Interesting story in the DMN today about something I’d heard a few weeks ago: That the final audit report regarding the incredibly high 9 percent commission paid to the real estate broker on the Dade Middle School land purchase identified former trustee Ron Price as the one who pushed for the deal. (This report was actually posted online last week, and I missed it, because I’m an idiot. Hey, DISD: You can ignore that FOIA request I made for the report.)
The story, based on DISD’s final audit report, says that investigators concluded former trustee Price is the one who pushed behind the scenes for the broker. This goes further than information found in the initial draft of DISD’s report, which was summarized in this story (supplemented by the paper’s own excellent reporting on this issue). Here is a long excerpt (complete with double spaces after periods) from the report’s executive summary, which neatly explains how the shady trustee-backed operation came to be:
The Dallas ISD paid over $1.6 million in commissions and other fees, relative to 2008 Bond Program property acquisition projects, to three real estate brokerage firms. This investigation focused on 14 acres purchased for the Dade Middle School in southern Dallas and the brokerage firm that received nine percent commissions on many of the land transactions (those not involving condemnation proceedings). Nine percent commissions exceeded the industry norm.
The purchase prices of the land acquired for the Dade campus, which opened in August 2013, exceeded $3.4 million and involved 29 property owners. Relative to the Dade land acquisitions, John Collins, owner of The Collins Co., received over $341,000 in commission and fee payments.
A key finding is the District’s long-time practice of paying nine percent commissions on real estate transactions in which John Collins played a role. Relative to 2002 Bond Program land acquisition projects, Collins had listing agreements with a number of individuals who sold land to the District for the Salazar and Botello Elementary Schools and Garcia Middle School. While the sellers were responsible for paying all real estate broker commissions at that time, archived records and witness testimony clearly revealed the District’s practice of increasing the purchase prices of properties to cover those payments. Thus, the District paid the commissions indirectly. Whenever Collins represented a seller, he received a six percent commission; and the District’s broker got three percent. If any other broker represented the seller, the co-brokers split a six percent commission, which is standard practice in the real estate industry.
Based on the totality of the evidence, the District did not select The Collins Company as a vendor in 2008, based on its rankings under the selection criteria. Rather, the evidence shows Collins was a long-time recipient of favorable treatment, in spite of the actions he took as a seller’s broker, which hindered the District’s efforts to procure properties with 2002 Bond Program funds.
James Robinson, who was the Executive Director of Procurement Services at the time he served on the broker selection committee, stated the following in his sworn affidavit:
“…I…remember conversation that, unless a specific firm was included, the recommendations would not get through Ron Price and the rest of the Board…”
Attorney Florentino Ramirez, who has provided legal representation to the Dallas ISD since the 1970s, conveyed a similar perspective in a May 9, 2014 interview with Internal Audit:
“…As Ramirez described the situation, John [Collins] came from up above. He added that they suddenly had another broker; and they had to live with the guy.
When asked for clarification on the meaning of Collins coming from ‘up above,’ Ramirez explained he was referring to the Board of Trustees. In response to Internal Audit’s inquiry as to whether he was referencing a particular Board member pushing Collins’ selection, Ramirez said he assumed it was Ron Price. He indicated that was a common belief at the time.”
The final report’s finding is just one more example of how trustees can influence day-to-day DISD operations behind the scenes. As well, the way this deal went down shows a) how hard it is to pin things on trustees when they try to influence district actions day-to-day, and therefore b) just how tough it is to be a DISD administrator when you have a trustee ordering you about. Do you do the bidding of the trustee who is quietly telling you what action to take, or do you stand up to the trustee — as some have begun to do under Miles — and face his or her wrath? Said wrath will most likely take the form of the angry trustee instigating a b.s. investigation against the bold employee, then leaking the draft of the internal investigation, then watching as the person’s name is smeared across the front page of the paper. (Example here.)
This is the sort of context you need when evaluating the actions of trustees like Bernadette Nutall, who has made no secret that she believes her status as an elected official gives her the right to be involved in day-to-day activities of her district to an unsettling degree.