Seattle Schools Lost Additional $1.3 Million in Stolen Funds

The scandal gripping Seattle schools seems to keep growing. The Seattle Times has reported that state auditors have uncovered an additional $1.3 million in questionable spending in their second investigation into the dealings of Silas Potter Jr, the key figure in the financial scandal that was first uncovered in 2011. The Auditor’s Office, who are [...]

The scandal gripping Seattle schools seems to keep growing.

The Seattle Times has reported that state auditors have uncovered an additional $1.3 million in questionable spending in their second investigation into the dealings of Silas Potter Jr, the key figure in the financial scandal that was first uncovered in 2011.

The Auditor’s Office, who are leading the second probe into Potter, says that over four years he has approved expenditures that were two to ten times higher than they should have been. As an example, the findings cite a $14,505 bill for video surveillance equipment and cabling that should have added up to just a bit over $1,000.

Potter already faces 41 counts of theft stemming from the first investigation, which centered on a now-closed district program that was supposed to help small businesses win government contracts. He has pleaded not guilty, and his trial is set for Feb. 12.

Implicated with Potter are two district vendors, David A. Johnson and Lorrie Kay Sorensen. Both have been charged with conspiring with Potter to defraud the school district. In a deal with the persecutors, Sorensen has pleaded guilty.

The first audit released in 2011 resulted in the dismissal of then-Superintendent Maria Goodloe-Johnson and the district’s top financial officer, Don Kennedy. In announcing their decision, the Seattle School Board said that Kennedy failed to perform his duties and adequately oversee the district’s small business program. Potter headed the program between 2006 and 2010 and used his connections to implement a scheme to over-bill the district in exchange for kickbacks.

In the earlier investigation, the Auditor’s Office identified $280,000 in losses and questioned $1.5 million more in expenditures. This latest audit covers the district’s small-works program, which awards public-works contracts that cost $200,000 or less. Potter oversaw that program from 2005 through 2009. With the additional $1.3 million reported Monday, the district’s loss now may total as much as $3 million. Sherry Carr, the Seattle School Board member who chairs the district’s audit and finance committee, said the $1.3 million alone is equivalent to the cost of the teaching staff for a small elementary school for an entire year.

Seattle isn’t the only city finding itself in the grip of an education-related financial scandal. Just last week, federal Judge Joel Pisano sentenced the former superintendent of New Jersey’s Tom River School District, Michael J. Ritacco to 135 months in prison for bilking the district out of nearly $2.5 million in a very similar kick-back scheme. Ritacco was accused of accepting high bids from insurance brokers and other independent contractors in exchange for bribes and kickbacks. In his remarks, Pisano called the entire conspiracy a “complex kickback and bribery scheme which represents to me a shocking plundering of the public coffers.”

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