A broke Chicago Public Schools filed a lawsuit Thursday seeking $65 million in damages and losses against its corrupt former CEO, Barbara Byrd-Bennett, and two co-defendants also accused of trying to defraud the school system in the SUPES contract scam.
The filing in Cook County Circuit Court came a day after the school district told principals to stop spending through the end of the school year. The district is frantically stockpiling cash to pay a nearly $700 million pension payment due June 30.
Schools chief Forrest Claypool denied timing the suit. Rather, he said, Illinois law entitles the district to go after individuals who have defrauded it. But he acknowledged that none of the money could be recovered before June, and that it’s unlikely the three co-defendants have anything close to $65 million among them.
“These gentlemen have been in business a long time all over the country,” he said of Gary Solomon and Thomas Vranas, partners in The SUPES Academy and Synesi Associates. Those consulting companies previously employed Byrd-Bennett. “We’re entitled to discover assets, to track those assets and pursue every one.”
“The bottom line is to track and find every single dollar that’s available because that money is owed to the children of Chicago, and it’s our duty to go out and get it using the statue, using every tool that’s available to us. We’re being vigilant on behalf of kids who got taken advantage of.”
Solomon and Vranas also face federal criminal charges, which are pending. They stand accused of offering Byrd-Bennett a 10 percent kickback on multimillion-dollar CPS deals she could steer their way.
Byrd-Bennett pleaded guilty in October to one count of wire fraud for her role in handing them nearly $23 million in no-bid deals in exchange for kickbacks. Her plotting was captured in damning emails that began even before Mayor Rahm Emanuel appointed her in 2012 to head the country’s third-largest school district. She resigned from CPS in June and still collects at least $140,000 a year in pensions from other states where she has worked. She has not yet been sentenced as she continues to cooperate with investigators.
The civil lawsuit alleges civil conspiracy and breach of fiduciary and eight other counts. It claims $16.3 million was spent in fraudulent taxpayer-funded payments — almost $900,000 in salary and benefits to Byrd-Bennett and $15.4 million to SUPES and Synesi — and is seeking that much money plus civil penalties equal to triple that sum be awarded.
The 17-page complaint accuses the defendants of having “used and are continuing to use public funds fraudulently obtained from plaintiff to pay multiple law firms to defend them in their efforts to avoid the consequences of their wrongful conduct, to hire lawyers to insist that defendants’ ability to pay be kept secret from public scrutiny, and to provide sources of funds to pay criminal penalties as part of hoped-for concessions in plea agreements and sentencing.”
Byrd-Bennett’s attorney, Thomas A. Smith, and Vranas’ attorney declined to comment.
Anthony Masciopinto, who represents Solomon and the companies, said his client still hasn’t been convicted of any wrongdoing, though plea deals have been discussed.
“Since the CPS board approved these contracts, they wanted these services, they were legitimate services, to say, we wanted these services but now we want all the money back seems very, very unfair and aggressive to me,” Masciopinto said.
“Certainly restitution will be determined by the criminal judge. CPS apparently is looking for far more than what a criminal judge would order as restitution under the criminal laws.”
The Chicago Teachers Union, still in contract negotiations with CPS, criticized Claypool for missing the mark with his “slapdash lawsuit”, saying he should consider more lucrative lawsuits against others who may have wronged CPS.
“Since Mr. Claypool is in the suing mood, he should seek to recoup the more than $300 million that the (former Board President David) Vitale-led Board of Education has given away to its politically connected corporate friends,” spokeswoman Stephanie Gadlin said in a statement.
Ald. Joe Moore (49th), one of Mayor Rahm Emanuel’s staunchest City Council supporters, acknowledged that the $65 million lawsuit is “part public relations” and clearly “not the answer to our budget problems” at CPS that have led to recent unpaid furloughs, layoffs and budget cuts.
But he called it worthwhile, nevertheless, considering how Byrd-Bennett’s contract corruption scheme was “damaging on all sorts of levels” to CPS.
“It played into the hands of those in Springfield who don’t want to help us. It certainly embarrassed the mayor. And even though she seemed to be doing a pretty credible job while repairing the rifts with the teachers union, all of that good work was for naught given her greed and stupidity, “ Moore said.
Ald. Scott Waguespack (32nd), one of Emanuel’s most outspoken City Council critics, dismissed the lawsuit as “kind of pointless” and going nowhere.
“They’re not going to get anything out of her. She’s convicted. She’s basically broke once she pays her legal fees. And I don’t think they have a prayer of winning any money against the companies, either,” Waguespack said.
“It could be, `Let’s do something to make people think we’ll get some money.’ But when you add up all the fees, it’s a break-even proposition for a feel-good lawsuit that’s kind of pointless. If they wanted to do something meaningful, they should start vetting these deals beforehand and knowing what they’re getting into rather than trying to play games at the end.”
Contributing: Jon Seidel