A bus company the Chicago Public Schools fired more than two years ago, accusing it of overbilling taxpayers at least $1.5 million, has since gotten deals worth more than $500,000 from another city agency, records obtained by the Chicago Sun-Times show.
Chicago Park District officials signed two contracts with Jewel’s Bus Co. totaling more than $541,000 to bus students to and from camps at dozens of parks this summer.
The park district hired the company — which has found support from the Rev. Jesse Jackson — even after receiving letters from a school official warning about the problems CPS had with the company.
“We uncovered a great deal of illegal activity by Jewel’s Bus Co,” Paul Osland, who recently left his post as CPS’ chief facilities officer, wrote in March. “I anticipate that the issues with Jewel’s will end up in the public eye and I would hate to see [the park district] embarrassed.”
CPS Inspector General Nick Schuler says his office has an ongoing investigation into Jewel’s.
“We are aware of the matter and are investigating,” Schuler says, declining to comment further.
Park district officials say they have known of the CPS investigation since June 2015.
But parks spokeswoman Jessica Maxey-Faulkner says officials decided they had “reasonable assurance that the CPD is paying only for services completed in compliance with the contract requirements.
“The payment terms of the CPS contract were substantially different and did not apply to the park district’s payment structure,” she says.
CPS records show Osland wrote in 2014 that he found Jewel’s “did not own or operate sufficient buses, nor did it employ a sufficient number of drivers that would be required to operate all of the alleged first routes for which it billed the board.”
Jewel’s, based on the Far South Side, had been one of CPS’ major contractors for student bus services, paid more than $75 million by the Chicago Board of Education during the 11 years before being dumped in July 2014.
Carshena Ross, the company’s general manager, declined to comment. Ross is the daughter of the company’s sole owner and president, Jewel Lockhart.
When CPS fired Jewel’s, officials informed the company they were considering banning it from ever again getting schools business and planned to sue over lost money.
“JBC’s acts of overbilling are to the detriment of the students and families and ultimately to the detriment of Chicago’s taxpayers,” Osland, then executive director of transportation, wrote in a termination letter obtained by the Sun-Times. “It is not in the board’s best interest to continue its relationship with JBC.”
CPS officials haven’t carried out their threat to bar Jewel’s from ever doing business with the district, nor have they sued for the “immediate restitution” they demanded 25 months ago.
CPS spokeswoman Emily Bittner says, “Jewel’s owes the Board of Education at least $1.5 million.”
But she says, “CPS will make a determination on additional actions after we receive the I.G.’s report, and we will take aggressive action to recover lost funds after the investigations concludes, when we can make the strongest possible legal case.”
The company, located at 1035 W. 111th St., was founded in 1992 as Jewel’s Transportation Inc. Lockhart started as a bus driver at another CPS bus vendor, Art’s Transportation, where she rose to become its president, according to city records.
She started her own business after Art’s Transportation was sold to investors. Jewel’s became a certified women-owned and minority-owned business, giving it preference in bidding for government contracts.
The company had a rocky relationship with CPS long before the overbilling allegations. In 2010, CPS officials accused Jewel’s of using vans, rather than buses, to transport children, even though its contract didn’t allow that.
Jackson wrote a letter praising Jewel’s and asking for a meeting with a top CPS transportation official in November 2010 — one day after the company had been told it was “still operating the vans in violation of your school bus contract and our directives.”
Jewel’s was the sort of “small and emerging business” that his Rainbow/PUSH Coalition tried to help succeed, Jackson wrote.
“They have overcome all of the obstacles and provided services and now their survival and growth is jeopardized by late payment on services already rendered,” Jackson wrote. “I appeal to you today to immediately pay this company.”
Jackson says he called CPS chief Forrest Claypool on Jewel’s behalf last year because Lockhart has been an outstanding “community servant” that’s offered her company’s buses at no cost to transport seniors and community groups.
“I certainly gave a recommendation based on my knowledge,” Jackson says, noting he has known Lockhart “a long time.”
“What I know of them is very high and uplifting,” he says. “They hired a lot of people who were second-chance people, people who otherwise would not have a job had a job, stabilizing our families.”
In an email in September 2015 to Claypool’s assistant, Osland wrote that he heard about Jackson’s call to Claypool and also said Jewel’s “has a relationship” with Ald. Carrie Austin (34th), a top Chicago City Council ally of Mayor Rahm Emanuel.
Jewel’s contributed $10,500 to political funds controlled by Austin from 2010 through 2014, state records show. Ross, the company manager, made a $500 campaign contribution to Austin on June 2.
CPS officials won’t say whether Claypool has spoken with Jackson or Austin regarding Jewel’s.
Osland would not comment. Austin did not return calls.
This February, shortly before leaving CPS, Osland tried to contact Jesse Ruiz, the park board president, writing: “I understand a vendor who we ‘defaulted’ here at CPS is pursuing” park district bus business. “I feel strongly that the park district should not do business with the company: Jewel’s.”
But Osland’s email was sent to an incorrect address for Ruiz, records show.
Weeks later, Osland forwarded the same message to a procurement official. Records show it got passed on to higher-ups, who checked whether Jewel’s had been placed on the list of companies barred from getting city business “but did not find Jewel’s Bus Co. there.”
Parks officials didn’t tell Ruiz they received the email from Osland that was intended for him, according to Maxey-Faulkner.