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New Rochelle Board of Education: Criminal Enterprise Masquerading as an Educational Institution - Part VIII

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New Rochelle Board of Education: Criminal Enterprise Masquerading as an Educational Institution - Part VIII

February 18, 2015 - 22:30
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This is Part VIII in a Series.

While there are many culprits, the person who may be most directly responsible for massive theft from the school may well be John Gallagher of Aramark. As I continue to roll out these stories about corruption involving both Buildings & Grounds and the Business Office in New Rochelle schools  — and they are going to keep coming for a good long while — it is good to keep in mind that Gallagher was at the nexus of both departments.

Schools Superintendent Dr. Brian Osborne and the entire school board is well aware of the corruption under Gallagher. It is why Interim Superintendent Dr. Jeffrey Korostoff sent a letter to Aramark last July requesting that Aramark replace the entire Aramark management team. Inexplicably, having concluded there was sufficient cause to get rid of Gallagher there was no one in any itching hurry to show him the door. He was allowed to remain working in New Rochelle for more than two months after the decision was made to give him the boot. Imagine if a bank teller was caught stealing from the till; do you think the bank would give her two-weeks notice or have her arrested and escorted from the building.

Gallagher has been allowed to walk away from the district having left the physical infrastructure in shambles, allowed all manner of theft and corrupt practices to go on among employees under his management and having been the direct recipients of kickbacks and bribes, this last bit according to sources directly involved in cash payments made to Gallagher. Gallagher also used the staff under him to provide personal services to him. The district knows this — they spoke directly to the same people who told me about Gallagher’s corrupt activities.

This corruption takes on many forms, and can be on a large scale or small, but it is also indicative of a culture in the New Rochelle school systems that has been a permanent feature of the administration of the school system for decades. To that extent, people like Gallagher, Quinn, Richard Organisciak or their predecessors like Tom Ryan, and Linda Kelly, and people before them are merely perpetuating endemic corruption. The problem has been a lack of will to face the corruption head on and eradicate it once and for all.

One former board member told me how years ago the board received a letter commending the fine work done by the district’s painters on her home. A woman wanted to make sure that the board knew what excellent painters the district had and how pleased she was with the result of their work. Of course, the district does not provide painting services to residents.

When I reported how B & G employees were misappropriating district work vans — bringing them home every day, using them for shopping (and stealing supplies and equipment), or taking them on hunting trips (one guy used to clean deer had shot in the van on school grounds, hosing down the blood and deer guys onto the pavement outside the high school), Dee Polow told me how she had confronted that issue years earlier when she and other board members observed a district work van parked in the driveway of a district employee as they all drove along Davenport Neck on their way to some beach club function. They confronted the issue by passing a policy prohibiting the use of district vehicles for personal use which was then promptly ignored. When I raised the issue, FUSE President Marty Daly argued that workers were allowed to take the vans home because it was a “past practice” — that since the district failed to enforce their own policy workers had accrued as a right under the union contract, taking the work vans home. Got that, workers are entitled to steal, it’s in the union contract. My reporting on this issue several years ago is why, today, you see many work vans parked in the Braemar parking lot near the high school tennis courts.

Passing a board resolution against personal use of vehicles — or installing GPS tracking equipment — does not mean anything if no effort is made to enforce the policy or look at the GPS reports. I have written about Mike Matisse, a mason who works out-of-job-title as a plumber, being among those taking work vans home. When confronted about this, John Quinn told the board he had given permission to Matisse to take his work van home at night despite a board policy that clearly prohibited this practice. Over the past year, Matisse’s GPS tracking equipment was mysteriously disconnected and remained so for three months. When it was repaired a mechanic found that a wire had been cut. The vehicle was returned with the GPS working again and then it stopped working and is still not working as of now, based on my most recent information. How can a GPS tracker stop working and no one at City Hall knows about it — either they know and don’t care or don’t know in which case they are not monitoring the GSP trackers raising the rather obvious question: why have GPS trackers if you are not going to monitor them?

