Updated Oct. 9, 8:12 a.m.
The former head of Chicago Public Schools is facing federal corruption charges for her alleged role in a kickback scheme involving millions of taxpayer dollars.
The Department of Justice alleges Barbara Byrd-Bennett, 66, steered $23 million worth of no-bid contracts to her former employer, the SUPES Academy, and a subsidiary company, called Synesi Associates.
The indictment outlines a secret scheme in which the co-owners of SUPES and Synesi — Gary Solomon and Thomas Vranas — promised to funnel money into accounts set up under the names of two of Byrd-Bennett’s relatives.
“They entered a scheme to secretly profit from the schools,” said U.S. Attorney Zachary Fardon.
The alleged scheme also included an agreement that Byrd-Bennett would get part of the money from the CPS contracts in the form of a ‘signing bonus’ when she left the district’s top job and returned to SUPES.
“If you only join for the day, you will be the highest paid person on the planet for that day,” Solomon wrote to Byrd-Bennett. “Regardless, it will be paid out on day one.”
Solomon, 47, and Vranas, 34 are also charged with multiple counts of mail and wire fraud, as well as bribery and conspiracy to defraud the U.S. Byrd-Bennett is charged with multiple counts of mail and wire fraud.
The alleged scheme dates back to before Byrd-Bennett took over the helm of the nation’s third largest school district in late 2012. Records obtained by the U.S. Department of Justice detail how Solomon and Byrd-Bennett conspired to get SUPES business with the district.
“When this stint at CPS is done and you are ready to … retire, we have your spot waiting for you,” Solomon wrote to Byrd-Bennett in 2012. “In the meantime, if we can figure a way to do deep principals (professional development) at CPS, I can find a good home for [friends of Byrd-Bennett’s] and others, and make sure principals in CPS get kick ass training with kick ass teachers and kick ass coaching.”
The first two contracts between SUPES and CPS were awarded in 2011 and 2012 under a leadership training initiative, called the Chicago Executive Leadership Academy.
That initiative was initially funded by the Chicago Public Education Fund, a politically connected venture fund started by top civic and corporate leaders. The Fund’s board has included many top political leaders, including Illinois Governor Bruce Rauner and U.S. Secretary of Commerce Penny Pritzker, who also served on the Chicago Board of Education before her appointment to the president’s cabinet. The Fund decided not to renew funding for that initiative in 2012.
In June 2013, amid millions in school budget cuts and one month after the district decided to close 50 public schools, the Chicago Board of Education voted to approve a $20.5 million no-bid contract to SUPES for principal training. There were no questions and no discussion before the unanimous vote. One board member, Carlos Azcoitia, was absent.
Shortly after, Catalyst Chicago raised questions about the no-bid nature of the contract and reported on the principal training provided by SUPES. Principals interviewed by Catalyst said the sessions were too basic and led by people who knew little about Chicago. Six months later, the CPS Inspector General opened an investigation.
Multiple CPS Board members repeatedly defended their votes on the contract until this year, when the U.S. Department of Justice subpoenaed the district, seeking interviews with people who worked with the ex-CEO and records related to SUPES and Synesi Associates.
After taking a two-month leave of absence amid the scrutiny, Byrd-Bennett resigned from the top job at CPS in June.
The corruption scandal comes as the district continues to face a $500 million budget hole that could force more layoffs by Thanksgiving. Current CPS CEO Forrest Claypool wants state lawmakers to come through with a bailout.
Claypool tried to distance himself from the scandal at a conference of suburban and downstate school districts this afternoon.
“This is in the past,” Claypool said. “It’s not reflective of our administration. It’s not reflective of the current leadership.”
Claypool, who has been on the job since mid-July, said the district has fully cooperated with federal investigators, and has instituted “controls.”
Mayor Rahm Emanuel also distanced himself — both physically and figuratively — from the controversy by having his office issue an emailed statement while he talked about public-private partnerships at a conference in Washington D.C.
“I am saddened and disappointed to learn about the criminal activity that led to today’s indictment of Barbara Byrd-Bennett,” the statement read. “Our students, parents, teachers and principals deserve better.”
Becky Vevea is an education reporter for WBEZ. You can follow her @WBEZeducation.