Tuesday, July 24, 2018

Is no news good news in Highland Park? Censorship in Highland Park and Deerfield

Is your local news censored? Mine was today. So was an article by Dennis Rodkin in Crain's Chicago Business: "A deal for a Highland Park House fell apart. There's more." Yes, Dennis, and there's so much more.

It was an intriguing article to anyone interested in real estate on the North Shore and, in particular, in Highland Park. Rodkin reported that a lawsuit, filed by Kathy Rifkin, claims that Ricco Garrett is a man whose goal wasn't to buy homes but to "move into the [luxury] properties without payment until he was either evicted or otherwise forcibly removed from the property." Rifkin's home is on more than 2 acres on Hazel Avenue and was, at the time, listed for $4.8 million.

According to Rodkin, plaintiff Rifkin claims there were at least three other homes in Highland Park and Glencoe where Garrett tried the same tactics. The lawsuit is comprised of many allegations, including that there were at least two reports to the Highland Park Police Department, checks that never showed up, and a real estate broker who informed potential sellers and/or their real estate brokers that Garrett could afford the purchase price as he was "famous" and a "family friend." For further context and details, read Dennis Rodkin's article.

To be sure, ordinarily, a post about a real estate broker asking for access to show luxury homes at 11PM on Friday nights would be irrelevant to a Facebook closed group page dedicated to serving as a sounding board for residents about their local school district. Yet, Rodkin's article referred several times to the real estate broker who is alleged to have been representing Garrett in various contacts with other real estate brokers, "Debbie Hymen", formerly of Coldwell Banker, currently of Berkshire Hathaway HomeServices KoenigRubloff Realty Group. Debra Hymen has been on our District 113 School Board since 2011. The same Debra Hymen referred to in the recent "Cash and Carry" article with regard to the Board's profound lack of governance and transparency.

Rodkin's article should have been relevant to "Highland Park/Deerfield High Schools Sounding Board". After all, it involves an elected official, a member of the School Board. So, I posted the article on the closed group page, with the following introduction:

"An interesting article about a lawsuit related to the sale of a property in HP. Real estate broker Debbie Hymen is District 113 School Board member Debra Hymen."

It was promptly censored and removed from the page by the page's administrator, Walter Hainsfurther, without any notification to me. There one moment, deleted the next, even after a couple of people reacted to it. Later, Hainsfurther informed me on another closed group page, "HP/HWD/FORT Planning for Our Future" why he censored my post.

"As moderator of the 113 Board, I removed the post because it has absolutely nothing to do with her performance as a 113 Board member. As far as I know, Ms. Hymen is not running for re-election next April, and will retire from public service. This is not a recent development, but something she has said for over a year. If she changes her mind and runs again, feel free to repost it then."

It appears that news is only news, if, when and where Hainsfurther determines. That's what a good censor does.

Fortunately, I also posted Dennis Rodkin's article on another closed group community page, HP/HWD/FORT Planning for Our Future Facebook page. Evidently, some think that sharing information about our community is a good thing, and others don't. In posting the article, one might think that, surely, people who are planning for our future might be interested in how to protect their homes from a scam. Further, they might wonder whether the Highland Park Police Department should have alerted residents to the scam – after all, a lot of people are selling their homes – as well as ask why charges hadn't been filed. Also, this particular group had initially been started by discussing local school board matters – as their kids go to District 113 schools, they should be interested in our elected school board officials. The administrator of this page is Lisa Remer Hirsch. Even though encouraged to do so, she did not take my post down. Hirsch said, "I do not censor. I might take down bad language or personal attacks but that's it."

It's very simple. Residents can't make informed decisions if they aren't fully informed. In a stroke of Orwellian proportions, Walter Hainsfurther decided residents concerned about District 113 in Highland Park and Deerfield just don't need to know about Dennis Rodkin's article. Or not until Debra Hymen runs for office again. And, if they are going to find it, it won't be on Hainsfurther's Sounding Board (let's call it what it is now).

