Criminal charges to be filed in Seattle Schools financial scandal

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by SUSANNAH FRAME / KING 5 News

Bio | Email | Follow: @SFrameK5

KING5.com

Posted on October 17, 2011 at 6:58 PM

Updated Tuesday, Oct 18 at 6:46 AM

SEATTLE -- The Seattle Public Schools financial scandal that rocked the district earlier this year isn't over.

The KING 5 Investigators have learned criminal charges of felony theft will be filed by the King County Prosecuting Attorney's Office against former district employee Silas Potter and others in connection with the case within the next few weeks.

Earlier this year the State Auditor's Office found Potter misspent hundreds of thousands of taxpayer dollars on behalf of the school district for services that were never provided. Others at the district were also found to be involved in the wrongdoing.

Before the audit came out publically, Seattle School Board member Michael DeBell got an advance copy. After he met with two other top district officials, DeBell took the audit to law enforcement.

"It was a grave set of details (in the audit) that really troubled me and I thought that the actions that some of our employees had taken were potentially criminal, so I went to the prosecutor," said DeBell.

That sparked the Seattle Police Department and the Economic Crimes Unit of the King County Prosecutor's Office to begin a criminal investigation. Law enforcement officers interviewed dozens of people during the course of the investigation but the probe centered on Potter, who managed a program to help minority-owned companies bid on school district contracts. That program, which the district ended a year ago, was called the Regional Small Business Development Program.

Potter and at least two other individuals will be charged with stealing district money. Potter's accused of using district funds to benefit select vendors he hired to carry out jobs for the program. The services included marketing, teaching classes and lobbying legislators. Potter allegedly paid these preferred vendors $1.5-million for services that were highly suspicious. In one example Potter allegedly authorized a $165,000 payment to a vendor to teach classes on dates when no classes took place.

Potter is also accused of using district funds to pay for services that personally benefitted him and a private consulting company he had secretly set up on the side. In one instance Potter allegedly used $15,000 of district money to pay a grant writer to submit grants for his consulting firm. He's also accused of using $6300 of public money to pay an architect to draw up plans for his company's new office space in Bellevue. In all, authorities say Seattle Public Schools wasted at least $280,000 for these types of services which the district didn't receive.

KING 5 was unable to reach Potter for a comment. In March he told the Seattle Times he was a scapegoat in the controversy. He said two of his superiors at the district dictated how he should spend the money allocated to his program.

"The bottom line was that I followed directions," Potter told the Times. "I never said to anyone: 'give me money,'" he said. "I defy anyone who says they gave me a penney."

Board member DeBell found out about the decision to file charges from KING 5.

"I'm grateful to the prosecutor for diligently pursuing the case and taking it wherever it led," said DeBell. "It was a large amount of money, taxpayer money, that could have gone to school children for classroom instruction."

Seattle Public Schools is attempting to recover the wasted taxpayer dollars. DeBell says the district's insurance pool will most likely pay for the $280,000 that benefitted Potter and his private company. The district's legal department is also working to recover the money wasted by hiring vendors for jobs that don't appear to have provided any value to the district.

"We took all of our due diligence to heart. We are trying to do everything we can (to rebuild trust in the district)," said DeBell.

Potter resigned from his position with the school district in June of last year. After that he disappeared as investigators sought to question him. KING 5 News has learned law enforcement officers from Seattle were able to find and interview him.

Although auditors found former Seattle School Superintendent Maria Goodloe-Johnson didn't know about the misspent money, the school board fired her and the district's Chief Financial Officer in March because of their lack of oversight.

 

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