BISD Secret Settlements

BISD Secret Settlements

Copies of secret settlement documents obtained by The Examiner from the Beaumont Independent School District show Superintendent Carrol Thomas has for years violated district policy by failing to seek approval from the Board of Trustees to pay several hundred thousand dollars in taxpayer money to settle lawsuits and legal complaints with parents and others complaining primarily about the district’s special education program.

The documents, obtained after a five-month open records battle with BISD, contain similar wording to indemnify the district such as, “Neither party to this agreement shall reveal the amount paid for settlement of this matter, or the fact that it was resolved, in part, by payment of some amount of attorney’s fees” and “(names redacted by school district), in exchange for the agreements made by the district in this mediation agreement, hereby releases, acquits and forever discharges the Beaumont ISD, its trustees, agents, officers, servants and employees from all claims and or all causes of action …”

A public information request filed by The Examiner on Jan. 18, 2011, sought “a list of all legal settlements approved by Dr. Thomas for the past 15 years and the amounts of those legal settlements, with whom they were settled and the claim that was made. Please indicate which of these settlements were approved by the board and which ones were signed off on solely by Dr. Thomas.”

The newspaper fought to obtain all of the documents from BISD but – to date – the district has not fully complied. Without going to the Texas Attorney General for a ruling on what information the district could withhold, the names of parents, students and the attorneys representing claimants were removed by the district. The newspaper successfully protested some the redactions and the information was included in the documents that were released last week.

Using various tactics, including an initial charge of $609.40 to produce 13 settlement agreements the district claims to have entered into over the past 15 years, BISD fought to keep the requested information secret. BISD’s stall tactics became so pervasive that a criminal complaint was filed with the Jefferson County District Attorney’s Office over the delays and costs being assessed by Jessie Haynes, who was at the time BISD’s public information officer. The status of that investigation is still under review, according to Jefferson County District Attorney Civil Division Chief Tom Rugg, who forwarded the case to the criminal division. Haynes is no longer in charge of public information but is the department head over the employees now handling those duties and still calls the shots on what information is released.

The newspaper also filed a complaint with the Texas Attorney General’s Office and received assistance in having the cost of the records reduced to $221.65. The newspaper informed the district it would pay the new amount but Haynes wrote an e-mail a week afterward saying she was unsure if the newspaper was still interested in paying for the documents. Then, after a check was given to the district April 27, 2011, to cover the amount, Haynes took until early June to finally produce the requested records. Additionally, the newly revised cost for the documents had dropped to $66.20 – almost 90 percent less than the original amount.

There is also a question as to whether BISD turned over all of its settlement agreements to the newspaper. The request asked for records going back 15 years but the oldest settlement agreements provided were from 2006.

What is BISD hiding?

All of the settlement documents obtained by the newspaper involved financial payments, as well as other remedies being provided by the district, which in most cases included attorney’s fees. For example, in one case settled in September 2010, the district agreed to pay $7,000 in attorney fees and pay for one hour of speech therapy each week, 12 hours of private, outside speech therapy for what remained of the 2010 school year, pay for parent training, provide reimbursement to parents to attend two autism seminars and provide special campus placement for the student involved.

Another document highlights how the district will provide a payment of $40,000 to the parents on behalf of the student in question, as well as provide “a document and (testify) at (student’s name redacted by school district) criminal adult certification hearing and trial that: BISD failed to evaluate (student’s name redacted by school district) for special education immediately after having been requested to do so; that if tested and found eligible that he would have been provided special education services; that those services could have included among other things, a behavior intervention plan, counseling and the services of a social worker; that if provided such services by BISD it may have made a difference and his behaviors may have been stabilized such that he would not have engaged in criminal behavior.”

Still, another document lays out how the district will “make a one-time payment of $25,000 into a minor’s trust for the benefit of (student’s name redacted by school district) and will execute all paperwork necessary in the local county court to establish the trust, pay any filing fees, etc.” and provide private counseling for two years of not less than one hour per week, as well as other concessions including providing reimbursement for the parent’s transportation to counseling and tutoring and $10,550 in legal fees to attorney Dorene Philpot and $2,500 to attorney Martin Cirkiel.

Philpot, who has law offices in Texas and Indianapolis, told the newspaper she has entered into numerous settlements with BISD over its special education program, which has been overseen by a state conservator for the past year. She said districts often try to tell parents that the settlements they enter into are confidential, but that is not the case. “Districts often but not always want the parents to agree to confidentiality to prevent them from going around town bragging about what they got for their kids, for pride reasons and also because they think if folks know one kid got it that all parents in the district will want the same,” Philpot said. “I have never seen that happen, but that’s what they fear, as I understand it. Settlement agreements that involve public funds are never confidential, in reality. As I tell folks, your Aunt Edna can get a copy of any settlement agreement a district did if public funds were expended.

