.

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

The board member requested an investigation into whether the district acted illegally when it approved bonds last month that will fund the installation of air conditioning at Hinsdale Central and Hinsdale South.

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.

Proud Teacher March 22, 2012 at 11:21 AM
"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.'" The Patch may want to do some fact-checking here. It is not clear that Chapman & Cutler was counsel for the District. They may have been retained by a party to the transaction other than the District. That could be significant when it comes to analysis of the relevant data set.
Joe O'Donnell (Editor) March 22, 2012 at 02:19 PM
Hi Proud Teacher, thanks for the comment. I'm not sure I quite understand what you're inferring. Chapman and Cutler is the bond counsel to the district for this bond. I may not have explained it well enough above. At the Feb. 6 meeting, Ms. Barrett had expressed her feelings of skepticism about the legality of Chapman and Cutler's bond draft. She asked the reps present from George K. Baum, the firm that underwrote the bond sale, if George K. Baum has any process of checking the legality of the bond written by Chapman and Cutler. The reps said George K. Baum lawyers reviewed the bond before it went on the market and found it to be "completely legal." Does that help?
J. Geoff Rove March 30, 2012 at 12:55 AM
I see that D86 is using "Hinsdale Township..." on their signs. I missed the split from DG. Is the dividing line Cass or CH road ??
Joe O'Donnell (Editor) March 30, 2012 at 03:30 PM
Hi Mr. Rove, District 86 is still within Downers Grove Township. Here's a map of the township: http://www.dgtownship.com/docs/so/twp/DGTMap.pdf. I've followed up with D86 to see why it's called Hinsdale Township High School District 86. (There is no Hinsdale Township, in fact; see this link for a list of townships: http://www.toi.org/Resources/townshipsbycounty.aspx#dupage.)
J. Geoff Rove March 30, 2012 at 11:41 PM
Thanks for the township map Mr. O'Donnell. Its hard to tell from the color scheme what areas are unincorporated. It appears that the new Costco at Woodward and Boughton/87th is split between Will and Dupage Co. At least a chunk of the parking is in Will. Does someone know is all the nuclear sites have been cleaned up yet at Argonne. IIRC, some old reactor parts are still buried around the area, and the water table is likely rising now that villages' wells stopped pumping.
Prince April 02, 2012 at 02:05 PM
An investigation by Patch would be good. Patch should investigate Ms. Barrett: her voting record, her attendance, why she is doing this, etc. Isn't this the second time she has said that selling bonds are illegal? She had used the term "money-laundering" in the past. Now this. I am ashamed I voted for Ms. Barrett. How can a member of a committee make formal allegations without any proof? School Board members volunteer their time to help our community. They should not have to endure this slander. Why hasn't she been at any meeting since she sent the email? How many meetings has she missed since elected? Why hasn't she been responsive to the media? With this current action and with the Hinsdalean article published last week about her "new" argument on the student document case, it appears Ms. Barrett just doesn't like when others disagree with her; not her peers, not lawyers and not judges. Her actions are not "doing it for the kids" as she claims. She appears to have the need to stop any forward steps by the district. Ms. Barrett should step down, as she does not want to do what is best for the district. What can community members do (before the next election) to have her removed?

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something