When big business was selling the public on the need to approve multimillion-dollar school bonds, whose needs were they talking about? In 2008, a majority of South Bay voters agreed to open their wallets for Proposition R, a $389 million school bond for Southwestern College. But with over $120 million remaining in the bank from Proposition AA, why was additional bond money needed? A growing body of evidence indicates that the same companies that created the appetite for these million-dollar bond projects were later rewarded with lucrative contracts. How did we end up with this bond, and who’s minding the till now that we have it?
The voters approved a string of Prop R improvements, listed on the ballot as job training, earthquake retrofitting, asbestos removal, and classroom repair. Near the end of the list was “acquire, construct, repair, equip classrooms, sites, [and] facilities.” Shortly after the bond passed, the school began planning three phases of construction and reconstruction. Phase I included the “corner lot,” an elaborate $73,835,000 development of food courts and conference rooms built at one end of the campus, as well as the construction of higher education centers in eastern and western Chula Vista, for $40,977,000. Phase II called for synthetic turf, track, team rooms, and training course, for $11,231,000. And Phase III included replacing swimming pools, for $3,839,000, and tennis courts and lighting, for $4,853,000.
Mitch Thompson, a former Chula Vista city councilmember who applied to be on Southwestern’s Bond Oversight Committee, said in a recent interview, “In light of the financial crash and the reduction in total classes offered at Southwestern [this spring and summer], the basic fiduciary responsibility of the board would suggest that a prudent board should have looked at not spending a decent portion of that money.”
Southwestern’s board of trustees did not select Thompson for the Bond Oversight Committee, despite his background in overseeing bond programs, commercial real estate construction financing, and real estate development.
“School districts are set up to teach, not do facilities development,” Thompson observed.
Southwestern officials have a history of being led astray by bond money. In 2000, when college president Serafin Zasueta and political consultant Larry Remer were working to pass Proposition AA, they misused college funds to pay for a commercial and ended up being indicted and placed on probation.
Money to advocate for the passage of Proposition R came from a legal place but one that is certain to raise eyebrows. Southwestern College Foundation, traditionally considered as a funding source for student scholarships and campus organizations, gave $75,000 to the Friends of Yes on Proposition R.
Superintendent Raj Chopra, Southwestern College board member Jean Roesch, and Peter Mabrey, who now serves on the Proposition R Bond Oversight Committee, are listed on the foundation’s 2008 Form 990 as directors. Also listed as a foundation director is Dan Hom, president of the public relations firm Focuscom. Shortly after the foundation funds were transferred to Friends of Yes on Proposition R, Focuscom went to work for the campaign and Hom became its public spokesperson. In an October 2008 article in the Southwestern Sun (the campus newspaper), Hom identifies himself as the consultant for Yes on Prop R.
After Proposition R passed, Hom’s company, Focuscom, was awarded a $100,000 contract to do public relations work for Phase I of Proposition R. Focuscom was hired to keep the voters on board with the various projects and to silence opponents. Southwestern’s vice president of business and financial affairs, Nicholas Alioto, signed the letter approving the contract and indicated that there may be more Focuscom contracts for Phase II and Phase III.
In addition to the money Southwestern College Foundation gave to Prop R, companies soon to be awarded million-dollar contracts donated $224,600 to Yes on Prop R. For example, the bond company Piper Jaffray & Co. in October 2008 gave the committee $25,000. Then, according to Piper Jaffray’s website, in October 2009 the company got contracts with Southwestern for two general obligation bonds for $10.2 million and $89.8 million.
On October 2, 2008, the law firm Stradling, Yocca, Carlson & Rauth gave $5000 to Yes on Prop R. Six days later, on October 8, Southwestern’s board hired the firm “for legal services for issuance of Bonds…until all bond series have been issued.”
Likewise, BCA architects gave $5000 to Yes on Prop R. In April 2010, BCA won Southwestern’s design competition and was handed a $55 million contract to design the corner lot.
Echo Pacific Construction gave $1000 to get the bond passed, then received a $4 million contract in April of this year.
Seville Construction Services does the project management for Southwestern’s construction and reconstruction. In addition to managing the $389 million from Proposition R, Seville is managing the remainder of Southwestern’s Proposition AA money. The total comes to $500 million, according to a Seville press release. Henry Amigable is the project manager. Invoices acquired through a Public Records Act request detail Amigable’s salary and the hours he worked in February through June of this year. He is paid $165 an hour. He typically bills 160 hours a month, which totals $26,400.
Amigable appears to follow the bond money. According to a Seville press release, he joined the company in April 2009. Prior to joining Seville, Amigable worked for Gilbane Construction. He had been responsible for the oversight and management of Proposition O construction at Sweetwater Union High School District, also located in the South Bay.
Before working for Seville and Gilbane, Amigable was a senior vice president at Douglas E. Barnhart, Inc. In 2008, Balfour Beatty acquired Barnhart and formed Barnhart Balfour Beatty, which recently received a $33 million Proposition R contract.
According to the Yes on Prop R campaign statement, Gilbane Construction gave the group $10,000 and Barnhart Inc. gave $30,000.
Another person whose finances were enhanced by Southwestern’s Proposition R is John Wilson. Wilson retired in April 2009 as Southwestern College director of business and operations and became Seville’s consultant. While working for Southwestern, Wilson initiated and signed off on the contract with Seville, in which Seville made 2.7 percent of the $100 million Phase I project costs. According to Seville/Southwestern invoices, Wilson also earns $165 per hour.
During the run-up to Proposition R, Wilson had a relationship with board member Yolanda Salcido. In May 2008, the Union-Tribune reported, “Southwestern College’s board president [Raj Chopra] says that the board knows a fellow trustee [Salcido] is dating a high-ranking administrator [Wilson], but it has not asked her to recuse herself from votes that affect his pay or duties.”
Wilson oversaw development of Prop AA projects. Salcido and Wilson also played important roles packaging Proposition R. An August 2008 Union-Tribune article reported, “Next week, the board is scheduled to consider putting a property tax increase on South County’s November ballot to fund $389 million in college construction projects based on work led by Wilson.”
David Krogh is a member of the Bond Oversight Committee, charged with watching the expenditure of bond money. Members of the committee work without compensation. Minutes from one meeting report that Krogh asked about ethics and conflict-of-interest policies. The minutes from the same meeting indicate that Southwestern’s vice president of business and financial affairs, Nicholas Alioto, checked with attorneys and found that committee members should have filled out Statements of Economic Interest when the committee first began meeting. Alioto would be getting these forms to committee members. A Public Records Act request for the forms was made on July 27, 2010. On August 19, Chris Bender, the chief of communications at Southwestern, wrote in an email, “It has been determined that the Prop R Oversight Committee is not a required reporting body for the purposes of Form 700 [Statement of Economic Interest] filing.”
In a recent interview, Krogh said he thinks he recalls filling out a Statement of Economic Interest. Krogh also says that he asks a lot of questions about the bond work at the meetings. On the whole, Krogh believes that information has been made available to him promptly. He also believes that Alioto has been very active in obtaining competitive bids.
On the other hand, committee member Joe Casillas says he hasn’t been asked to fill out a Statement of Economic Interest. He has served as a planning commissioner, a housing advisory commissioner, and in many other positions that all required filing a Form 700. In contrast to other committees he’s served on, Casillas says the Bond Oversight Committee often has presentations that are “nothing but fluff.” Casillas expressed frustration with the committee’s lack of power. “There isn’t really a damn thing that the committee can actually do,” he says.