Some might say, we get the community we deserve. Do residents in Highland Park prefer to be well informed? Thanks to Lisa Remer Hirsch, Rodkin's article remains on "Planning for Our Future." The comments are mixed. Here is a sampling of some resident comments posted so far (they have been cut and pasted – so spelling, typos and grammar have not been edited; as the page is a closed group, no names are included):
  • "I'm not comfortable with this article at all. I feel it implies a certain guilt that may or may not exist"
  • "…I add this into the other things I've heard over the years and formulate my opinion. Your may of course vary. But I'd rather have more information than less."
  • With all due respect - I am wondering why you felt a need to post this here and on the District 113 page? You clearly have every right to be some type of self appointed "gotcha" reporter on your blog and such.....but it clearly seems like you are looking for anything and everything to complain about and call public officials out about....which again is our right....but your agenda seems pretty clear.....while I do not agree with every decision Ms Hymen has made in her many years as a school board member I respect her wilingness to voluntarily serve our community - and posting an article that has nothing to do with her work on the school board isn't too neighborly and basically not kind....this guy was clearly a con artist...not cool IMO
  • Ok[..]...but again the agenda of posting this article while recently and continually blasting voluntary school board members and making unsubstantiated comments about falling real estate values due to closing schools...which may be an opinion that Ms Rade holds but is by no means fact.....seems clear. What is the purpose of community members looking for every reason to hurt members of our community that voluntarily take the time to serve? Being treated like this why would one choose to serve? Anyone who is in the real estate business at the level of Ms Hymen...who has done the number of deals she has done...is bound to have some deals go sideways and even end up in litigation....and as you know there are two sides and this is what a court is for.....posting it to Facebook with an obvious agenda is really lame.... sorry....but it's the truth. (Same person as the previous comment.)
  • Debbie Hyman has been an incredible advocate for District schools for years. I knew her before she was THE Debbie Hyman and she worked just as hard for the community then. Funny, how communities, all of them, end up eating their own.
  • …Thanks for Ms. Rade for linking to this, it's a good starting point for investigating the details.
In this era where the president of the United States frequently tweets about "fake news," it becomes all the more important to know who is determining the news that is fit to print and what is their agenda. Granted, a closed Facebook page can be a very unreliable source. Where do you source relevant news about your community? For instance, the Highland Park Patch posted my article "Cash and Carry: $1.013 Million in Paper Bills" but you didn't read about the lack of controls over these funds in the Chicago Tribune. Consider that the Trib recently published a recent article that a Zion school district paid $15K to a newly hired principal to resign before he started. Yet, the Trib never reported any of the associated facts concerning the more than $1 million dollars in cash, even though it had been reported to the Trib years before. The Chicago Tribune was made aware of the Lake County State's Attorney's investigation. Still not reported. We also haven't seen an article about the Rifkin litigation, either. Perhaps the Chicago Tribune just doesn't know about it yet. Or, perhaps, there are reasons why a report has been withheld. Censorship, perhaps?

I was censored today when I shared news from a respected, bona fide, news source – a fine journalist who lives in Highland Park. It was relevant to the community and, in particular, District 113 in Highland Park and Deerfield. Are we living in a censorious community, filled with hidden agendas? Has the public's right to access knowledge become subordinate to the private interests in our community? Today I might be censored, tomorrow I might be removed from Hainsfurther's Sounding Board entirely. It's hard to notice the dissenters when there aren't any. Sadly, the problem is that everyone may be under the assumption that they are getting all the news that is relevant to our community.

That's the thing about censorship of news. You just don't know what you just don't know.

Reprinted, slightly revised, from article published in the Highland Patch by this author.

Thursday, July 12, 2018

$1.013 Million in Cash -- Why Residents Cannot Afford for Township High School District 113 to Go Back for the Future

Township High School District 113 is in turmoil, again. Superintendent Christopher Dignam was ousted, taking with him a $300,000 severance payment after two years of service. Shortly afterward, long-term School Board member, David Small, resigned, reportedly because he found his views "at odds with the majority of board." This created the second vacancy on the School Board since November 2017 when Julie Gordon resigned, later replaced by the appointment of Gayle Byck. More recently, the School Board replaced Small with Ken Fishbain, who was on the school board from 2003 to 2011 and served as its president during 2009-2010. At this time, two of the seven School Board members were not elected by residents but were selected by the School Board based on unspecified criteria.

If the residents of Highland Park and Deerfield think the current School Board is going to right the ship, they are sadly mistaken. It's time to recognize that the single biggest threat to the success of Highland Park High School (HPHS) and Deerfield High School (DHS) is the School Board. The second biggest threat is resident apathy. Based on the current status of our school district, it appears that the School Board simply lacks the ability to move forward as it clings to its past. The recent appointment of Ken Fishbain as a member of the School Board confirms this. Déjà vu, all over again. As George Santayana said, “those who cannot remember the past are condemned to repeat it."

