BTW, Marty McLaren's website is up.
www.marty4SSD.com

Anonymous said...

Candidates listing on KC site:

listing

Mr. Ed

Robin said...

So here's an idea. Instead of paying school board members (not done right now, but floated), what if we paid for a dedicated, full-time researcher for the board. Someone with a library or journalism background. Someone independent, who could take questions asked by the board and go out and find answers (instead of waiting on the district). The researcher could even -- shocker! -- assemble contrasting pieces of information, instead of only offering the district's word.

suep. said...

Why isn't Michelle Buetow listed on the KC site? She's running against Martin-Morris and has already nabbed a significant endorsement.

http://www.buetowforschoolboard.com/

For Immediate Release: Thursday, May 26, 2011

Contact: Michelle Buetow (206) 856-4815

michelle@buetowforschoolboard.com

King County Democrats Endorse Michelle Buetow for Seattle School Board

Challenger earns only KC Dems endorsement so far in Seattle Board races

Seattle School Board candidate Michelle Buetow received the formal endorsement of the King County Democratic Central Committee at the KCDCC’s May 24 meeting. Buetow, a candidate in Board District III, was the only Seattle School Board candidate to receive an endorsement at the meeting, although four incumbent board members were given formal consideration.


Also, aren't Joy Anderson and another candidate running against Sundquist?

suep. said...

Okay, apparently candidates have till Friday at 5 p.m. to officially file.