I have already written about how Scott Empara and Jimmy Bonanno (note how they are both working-foreman) solved the GPS issue by moving from school to school every 1-2 hours during the day to create the illusion they were working. They are not the only ones. And Gallagher knew of this and did nothing.

Werner Graefe, the locksmith, parks his work van at the high school and leaves early as a matter of routine — mostly to run Schimolers Locksmith at 15 South 3rd Avenue in Mount Vernon, the private locksmith business he owns. Graefe’s father was also a locksmith for the district up until his recent death (New Rochelle does not need a full-time locksmith but for many years had two!). The senior Graefe was a silent partner in Jacobs Lock Company at 685 Main Street in New Rochelle. 

This was a great deal for all concerned — the Graefe’s were paid for not working, paid while they operated their private businesses and, for a kicker, used their private businesses to sell supplies to the district which they then stole and sold from their private businesses. Several years ago when I raised this issue, the school board took it up with the result that the board voted to fire the two locksmiths. At the next meeting Schools Superintendent Richard Organisciak declared that the locksmith’s were “necessary” and without a whimper the board re-instated them. It’s important to realize that locksmith’s do not install locks — that is done by carpenters when they install doors. Locksmith’s might replace some locks but mostly they would make keys. How many keys are lost or broken each day that would there would be a need for a full-time locksmith, let alone two?

Graefe the Younger stops working at 11:30 a.m. He parks his work van in the backlot at New Rochelle High School (the one in violation of the Americans with Disabilities Act because there is no handicapped parking) and heads down to Mount Vernon or, when Gallagher was still working in New Rochelle, would join John Gallagher for a “liquid lunch” at Fratellis on East Main Street. This I observed personally and reported to the district in real-time. Nothing was done about it.

In the scheme of things, these are among the smaller transgressions. If you are interested in the big money you need to look at things like the Annual Visual Inspection reports, signed by Gallagher, and rife with fraud. These reports are required under New York State law to describe the physical condition of school buildings. In cases where there is an imminent healthy and safety risk, the report must indicate a dollar figure to make repairs. The amounts involved are tens of millions of dollars in repairs that have been “hidden” by simply declaring that problems that do exist do not exist. I am going to get into these reports in detail in future articles in this series.

Anyone who has been watching recent board meetings knows how upset parents are at Trinity Elementary School because classrooms are not heated in the winter, that water leaks into classrooms around light fixtures and concerns over mold. I sent those parents copies of the AVI reports for Trinity so they could seem for themselves how Gallagher reported this to New York State, that none of these problems exist at the school.

These AVI reports were evaluated by Mike Orifici and the folks at Capital Project Consulting, the firm hired to review jobs performed by outside contractors (all hired by Gallagher), who, I was told, estimated that the all-in cost to fix all the problems that Gallagher lied about on the AVI reports was about $40 million. The district does not have a spare $40 million so Schools Superintendent Dr. Brian Osborne and Board Members are left with a choice — continue to ignore the problems or go to the voters to bond for the money. So far they have continued to ignore the problem. They have certainly not shared the bad news with the public. Meanwhile children continue to be placed in classrooms without heat, with mold, with leaking roofs and much worse and told it is their imagination (there have been heating issues this winter at Barnard, Ward and Columbus as well).

It is inconceivable that former Assistant Superintendent for Business & Administration John Quinn did not know about these falsified AVI reports.

Work to maintain schools in New Rochelle should be, but is not, based on prioritizing the most serious problems or operating in the most cost effective manner but rather how contracts to perform the work can be doled out to produce the most inflated invoices leaving the most room for kickbacks. Work that can funded in whole or in part by State or Federal grants is even better because the invoice can be tailored to the amount of money available regardless of the actual work done.