“As far as your question on what’s wrong with BISD special ed, that’s another whole article and too much to type on a cell phone keyboard.”

She also said there are a number of other attorneys that have settled cases with BISD.

According to budget records from BISD, the district is projecting it will exceed its budgeted amount for legal settlements by nearly $1 million. The current budget for legal services at the beginning of fiscal year 2010 was $5.35 million, and the projected cost of legal services is $6.32 million.

The reaction

Thomas declined to speak with The Examiner on Wednesday, June 15, and walked back in his office before he could be asked to explain why he spent taxpayer money settling legal cases without the board’s approval.

Jessie Haynes, BISD’s head of communications, and assistant Craig Eichhorn both declined to comment about the secret settlements and referred questions to the school district’s attorney, Melody Chappell.

“I am referring you to board policy CH (Local) wherein the board has delegated to the superintendent authority to spend up to $50,000, without additional board approval,” Chappell wrote in her e-mail responding to questions from the newspaper. “As you are aware, any educational services that are provided to special education students are provided as about of (sic) the curriculum required for that student to receive a free and appropriate education with the district.”

But that is not what the policy states. A close reading of the policy reveals that it makes no mention of settling legal complaints or lawsuits and applies only to budgeted purchases. “The board delegates to the superintendent or designee the authority to make budgeted purchases for goods or services,” states Beaumont ISD Policy CH Local. “However, any single, budgeted purchase of goods or services that costs $50,000 or more, regardless of whether the goods or services are competitively purchased, shall require board approval before a transaction may take place.”

Chappell also declined to say how much in legal fees that she or whoever was representing BISD received for working on the settlement agreements approved by Thomas. Additionally, the board policy states the superintendent must use a purchase order in order to transact the district’s business, and nowhere does it mention payments for settlements. “All purchase commitments shall be made by the superintendent or designee on a properly drawn and issued purchase order, in accordance with administrative procedures,” the policy states.

When told about the secret settlements, BISD trustees Mike Neil and Tom Neild were upset. Neild, who has been aware of The Examiner’s battle to obtain the records for months, said he asked Chappell about the issue when he found out there were settlements the board was not being told about. He said she told him the same thing she provided to the newspaper in her e-mail – the board’s policy allowed it.

“I am very disappointed because I raised this question and was told that he (Thomas) had the authority to settle any lawsuit up to $50,000, and if we are in violation of that then, yes, I am very upset,” Neild said. “No one likes to find out they are in violation of something. We are where the buck stops, and it reflects on each one of us as board members. I definitely was misled, but I am disappointed in myself that I didn’t go back and verify. I mean, that bothers me because now do we have to go back and verify everything that we are told? You want to hang your hat on what those in their profession tell us because that is what we base our decisions on.”

Mike Neil said he has no doubt that this isn’t the only information that BISD is trying to keep from taxpayers. He said it really isn’t any different than when Chappell signed off on the recent voting ballot knowing there was an error and a protest by the people listed on the ballot.

“I would like to know when the district is spending $49,000 no matter what it is, regardless of whether it is a lawsuit,” Neil said. “I think this is something that seriously needs to be looked into especially whether or not we can have legal settlements without the knowledge of the board. I have a concern that anyone can spend up to $50,000 without the board’s approval or knowledge. I think that number is about five times, if not 10 times, too high. It should be much lower than that.

“It’s very alarming and irritating to know that as a taxpayer. I know the citizens aren’t getting the real story about what is going on in BISD. When the board members feel we aren’t getting the whole story and we get as much as we do, then there is no way the community is getting the whole story. We have a hard enough time as board members trying to get information that we need to make our decisions.”

Suzanne Marchman, a spokesperson for the Texas Education Agency in Austin, said the agency could not take a firm position on the issue because it could be something that could come back for review at a later time. She also pointed out that legal settlements aren’t specifically limited to cash payments, which was the case in many of the settlements Thomas approved for BISD.

“The board can delegate anything that is not statutorily required of the board. For example, it couldn’t delegate setting the tax rate or adopting the budget, but settling litigation is not required and could be delegated,” Marchman said. “A settlement can do much more than spend money, potentially committing the district to act in a certain way for a long period of time. That said, the issue might be whether a delegation to spend money is sufficient to allow settling litigation.”

When asked about Jefferson County’s policy to settle lawsuits, Rugg said he “won’t settle a $500 property damage claim” without bringing it before the commissioners court for review.

“I am not sure what authority they have as a board but I find that policy to be a little different,” Rugg said.

BISD board president Woodrow Reece did not return a phone call seeking comment.

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