“Garbage in, garbage out” -- incorrect or poor-quality input and procedures results in predictable faulty output. Consider the process for selecting Small's replacement. While the School Board accepted online applications from interested residents, it invited only one applicant for an interview, Fishbain. The interview was held in closed session (and the frequent use of closed session school board meetings is worthy of another report). Residents don't know how many applicants there were from two communities known for having many talented, educated, smart, civic-minded people. Yet, the School Board chose to ramrod a former board member and president as the appointee. The purported benefit of this selection was there would be a “quick transition to the board.” This is a euphemism for onboarding someone who will not rock the boat, someone who will not be critical of the existing board, and someone who will vote with the pack. Unfortunately, as seen too often in local politics, unanimity is treated as a virtue, when the community can benefit more from people challenging the status quo and presenting new ideas.

To be sure, I don’t know Ken Fishbain personally or professionally. Based on a cursory online search, he appears to be a talented, educated, smart, civic-minded person. However, while the School Board perceived his previous service to District 113 as an asset, some may consider it a liability. Residents of District 113 cannot afford to allow the School Board to go back for the future.

In at least one material regard, during Fishbain's tenure and leadership, the School Board of District 113 was not paying much attention to financial management and governance from 2009-2011. At the least, it appears it was not paying enough attention to finances. These years were also a time when David Small and Debra Hymen were on the School Board -- Hymen remains on the board. It's time residents take a critical look financial management in that era. 

Between the years 2009-2011, more than $1,013,000 dollars was handled in cash by the District 113 administration. Cash – paper bills – the stuff you used to take out of your wallet to pay for things before credit cards and Apple Pay. Cash, the paper money that leaves no record as it circulates from hand to hand.

In June 2009, Barry Bolek, District 113’s Assistant Superintendent for Finance, signed a “petty cash” check for $349,000. It was endorsed by a District 113 staff member who reported to Bolek.

Ostensibly a finance expert, Bolek should have known that a petty cash check is usually under $50 or, perhaps, even as much as $2,000, depending on the size and purpose of a company. However, $349,000 is not “petty cash” in anyone’s lexicon. Further, the $349,000 check had only Bolek’s signature authorization. There was no countersignature – meaning that there was no internal control to require either the superintendent or the Chairman of the School Board to countersign the check as an internal control on finances. The treasurer or controller of any reasonably sized company would know to have countersigned checks for any payments above a certain level.

Similarly, in June 2010, Bolek signed another “petty cash” check, this one for $343,000. This check wasn’t countersigned, either.


Finally, in 2011, Bolek signed two more large “petty cash” checks. One for $136,000 and the other for $185,000.  The aggregate for those two “petty cash” checks in 2011 was $321,000.



Why $321,000 was split into two checks in 2011 is unknown. Perhaps someone would like to investigate this, or a member of the School Board at the time would like to provide the answer to our communities. 

Worth noting, most suburban banks do not have this much cash on hand. District 113 needed to advise the Chase Bank in Deerfield to be prepared in advance for each of these transactions. Here is an example of the request in 2009.




We don’t know when this process of obtaining hundreds of thousands of dollars in cash started, it could have been going on for decades.

What is known is that in 2011, Chase Bank handed over $321,000 in cash to someone at District 113 for the two "petty cash" checks. These two checks carried the single authorized signature of Barry Bolek, as well as his endorsement on the back of each check for endorsement (see, images of 2011 checks above with signature on front and back of check). It might be assumed, based on the endorsement, that Bolek himself picked up the cash.

To be clear, the School Board allowed Barry Bolek, and most likely his predecessor in the financial role, to have unlimited, unfettered, and uncontrolled access to School District funds. Even if the School Board was unaware of this untenable lack of control, it was also Bolek's responsibility as the person in charge of finance to ensure that standard accounting practices and proper controls were in place. 

In a light most favorable to Bolek, he did not know enough about internal control standards to ensure that checks for amounts over a certain established minimum level would need to be countersigned. Also, the only check that Bolek should have personally endorsed when District 113 was the payor was his own routine paycheck. Residents should also question the standards used by the public accounting firms who audited our public funds during this era and determine whether the accounting firm(s) was held accountable. The same questions are relevant today.

