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Megataxers Feed Off Taxpayer’s Trough for LAUSD’s $7 Billion Bond

August 28, 2021

BY THE IRISHMAN AND BRIAN HEWS

Sometimes you just have to exercise your faith. Hopefully, L.A. County Superintendent Duardo will open her ears and eyes. In 2016, San Francisco Unified School District passed Proposition A for $744 million. In 2020, Los Angeles Unified School District one-upped SFUSD and passed Measure RR, a bond nine-times bigger, for $7 billion.  

LAUSD’s $7 billion is estimated to cost taxpayers $11.2 billion, 62% more than the initial price. Credit real negotiators, at least former Superintendent Austin Beutner paid for himself in savings.

Architects and Engineers ‘Code’

Since the Strict Accountability in Local School Bonds Construction Act of 2000 was passed, along with other Code Sections, architects and engineers around the state have been engaged in campaigns for nearly 20 years to pass school bonds.

This went largely unchecked until the L.A. Times exposed the Los Angeles Community College District. 

Sometimes the stench takes ten years make its way to the public.  

Most people don’t know that in 2000, Proposition 35 was passed, adding Article XXII to the California Constitution and Chapter 10.1 of Division 5, Title 1 of the Government Code.

The law declared, “in the design, development, and construction of public work projects, state and local governments may choose to contract with private entities for engineering and architectural services, without regard to certain existing legal restrictions, which apply to the procurement of services. This may include construction managers.”

The Megataxers were born.

LAUSD’s Bond Measures Prior to 2020

It did not take LAUSD long; two years later, the District asked voters to approve $3.35 billion in public school bonds, Measure K.

Two years after that, the District asked for Measure R. The ballot label declared, “Should the LAUSD be authorized to issue up to $3.87 billion in general obligation bonds for new construction, acquisition, rehabilitation and upgrading of school facilities?”  

The ballot label clearly violated Education Code Section 15272. Residents are still paying for Measure R.

The District only waited one year after Measure R, asking for another $3.985 billion, Measure Y.

In 2008, LAUSD passed Measure Q for $7 billion; at the same time, the half-cent sales tax measure for Metro passed.

The Full Text of Measure RR

The full text of the 2020 tax measure, just like the others we have chronicled in this series, stated that “bonds may be issued in excess of the statutory limit;” the text also included charter school facilities. That was charter school’s destiny; just ask Reed Hastings.

Like Bassett, Duarte, Citrus and Inglewood, LAUSD’s ballot label played the Megataxer verbiage game, violating Education Code Section 15272.

Violation one: The lawyers used “bonds at legal rates” instead of disclosing the real rate of interest.

Violation two: The duration portion of the text, which should be set in stone, stated, “until approximately 2055.”

More Violations, But RR Made the Ballot

First, a very strong argument can be made that the District failed to put the multibillion-dollar tax measure on its regular agenda in a routine manner. It was hurriedly placed on the board’s August 4, 2020 agenda, buried far down the list of items.

Second, the County Registrar negligently overlooked the provision to provide adequate notice to the public.

The Notice of Date to Submit Arguments was published on Aug. 14, 2020 and stated, “arguments had to be filed with the Registrar-Recorder/County Clerk in Norwalk no later than 5:00 p.m., Aug. 14, 2020.”  Voters are supposed to get ten days.

The move to not allow arguments for or against the bond violated California Education Code Section 950O, which reads: “The governing board of the school district, or an individual voter who is eligible to vote on the measure may file a written argument for or against any school measure within ten days. The elections official shall cause arguments for and against the measure to be printed (on the ballot), and shall include the arguments, preceded by the analysis, in the county voter information guide.

Similar to Bassett, Citrus, Duarte and Inglewood, Los Angeles County Counsel and the County Registrar negligently allowed non-compliant documents, in this case, $7 billion bond documents, to qualify, even though they violated both Government and Election Codes.

Walter Karabian once said, the “greater the amount of money, the less the argument.”

The Megataxers Step Up

$7 billion will bring out the best of the Megataxers.

According to campaign committee documents, 45 companies and organizations gave an average of $38,000 to pass the bond for a total of  $1.738 million.

Glenn Gritzner was registered as the Treasurer and Kaufman Legal Group as the contact.

 

Document showing Kaufman and Gritzner running the RR campaign committee.

