EPISD chief Lorenzo Garcia indicted in fraud, theft case: Charges focus on $450K contract, relationship
by Zahira Torres \ Austin Bureau
Posted: 08/02/2011 07:21:09 AM MDT
El Paso Independent School District Superintendent Lorenzo García was arrested Monday for allegedly steering a nearly half-million-dollar contract to a woman with whom he had a personal relationship.
García, 55, took the helm of the city’s largest school district five years ago. He has served as its leader during an FBI public corruption investigation into elected officials and public employees that began before his tenure.
He is now the focus of an investigation that alleges he and others conspired to defraud the school district from Feb. 1, 2006 to March 11, 2007.
García allegedly directed a $450,000 contract to a company run by a person with whom he had a personal relationship and in which he had a personal financial interest, according to the U.S. Attorney’s office. The nature of García’s relationship with the person was not provided.
The El Paso Times obtained documents that indicate one company that received a sole-source contract during the same time frame was Houston-based Infinity Resources and Associates. The company’s president was Tracy Rose.
García is currently being held in the El Paso County Jail without bond.
García’s arrest came as a surprise to many district employees and community leaders.
Texts and phone calls quickly cascaded among stunned employees, some of whom watched as García was placed in handcuffs and led out of the school district’s headquarters.
He will appear before a U.S. magistrate judge at 2:30 p.m. today on charges that include one count of conspiracy to commit mail fraud, two counts of mail fraud and one count of aiding and abetting theft from programs receiving federal funds.
If convicted, García faces up to 20 years in federal prison for each count of mail fraud, up to 10 years for the theft charge and a fine of up to $250,000.
García allegedly paid $5,000 to an unindicted co-conspirator with whom he had a personal relationship.
Of that amount, about $4,000 was deposited into the bank account of the company run by the co-conspirator.
He then, according to the federal indictment, convinced the co-conspirator to seek a contract with his district and claim the value of the company’s services to be between $400,000 and $500,000.
García allegedly sought the help of a lawyer to help the company craft the contract in a manner that would eliminate competition.
The co-conspirator in July 2006 submitted a letter to the district claiming the company was the only source for the products and services provided to the district, according to the indictment.
That coincides with an affidavit Rose signed on July 6, 2006, stating that her company was the sole-source provider of specialized data-driven materials for boosting student math scores in the state’s standardized test.
Administrators during a July 11, 2006, school board meeting recommended that trustees approve a $450,000 contract for math materials and staff development from Infinity Resources and Associates, according to the documents obtained by the El Paso Times.
The same amount is listed in the indictment.
The following month, EPISD sent two checks of $180,000 each to the company, according to the indictment.
Records obtained by the Times show that administrators recommended paying Infinity Resources and Associates $360,000 immediately to provide the district products for kindergarten through fifth grade and pay the company’s travel costs for 18 trips to the district.
Rose could not be reached for comment.
The school district’s website does not have minutes for any school board meetings in 2006.
The indictment says García failed to disclose his personal relationship and his financial interest in the company to the school board.
“The citizens of this community deserve to have a sense of confidence that their tax dollars are being spent efficiently for the public good and not for the private enrichment of a select few,” David Cuthbertson, Special Agent in Charge of the FBI in El Paso, said in a statement after the arrest.
School board members remained tight-lipped about the incident during a news conference Monday afternoon. After meeting for about 45 minutes behind closed doors, they emerged only to say they were “shaken” and cooperating with authorities.
Trustee David Dodge said in an interview with the Times that he was caught off-guard by the arrest.
He said that there are two sides to every issue and that the district is waiting for results of the federal investigation.
“It’s our understanding that this would be an incredible leap to do anything, however, once the government has spent a lot of time and money pursuing something, whether it turns out ultimately in the end to be provable, usually doesn’t matter,” Dodge said. “They have to do something.”
The board had also met behind closed doors last week to consult with its lawyers about “current investigations by outside agencies.”