Cash is really not a good way to store or transport money. Who can forget the Unsinkable Molly Brown who hid her fortune in a stove, only to have her husband set it aflame? What if there had been a car accident on the way back to administrative offices? Cash is also not traceable. Yet, it appears likely that the cash – or most of it -- was delivered directly from the Chase Bank back to District 113 administrative offices. Who was responsible for it there? Where was the cash stored there? A large cash drawer, perhaps. Maybe the Assistant Superintendent’s locked file drawer or desk. Maybe a safe. Maybe in the trunk of a car. Who knew or cared? Likely not the School Board.

To be sure, all or part of the cash was intended and used for a yearly book buy-back program at DHS and HPHS. However, based on the lack of records, there is no one at District 113 who can provide an acceptable accounting to residents for the use of $1.013 million of cash during 2009-2011. Also, during 2009-2011 there were many other checks made out to “petty cash” in large amounts of $2,000-$37,000. 

No one can say how much or little of the cash was used in the manner for which it was intended. District 113 had, at best, a very rudimentary accounting for the book buyback program. We do know that lots of people were handling lots of cash. The few existing reports consist of cash received from the bank, cash paid to the students, and the difference to be re-deposited at the bank. The number of books claimed to have been bought back is provided but there are no receipts or credit slips for the books, no inventory records of the books purchased per title, nor is there a signature to hold anyone accountable for the reports. Here is a sample accounting for use of $195,000 in cash in 2009 from Deerfield High School, called "Fiscal Report."


 
Without inventory and detailed cash records, it is challenging to determine if all the cash was used for the benefit of the school district. A basic review of the shoddy “Fiscal Reports” for the book buy-back programs in 2009-2011 reveals something strange. On average, and inexplicably, the books were always significantly more expensive at Deerfield High School. Same school district, different books? For instance, in 2009, the average alleged cash payment to a student was $35.25 per book at HPHS, while the average alleged cash payment to a student at DHS was $44.71. Compare the following "HPHS 2009 Book Buy Back Ending Cash Report" with the "Fiscal Report" above to see the difference in average price per book. This also shows the lackadaiscal and inconsistent manner in which cash reports were prepared. 
 
This strange discrepancy was equivalent in 2010 and 2011. The submitted “Fiscal Reports” confirm that the average HPHS book was worth $32.45, while the average DHS book was $46.14.  In 2011, HPHS books averaged $32.72 while DHS books averaged $41.82. Why the consistent disparity? There are several possibilities.

Also, why were there no receipts for the books, or if there were, why were they discarded? Parents like to account for how their children spend money. They might have desired a receipt. Does anyone remember receiving one for the book buy-back? Also, while there was a mention in one document that claimed there was an inventory list for the (approx.) 6,000 books a year District 113 acquired, this list was not made available in the FOIA research done by some interested residents. Were these books purchased the next year by seniors? For cash? So many unanswered, serious monetary questions. Where was the School Board, and president Ken Fishbain during this time?

How is it that these issues at District 113 first came to my attention? In 2014, several concerned residents contacted me, seeking assistance, about financial issues in the district and, in particular, the ginormous "petty cash" checks. (While I am an attorney, I am not representing anyone in any of these issues, but I am a concerned resident.) Like most of us in this District, this was the first I had heard of hundreds of thousands of dollars being handled in cash. As a former bank teller in my college days, I found this of great concern and worth further inquiry. Frankly, I found it unbelievable until these residents provided me with documentation. Some residents had already complained to no avail to the School Board, as well as prominent local politicians at City Hall in Highland Park and with the Village of Deerfield. After reviewing the supporting documentation, it seemed best to reach out to Mike Nerheim, the Lake County State's Attorney. Perhaps the State's Attorney's office could provide some light on the subject or would be interested in inquiring further about the use of large cash sums in the management of public funds.
In January 2015, a concerned Highland Park resident and I met with Kenneth W. LaRue, the Chief of the Special Investigations Unit. Much to my surprise, we were informed that there had been a previous investigation of the book buy-back program's use of cash and "petty cash." (I don't know who reported the matter but would like to thank him/her/them.) The original investigator assigned to the matter also attended this meeting. LaRue later informed me that “the information discovered [in the previous investigation] by our office resulted in the conclusion that while the book buyback program was a terribly disorganized and poorly regulated operation with no oversight, there was no provable criminal conduct.”  He further added, “Although the sloppiness may have been intentionally constructed to disguise criminal behavior, based upon the evidence that we have reviewed, we cannot prove criminal intent due to the lack of documentation, poor accounting and use of cash.” 
Unfortunately, there was no second investigation into the new information I provided the State’s Attorney. LaRue said that the statute of limitations for fraud and other criminal actions had passed. LaRue and the investigator also confirmed in our meeting that they had not noted the disparity between the value in books between the HPHS and DHS book buy-back program sales in their previous investigation, though it was clearly evident in the reports I submitted for their review.

