U.S. Department of Justice officers primarily based in Sacramento say that federal research into construction contracts awarded using Fresno Unified School District is over, and no fees might be filed. The probe, which was released in August 2015, commenced with a federal grand jury subpoena of district facts related to its use of hire-leaseback contracts to build and renovate schools.
“We consider that they came to the ideal conclusion, and the district is truly pleased that this chapter is closed,” said legal professional Carl M. Faller of Fresno, a former assistant U.S. Attorney who represented Fresno Unified within the crook research. Faller said that he believed federal officials made the statement because of “the sizeable quantity of public dialogue” about the research.
“They rightfully determined to notify the public whilst it becomes concluded, and we very an awful lot recognize that,” Faller said. Fresno Unified officers have steadfastly maintained that the contracts had been legal and that no district employees engaged in wrongdoing.
Civil Lawsuit Over Gaston Contract in July
Three months earlier than the federal inquiry commenced, the Fifth District Court of Appeal reversed a Fresno Superior Court decision in a lawsuit hard Fresno Unified’s award of a $37 million contract to build Rutherford B. Gaston Middle School to Harris Construction. The attraction court docket based totally a part of its reversal on locating that the settlement between Fresno Unified and Harris wasn’t an “authentic” lease because the contractor didn’t finance the undertaking.
However, different California appellate courts have since dominated that hire-leaseback is exempt from aggressive bidding requirements, and the regulation governing leaseback production doesn’t require a real lease and contractor financing. That lawsuit, filed using Stephen Davis of Davis Moreno Construction Inc., is scheduled to be heard by way of a Fresno judge starting in July.
Documents Sought in Federal Subpoena
The federal subpoena required Fresno Unified to offer monetary documents involving its leaseback contracts. The district switched from competitive bidding to the leaseback mechanism under then-Superintendent Michael Hanson following voter passage of the $280 million Measure Q bond in 2010.
In the leaseback arrangement, a district forgoes the traditional competitive bid process. Instead, it hires a company to front the value of a project and pays off the contractor over time. Fresno Unified, again and again, used the leaseback manner following the passage of Measure Q even though it had the funds to pay for Gaston and renovate many faculties.
The federal investigation also tested the non-public emails and contact statistics of district officials and sought information pertaining to financial dealings among contractors and officers, and the campaign contributions of Harris Construction and any other employer, Bush Construction, in Fresno Unified college board races. In January 2017, Fresno Unified trustees fired Hanson on a 4-2 vote. The dismissal came eight months earlier than Hanson’s previously announced departure date from the district.