The invoices are submitted by the outside contractors and then paid without following the required processes to verify the work was done, the invoices are not properly “vouched” but are paid anyway. I wrote an article last year which provided a highly detailed explanation of what is supposed to happen — the various checks and balances — before funds are dispersed by the City School District of New Rochelle. Do not ask how but I was able to obtain all of the paperwork for over 200 paid invoices. Guess how many were properly “vouched” before payment? Precisely zero. Again, the district knows all about this. I shared this information with Korostoff and VRI.

I have heard from multiple sources how invoices would come in without supporting paperwork but would get paid because John Gallagher would badger and harass and cajole business staff to pay the invoices in violation of district policy and often in violation of state law. Some of these people were complicit but others were simply to weak to stand up to Gallagher who, supported by Quinn, ran roughshod over them. Those people that asked the wrong (i.e. right) questions were summarily removed from the department ending that practice and sending a message to other employees — keep your head down, your mouth shut and keep the checks flowing.

I am going to have more on the Orifici report soon enough. The district has been stonewalling my Freedom of Information request but I am told I will get a redacted version of the report next week. But there is one case I have written about and spoken about quite a bit is the work done at the New Rochelle High School Planetarium. So, let me talk about that for a bit.

As I have already reported, after the district was investigated by the U.S. Department of Education’s Office of Civil Rights and found in violation of the ADA, the district agreed to fix several access problems, among them exterior ramps to allow students in wheel chairs to have access to the planetarium. The district was involved in this with the OCR for about 16 months. Before anyone knew about the work that was going to be done to comply with the ADA, John Gallagher provided the architectural drawings and the consent agreement between the district and the OCR to Mauro Zonzini, a long time public works contractor from New Rochelle who is as corrupt as the day is long.

Readers may recall Zonzini being arrested in Rye for impersonating a police officer, his involvement with the New Rochelle Police Foundation despite his “hating f—-ing cops” and the infamous $8,000 invoice for supposedly moving a pile of dirt from the high school that no one had ever seen, before or since. There is some serious heat on Zonzini right now but I am going to have to save that for another day; let’s just say that Zonzini suddenly sold all of his interests in New Rochelle and moved to South Carolina apparently unaware that the IRS has offices there too.

In any case, the job that was Zonzini’s for the taking was given instead to Wager Construction, another corrupt company we have reported on in the past; readers may recall Anna Giordano exposing their rips offs involving masonry work at the Columbus School.

I have the invoices somewhere (among the many thousands and thousands of records I have accumulated over the years) but from memory the district paid Wager about $185,000 for the work on the planetarium. Understand that the district had over a year to plan for this work and 8 months from when the consent decree was signed until the work was to be completed. So, there was no “emergency”. Unless there is an emergency, New York State law requires capital projects like the planetarium to be put out for competitive bid. Gallagher can always work around that if he has need (rigged bids are the norm in New Rochelle schools) but it is always much better if he can just hand the contract to a “friendly” contractor like Wager. It’s not rocket science, the contractor inflates the contract and the margin between what the work should really cost and what the invoice charges is the slush that is used to pay kickbacks and bribes.

In New Rochelle, the prevailing kickback on most contracts is $5,000 cash, paid by the contractor to Gallagher. What he does with the money I do not know but it would seem reasonable to believe that he sprinkles some of that around and pockets the rest. But on a large job like the planetarium, the money involved is large and so the slush can be larger and so everyone can be made very happy (when Zonzini was first informed of the planetarium deal he was positively giddy).

The district paid the Wager invoice without bothering to check whether what they built was ADA complaint (it was not).

So that is about $185,000 to NOT solve the ADA issues with the planetarium.

Because I had written often about this particularjob, this was one of the projects selected to be investigated by Orifici. I do not want to get ahead of myself but every project examined by Orifici that we had reported as being a rip-off was determined by his firm to have been a rip-off — he found we were 100% accurate. The planetarium is the largest of those corrupt deals.

Wager was contacted regarding the Orifici report and asked about the matter of their over-billing the district.

So, what do you think Wager did? Did they yell and scream and deny? Did they threaten to file a lawsuit? Did they hang up the phone?

No.

They immediately wrote a check for $50,000 to the district.