There is a record of emails between Bolek and the Lake County State’s Attorney’s office. It may be reasonably inferred that the School Board was aware of the previous investigation -- this would include Small, Hymen and Fishbain. Were Deerfield and Highland Park residents advised of the State’s Attorney’s investigation? In what manner did the School Board step up in response to this investigation? Did the Chicago Tribune, Highland Park News or other local papers or media ever report on this investigation?

Perhaps the only thing that the School Board did right was to put an end to the cash buy-back program in 2012. Yet, a School Board that claims transparency and holds itself accountable to residents should have advised the residents about the State's Attorney's investigation. Also, it should have initiated an independent, third party review and audit to account for the use of cash in 2009-2011, as well as the preceding years.

Did the School Board hold anyone accountable for this monumental lack of control over district finances? We don’t know. There were were two people – one was a CPA – who reported to Bolek and who endorsed various "petty cash" checks for cash. It remains astonishing to me that anyone was willing to accept the assignment of picking up more than a third of a million dollars in cash. That is something many of us would have declined because of the obvious risks. In any event, both of them are no longer with District 113. We do not know if they were terminated or if they just left the district for their own personal reasons, but it is reasonable to assume that they were not held accountable for this cash practice.

On the other hand, Barry Bolek, whose primary responsibility was to manage and protect the District’s finances, does not appear to have been held accountable in any way for the cavalier use of of the "petty cash" and its account. To the contrary, Bolek went on to enjoy a very long career with District 113. The Board rewarded him with substantial pay increases every year until he retired in 2018. His online bio refers to his position as “Assistant Superintendent for Finance, Facilities, Operations, and Transportation.” In other words, he was entrusted with even more responsibility, including the supervision of $120.4 million of improvements as the result of the divisive referendums in 2011 and 2013. In 2017, Bolek was listed as the 6th highest paid public servant in education in Lake County per the Lake County Gazette.

Neither Bolek nor the School Board, individually or as a board, has ever been held accountable for what took place in 2009-2011. Without a thorough, independent, third-party investigation, into the administration's practices, as well as the School Board's conduct, it is impossible to tell whether the use of "petty cash" was caused by incompetence or design. 

Is the current School Better better than the one in place during 2009-2011? Draw your own conclusions. In August 2017, I requested a meeting that was held in the office of the new superintendent, Dignam. The president of the School Board, Michele Culver, was there, as well. Also participating in the discussion was Gerald Meister, a concerned Highland Park resident who has been rebuffed and insulted many times by the School Board over the years for complaining about the misuse of School District finances.

Culver and Dignam listened politely to my detailed report about Bolek’s financial management during 2009-2011 and the failure of the Board to address the problem. They were given all the documentation included with this article and more. I requested that all the information be delivered to the full School Board and offered to meet with them. While Culver and Dignam thanked me for sharing the information, they never provided any follow up whatsoever. Not even a "thank you." To this day, I don't know what they did with all this information. This meeting took place many months before Bolek retired with his substantial retirement package. 

The same School Board that was given the information, and who failed to even respond to me based on the facts, just appointed Ken Fishbain to join them. 

District 113 will be doomed to a "do-nothing” effete board unless and until Deerfield and Highland Park residents rise up and demand transparency and accountability. As a District, we cannot allow the School Board to go on like this forever, underperforming and playing musical chairs, recycling board members when convenient. We must demand better and hold School Board members, administrators and staff accountable. We will have the School Board we deserve.

We simply cannot afford to elect people who are not up to the challenge, who do not represent the residents. We cannot ignore the importance of our votes for School Board, and the necessity for monitoring the board, without reaping the repercussions. We cannot allow our School Board to go back for the future with decisions made in closed sessions. More than two-thirds of your real estate tax dollars is devoted to our school districts. Mismanagement of funds not only puts our children’s education in peril, it impacts our personal and community finances.

We need a School Board comprised of different people. It's time to step up and find new candidates who will take on these responsibilities with integrity and vigor, preferably not from the insular political groups of who usually put forth and endorse candidates in our communities, preferably  comprised of diverse people who understand the importance of financial controls and governance, and who have a better compass for the future of our communities and schools.

© Debra Rade

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