District 86 Following Up on Barrett's Bond-Fraud Allegation

Editor's note: District 86 announced in its Board Briefs newsletter on March 21 that Attorney General Lisa Madigan's Office alerted the district on March 19 that it doesn't plan on investigating the district for bond fraud. According to the district, the attorney general's office said it reviewed materials sent by the accuser, board member Dianne Barrett, as well as the response from the district's law firm, Scariano, Himes and Petrarca, and bond counsel, Chapman and Cutler, LLP. Madigan's office "[does] not anticipate taking any further action at this time."

District 86's attorneys will reach out to DuPage County State’s Attorney Robert Berlin and Illinois Attorney General Lisa Madigan to find out whether either of those offices plans to investigate an allegation of bond fraud made against the district by one of its own board members.

In a Feb. 14 email to Berlin and Madigan, board member Dianne Barrett requested an investigation into what she believed was the district’s fraudulent issuance of approximately $15.4 million in bonds to pay for, among other things, air conditioning at Hinsdale Central and Hinsdale South.

Scariano, Himes and Petrarca, the district's law firm, received an email from Madigan’s office asking for a response to Barrett’s allegations. Berlin’s office, according to Board President Dennis Brennan, has not sent any follow-up.

The sale of the bonds was closed in February without any issues.

The board discussed Barrett's allegation at Monday night's Committee of the Whole meeting at and agreed to direct the district's law firm to follow-up with both the state's attorney and attorney general to see if any investigations into the bond sale are forthcoming.

Barrett was not in attendance at Monday’s board meeting at Hinsdale Central and she has not responded to multiple emails from Patch regarding the topic.

In Barrett's email to Berlin and Madigan, which was obtained from District 86 via a Freedom of Information Act (FOIA) request, the board member states that it his her "firm belief that a fraud is being knowingly and intentionally perpetrated" by the five board members who voted in favor of , as well as by District 86 Superintendent Dr. Nicholas Wahl; business manager Jeff Eagan; Chapman and Cutler, LLP, the district's bond counsel; and George K. Baum & Company, the bond sale's underwriter.

Brennan, Kay Gallo, DeeDee Gorgol, Michael Kuhn and Jennifer Planson all voted to finalize the bonds. Richard Skoda voted against the measure and Barrett abstained.

Barrett spoke out against the bonds when they were finalized on Feb. 6. She said she thought it was illegal for the district to ask for working-cash bonds when it was clear the money would be going towards capital improvements.

“The working cash funds are going to be used for air conditioning—that’s deceiving to taxpayers,” Barrett said at that meeting.

In her email to authorities, Barrett made a similar argument.

"In my opinion, the above mentioned parties are knowingly, willing[ly] and intentionally attempting to sell bonds for one stated purpose with the complete knowledge that the money is going to be used for another purpose," the email reads. 

Barrett's email also calls for an investigation into whether it's legal for the district to issue working-cash bonds at a time when the working-cash fund contains approximately $7.3 million, a "more than sufficient" amount according to Barrett's email.

At the Feb. 6 meeting, Bill Hofherr of George K. Baum said the firm’s attorneys had looked over documents drafted by the district’s bond counsel, Chapman and Cutler, and found the bond purchase and use of the resulting revenue to be “completely legal.”

District 86 attorney Tony Scariano was at Monday's meeting and said he believes Chapman and Cutler to be the best bond counsel in the U.S., and that Barrett’s allegations “aren’t worth the paper they’re written on.”

Nevertheless, Scariano advised the board to follow up with the authorities to see if an investigation is planned. He said that just because the bond sale was not stopped and the district hasn’t heard back from Berlin’s office doesn’t mean there won’t be an investigation in the future.

“I would be concerned if you do nothing and wait for something to happen,” Scariano said.

Gallo said Monday that she felt the board and district followed "the letter of the law" during the bond process and she was “taken aback” when she heard of Barrett’s emails.

“She has her right to her opinion, but now she has gone farther with making formal accusations,” Gallo said.

Brennan said he thinks that the terms Barrett has used to describe the actions of the board “are generalizations you hear when you’re part of the mob, not when you’re a school board member.

“And that’s unfortunate when it comes from one of your own,” he said.

The board's next meeting is a regular action meeting on March 19 at Hinsdale Central.