The school board has hired a separate lawyer to represent the district in such matters. The lawyer does not represent García.
Dodge declined to offer specifics about the closed-door meeting to the El Paso Times, saying that it was subject to attorney-client privilege.
García earns $280,314 annually under a contract that trustees recently extended through 2014.
District officials were unable to answer questions on García’s employment status and pay. Yet they did say Dr. Terri Jordan, the district’s chief of staff, would be in charge of day-to-day operations in his absence. A district spokeswoman said the employment status and pay issues would be discussed at a school board meeting Thursday.
Many school district officials did not immediately answer phone calls after the arrest Monday.
A district spokeswoman quickly sent out a news release that was simply titled “statement.”
The line that followed did not mention García or the arrest but instead said, “We are not privy to any details right now.”
It went on to give the time and place of a news conference without stating its purpose.
Lucy Clarke, president of the El Paso Federation of Teachers and Support Personnel, said she fielded phone calls throughout the day from district employees after news broke about the superintendent’s arrest.
“The fact that the federal government has found enough information to take action makes it real serious,” Clarke said. “We will wait to watch the process play out.”
Richard Dayoub, president and CEO of the Greater El Paso Chamber of Commerce, said business leaders were surprised and troubled by news of the indictment.
“We sincerely hope this does not have a long-term impact on the district and that it is resolved quickly and fairly for all parties involved,” Dayoub said.
García’s tenure at the district has been tumultuous.
El Paso ISD has been a focus of the FBI’s public corruption investigation for contracts that were awarded to Access HealthSource, a health-care administrator, and Strategic Governmental Solutions, a company that was hired to manage the School Health Related Services (SHARS) and Medicaid Administrative Claim (MAC) programs.
García was not the superintendent when the contracts were initially approved but was at the district when several officials were indicted.
Two former school board trustees, Sal Mena and Carlos Cordova, pleaded guilty to public corruption charges and a former employee at the district, Fernando Parra, has also pleaded guilty to charges.
Cordova pleaded guilty to one count in November 2007, admitting he exchanged his vote for money.
He has been released on $10,000 bond and has not been sentenced.
Mena was arrested in August 2008 and was charged with six counts of accepting bribes and bribing others in a scheme involving the awarding of multimillion-dollar contracts to district vendors.
Mena has pleaded guilty and is free on bond. He also has not been sentenced.
Parra, a politically connected computer technician who worked for the county and EPISD, pleaded guilty in July 2008 to one count of taking and receiving obscene pornographic videos and to one count of conspiring with others to bribe members of the El Paso County Commissioners Court. He was released on $10,000 bond and has not been sentenced.
The district also came under fire last year when former state Sen. Eliot Shapleigh accused administrators of inappropriately moving certain students out of Bowie High in an attempt to raise the school’s performance on standardized tests and avoid negative publicity.
García maintained that Shapleigh misinterpreted data or made incorrect assumptions that cast a negative light on Bowie.
An investigation into the allegations is still pending.
Times reporter Caylor Ballinger and freelance writer Michael D. Hernandez contributed to this story.
Zahira Torres may be reached at email@example.com; 512-479-6606.
A look at Lorenzo Garcia
He is the son of Mexican immigrants and grew up in the Lubbock area.
His bachelor’s and master’s degrees are from Angelo State and Stephen F. Austin State universities, respectively. He received his doctorate from the University of Houston this year.
Served as an assistant and area superintendent at Houston’s Spring Branch Independent School District.
Became deputy superintendent of instruction in the Dallas Independent School District. After arriving in Dallas in 2003, the district had a record number of schools reaching “exemplary” and “recognized” status from the Texas Education Agency.
In December 2005, Garcia gets hired at EPISD.
Garcia was chosen over Jesus “Jesse” Gandara, a native of El Paso who had been a superintendent of the school districts in Fabens and Mercedes, Texas.
Garcia’s starting base salary was $215,000 — the highest among the nine superintendents in the county.