Justice on hold

Justice on hold

Diaz wants action on alleged theft of Measure Y funds

By Andre Coleman 12/18/2008

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Pasadena Unified School District Superintendent Edwin Diaz is growing impatient.

Last week, Diaz turned over to LA District Attorney Steve Cooley 700 pages of documents related to an internal audit that indicated nearly $300,000 of school construction bond money had been misallocated. On Tuesday, Diaz said if he doesn’t hear from Cooley’s office by the end of this week, he will be calling to “inquire about a timeline and process for reconsideration” of his claims of being robbed.

The evidence that Diaz has compiled is the result of a probe conducted by Michael Ammermon, a forensic auditor hired by the district to investigate spending of funds generated by Measure Y, a $240-million school-repair bond passed by voters in 1997.

Ammermon concluded that in 2006 and 2007 contractors Eric Peterson and Jesse Yzaguirre billed the district separately for $81,000 and $216,000, respectively, for work they claimed to have completed with Measure Y funds. Yzaguirre did not have a contractor’s license but used one for another business he did not own. Peterson falsified contracts to bill the district through a company he controlled.

Both men were supervised primarily by former PUSD Assistant Construction Coordinator Mark Kingsbury, who signed off on all of their work orders and invoices. In fact, in a tape-recorded interview with Ammermon, Yzaguirre, who mostly hauled waste from the Washington Middle School construction site, said he paid Kingsbury 20 percent from every check he received from the district.

Kingsbury quit the district soon after Ammermon’s audit was launched in July 2007. He did not return calls for comment. Neither did Peterson. Yzaguirre, who said he was under the influence of drugs when he told Ammermon about the kickbacks to Kingsbury, has declared his innocence, saying he did nothing improper.

In the other case, “Peterson said the district came to him and indicated the district was under such pressure to complete the West Wing project [at Washington Middle] that Mark Kingsbury and [former PUSD Director of Facilities] Jim Ripley asked him if he could get this additional work done,” Ammermon wrote in his final report to Diaz.

“Peterson continued to explain that the district did not care how things got done and only wanted to get the work done,” Ammermon went on.

The Peterson case was investigated by Pasadena police in late summer and fall without criminal charges being filed, primarily due to the sloppiness of Measure Y bookkeeping.

Peterson worked for Pacifica Services, a company hired by the district to manage projects at Washington Middle School. However, Peterson allegedly billed the district under his own company, EPCON Construction, and listed contractor Michael Shannon Scrugham as a company contact on required documentation. Scrugham later told Ammermon that he knew Peterson but had no idea why his name was on the documents. Scrugham also did not return calls for this story.

Ripley confirmed Peterson’s employment with Pacifica Services, a company hired to oversee the projects at Washington Middle School, but would not discuss EPCON.

“I will leave those answers up to the district,” said Ripley, who retired from the district in August 2007 and is not suspected of any wrongdoing.

“The big question is: Why is this not being prosecuted?” asked Board of Education member Ed Honowitz. “If we find any evidence that any fraud is going on, we want to ensure that it is followed up on to the Nth degree.”

Details of the alleged illegalities were released to reporters on Dec. 8, the same day Diaz sent his letter to Cooley pleading for reconsideration. Apparently the wheels of justice grind slowly sometimes. “The matter is still under review,” said DA spokeswoman Shiara Davila. “Right now,” Davila said, “we don’t have a time frame as to when the review will be completed.”

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