Just think about that. Because I reported on this planetarium scam, and because there was briefly an honest person at the helm (Korostoff) and because they hired an outside consultant to investigate, the district got back $50,000 on a $185,000 job just by asking for it. Orifici was paid a $6,000 finders’ fee. I got nothing.

Now maybe folks can understand why I keep saying that the amounts stolen in New Rochelle are millions and millions of dollars — here is one job where the contractor does not even put up a fight and basically admits to stealing $50,000. There are many such deals. Each year the board was pre-approving a half-million dollars in “emergency” work, a blank check for some of the most corrupt contractors in the Southern District. The Honeywell deal was for millions — and that does not even account for the crooked overtime payments to district employees. There are just so many of these deals it is staggering.

And here is a good example of why I have described the school district as a criminal enterprise — the people running the district all know about this. They have all seen the Orifici report. You haven’t. And they are doing what they can to make sure you don’t.

Think about this Orifici report — they looked at 5 invoices. They go 5 for 5. So what would any honest person conclude from this? Doesn’t make sense that if you drill for oil five times and hit five gushers you keep drilling? Wouldn’t you want to audit EVERY invoice submitted by these particular vendors, then expand the audit to sample several invoices from all the other vendors. As I said, I have obtained and reviewed over 200 invoices and not a single one was submitted with the proper paper work and yet every single one was paid. Everyone of those invoices should be audited too.

Gallagher and Quinn were the people signing off on the corrupt deals. So how about auditing every single purchase order they signed?

By their own actions, Wager Construction has admitted ripping off the district. G.R.W. Plumbing (Davis asbestos, $5,000 flag pole at Trinity) and Zonzini Mason Contractors and Zonzini Pipeline are proven to be corrupt. I have heard plenty of stories about F & L Floorworks, Environmental Control and J & J Backflow (owned by Jimmy Bonanno’s brother Joe V., recall the brother where Jimmy does not know what the “V” stands for). Also on my list for further review would be Crown Boilers, Westrock, Falcon Engineered Systems, Honeywell (and all the subcontractors they brought to New Rochelle). So, how about them?

That would be a lot of auditing but worth it given the proven ability to recoup money. It would pay for itself many times over.

Well, guess what? Since the Orifici report was issued, there has not been a single purchase order audited by the district. Orifici has never been brought back to do follow up investigations. No criminal referrals have been made. Now why is that? Obviously, some people know all about this and many were in on it or they do not want to know.

Maybe now people will start to understand why it is so significant that David Lacher, while board president, placed himself in a position to be financially beholden to Quinn — and for something very, very important to Lacher, his family’s medical insurance. It’s why it matters that Lacher and Merchant failed to report their debts to the district while on the board. Quinn had them both right where he wanted them. Lacher in particular was an aggressive defender of Quinn. Gee, I wonder why?

It is impossible to orchestrate this sort of a corrupt scheme without an awful lot of people going along with it. It is because of that fact that this corrupt system has been perpetuated. As one local wag put it “no one’s going to say nothing about no one because everyone’s got something on someone”. They all realize it’s a house of cards, pull away one piece and the whole thing can come tumbling down on them.

Last spring, when the school board voted to approve the 2014-15 budget several members remarked upon the financial irregularities under the watch of John Quinn. Ms. Polow used the word “incompetence”. Ms. Relkin used the phrase “grave concern”. Board members expressed support for the ongoing investigations into corruption under Quinn and praised Dr. Korostoff for setting the tone with his budget statement acknowledging the corruption.

Lot’s of tough talk.

When she became president, Lianne Merchant and Greg, her husband, told me how they were committed to cleaning up corruption the district. Seriously!

And yet the board has gone along with the administration’s recommendation not to pursue these investigations further and not to make criminal referrals. And don’t let these board members fool you — I have made dozens and dozens of speeches on this topic, I ran two school board campaigns where corruption was a central issue, and many of them have been hearing from me privately for years. They know. They do nothing.