 

The Los Angeles-based Kaufman Legal Group was the longtime campaign attorney and treasurer for former disgraced L.A. County Assessor John Noguez, who is currently under criminal indictment.

HMG-CN was first to break the Noguez investigation, which former AG Steve Cooley called “the biggest financial scandal in Los Angeles history.”

Grtizner is a heavyweight at the global firm Mercury Public Affairs.

He is not shy about blatant conflicts when it comes to LAUSD; on his Linkedin account he boasts, “he brings a host of relevant experience, having led three major bond campaigns for the LAUSD that raised more than $20 billion. During Gritzner’s five-year post as Special Assistant to the Superintendent and Director of External Affairs at the LAUSD, Gritzner acted as the chief political consultant to the superintendent, managing high-profile projects.”

Just call him the $20 billion baby. By the way, Mercury was given $100,000 for “Campaign Consultants” by the committee.

WHO CUT THE CHECK?

Document showing Gritzner’s Mercury receiving $100,000 from the RR campaign committee.

 

Did the huge sums of cash pass through the LAUSD campaign committees straight into Democrat’s pockets? 

Just ask Fabian Nuñez, who moved from Speaker of the Assembly to Partner at Mercury Public Affairs after LAUSD passed its $7 billion bond in 2008.

RR documents show that the committee took in $1.734 million but the year-to-date expenses were not listed, only that the committee spent $919,000.

 

Document showing no year-end expenses from the RR campaign committee.

 

 

Some of the large Megataxers who donated included: the Southern California Partnership for Jobs, who gave $250,000; the Southwest Regional Council of Carpenters, who donated $250,000; LPA Design Studios who gave $125,000; International Union of Operating Engineers gave $100,000; the Sheet Metal, Air, Rail, Transportation Workers Local Union 105, gave $100,000.

There was a basket full of small contributors under the amount of $5,000.

LAUSD Residents?

James Scott Carter, Susan Jack, and Marshall Tuck, who contributed $1,550 combined. It is not like they weren’t trying, the campaign had an individual donor page on their state-of-the-art website.

Full 460 report, click here.

Pull in One Direction 

Our Megataxer exposé has revealed several consistencies about “Education” bonds that appear on our election ballots.  

The process starts six-ten months before the election. Megataxers visit school boards and convince officials to offer a bond. They write up the tax measure and ballot label, send it to County Counsel for a non-compliant rubber stamp, and on to the County Registrar for another non-compliant rubber stamp.

District Board Members start campaign committees and hire campaign consultants, or, in the case of Duarte, hire themselves to run the committee, or in the case of LAUSD, hire a public affairs bigwig to manage the campaign cash for a bond of the very same District he works for.

Accountants, architects, contractors, designers, engineers, inspectors, labor unions, material suppliers, and lawyers – the Megataxers – begin donating months in advance of the bond’s appearance on the ballot.  

And the chosen firms reap the whirlwind.

In Measure RR’s case, $525,000 went to Cleveland -based Date Genomix, so much for staying local.

Oakland-based Clifford Moss, who billed $25,000 for Duarte, received another $25,000.

On November 3, 2020, the bond passed, no sign of what happened to the left-over cash in the committee.

On a side – but relevant – note, teaching Ethnic Studies is a controversial subject these days; according to LAUSD documents, Ethnic Studies was taken off LAUSD’s agenda and “deferred for action.”  

You could make a film about this. Just ask Bonifacio Garcia, Esq.

The Megataxer count so far:

Bassett Unified: $50 million bond, cost to taxpayers, $94 million

Citrus College: $298 million, cost of half a billion

Duarte Unified: $79 million, cost of $148 million

Inglewood Unified $240 million, cost of nearly half-billion

LAUSD $7 billion, cost of $11.3 billion.

Over $7.670 billion in bonds, with a cost to taxpayers of nearly $14.1 billion, passed using compromised board members, bogus ballots labels, statements and tax measures, questionable impartial analyses by L.A. County Counsel, rubber stamps by the County Registrar and conflicts of interest between L.A. County agencies.

“Education costs money, but then so does ignorance.” – Claus Moser

In the first place, God made idiots. That was for practice. Then he made school boards. – Mark Twain

Next up, Pasadena Unified.

    

 

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