My purpose here is not provide a full account of Gallagher’s misdeeds — there are too many and it would take too long. My intent is to provide context for what will follow as I go through some specific examples.

But here are a few examples:

  • A painter working for the district met with Korostoff and the VRI investigators and told them how he was personally directed to go to Gallagher’s house and paint the house. This same painter told them that this was traditionally done for Gallagher by other painters and other mechanics (electricians, plumbers, carpenters) and so the painter felt he could not refuse or risk retaliation. By admitting this the person was incriminating themselves but they came forward voluntarily. Some of the people identified as working on Gallagher’s house include Scott Empara, Anthony Raffa and Mike Matisse, all names that should be familiar to readers by now.
  • Gallagher knows that Jimmy Bonanno has kept dogs caged up inside the building at Cliff Street. They are not supposed to be there, they are covered in fleas, it amounts to animal cruelty.
  • I heard back from a DEC investigator involved in the asbestos case, after the Department of Labor Asbestos Control Bureau took action was taken against George Wood and his company, G.R.W. Plumbing. “Wood broke every rule in the book, wrote his own book,” he said. “We want his ass.” The DEC investigator said he was going to see George Wood to tell him he is going to be arrested, said that New York State Attorney General was involved. The DEC investigator said he believes tiles were friable — that crushing up the rug in the garbage truck made it friable - and they were just waiting for a DEC engineer to confirm. “We're getting a lot of bad phone calls about Gallagher, he said, adding that Gallagher was investigated by the Westchester County District Attorney in the past. That is interesting because Brian Conway of the DA’s office sought to portray Gallagher as a “victim” of corruption in the Vito Costa case.
  • On many occasions cost increases for purchase orders were signed off on by John Gallagher (and John Quinn), largely due to unsupported and random claims of extra “man hours” for work that was not part of the originally quoted job for which the PO was generated and thus resulted in POs that did not match invoices. Such changes are required to be referred back to the Purchasing Agent not done by fiat.
  • Gallagher ordered supplies from the two locksmith companies connected to the Graefes where lots of extra stuff was ordered and then kept by the Graefes or their private business.
  • Gallagher was a key part of a resolution brought forward by John Quinn to place Aramark employees including Gallagher on the district payroll in clear violation of the Aramark contract. It was an attempt to qualify John Gallagher and 2 other Aramark employees for a Tier 5 NY State pension in the event the Aramark contract was terminated. Quinn was scheming to rehire Gallagher if the board killed the Aramark contract.
  • I called the New York State Education Department to ask questions about asbestos in schools. The SED then called the school district about the asbestos exposure incident at Davis School. Gallagher, posing as a duly authorized representative of the school district, told state officials that all proper procedures for the removal and disposable of asbestos from Mr. Galland’s office at Davis had been followed. State investigators later found these claims to be false.
  • When Gallagher wanted to place a certain person in the position of Working Painter-Foreman without going through the required Civil Service Process, it was Mr. Gallagher, claiming to represent the school district, who instructed the Municipal Civll Service to cancel the exam for that position so that no one could qualify for the position.
  • Gallagher was listed on the district web site as an employee with the title of Director of Buildings & Grounds — not listed as Aramark consultant (as is the case at his new school in Pennsylvania).
  • On Gallagher’s LinkedIN page he lists himself as Director of Environmental Services for the City School District of New Rochelle — not an Aramark consultant.
  • Gallagher had his own letterhead, where three names appear - the Superintendent, John Quinn and himself, John Gallagher under the title Director of Environmental Services.
  • The BID Award documents given out to contractors state that Gallagher is authorized to order Emergency Work even thought the Aramark contract prohibits Aramark employees from binding the school district.
  • I have copies of many invoices, without required purchase orders, where Gallagher is authorizing non-emergency work and payment

There are just too many to keep listing them here but at least know you have some context for when I get into some specific purchase orders.

NEXT: New Rochelle Board of Education: Criminal Enterprise Masquerading as an Educational Institution - Part IX

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